SA mining house Sibanye-Stillwater said on Monday it had agreed to sell its Beatrix 4 shaft to London Stock Exchange-listed uranium exploration and development group Neo Energy Metals, in a R500m deal that allows the group to free up capital while retaining its exposure to the operation’s Beisa uranium project.
The deal will see Sibanye handing over Beatrix 4, which includes Beisa, in exchange for R250m in cash and R250m in newly issued Neo Energy shares. On signing, this will equate to Sibanye owning a 40% stake in the company.
Sibanye will also receive a royalty on all uranium sold from Beisa, with rates varying based on the spot uranium price. With its 40% interest in Neo Energy, it will enable Sibanye to retain its exposure to Beirathe operation’s future uranium production, while gaining exposure to a listed junior uranium company.
“Though the Beisa uranium project is not a capital priority for Sibanye-Stillwater, the transaction presents an opportunity for Neo Energy to develop the project while allowing Sibanye-Stillwater to maintain exposure to uranium production,” said Sibanye.
Sibanye said the transaction fast-tracked the potential development of Beisa without extending the group’s balance sheet, while also immediately crystallising value for Sibanye’s shareholders.
CEO Neal Froneman said the sale of the strategic uranium asset was in line with the group’s strategy to unlock value from its uranium assets, and “realises immediate value for Sibanye”.
“Through our direct shareholding in Neo Energy, we retain exposure to the uranium price and the future development of the project, while prioritising allocation of capital from the group balance sheet for projects now under development,” he said.
After the deal, Neo Energy will be responsible for all the Beatrix 4 shaft’s rehabilitation and environmental liabilities.
The shaft was placed on care and maintenance by Sibanye last year, mostly due to its declining gold reserves and a depressed uranium price. However, uranium prices have since recovered, reaching a peak of $106/lb in January, with Sibanye holding a positive outlook for the radioactive element.
The transaction now hinges on two outstanding conditions — the first being Neo Energy shareholder approval, with the company having secured 46% irrevocable support for the deal from existing shareholders.
Second is regulatory approval in terms of the Mineral and Petroleum Resources Development Act, which is expected to be finalised by the last quarter of next year. Sibanye said both parties were confident that these conditions can be completed timeously.
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