Sibanye Stillwater, fresh from raising $2.45bn, announced the first production at an important project at the US palladium and platinum miner it bought for $2.2bn in cash earlier in 2017.
Sibanye, which has vaulted into the top ranks of platinum group metal producers with the purchase of Stillwater and its mining and recycling assets in Montana, said on Monday it had started production at the $250m Blitz mining project, which would add more than 300,000oz of production to the US business.
The amount Sibanye Stillwater paid earlier in 2017 for a US platinum and palladium miner
Stillwater will, from early 2022, produce 850,000oz a year of palladium and platinum, a more than 50% increase from prevailing levels.
By the end of 2016, $111.6m had been spent on Blitz and it needed $138m more to complete the project.
Stillwater needed to expand the concentrator at its processing plant to treat the extra tonnage from Blitz, and an unspecified amount of money is needed for this project.
Production started three months sooner than planned and the grade of the material from Blitz is 39g of palladium and platinum per tonne, well above the average 19.55g per tonne from the Stillwater mine.
Value of Blitz mining project in Montana in the US
"Delivery of low-cost production growth into a robust price environment, supported by long-term palladium fundamentals, is what underpinned our decision to acquire Stillwater," said Sibanye Stillwater CEO Neal Froneman.
Sibanye, with its R32bn market capitalisation, has a long way to go to persuade shareholders of the merits of the deal and that it did not overpay. Sibanye’s share price has fallen to R15.08, from R47.83 a year ago.