JSE- and NYSE-listed Sibanye-Stillwater has entered into investment agreements to acquire a 19.99% shareholding in ASX-listed New Century Resources, which owns the Century tailings zinc retreatment operations in Queensland, Australia.
Sibanye says the transaction, which is expected to close by December, represents a unique opportunity to generate long-term value for its stakeholders, while enhancing its profile as a premier, global tailings retreatment leader that is uniquely positioned to play a key role in future supply chains for a sustainable circular economy.
“This investment in New Century represents a significant next step in our strategy of building a leading global tailings retreatment business, diversified by commodity and geography, and is aligned with our sustainability strategy of building a climate change resilient business.
"We have been impressed with what the New Century management team has achieved in developing a globally significant zinc-producing business through the reprocessing of tailings, while facilitating the rehabilitation of an old mine site.
"We are pleased to partner with New Century Resources in this exciting next phase of their growth at Mt Lyell and support their vision of growing their tailings management advisory service business model globally, to produce green metals and address environmental legacy issues,” comments Sibanye CEO Neal Froneman.
This investment in New Century complements Sibanye's existing investment in South African gold tailings retreatment company DRDGold.
It also gives Sibanye a foothold in Australia and allows for the potential sharing of technological best practices and synergy realisation across Sibanye's various investment platforms, further advancing Sibanye as a global environmental, social and governance- (ESG-) focused industry leader in tailings reprocessing.
The Century zinc operations were placed on care and maintenance in 2016 following depletion of the original openpit reserves.
After acquiring the operations, New Century converted existing processing infrastructure to enable the reprocessing of legacy tailings waste dumps. The infrastructure refurbishment was completed in August 2018 and the operations have been re-processing tailings since.
The Century zinc operations have a mine life up to 2027, with indicated and inferred resources holding a further opportunity to extend the mine life beyond 2030.
The operations produced about 128 000 t of zinc in the 2021 financial year.
Meanwhile, New Century has entered into a binding term sheet with Vedanta Limited for a two-year option agreement to acquire the Mt Lyell copper mine, in Tasmania.
The Mt Lyell mine has mineral resources of about 1.1-million tonnes of "green" copper and about one-million ounces of gold. New Century sees potential for an accelerated restart of the operation through tailings reprocessing and existing infrastructure.
New Century’s investment in the Mt Lyell copper mine will also provide an opportunity for sustainable green copper production, large-scale tailings reprocessing and rehabilitation. Through this investment, Sibanye further increases its exposure to green metals.
"As New Century develops its environmental liability management advisory service to large mining clients globally, and on the back of increased scale and visibility, we expect New Century to benefit from a re-rating in line with recyclers and waste management providers.
"Therefore, the investment itself is expected to have embedded re-rating potential as New Century grows and develops its strategy with the assistance of Sibanye as a partner," Sibanye notes.
"With the strategic investment by Sibanye and the option over the Mt Lyell copper mine, New Century is in an enviable position to grow its ESG-focused business through potential near-term 'green' copper supply, while also developing a client-focused tailings management services division," comments New Century MD Patrick Walta.
The investment in New Century will be conducted as a subscription by Sibanye for newly issued New Century ordinary shares at an issue price of A$0.155 a share, for a total consideration of $46-million.
The transaction will be funded from Sibanye's available cash reserves.
Sibanye expects the transaction to close by December.
This follows a day after Sibanye announced a $1-billion buyout of the Santa Rita nickel mine and the Serrote copper mine, in Brazil, from private-equity fund Appian Capital Advisory, as it continues its push into the battery metals sector.