Precious metals mining company Sibanye’s proposed acquisition, Stillwater Mining, of the US, edged forward last week with the notification that both companies had received early termination of the waiting period under the US’s Hart-Scott-Rodino legislation, which means that the transaction’s antitrust condition has now been satisfied.

Announced in early December, the deal is expected to close in the second calendar quarter of 2017, subject to customary approvals of shareholders, the South African Reserve Bank and ‘other’.

Sibanye CEO Neal Froneman says satisfying the antitrust condition early is an important first step towards concluding the acquisition.

“We’ve made very positive progress,” he added in the Stock Exchange News Service announcement.

Sibanye has entered into a definitive agreement to acquire all the outstanding common stock of Stillwater for R30billion ($2.2-billion) – the $18-a-share offer representing a premium of 23%.

Stillwater’s board has resolved that the transaction is advisable and has recommended shareholders vote in favour of what Sibanye’s management sees as a value accretive transformational opportunity to create a balanced portfolio of gold and platinum group metals (PGM) assets at a favourable point in the commodities cycle.

The acquisition has the potential to put South Africa’s Sibanye on the inside track of low-cost mechanised primary mining, as well as provide it with deep insight into the recycling of PGMs.

Sibanye has obtained a $2.7-billion bridge loan commitment from Citi and HSBC banks to fund the transaction and repay Stillwater’s $0.5-billion convertible debentures and plans to raise $750-million in equity capital in a rights issues.

The 1 400-employee NYSE-listed Stillwater, headquartered in Colorado, last year generated revenue of $726-million and operating cash flow $110-million from the production of 540 000 oz of primary PGMs from two mechanised mines in Montana.

Its cash costs are $428/oz at the Stillwater mine, where the grades are a high 20 g/t, and $441/oz at the East Boulder mine, where the grades are just over 13 g/t. Reserves are sufficient for another quarter century of mining.

As a mine-to-metals business, Stillwater has smelting and base metals refining assets and is also one of the largest recyclers of PGMs; in its 2015 financial year, it recycled 551 000 oz of platinum, palladium and rhodium from secondary sources.

Growth is offered through the $250-million Blitz project, where new production will emerge in 2018, rising to 300 000 oz/y from 2021.

Another project, the Lower East Boulder project, at prefeasibility stage, offers another potential 200 000 oz/y of primary production.

Further options include the Altar project, in Argentina, and the Marathon PGM-copper project, in Canada.

Part of the metallurgical complex has been designed for the recycling of old PGM catalysts, which in the third quarter of this year yielded a record 175 000 oz of PGMs.

Stillwater CEO Mick McMullen expressed confidence that Sibanye would continue to be a world-class steward of the US operations and partner to local Montana communities.

Sibanye’s newly formed US holding company will merge into Stillwater, which will become an indirect wholly owned subsidiary of Sibanye.

Consistent with its long-term strategy, Sibanye is targeting a net-debt-to-2017 earnings before interest, taxes, depreciation and amortisation ratio of no greater than 1.5 times by the end of fiscal year 2017.

Stillwater’s two underground mines, which have been in operation since 1986 and 2002 respectively, are expected to produce between 535 000 oz and 545 000 oz of two element (2E) PGMs in fiscal year 2016, at a total cash cost net of credits of $430/oz to $455/oz. Each mine has its own milling and concentrator infrastructure on site.

Development of the Blitz project is expected to be completed in early 2018 and to ramp up to full production of between 270 000 oz and 330 000 oz 2E PGMs by 2021/22, with a lower cash cost per ounce than currently at the Stillwater mine and East Boulder mine.

Stillwater’s proven and probable reserves consist of 39.4-million tonnes of ore with an average grade of 15.6 g/t, or 19.9-million ounces of contained 2E PGM.

The proven and probable reserves are 78% palladium and 22% platinum, and support a mine life of over 25 years.

The Columbus metallurgical complex, which is capable of providing smelting and refining processes for mine concentrates, produces a PGM-rich filter cake that is shipped to a third-party precious metal refinery.

Sibanye’s two largest shareholders, Gold One International and the Public Investment Corporation, which in aggregate represent 29% of Sibanye’s issued share capital, have confirmed their support.

The net asset value of Stillwater is $916-million and the profit attributable to the company for the nine months ended September 30, 2016, is $4-million.

Sibanye last year took over South Africa’s Rustenburg Operations from Anglo American Platinum’s (Amplats’) Rustenburg Platinum Mines, which include the Bathopele, Siphumelele, Khomanani, Thembelani and Khuseleka mining operations, as well as two concentrating plants, an on-site chrome recovery plant, the Western Limb Tailings Retreatment Plant and associated surface infrastructure, for R4.5-billion.

It also completed the acquisition of Aquarius Platinum, which owns stakes in the Kroondal platinum mine, in Rustenburg, and the Mimosa joint venture with Impala Platinum, in Zimbabwe.

Long-serving Sibanye VP Robert van Niekerk has been appointed CEO of Sibanye’s platinum division following the stepping down of Jean Nel.