Multinational mining and metals processing group, Sibanye-Stillwater (JSE: SSW and NYSE: SBSW) has agreed to sell its Beatrix 4 shaft, which includes the Beisa uranium project, to Neo Energy Metals Plc. Neo Energy will develop the Beisa uranium project, while Sibanye-Stillwater will retain exposure to both the project and a listed junior uranium company. This move crystalises value for Sibanye-Stillwater shareholders and fast-tracks the possible development of the uranium project, without extending the miner’s balance sheet.

Neo Energy is a uranium exploration and development company listed on the main board of the London Stock Exchange (LSE) and dual-listed in South Africa on the A2X market. The Beisa uranium project, located at the Beatrix 4 shaft in the Free State Province of South Africa, accesses the Beisa uranium reef through the upper sections of the Beatrix 4 shaft infrastructure.

Beatrix 4 shaft was placed on care and maintenance by Sibanye-Stillwater in 2023 primarily due to declining gold reserves and a depressed uranium price, which has subsequently recovered, peaking at USD106/lb during January 2024. The outlook for the uranium market remains positive. Although 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.

Neal Froneman, CEO of Sibanye-Stillwater, commented, “The sale of this strategic uranium asset is in line with Sibanye-Stillwater’s strategy to unlock value from our uranium assets. The sale of Beatrix 4 shaft and the Beisa uranium project realises immediate value for the group. 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 currently under development.”

 

Key terms of the transaction

  • Total Transaction consideration of R500-million, comprising R250-million in cash and R250-million in newly issued shares in Neo Energy (which on signing equates to Sibanye-Stillwater owning a shareholding of approximately 40% in Neo Energy)
  • Sibanye-Stillwater will also receive a royalty on all uranium sold from the Beisa uranium project at varying rates depending on the spot uranium price (with a maximum of USD5.00/lb)
  • Neo Energy will assume responsibility for all Beatrix 4 shaft rehabilitation and environmental liabilities

 

Key outstanding conditions precedent include:

  • Neo Energy shareholder approval and a Rule 9 Waiver in terms of the City Code of Takeovers and Mergers (Neo Energy has secured 46% irrevocable support for the transaction from existing Neo Energy shareholders)
  • Regulatory approval in terms of the Mineral and Petroleum Resources Development Act (MPRDA) for the transfer of Beatrix 4 shaft (inclusive of the Beisa uranium project) to Neo Energy which is expected to be finalised by Q4 2025. Both Neo Energy and Sibanye-Stillwater are confident these conditions can be completed timeously.

Source: supplied by Sibanye-Stillwater