Sibanye completes Lomnin takeover

Harare – JSE and NYSE-listed Sibanye Stillwater which jointly own Mimosa with Implats has completed the takeover of London-listed platinum producer Lomnin in a deal US$286 million after shareholders of both companies voted in favour of the move.

In a statement, Sibanye said that 87 percent of its shareholders approved the deal at a general meeting held on Monday, while a majority of Lomnin’s shareholders also approved on Tuesday the takeover of the company by Sibanye at a meeting held in London.

Sibanye focuses its efforts on both platinum and other precious metals including silver and gold, but has stated its aim to shift its focus toward platinum primarily in the years to come.

Effectively, the transaction which has been in the pipeline since 2017 is set to elevate Sibanye to become the second largest producer of platinum group metals (PGMs) behind Anglo American Platinum (Amplats).

In turn, the deal is expected to give Lomnin a lifeline after it was besieged with liquidity problems on the back of lower prices between 2014 and 2017.

Lomnin avoided a near death in 2015 after being bailed out by investors who approved a $400 million (R5.75 billion) capital raise.

Lomnin chief executive Ben Magara said last week that he still believed that the transaction continued to be in the best interest of all stakeholders.

It was previously reported that Lonmin shareholders will own about 11% of the enlarged group if the deal goes ahead.

Sibanye which posted impressive production figures for 2018 has been on an acquisition spree having bought up Stillwater in 2017, however, it faces ongoing concern related to employee strikes as South Africa’s Association of Mineworkers and Construction Union has previously gone on strike.

In an operating update for the quarter ended 31 March 2019, Sibanye chief executive Neal Froneman said mined platinum, palladium, rhodium and gold (4E PGM) production guidance from the SA PGM operations which includes attributable production from Mimosa for 2019 remains unchanged at between 1 000 000 ounces and 1 100 000oz, while capital expenditure is forecast at US$103 million.

Likewise, Froneman said “mined 2E PGM production guidance from the US PGM operations for 2019 of between 645,000oz and 675,000oz and AISC guidance of between US$690/2Eoz and US$730/2Eoz remains unchanged.”

Equity Axis News

Raynold Mhotseka

Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, rayjnr.mhotseka@gmail.com and raynoldm@equityaxis.net.

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