Sibanye-Stillwater open to JV on Burnstone gold project

SIBANYE-Stillwater was prepared to sell its Burnstone gold project or…

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SIBANYE-Stillwater was prepared to sell its Burnstone gold project or bring it out of mothballs if a joint venture partner could be found for it, said CEO Neal Froneman.

“We do want to develop it rather than sell,” he said in an interview on March 5. “But like everything if someone with the right price came long we would consider selling it or doing a partnership, with the right partner”.

Sibanye-Stillwater decided to suspend the Mpumalanga project’s development as it contended with lower revenues for platinum group metals (PGMs) which took the group into nearly R12bn in net debt as of December 31.

Froneman said Burnstone was “a good quality asset” that was shallow with a ‘well understood” geology. “We know how to mine it,” he said. But the mine’s development suffered as a result. “The problem is we use it as flexibility in terms of capital.

“We can switch it on or off as it’s not an asset that floods or will go away. It suffers the consequence of almost being a free float in our portfolio, but it will provide low cost risk ounces in the future,” he said.

The project’s suspension comes amid record rand gold prices. At just over R1.3m per kilogram of gold, the price received for South African gold producers is nearly 8% higher so far this year and 12% higher over the last 12 months.

Working against Burnstone is Sibanye-Stillwater’s strategy to diversify the geographic spread of its portfolio. It its building the Keliber lithium mine and refinery in Finland and is hopeful of developing the Rhyolite Ridge lithium/boron project in the US.

At 31 December 2021, Burnstone contained surface and underground gold mineral reserves of 2.6 million oz and mineral resources of 9.1 million oz. The project’s development was approved by Sibanye-Stillwater in 2021 when it was envisaged it would produce 140,000 oz/year of gold. At the time, the project required capital of about R2.4bn to complete.

The mine was previously operated by Great Basin Gold, a Toronto-listed firm.

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