Stillwater Mining takeover needs more study

Sibanye Gold (JSE:SGL) (NYSE:SBGL), the world's number ten producer of gold, has been informed by a US regulatory body that it needs more time to study the South African company's $2.2 billion acquisition of Stillwater Mining (NYSE:SWC), the only US platinum producer.

Sibanye said the investigation, follows the initial review period which concluded at the end of February and will be completed by no later than April 14, 2017, although it is possible CFIUS’ investigation could be concluded sooner.

The notification is in line with standard CFIUS procedure for a transaction of this nature according to a company statement:

The Transaction remains on schedule for closure during the second calendar quarter of 2017 and, in addition to the CFIUS approval, remains subject to the approval of the Transaction by the holders of a majority of Stillwater’s outstanding shares, the approval of the Transaction by the holders of a majority of Sibanye’s shares present and voting, the approval of the related issuance of shares by Sibanye in the context of a potential rights issue by the holders of at least 75% of the shares present and voting, and other customary conditions.

The deal announced in December which gave Stillwater shareholder a healthy 22% premium over the ruling share price was given the go-ahead by US antitrust authorities in January while the South African Reserve Bank gave its approval to the deal last month. Stillwater shares have more than doubled in the past year.

Together with reducing Sibanye’s dependence on its aging South African mines, the deal will make the company the world's third largest palladium producer and fourth biggest platinum group metals miner. Stillwater is the biggest producer of PGMs outside South Africa and Russia which together control 70-80% of global output.

The Johannesburg-listed company, which was spun out of South Africa’s Gold Fields in 2013, spent most of last year shopping for new mines, particularly in the platinum sector.

The company first expanded into PGMs, used in jewellery and as catalytic converters in the vehicle industry in September 2015, by buying Aquarius Platinum and three Anglo American Platinum mines.

Sibanye on Friday also declared total gold mineral reserves of 28.7Moz, a reduction of 2.3Moz, which after accounting for depletion of 1.6Moz due to mining activities in 2016, equates to a 2% decrease year on year.

The company's maiden 4E PGM (platinum, palladium, rhodium and gold) mineral resources came in at 126.5Moz while reserves of 23.2Moz declared, position

The post Stillwater Mining takeover needs more study appeared first on MINING.com.

from MINING.com http://ift.tt/2mWmsK6