Blitz project (bottom right) is a brownfield extension of the Stillwater Mine.
JOHANNESBURG (miningweekly.com) – Production is under way three months ahead of schedule at Sibanye-Stillwater’s Blitz project in the US, where the completion of a secondary escape-way system concluded the final infrastructure required for production to begin.
An upside for Sibanye-Stillwater shareholders is the rapid ramping up of the Blitz project (see attached graphics), which was an important driver of the Stillwater transaction.
An indication of the quality of the Blitz project is that initial ore intersected and excavated is of higher grade than the average grade at Stillwater Mining, the world’s largest primary palladium producer.
Through Blitz, a brownfield extension of the existing Stillwater mine, the Johannesburg- and New York-listed Sibanye-Stillwater is benefitting further from both an increasing palladium price and improving operational performance.
Once operating at a steady state, Blitz is expected to lift output by 300 000 oz/y of palladium and platinum from the end of 2021.
At full flight, Blitz will enable total output from the combined US operations to hit the 850 000 oz/y mark, as well as cut the unit operating costs.
“The early commissioning of Blitz has confirmed our view that the US operations will deliver significant value in future,” Sibanye-Stillwater CEO Neal Froneman said in a release to Creamer Media’s Mining Weekly Online.
The integration of the US operations has been under way since May.
The palladium price has soared by more than 64% since Sibanye began discussions for the acquisition and the combined Sibanye-Stillwater has had the benefit of at least 30% of the palladium price surge since the consummation of the transaction earlier this year.
At current basket prices, Stillwater will pay off its capital and financing costs and return some cash to shareholders.
The Colorado-headquartered, 1 400-employee Stillwater at last count generated a revenue of $726-million and an operating cash flow of $110-million from the production of 540 000 oz of primary platinum group metals (PGMs) from two mechanised mines in Montana.
Its cash costs were $428/oz at the Stillwater mine, where the grades were a high 20 g/t, and $441/oz at the East Boulder mine, where the grades were more than 13 g/t.
Ore with an estimated average grade of 1.15 oz/t is being processed off a 1 360 t stockpile that built up during Blitz’s development phase.
On the funding front, Sibanye-Stillwater last month launched a $450-million convertible bond offering linked to the refinancing of the outstanding portion of the bridge loan the company raised to buy Stillwater.
Sibanye-Stillwater last year acquired the Rustenburg Operations from Anglo American Platinum’s 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.
Through its acquisition of Aquarius Platinum, it also owns stakes in the Kroondal platinum mine, in Rustenburg, and the Mimosa joint venture with Impala Platinum, in Zimbabwe.