New Century Resources

Sibanye-Stillwater, on October 27, 2021 announced that it has entered into investment agreements to acquire a 19.99% shareholding in New Century Resources Limited (Ticker ASX: NCZ) (New Century) through a new equity placement, and sub-underwriting of a New Century entitlement offer, for a maximum cash consideration of US$46 million* (the Transaction). The Transaction is expected to be completed in December 2021, with a portion (outlined in the “Transaction details” section) subject to approval by New Century shareholders.

* Being a maximum subscription amount of A$61.39 and at an assumed exchange rate of A$1.00/US$0.7517.

Sibanye-Stillwater Chief Executive Officer Neal Froneman
“This investment in New Century represents a significant next step in our strategy of building a leading global tailings retreatment business, diversified by commodity and geography and is aligned with our sustainability strategy of building a climate change resilient business.
We have been impressed with what the New Century management team has achieved at developing a globally significant zinc producing business through the reprocessing of tailings, whilst facilitating the rehabilitation of an old mine site.
We are pleased to partner with New Century Resources in this exciting next phase of their growth at Mt Lyell and support their vision of growing their Tailings Management advisory service business model globally, to produce green metals and address environmental legacy issues.”

A CLOSER LOOK

About New Century

New Century is a leading tailings management and rehabilitation company which currently owns the Century tailings zinc retreatment operations in Queensland, Australia and is listed on the Australian Securities Exchange. The Century zinc operations were placed on care and maintenance in 2016 following depletion of the original open pit in-situ reserves after producing and processing on average 475ktpa zinc and 50ktpa lead concentrate for 16 years. New Century converted existing processing infrastructure to enable re-processing of legacy tailings waste dumps. The infrastructure refurbishment was completed in August 2018 and the operations have been re-processing tailings since.

Key operating metrics⁽²⁾:

Top 15 global zinc producer with annual zinc (Zn) production of 128 ktpa (FY2021)
Reserves: 51.8Mt at 3.1% Zn for 1,613kt contained Zn (including tailings of 49.3Mt at 3.1% Zn content for 1,473kt contained Zn)
Resources (incl. Reserves): 65.2Mt at 3.5% Zn for 2,306kt contained Zn (including tailings of 53Mt at 3% Zn for 1,604kt contained Zn)
Life of Mine (LOM) to 2027, with indicated and inferred resources offering opportunity to extend LOM to 2030+
Attractive second quartile industry cost curve position, with C1 cash costs (net of by-products) of US$0.89/lb Zn⁽¹⁾⁽²⁾ vs current spot of US$1.59/lb

The New Century management team has a proven track record of best practice tailings reprocessing in Australia and is focused on expanding the business by providing best-in-class advisory services to large-scale, tailings reprocessing and rehabilitation operations in Australia and globally.

The information in this announcement that relates to New Century – including in relation to production, mineral resources and ore reserves estimates, costs and other financial information or plans – is extracted from publicly available information about New Century. Sibanye-Stillwater has not independently verified such information, and, to the maximum extent permitted by law, makes no representation or warranty, express or implied, as to the fairness, accuracy, correctness, completeness or adequacy of any information in relation to New Century.
As of the quarter ending September 2021

Investment rationale

Sibanye-Stillwater believes that the Transaction represents a unique opportunity to generate long-term value for our stakeholders while enhancing its profile as a premier, global tailings retreatment leader, uniquely positioned to play a key role in future supply chains for a sustainable circular economy.

This investment in New Century represents an attractive opportunity for Sibanye-Stillwater on a standalone basis, given the ability to own 19.99% of a high-quality tailings retreatment business in Australia and complements our existing investment in DRDGOLD Limited (DRDGOLD) in South Africa. As New Century develops its environmental liability management advisory service to large mining clients globally, and on the back of increased scale and visibility, we expect New Century to benefit from a re-rating in line with recyclers and waste management providers. Therefore, the investment itself is expected to have embedded re-rating potential as New Century grows and develops its strategy with the assistance of Sibanye-Stillwater as a partner.

Sibanye-Stillwater took the opportunity to create an industry-leading surface mining partnership with DRDGOLD in November 2017 by vending selected gold surface reprocessing assets and currently owns 50.7% in DRDGOLD. The investment in New Century allows Sibanye-Stillwater to expand on the success of its investment in DRDGOLD in another tier-1 mining jurisdiction and to build a global platform for tailings retreatment with associated complementary partnerships.

The investment in New Century further diversifies Sibanye-Stillwater geographically, providing a foothold into Australia, a high-quality international mining jurisdiction.

The Transaction also allows for potential sharing of technological best practices and synergy realisation across Sibanye-Stillwater’s various investment platforms, further advancing Sibanye-Stillwater as a global, ESG-focused industry leader in tailings reprocessing.

New Century’s investment in the Mt Lyell copper mine will also provide an opportunity for sustainable green copper production, large scale tailings reprocessing and rehabilitation. Through this investment Sibanye-Stillwater further increases its exposure to green metals.

Transaction details

Sibanye-Stillwater (through its wholly-owned subsidiary) will acquire a 19.99% ownership stake in New Century through a phased equity investment program (expected to be completed in December 2021) in line with New Century’s announced capital raising timetable https://newcenturyresources.com/investor-centre/announcements. The investment in New Century will be conducted as a subscription by Sibanye-Stillwater for newly issued New Century ordinary shares at an issue price of A$0.155 per share. This represents a 0% discount to New Century’s market close on 30 September 2021 (being the last trading day in New Century shares before the date of this announcement), for a total consideration of up to US$46 million*. The phased equity investment program will comprise an unconditional placement to (among others) Sibanye-Stillwater, the partial sub-underwriting by Sibanye-Stillwater of a New Century entitlement offer, and a conditional placement to Sibanye-Stillwater subject to the approval of New Century shareholders (Conditional Placement).

The Transaction will be funded through Sibanye-Stillwater’s available cash reserves. Relevant regulatory approvals (including South African Reserve Bank and Australian Foreign Investment Review Board) have been received for the Transaction. The Conditional Placement (only) remains subject to the approval of New Century shareholders at its Annual General Meeting planned to be held in November 2021.