Feb 2020 – Neal ‘the deal’ Froneman suggests Sibanye’s next deal would be away from South Africa and in battery metals. “We want to play in the international arena. We are probably ex-growth in South African because of our market position in PGMs,” he said. He also spoke to Bloomberg about growing capacity in the US market though, making a $5bn acquisition of a gold producer, so not directly linked at this time to Eurasia.
Worth noting though that in the infamous tweet by Michael Hammond, South Africa was listed a country interested in Eurasia.
May 2020 – conditions outlined for Sibanye making acquisitions in future
Namely cutting debt and returning to dividends for shareholders. So perhaps they aren’t going to be buying anyone in 2020, except…
August 2020 – update on Sibanye H1 results, with impressive profits posted and dividend reinstated for first time since 2016. So the conditions to be met before making an acquisition are in place now. Coped well with Covid restrictions, so expect H2 to be even more profitable as PGM pricing stable.
October 2020 – Sibanye announce new executive appointments. Including Laurent Charbonnier.
“Laurent Charbonnier will be joining the company and assuming the role of EVP Business Development. Laurent has more than 20 years’ experience in investment banking and recently left his role as Managing director and Global Head of Metals & Mining for HSBC, which he occupied for the last eight years.
He was a lead advisor to Sibanye-Stillwater on the acquisitions of Aquarius Platinum, Rustenburg, Stillwater and Lonmin and their related financing (bridge financing, rights issue and bonds).”
A little research on LinkedIn shows Laurent also worked at Credit Suisse and UBS prior to HSBC, being a seasoned professional in the mining investment community and a track record of financing large deals in the PGM sector.
Also in October, Froneman conducts various interviews stating his level of unhappiness with investing in South Africa, talking about battery metals and how he needs to diversify the company to get closer to supply chains and downstream users.
Sibanye under Froneman have shown impressive growth over the years, he isn’t afraid to take risks and has given a clear steer on future direction when you combine these interviews and facts.
They are clearly moving towards an acquisition, whether it is a North American Gold producer, or someone in the battery metals space, or PGM away from South Africa.
With their credit rating improved, finding money to fund an acquisition should be easier too.
Eurasia Mining ticks some boxes for them, especially with Monchetundra on the Kola peninsula. Closer to European markets and large car manufacturers, cheaper cost of extraction.
On the downside, it doesn’t have a lot of gold or as much nickel/copper as other assets.
But the chance to take a crown jewel right on the doorstep of Nornickel, showing Potanin he has a rival, well that might just be the extra ammunition Froneman needs to pull off the PGM deal of the century.
So who will they buy, will it be Eurasia Mining?