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A Bowl Of Cherries For Sibanye-Stillwater Shareholders


I think it is absolutely remarkable that Sibanye pulled off this acquisition of Lonmin, getting not only all the PGMs in the ground for cents on the dollar, but all of this vertical infrastructure re refining etc. An extraordinary deal I think, that will be made truly extraordinary if it proves to be at the bottom of the platinum market. But it already was done at a time when palladium has had a major up move over the past year... so there is lots of incremental palladium coming out of Lonmin, in addition to what is produced by Stillwater and SBGL's other platinum mines.

Sibanye is now the largest platinum miner, and according to Heraeus, as reported by Business Day, is the 2nd largest miner of platinum group metals in the world, supplying more than 3 million ounces of PGMs (20% of the world's supply) versus the 3.5 million ounces produced by Norilsk, which represents 25% of world production. Here is the link to the excellent article:

https://www.businesslive.co.za/bd/companies/mining/2019-06-10-sibanye-is-now-the-proud-owner-of-lonmin/  

Nothing is easy in the markets, though I do believe that the risk/reward for SBGL shareholders will prove to be that proverbial bowl of cherries, but all said with humility.


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