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Sibanye Stillwater Limited (SBSW)

NYSE - NYSE Delayed Price. Currency in USD
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14.54+0.50 (+3.56%)
At close: 4:00PM EDT
14.54 0.00 (0.00%)
After hours: 05:39PM EDT
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  • S
    Steve
    From Desert Line Capital's latest investor letter. There is more, but I cannot post it here due to the formatting:

    "Sibanye Stillwater is one of the largest PGM (platinum group metal) producers in the world
    with major operations in South Africa and the U.S. They also have gold mining operations in
    SA. There is significant upside optionality in their growing lithium, nickel, and uranium
    activities, which are not yet contributing to earnings and not recognized by the market in
    SSW’s price.

    During the third quarter, the company reported record earnings for the interim period ended
    June 2021. TTM EPS was R12.03, placing the stock on a PE multiple of 4. Cash generation was
    excellent, and the company is effectively debt free with surplus net cash. The management
    team continues to stay disciplined in their capital allocation, using cash profits to settle debt,
    repurchase 5% of the company’s shares at a discount, pay a healthy dividend (~11% annualized
    dividend yield), and expand their battery metals strategy with lithium and nickel acquisitions."

    PGM prices are down from their highs on the back of chip shortages and auto manufacturing
    concerns. I believe these demand shocks to be transient, and the long-term outlook remains
    buoyant. There is much pent-up demand for vehicles, and, combined with increasing
    inflationary expectations, auto manufacturing will likely overshoot once chip shortages are
    resolved. Climate change is becoming an increasingly prominent theme globally. I believe
    internal combustion engines are going to be around for longer than most expect. Battery
    electric vehicles (BEVs) require huge amounts of lithium, copper, nickel, and cobalt, and there
    is simply not enough of the stuff around to support the projected ramp-up in BEV production.
    PGMs are key to cleaner energy, and demand for some of the PGMs will continue to outstrip
    supply as limited capex has been allocated towards increased production in recent years. So,
    it will take some time for production to react to higher prices.

    While substitution will take place between palladium and platinum in catalytic converters over
    time, the inability to substitute the minor metals, the most important of which is rhodium,
    ensures that the PGM basket price will probably remain robust for several more years."

    Sibanye Stillwater is a well-managed, profitable business with excellent capital allocation
    discipline. I view it as a dividend-paying call option on the normalization of auto
    manufacturing, climate change initiatives, and inflation. The company’s lithium, nickel, and
    uranium activities also position them to participate in the continued drive towards “cleaner”
    energy, and so far, these options are not priced in at all.
  • I
    Indy
    OPERATING UPDATE
    QUARTER ENDED 30 SEPTEMBER 2021

    Johannesburg, 28 October 2021: Sibanye Stillwater Limited (Sibanye-Stillwater or the Group) (JSE: SSW and NYSE: SBSW) is pleased to provide an operating update for the quarter ended 30 September 2021. Financial results are only provided on a six-monthly basis.

    SALIENT FEATURES - QUARTER ENDED 30 SEPTEMBER 2021 (Q3 2021) COMPARED TO QUARTER ENDED 30 SEPTEMBER 2020 (Q3 2020)

    Solid operational results confirm the stabilisation of operations at pre-COVID-19 levels

    Robust financial performance - Group adjusted EBITDA of R14.9 billion (US$1 billion)

    Successful vaccine rollout to date - approximately 78% of employees in South Africa vaccinated

    Capital allocation discipline - early redemption of 2022 notes and 5% share buy-back successfully concluded

    Significant progress on green metals strategy - strategic acquisitions announced, shaping a meaningful initial footprint

    Precious metal prices stabilizing - outlook positive
  • P
    Peter
    In case you were curious, impact on revenue from nickel and copper acquisitions is approximately 400 million USD per year at today's prices. Both projects are already running so impact will be immediate at closing (4th quarter '21).
  • P
    Peter
    Recent Ni & Cu acquisitions will result in no dilution of shares. Management has stated this in the past and it looks like they're keeping their word. SBSW will find deal with internally available cash. No debt. No new shares. Checkout their website for details.
  • I
    Indy
    "Cautionary Announcement" from Sibanye Stillwater, Johannesburg 25 October 2021: Sibanye-Stillwater (JSE: SSW and NYSE: SBSW) hereby advises its shareholders that the Company has entered into negotiations with affiliates of funds advised by Appian Capital Advisory LLP, regarding the acquisition of both the Santa Rita nickel and the Serrote copper mines, located in Brazil. If these negotiations are successfully concluded, they may have a material effect on the price of the company’s securities. Accordingly, shareholders of Sibanye-Stillwater are advised to exercise caution when dealing in the Company’s securities until a full announcement is made.
  • I
    Indy
    Sibanye-Stillwater to acquire the Santa Rita nickel mine and the Serrote copper mine in Brazil and a withdrawal of cautionary: Johannesburg, 26 October 2021, Sibanye-Stillwater (JSE: SSW and NYSE: SBSW) is pleased to announce that it has signed definitive purchase and sale agreements (Transaction Agreements) with affiliates of funds advised by Appian Capital Advisory LLP (Appian) to purchase 100% of both the Santa Rita nickel mine (Santa Rita) and the Serrote copper mine (Serrote), located in Brazil, for a cash consideration of US$1.0 billion and a 5.0% net smelter return (NSR) royalty over potential future underground production at Santa Rita (the Transaction).

    Commenting on the Transaction, Neal Froneman, CEO of Sibanye-Stillwater said: “The Transaction is a significant additional step in Sibanye-Stillwater’s ongoing strategy to position the business for continued value creation during our transition into a climate change resilient business, and follows and complements the Keliber, Sandouville and Rhyolite Ridge transactions announced earlier this year1. The Transaction represents a unique opportunity for Sibanye-Stillwater to acquire significantly pre-developed and pre-capitalised, low-cost, producing nickel and copper assets with strong ESG credentials, which will continue to be managed by a high-quality team with a wealth of operating experience in Brazil.”
    Transaction Rationale: In line with Sibanye-Stillwater’s strategy to build an operating portfolio of green metals and related technologies, this Transaction is a further meaningful step - adding two low-cost, producing assets to its green metals portfolio. Both assets have been substantially pre-capitalised and as a result the Transaction will be immediately accretive to Sibanye-Stillwater’s cash flow and earnings.

    Santa Rita is one of the largest nickel-cobalt sulphide open pit mines in the world, located in the State of Bahia, Brazil and includes a preliminary economic assessment (PEA)-stage underground project. The mine produces a sulphide concentrate suitable for downstream processing to produce battery precursors and has outstanding infrastructure resulting from significant historical investment. Serrote is a producing open pit copper mine, currently in ramp up, located in the State of Alagoas, Brazil and developed at a cost of US$195 million.

    Santa Rita and Serrote are both low-cost and low carbon intensity operations with strong cultural alignment with Sibanye-Stillwater’s focus on health and safety, the environment and local communities. In addition, each asset has a well-defined pipeline of organic growth opportunities including mine optimisation, on site resource potential and regional exploration opportunities.

    The Transaction represents an attractive opportunity to acquire two pre-developed and cash flow generating open pit nickel and copper mines. In addition to generating a strong return on investment based on current operations, there is substantial long-term upside from the potential development of the underground mine at Santa Rita, with this project to be further studied and evaluated over the next 18 months.

    The Brazilian based Santa Rita and Serrote management teams are led by CEO Paulo Castellari (previously CEO of Mubadala’s bauxite operation in Guinea and CEO of Anglo American’s phosphates and niobium business in Brazil). The teams, which have a well-established track record of operating in Brazil and have been responsible for successfully developing and optimising the assets, have committed to joining Sibanye-Stillwater ensuring continuity of expertise, knowledge, and proven mining experience. Santa Rita and Serrote, alongside the world-class management team, represent a strong platform for Sibanye-Stillwater to explore further growth opportunities in Brazil and throughout the Latin America region.
    ...

    Financial Information: The combined net asset value of Santa Rita and Serrote, in the accounts, as at the year ended December 2020 is US$258 million. The Combined profit / (loss) attributable to Santa Rita and Serrote, in the accounts, for the year ended December 2020 is US$(143) million.

    Implementation of the Transaction: Implementation of the Transaction is expected in the fourth quarter of 2021, being the effective date and will be funded from internal reserves.

    Conditions Precedent: The Transaction is both subject to and conditional on the fulfilment of conditions precedent customary for a transaction of this nature, including approval of the Financial Surveillance Department of the South African Reserve Bank.

    Categorisation of the Transaction: The Transaction constitutes a Category 2 transaction for Sibanye-Stillwater in terms of Section 9 of the JSE Limited Listing Requirements and accordingly no Sibanye-Stillwater shareholder approval is required.

    Withdrawal of Cautionary: Shareholders are further advised that the cautionary is accordingly withdrawn following the publication of this announcement.
  • M
    Miguel
    how about the political situation? is it why this is so undervalued? and keeps on dipping? political takeovers, nationalization? is it a safe company to invest a sizable chunk of a portfolio?
  • M
    Mike
    By the words "If these negotiations are successfully concluded, they may have a material effect on the price of the company’s securities. " ARE they trying to say "we might make a total F up and lose the company money" . What type of company would say that ??. OR are they trying to say that they might make a really really good deal and the Shares rise . I cannot quite understand what their intention is.

    What I can say though is that IONEER stock has just fallen at same time. They are meant to be investing
    USD 500M in Ioneer at some point.
  • D
    Decoder
    I was scanning the PGM news yesterday and came across an article about an improved Pt catalyst technology made by Chinese scientists. Search for “Sulfur-anchoring synthesis” and you’ll find an abstract. There might be similar articles as well. The end of the abstract gives an “activity” of about an Ampere and a half at 0.9 Volts (these units should be capitalized and it’s one of my standard gripes when they aren’t) per milligram of Pt. You should be stunned by this as shareholders of SBSW. A milligram of Pt costs just over one dollar. The article’s focus is on PEM (hydrogen) fuel cells which typically stack cells to create a higher voltage to efficiently drive motors. Recent fuel cells use about one ounce of Pt (total) so this new technique has obvious benefits. Practical cells will be sized for higher current (more Pt used, of course) as well as being designed to suit specific applications.
    Five years of research, over a dozen scientists, all Chinese (mostly at Hefei), and the journal Science all support this as being significant.
    As I extrapolate this, among other items, I see that China may want to buy Sibanye-Stillwater next year. They do that sort of thing, you know, especially in Africa. This would explain the long buy-in dip since June, the quick rise & fall of PGM prices in recent days, the continual beating down of the share price, and many other items that I won’t disclose.
    I haven’t mentioned the date of that abstract: Yesterday, October 22, 2021
  • T
    Tom
    when you look at past history of this company everything that touches turns out very well this will be no exception they are buying assets below market value and they will do the necessary alterations to make these very profitable this company will be the one stop shopping for the new mandated by the government green energy deal they’re forward thinking they are way ahead of the curve these assets are going to go up tremendously in value over the next several years timing is everything and this management team is second to none.
  • N
    Naresh
    Mining guru Peter Major is the go to man for anything and everything resource-related. This week, diversified precious metals producer Sibanye-Stillwater con...
    Mining guru Peter Major is the go to man for anything and everything resource-related. This week, diversified precious metals producer Sibanye-Stillwater con...
    www.youtube.com
  • s
    serdar
    Someone is shaking the retail investors..even good news still makes red the cheapest stock in WS
  • D
    Decoder
    Now, late in the trading session - 3:18 EDT, the computer trading systems are waiting for shares to be offered so their earlier short trades can be covered. I don't think it suggests anything for tomorrow as they can do this indefinitely. In the old days, this was called painting the tape, but no one is paying attention to these extended, diffuse schemes. Aside from trading results one might have, it's elegant and very well executed.
  • G
    Guy
    This will be at $30 per share in a year or less. Sit tight
  • P
    Peter
    I'm in the industry. PGM recycling is down. Large collectors are hoarding their supplies awaiting better PGM prices. PGM markets will be tight. There may be some adjustment (Pt will go up, Pd down though due to substitutions).
  • D
    Decoder
    Today's SP drop is coincident with the drop in Pd suggesting very strongly that there is a core of computer trading sites for this stock all doing essentially the same algorithm. The disorganized set of individual entities (mostly regular traders) cannot do such a thing - they are just prey that can't move as fast. Typical African animal hunting style? Noticeable but impressive nonetheless.
    PGM prices call for only a 41 cent drop at the moment. SP down 63 cents (heading for the recent gap?).
  • S
    Skradux
    Ni&Cu mine acquisition might pay back already within 4-5 years if current prices hold. However, most likely basic material price inflation will take place. If we assume Ni complex produce 16,5 kT annually and similarly 20kT annually of copper. with current market price around 20 kUSD/T Ni and 10 kUSD/T Cu it would make around less say 10% discount to clients it would bring around 480-500 mUSD in revenues annually and around half of that in income. Similar to Stillwater deal in US which turned out to me very succesful!
  • N
    Naresh
    Sibanye-Stillwater has entered into a $1BN deal to acquire two Brazilian mines as part of the firm’s strategy to build a portfolio of metals critical to elec...
    Sibanye-Stillwater has entered into a $1BN deal to acquire two Brazilian mines as part of the firm’s strategy to build a portfolio of metals critical to elec...
    www.youtube.com
  • m
    mike1
    They diversified which is a good business idea .
    I added more shares while the shares are cheap .