JSE- and NYSE-listed Sibanye-Stillwater has agreed to sell its Beatrix 4 shaft, in the Free State, to LSE-listed uranium exploration and development company Neo Energy Metals for R500-million in cash and shares.

The transaction includes the Beisa uranium project, located at the Beatrix 4 shaft. The project accesses the Beisa uranium reef through the upper sections of the Beatrix 4 shaft infrastructure.

“It’s quite a big deal and really allows us to consolidate in the region and look at becoming a producer,” Neo chairperson Jason Brewer told Mining Weekly.

Beatrix 4 shaft was placed on care and maintenance by Sibanye-Stillwater in 2023 primarily owing to declining gold reserves and a depressed uranium price, which has subsequently recovered, peaking at $106/lb in January. Sibanye believes that the outlook for the uranium market remains positive.

Although the Beisa uranium project is not a capital priority for Sibanye-Stillwater, the company said on December 9 that the transaction presented an opportunity for Neo Energy to develop the project, while allowing Sibanye-Stillwater to maintain exposure to uranium production.

The total transaction consideration of R500-million will comprise R250-million in cash and R250-million in newly issued shares in Neo Energy. Upon signing, this will equate to Sibanye-Stillwater owning a shareholding of about 40% in Neo Energy.

Sibanye-Stillwater will also receive a royalty on all uranium sold from the Beisa uranium project at varying rates, depending on the spot uranium price, with a maximum of $5/lb.

Under the terms of the agreement, Neo Energy will assume responsibility for all Beatrix 4 shaft rehabilitation and environmental liabilities.

“To have secured such a strategic asset, which consolidates our position in the Witwatersrand basin, the heart of South Africa’s uranium industry, is a major accomplishment and I believe truly sets us apart from many other uranium development companies and further sets us firmly on the path to being one of the next uranium production companies in the world,” Brewer said.

Sibanye-Stillwater said the transaction would immediately crystalise value for its shareholders and fast-track the possible development of the Beisa uranium project, without extending the group balance sheet.

“I believe this is a win-win transaction for both ours and Sibanye’s shareholders. We are acquiring substantial and strategic uranium resources and mine and processing plant assets, whilst Sibanye is securing a significant and strategic shareholding in us and is able to participate in our planned accelerated production and growth strategy at both the Beisa uranium project and our broader uranium portfolio in South Africa,” Brewer said.

Before the transaction can be concluded, several conditions need to be met. Neo Energy shareholders need to give their approval and a Rule 9 Waiver in terms of the City Code of Takeovers and Mergers needs to be acquired. So far, Neo Energy has secured 46% irrevocable support for the transaction from existing Neo Energy shareholders.

The transaction also requires regulatory approval in terms of the Mineral and Petroleum Resources Development Act for the transfer of Beatrix 4 shaft, inclusive of the Beisa uranium project, to Neo Energy. This is expected to be finalised by the fourth quarter of next year.

Both Neo Energy and Sibanye-Stillwater have expressed confidence that these conditions can be completed timeously.

"The sale of this strategic uranium asset is in line with Sibanye-Stillwater’s strategy to unlock value from our uranium assets. The sale of Beatrix 4 shaft and the Beisa uranium project realises immediate value for the group.

“Through our direct shareholding in Neo Energy, we retain exposure to the uranium price and the future development of the project, while prioritising allocation of capital from the group balance sheet for projects currently under development,” Sibanye-Stillwater CEO Neal Froneman said.

Neo Energy’s executive management team has already started work on updating the previous development studies for the Beisa uranium project and this work will continue in 2025, the company said.

This work includes updating the operating and capital cost aspects associated with the recommencement of operations at the Beisa uranium project. It also includes capital cost estimates and detailed timelines associated with any refurbishment and upgrade work to the Beatrix 4 shaft complex and the installation of a uranium processing plant alongside the existing gold plant at the Beatrix 4 Shaft complex.

Neo Energy said that it plans on releasing an updated development plan for the Beatrix uranium project in the second half of next year, which will target yearly production of between one-million and three-million pounds of uranium and up to 100 000 oz of gold over an initial 20-year life-of-mine (LoM).

The company will also review and update the additional development studies that incorporate operations extending into the Beisa North uranium project and which have the potential to extend the estimated LoM well beyond 20 years.

In addition, Neo Energy said it would look to materially expand its executive management team with the appointment of key positions to allow its planned acceleration and restart of mining and processing operations at Beisa.

These key appointments are planned to be announced from early in the first quarter of 2025.

“This acquisition gives Neo Energy underground mine and processing plant and associated infrastructure that would take years to construct. With this acquisition, we have not only consolidated our position in the Witwatersrand Basin with over 117-million pounds of uranium resources and 5.4-million ounces of gold, but we have now secured the necessary infrastructure to access and develop these resources and quickly bring the Beisa uranium project back into production,” Brewer said.