This article sparked some interest in me for many reasons listed at the end of this article.

South Africa’s Sibanye Gold to buy Stillwater Mining for $2.2-billion

TJ STRYDOM

JOHANNESBURG — Reuters

Published Friday, Dec. 09, 2016 6:48AM EST

South Africa’s Sibanye Gold took a major step outside its home market on Friday with a $2.2-billion deal to buy Stillwater Mining, the only U.S. miner of platinum and palladium.

If it goes through, the cash takeover will increase South Africa’s grip over global platinum and palladium supply and underline chief executive Neal Froneman’s determination to branch out of gold mining and South Africa.

However, the price Sibanye is offering to increase its own share of supplies of the precious metals is larger than its market value and the move triggered a sharp fall in its stock.

Sibanye said it would buy Stillwater, which operates in Montana and is the largest primary producer of platinum group metals (PMGs) outside South Africa and Russia, with a loan that it will re-finance with debt plus a rights issue of at least $750-million.

Froneman wants to cut the bullion miner’s dependence on gold and platinum in South Africa, where a volatile currency, labour strikes and strict government rules have weighed on Sibanye’s share price.

The deal, the second-biggest South African outbound M&A transaction so far this year, will make Sibanye the world’s third largest palladium producer and fourth largest platinum group metals miner, Froneman said.

Some analysts highlighted the risks as the platinum market sinks into oversupply.

But while demand from the diesel car sector for platinum, which is used in catalytic converters, is under pressure because of air pollution concerns, palladium used in hybrid petrol cars could see higher consumption and the market is in deficit.

Palladium reached its most expensive versus platinum since early 2002 last month as the U.S. election result sparked a surge in cyclical assets.

“It’s a tier one asset in palladium in the United States,” a source close to the deal said. “Normally in the U.S., there would be a 30-40 per cent premium. This is around 20 per cent.”

Sibanye said it would pay $18.00 per share in cash for Stillwater, a 23 per cent premium over Thursday’s closing price, which it was initially financing through a $2.675-billion loan arranged by HSBC and Citigroup.

“These are some of the lowest cost ounces in the world,” said Froneman, referring to Stillwater’s operations.

SHARES UNDER PRESSURE

Sibanye’s shares dropped 18 per cent to an 11-month low, but recovered slightly to close 15.3 per cent weaker at 24.01 rand, their biggest daily percentage drop on record.

By 1512 GMT, shares in Stillwater had surged 18.5 per cent to $17.41, a touch below the offer price.

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I noticed that I can't find any noront corporate presentations that originally existed...which highlighted the PGM's.

Where did they go? 

But at least I can present to you this video.. from 2012 of Wes Hanson speaking about the precious metals in the ROF

https://www.youtube.com/watch?v=1g23HjOz50E&sns=em

IT's a 33 minute presentation.

some interesting things to note:

the palladium prices were $446 per oz during Wes's video.....the price today is $768 per oz.

The ratio of Palladium to platinum in the rof is 3:1...much like the stillwater montana project.

Wes mentions the geological chemistry indicates the higher the chromite values the higher the precious metal values...

Stillwater's montana had chromite values of 22%....

Wes mentions 2.2 million ounces of precious metals have been found during the 2012 speech, enough for a stand alone mine if there was infrastructure....and now the palladium price has almost ..doubled.

and not to forget from the buyout of Stillwater mining...

palladium used in hybrid petrol cars could see higher consumption and the market is in deficit.