THURSDAY, 16 September 2021
ioneer Ltd (“ioneer” or the “Company”) (ASX: INR) is pleased to announce that the Company has reached an agreement to establish a joint venture (the “Joint Venture”) with Sibanye Stillwater Limited (“Sibanye-Stillwater”) to develop the flagship Rhyolite Ridge Lithium-Boron Project located in Nevada, USA (the “Project”). Under the terms of the agreement, Sibanye-Stillwater will contribute US$490 million for a 50% interest in the Joint Venture, with ioneer to maintain a 50% interest and retain operatorship. ioneer has also agreed to provide Sibanye-Stillwater with an option to participate in 50% of the North Basin1, upon the election of Sibanye-Stillwater to contribute up to an additional US$50 million, subject to certain terms and conditions.
In addition, the Company has entered into a subscription agreement with Sibanye-Stillwater for a strategic placement of US$70 million of ioneer ordinary shares (the “Sibanye-Stillwater Placement”). The placement shares will be issued to Sibanye-Stillwater at ioneer’s 10 day VWAP as of ASX market close on 15 September 2021. The Sibanye-Stillwater Placement is subject to shareholder approval at an Extraordinary General Meeting (“EGM”) of the Company’s shareholders to be held on 21 October 2021.
- Transformational strategic investment underpins the quality of Rhyolite Ridge and ioneer’s future as a major lithium and boron producer in the US
- Sibanye-Stillwater is a US$10 billion global mining company, with a proven track record in large-scale mining projects, and has committed to become an important player in the battery materials supply chain
- Formation of a joint venture operating committee comprised of ioneer and Sibanye-Stillwater representatives will leverage the deep skillsets of both partners to help deliver the Project
- Sibanye-Stillwater and ioneer will work collaboratively to secure debt financing for the Project on acceptable terms to ensure the Project is appropriately fully financed to production
- Proceeds from the Sibanye-Stillwater Placement will be used towards ioneer’s development capital requirement, medium term working capital needs and to progress long-lead items to minimise time to production
James Calaway, Executive Chairman of ioneer commented:
“We are extremely pleased to welcome Sibanye-Stillwater, a leading international
mining company, as a strategic partner in the Rhyolite Ridge Project. Sibanye-Stillwater, with its proven track record of developing and operating major mining
projects including operations in the United States, its commitment to developing
and maintaining an inclusive and sustainable culture, and its determination to
become a major force in the battery materials supply chain, is an excellent partner
for ioneer to jointly realize the promise of Rhyolite Ridge. With a strong strategic
partner in place, we can now look to finalise the debt financing for the Project and
move towards construction. We are confident in the alignment of our companies.
Our partnership with Sibanye-Stillwater will allow ioneer to unlock the tremendous,
long- term value of Rhyolite Ridge.”
Neal Froneman, CEO of Sibanye-Stillwater commented:
“This is Sibanye-Stillwater’s second lithium transaction and third transaction in the
battery metals sector, which will be essential for the transition to a cleaner future.
We are excited to build a long-term relationship with ioneer, who share our vision
of facilitating security of lithium supply to the North American markets. Rhyolite
Ridge is a world-class lithium project and we recognize its strategic value, with the
potential to become the largest lithium mine in the US. We look forward to working
collaboratively with the ioneer team and leveraging our complementary skills and
capabilities to ensure this strategically important, world-class project is delivered,
and materially contributes to reducing climate change.”
The key terms of the transaction are summarized below:
- ioneer will contribute the Project for a 50% interest in the newly created joint
venture limited liability company (“JVCo”) and Sibanye-Stillwater will provide
US$490 million in direct funding to the Project for 50% of the ordinary units in JVCo
- ioneer will be the operator of the Project, will enter into a management services
agreement with JVCo and will be responsible for the development and subsequent
operation of the Project
- The companies will establish a Technical Committee which will meet regularly to
oversee the operations of the Project and an ESG Committee which will collaborate
on key initiatives given the importance of ESG to both parties
- In addition, the companies have agreed to establish a Marketing Committee to
leverage each company’s existing relationships to maximise the value of JVCo’s
- Establishment of the Joint Venture and Sibanye-Stillwater’s funding commitment is
subject to certain terms and conditions precedent, including receipt of final permits,
commitments for remaining debt financing, and other customary approvals. ioneer
anticipates these conditions precedent to be satisfied during the during second half
of calendar year 2022
- The JVCo transaction is not subject to shareholder approval and is not conditional on
ioneer shareholders approving the placement of shares to Sibanye-Stillwater
under the Sibanye-Stillwater Placement
Sibanye-Stillwater Placement Details
Under the terms of the Sibanye-Stillwater Placement, Sibanye-Stillwater will subscribe for
145.9 million ordinary shares of ioneer at a price of A$0.655 (representing the 10-day
VWAP as of ASX close on 15 September 2021). The issue of shares under the Sibanye-Stillwater Placement would exceed the Company’s existing placement capacity under ASX Listing Rule 7.1 and therefore ioneer will be required to hold an EGM to approve the issue
of the shares to Sibanye-Stillwater. The EGM is expected to take place on 21 October
2021 with further details on the EGM to be included in the Notice of EGM that will be
despatched to shareholders and published on ASX in the coming days.
The directors unanimously recommend that shareholders at the EGM vote in favour of the
issue of shares to Sibanye-Stillwater, and intend to vote the ioneer shares they own and
control, or to which the director is appointed as proxy, in favour of such a resolution.
ioneer’s financial adviser is Goldman Sachs, and its legal advisers are Vinson & Elkins
(United States) and Ashurst (Australia).
Sibanye-Stillwater’s financial adviser is Macquarie Capital, and its legal adviser is Davis
Polk & Wardwell LLP (United States).
Sibanye-Stillwater is listed on the Johannesburg Stock Exchange and New York Stock
Exchange (JSE:SSW and NYSE:SBSW) and has a market capitalisation of US$10 billion.
Sibanye-Stillwater is one of the world’s largest primary producers of platinum, palladium
and rhodium and is also a top tier gold producer, ranking third globally on a goldequivalent basis. It also produces other PGMs, such as iridium and ruthenium, and chrome, copper and nickel as by-products.
In the United States, Sibanye-Stillwater currently operates three integrated facilities in
Montana: the Stillwater and East Boulder PGM mines (78% palladium and 22% platinum)
and the Columbus Metallurgical Complex which smelts material mined to produce PGMrich filter cake and recycles autocatalysts to recover PGMs.
Sibanye-Stillwater has continued to advance its global diversification strategy to
encompass the battery metal space by investing in a Finnish lithium hydroxide project in
February 2021. With the acquisition of a 30% shareholding in Keliber Oy, Sibanye-Stillwater now has a substantial interest in the Keliber Lithium Project currently in development phase in the Kaustinen region of Finland.
In July 2021, Sibanye-Stillwater also announced it had entered into an exclusive put option agreement with French mining
group Eramet SA for the acquisition of 100% of the Sandouville nickel hydrometallurgical
processing facility in Normandy, France. Together with the ioneer Placement, the Rhyolite
Ridge Joint Venture represents Sibanye-Stillwater’s third transaction in the battery
materials sector following the Sandouville nickel and Keliber lithium transactions in 2021.
The Sibanye-Stillwater Group focusses on embedding and excelling at environmental,
social and governance (ESG) matters. Their vision is to create superior value for all
stakeholders through the mining of mineral resources. The sustainable management of
their operations is integral to their ability to obtain and maintain their social license to
operate and generate long-term value for all stakeholders, including employees, the
communities where they operate, governments and shareholders.
This post reflects the official AXS press release found below, authorised by ioneer Managing Director Bernard Rowe:
Official Press Release