Sibanye Gold Limited completes US$500 million gold and palladium streaming agreement with Wheaton Precious Metals Corp

On July 25, 2018, Sibanye Gold Limited (“Sibanye”) completed a gold and palladium streaming transaction with Wheaton Precious Metals Corp., through its wholly-owned subsidiary Wheaton Precious Metals International Ltd. ("Wheaton International"). Pursuant to the terms of the precious metals purchase agreement, Wheaton International paid US$500 million in cash to Sibanye as an advance payment in connection with its purchase of: (i) an amount of gold equal to 100% of gold production from Sibanye’s Stillwater mining complex in Montana (the “Stillwater Assets”); and (ii) an amount of palladium equal to: 4.5% of palladium production from the Stillwater Assets until 375,000 ounces have been delivered to Wheaton International or certain other milestones are reached; thereafter, 2.25% of palladium production until the later of a further 175,000 ounces having been delivered to Wheaton International and the advance payment having been reduced to nil through metal deliveries; and subsequently, 1.0% of palladium production for the remaining life of the Stillwater Assets. In addition to the advance payment, Wheaton International will make ongoing payments to Sibanye equal to 18% of the spot gold or palladium price for each ounce delivered until the advance payment has been reduced to nil through metal deliveries. Thereafter, Sibanye will receive 22% of the spot gold or palladium price for each ounce delivered. These percentages may be subject to downward adjustment in certain circumstances depending on Sibanye’s overall level of leverage. The transaction optimizes Sibanye’s capital structure by diversifying its sources of funding and provides Sibanye with financing at a cost lower than what is otherwise currently available in international capital markets. The stream also crystallizes significant value from gold by-product production from the Stillwater Assets, which are focused primarily on the production of palladium and platinum. Fasken advised Sibanye with a deal team led by Brian Graves that also included Janet Howard and Laura Konkel (Mining/Commercial), John Torrey, Stuart Brotman and Dave Ferris (Banking), and Mitchell Thaw (Tax).