Global
Argentina:
Sibanye’s value-add
Sibanye-Stillwater’s exploration projects in Argentina and Canada add an
interesting new dimension to the company’s future development, writes Leon Louw.
[8] MINING MIRROR OCTOBER 2018
The 2016 drilling resulted in the discovery of a new copper-gold porphyry stock
south-east of the Quebrada de la Mina (QDM) gold mineral resource.
Stillwater acquired Altar in October
2011 when it bought Argentine-focused
exploration company Peregrine Metals,
whose flagship asset was Altar. Altar is
primarily a copper-gold porphyry deposit
with potential for discrete peripheral gold
system targets. In 2016, the company
had drilled 4 931m on eight holes plus
one-hole extension. The 2016 drilling
resulted in the discovery of a new
copper-gold porphyry stock south-east of
the Quebrada de la Mina (QDM) gold
mineral resource. Altar had 2 614 million
tonnes of mineral resource at 0.31%
copper and 0.07g/t gold (17.9 billion lbs
of copper and 6.3Moz of gold) as at 31
December 2017.
Part of the package
“When Sibanye acquired Stillwater in
the middle of last year, Altar was part of
the package. Sibanye-Stillwater didn’t go
looking for greenfield projects; that is not
our strategy,” Richard Stewart, executive
vice-president of business development at
Sibanye-Stillwater, tells Mining Mirror.
“When we got these two projects, we
had to ask ourselves how we would actually
realise value from their acquisition,”
Stewart adds. Sibanye-Stillwater had
three options: they could sell the project
to a third party; develop and finance the
project themselves; or they could partner
with an exploration-focused company. “The
chances of realising the full value upfront
by selling the project was slim, and we did
think there was real potential, therefore we
decided to rather look for a partner who
could develop the asset,” Stewart adds.
Enter Regulus, a Canadian company
focusing on developing exploration projects
in South America. Regulus had a proposal
that would take Altar up the value curve,
and Sibanye-Stillwater listened. Regulus
has a specialist team that consists mostly
of geologists and has been successful
W
hen South African mining
giant Sibanye Gold (Sibanye-
Stillwater) acquired American
PGM producer Stillwater Mining
Company (Stillwater) in May 2017, they
landed up with two greenfields exploration
projects — one a PGM project called
Marathon, located in Ontario, Canada, and
the other a copper/gold exploration project
called Altar, in Argentina.
At the time of the acquisition, Sibanye-
Stillwater didn’t ascribe much value to
these projects, as the company is not a
greenfield developer, and its strategy has
always been to acquire cash-producing
assets rather than to advance exploration
projects. But having Marathon and Altar
in the Sibanye-Stillwater stable adds value
and diversity to one of the major mining
success stories over the past few years.
Despite criticism and concern about its
high levels of debt, Sibanye-Stillwater
remains dynamic by contemplating how to
crystalise or create value from its portfolio
of assets.
The projects, however, give the
company a foothold in other mining
jurisdictions. It is early days yet, and
although Marathon doesn’t look as
exciting so far, Argentina might be a
springboard for venturing into the rest of
South America one day. By continuing to
seek ways to maximise long-term value
from these projects, Sibanye-Stillwater
has shown that it thinks long term.
Even if these projects prove to be
marginal, and even if Sibanye-Stillwater
is partnering to explore these projects,
as in the case with the Altar Project, it
is encouraging to know that exploration
is put on the map again by major
companies. In fact, the Altar Project,
which the company announced in June
2018, will now form part of a partnership
with Regulus Resources (Regulus). It
might hold some surprises and could
even add more value than Sibanye-
Stillwater expects.