JOHANNESBURG, June 26 (Reuters) - South Africa's Sibanye-Stillwater SGLJ.J is to sell a 51% stake in its PGM-copper project in northern Ontario to Generation Mining Ltd GENM.CD in a deal to further develop the asset, the previous miner said on Wednesdaay.
Sibanye-Stillwater will receive 3.0 million Canadian dollars ($2.28 million) in upfront proceeds and 11 million shares at 0.2714 Canadian dollars per share in Generation Mining, equating to a 12.9% equity stake. In exchange, the Canadian miner will have a 51% stake in the project adjacent to Lake Superior and form a joint venture with Sibanye-Stillwater Canada.
Generation Mining, an exploration-focused company, will advance the project, which Sibanye acquired in May 2017, and will conclude further studies on its development, Sibanye-Stillwater said.
"We are pleased to enter into this agreement which unlocks immediate value for the Group and ensures appropriate investment and focus on the Marathon project, whilst we maintain our attention on our core US PGM operations," Sibanye-Stillwater Chief Executive Officer Neal Froneman said in the statement.
Sibanye expects the deal to be completed by mid-July.
Generation Mining, which will be the operator of the joint venture, will also have the right to earn an additional 29% interest within four years, by making total cash expenditures of at least 10 million Canadian dollars and delivering a preliminary economic assessment.
($1 = 1.3160 Canadian dollars)