Precious metals miner Sibanye-Stillwater (JSE: SSW)(NYSE: SBSW) said Thursday that it will provide up to $A30 million (about $20m) to its takeover target Australia’s New Century Resources (ASX: NCZ), subject to certain conditions.
The emergency financial support comes as record levels of rainfall in North Queensland, Australia, resulted in flooding at the Century zinc mine and Karumba port facility in early March, forcing a halt of operations.
Activities are expected to remain suspended for a further two to three weeks, which is expected to hit production.
Earlier this month, New Century flagged output losses of 5,000 tonnes to 20,000 tonnes of zinc for the 2023 financial year as a result of the flooding. It also said the production shortfall was likely to impact short-term liquidity.
Sibanye-Stillwater launched in February an unsolicited takeover bid for New Century, offering to pay A$1.10 for each share it doesn’t already own.
Two weeks later, the firm secured a nearly 71% stake in New Century and it currently owns 87.64% of the company, up from its holding of 19.9% on February 21.
The Century zinc mine began open-pit production in 1999. Operations were placed on care and maintenance in 2016, following depletion of the original open pit reserves after producing and processing on average 475ktpa zinc and 50ktpa lead concentrate for 16 years.
New Century converted existing processing infrastructure to enable re-processing of legacy tailings waste dumps. The update was completed in August 2018 and the company has been re-processing tailings since.
The zinc mine is expected to run out of ore in 2027, with indicated and inferred resources holding an opportunity to extend operations beyond 2030.
New Century also has the Silver King lead-zinc-silver deposit in Queensland and the Mt Lyell copper mine in Tasmania.