Sibanye-Stillwater Limited has announced that it will provide $30 million in relief funds to New Century Resources Limited after the latter’s flagship mine in Queensland was forced to temporarily shut down operations due to high rainfall and heavy flooding.
Sibanye-Stillwater said New Century requested emergency financial support to get the mine operational again after rain and flooding cut off access to roads, impacting deliveries to the sites of production consumables.
New Century estimates that the suspension affected approximately 15,000–20,000 kilotonnes of zinc metal production.
Sibanye-Stillwater is currently engaged in takeover talks with New Century after Sibanye offered to acquire 100 per cent of the latter’s shares through an off-market takeover bid under the Australian Corporations Act and by on-market purchases at the takeover bid price of $1.1 per share.
The New Century board recommends shareholders to accept the offer as there are currently material uncertainties that may cast significant doubt on the company’s ability to continue its operations.
Sibanye-Stillwater labelled the New Century balance sheet as “under strain” due to potential funding requirements for growth projects in addition to the production shortfall that is likely to impact the company’s short-term liquidity position.
Despite the suspension of the Century mine, both companies are planning for the takeover to go ahead as planned.
In its announcement, Sibanye-Stillwater said it remains committed to working with New Century to ensure the on-site team’s safety and the operation’s safe restart.
Sibanye added that it would continue to work with New Century to ensure that it remains in a position to meet its financial obligations while it recovers from its unforeseen event, subject to certain conditions.
