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NEWS-LEADING DEVELOPMENTS 4 E&MJ; • JANUARY 2017 www.e-mj.com Sibanye Gold Acquiring Stillwater Mining in $2.2B Cash Deal Sibanye Gold has agreed to acquire Stillwater Mining in a cash transaction valued at about $2.2 billion. Sibanye is headquartered in South Africa and is that nation's largest producer of gold from do- mestic mines. The company has recent- ly expanded into production of platinum group metals (PGM) through the acquisi- tion of mining assets. Stillwater is the only U.S. miner of platinum group metals, with two mines and a metallurgical processing complex in south-central Montana. Implementation of the transaction is subject to Stillwater and Sibanye share- holder approvals, as well as applicable regulatory approvals in the United States and South Africa. Sibanye has secured bridge financing of $2.7 billion provid- ed by Citigroup Global Markets Ltd. and HSBC Bank to fund the transaction and repay certain existing indebtedness of Stillwater. The companies expect the transaction to close in the second quarter of 2017. Assuming completion of the transac- tion, it will be Sibanye's third major ac- quisition of PGM assets in a little more than a year. In early October 2015, the company announced a $294 million cash offer for Aquarius Platinum, following up on an agreement announced a month earlier to acquire the Rustenburg mining operations of Anglo American Platinum (Amplats) on the Western Limb of South Africa's Bushveld Complex in a transac- tion valued at about $326 million. The Aquarius transaction closed April 12. The Rustenburg transaction was ef- fective November 1. Sibanye's announcement stated that the Stillwater transaction is strategically compelling in that it expands the compa- ny's PGM portfolio with Stillwater's high- grade reserves, which currently support more than 25 years of mine life, while also providing near-term, organic, low- cost growth through Stillwater's Blitz project. Furthermore, the extensive strike length of the mineralized J-M Reef, which hosts the Stillwater mines, suggests there may be upside exploration potential. Also, Stillwater's Columbus metallur- gical complex will provide Sibanye with a "mine-to-market" PGM business, while its sizeable recycling operations, which recover PGMs from spent catalytic con- verters and other industrial sources, will provide a steady margin and strategic market insight. "This transaction balances Sibanye's portfolio operationally and geographically with the addition of a world-class opera- tion in an attractive mining jurisdiction," said Sibanye CEO Neal Froneman. "We have been most impressed with the work- force at Stillwater and look forward to the opportunity of working with them. We believe that our two organizations have a strong cultural fit, with mutual priorities of employee health and safety, the envi- ronment, and the communities in which we operate." Rio Tinto Outlines New $5B Productivity Push Rio Tinto has committed to generating $5 billion of additional free cash flow over the next five years from a productivity drive unveiled in late November as part of its long-term strategy. In a presentation at an investor seminar in Sydney, Rio Tinto Chief Executive Jean-Sébastien Jacques underlined the strategy centered around a strong focus on safety, cash generation, a world-class portfolio, commitment to cap- ital discipline and the delivery of superior shareholder returns. Rio Tinto intends to raise productivity across its $50 billion portfolio of assets by focusing on operational excellence to generate superior shareholder returns throughout the cycle. This is expected to generate a total $5 billion of further free cash flow by the end of 2021 in addition to the cash cost reduction target of $2 billion across 2016 and 2017. "We have placed our assets at the heart of the business to drive improved perfor- mance and ensure our resilience through the cycle," Jacques said. "We are well on track to meet our target of $2 billion of cash cost savings by the end of next year. We are also taking advantage of any opportunity to generate value from mine through to market. Lifting the productiv- ity on our $50 billion asset base creates a low risk and highly attractive return. It will deliver an additional $5 billion of free cash flow over the next five years. "We are continuing to reshape our portfolio. Following our announcement yesterday that we will sell our Lochaber smelter in Scotland for $410 million, the total of agreed divestments in 2016 now stands at $1.3 billion," he said. The transaction includes Rio Tinto's interest in Alcan Aluminium UK Ltd., Stillwater Mining extracts platinum group metals from the J-M Reef in south-central Montana.