Glencore grabs 10% of Stillwater Critical Minerals

Under a definitive agreement between the companies, Glencore will purchase more than $4.9-million worth of Stillwater units, each priced at 25¢, via a private placement. Each unit will consist of one common share and one share purchase warrant (the common share is priced at 20¢ at time of announcement).

Upon completion, Glencore will hold a 9.99% interest in Stillwater (on a non-diluted basis).

If it exercises all of its warrants, Glencore’s stake would rise to 15.9%, giving Stillwater approximately $5.2 million in additional funding. In addition, the global miner also has the right to participate in future financings to maintain its pro-rata position in Stillwater.

The company’s Stillwater West project is located in Montana’s Stillwater district, considered one of the world’s largest and highest-grade PGE (platinum group elements)-nickel-copper regions. It is adjacent to the high-grade PGE mines held by South Africa’s Sibanye-Stillwater with over 14 million oz. of past production.

The news propelled Stillwater shares 24% higher, gaining 4¢ each by mid-day in Toronto.

Commenting on the strategic investment by Glencore, Stillwater CEO Michael Rowley said: “This represents a major step forward for Stillwater as we advance our flagship Stillwater West project with the vision of becoming a large-scale source of battery and precious minerals that are now listed as critical in the U.S., and elsewhere.”

A mineral resource estimate update for Stillwater West earlier this year defined 1.6 billion lb. of nickel, copper and cobalt and 3.8 million oz. of palladium, platinum, rhodium and gold within a constrained model totalling 255 million tonnes at an average grade of 0.39% nickel equivalent.

The 2023 resource, which represents a 62% increase over the project’s inaugural estimate, is contained within five deposits in the 9-km central area of the project, all of which are open along strike and at depth.

According to the company, there are multi-kilometre-scale geophysical targets and metal-in-soil anomalies to indicate excellent expansion potential at Stillwater West. Untested anomalies and earlier stage targets extend across much of the 32-km-long property.

“There are very few projects globally, and especially located within the United States, that offer the combination of grade and scale in a producing district that we see at Stillwater West,” Rowley said.

“We are now booking drills and crews for our 2023 drill campaign with a focus on expansion of the high-grade nickel-copper sulphides identified in our past campaigns. We look forward to announcing further details in the coming weeks, along with the start of drilling,”

The Vancouver-based miner has a market capitalization of $33.5 million.