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Sibanye Stillwater [JSE:SGL], the South Africa-based precious metals miner, is confident that the company will successfully close its acquisition of London-listed platinum miner Lonmin [LON:LMI], said Chief Executive Officer Neal Froneman on today’s deal announcement call.

The deal, which does not have a break or cancellation fee, is expected to be completed in the second half of 2018, he said. Should Sibanye Stillwater shareholders fail to approve the deal, the parties have reached an agreement to discuss an acquisition at asset-level, said Froneman. Nonetheless, Froneman noted that there is a high probability that the current deal will close.

The all-share deal would see Lonmin shareholders receive 0.967 new Sibanye shares for each Lonmin share and values Lonmin at some GBP 285m. Lonmin has committed to paying down its current debt facilities prior to closing. As a result, no debt will be added to the Sibanye balance sheet, said Froneman. The company remains committed to deleveraging its balance sheet and reducing net debt/EBITDA from 2.6x to 1x in the medium term, he added.

Key conditions precedent for the deal include shareholder approval, certain competition and regulatory approvals and no cancellation of any prospecting or mining right held by Lonmin.

Upon completion of the deal, Sibanye will decommission Lonmin’s older mine shafts that are coming to the end of their lives. This process could result in the retrenchment of about 12,600 employees over the next three years, said Froneman. However, he stressed that these anticipated job losses would not be merger-related.

Sibanye will also implement a revised mining plan for Lonmin’s operations, which will reduce the capital expenditure needed to maintain Lonmin’s production levels, said Froneman. The conservative mining plan is more suitable for current economic and platinum mining conditions, he said.

However, this revised mining plan could result in the potential retrenchment of a further 890 people, he said.