International gold major, Gold Fields will list its wholly owned unbundled gold company, Sibanye Gold on the JSE and on the NYSE on Monday 11 February 2013.

Gold Fields announced the formation of Sibanye Gold late last year, whose assets comprise the KDC complex, (including Kloof, Driefontein and Beatrix mines). The company has also appointed former Gold One International CEO, Neal Froneman as its CEO. Froneman will be in charge of ensuring the sustainability of the KDC complex as well as developing the potential joint venture memorandum of understanding with Gold One for the reclamation of surface tailings dams for gold and uranium.

Sibanye Gold has committed itself to both continuing and enhancing Gold Fields‘ sustainable development, labour relations, transformation and other BEE policies. “The ability to preserve employment in deep level gold mining by extending the life of mines will depend on effective co-operation between management, trade unions and the workforce,” says Froneman.

The creation of Sibanye Gold is the first of what could be many similar deals in the South African gold mining sector as a result of its historical situation and labour woes. Plagued with illegal strike action in 2012, the whole sector saw a significant reduction in revenue, which directly impacts on the amount of cash available to fund new projects internally. Unfortunately, while there is never a suitable time for strike action, its impact is most severe in the months leading up to the Christmas period when mines traditionally deliver their best production volumes. The ramifications are long lasting. Sibanye Gold was not exception

“Looking to the future, I expect to see more asset consolidation in the industry to help sustain and create new shareholder value. Collectively grouping assets together that can best deliver value cohesively makes sense for the entire mining industry,” says Rob McGill, TWP head of mining and gold portfolio manager.

In the six-month period to June 2012, Sibanye Gold produced 0.69 Moz of gold, which comprised 0.53 Moz from KDC and 0.16 Moz from Beatrix.

Sibanye Gold says it intends to selectively pursue synergistic opportunities for consolidation in the South African gold industry.

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