Sibanye-Stillwater has announced on Thursday that it has entered into a forward gold sale arrangement with Citibank, receiving a cash prepayment of US$125m (some R1.75bn at current exchange rates) for the future delivery of 105 906 ounces of gold during the fourth quarter of 2019.
This is subject to a floor price of US$1 200 per ounce and a cap price of US$1 323 per ounce.
The funding will be accounted for as deferred revenue and will go towards the repayment of revolving credit, Sibanye said.
The mining group earlier this week announced it had raised some R1.7bn through the offering of 108 million new ordinary shares.
On Thursday at 15.35, shares at Sibanye were at R13.77 per share, down 1.64% on the day.
Sibanye described itself as “well positioned” following the Citibank transaction, plus its recent equity raise. It now has liquidity of approximately R10bn in undrawn facilities, it said.
“The gold prepayment, in addition to the share placing announced earlier this week, are both strategic and pre-emptive levers to enhance our balance sheet flexibility and ensure that the Group is appropriately positioned and sufficiently robust to endure any exogenous challenges,” said CEO Neal Froneman.