Business

Sibanye offers R407-million for Wits Gold projects

Paul Burkhardt

The gold mining company is seeking Wits Gold's operations to extend the life of its nearby Beatrix mine and unlock value.

The transaction would be at least the third by Sibanye since splitting off from Gold Fields in February. (Gold Fields)

Sibanye Gold, a producer of the metal in South Africa, offered to buy Witwatersrand Consolidated Gold Resources for R407-million  in cash to acquire operations near its Beatrix site.

"Wits Gold owns significant exploration and project areas in the Wits Basin, containing approximately 157-million ounces of gold resources," Sibanye chief executive Neal Froneman said on Wednesday in a statement from both companies. Wits’ projects "offer an opportunity to extend the operating life of Beatrix and unlock significant value in the region."  

The transaction would be at least the third by Sibanye since splitting off from Gold Fields in February.

The Westonaria-based company [Sibanye] agreed in November to exchange two mining-right portions at Beatrix for two at Harmony Gold Mining Co.’s Joel operation. It also agreed in August to acquire a majority stake in Gold One International Ltd.’s Cooke complex.

Wits Gold rose 30% to R10.70 in Johannesburg trading, the biggest one-day gain in a year. Sibanye fell 2.1% to close at R12.42.

Wits Gold itself made an offer for a gold-mining operation in July, bidding for Great Basin Gold Ltd.’s Burnstone mine to obtain its first bullion-producing asset. The mine, with a 6.4 million-ounce reserve, is 90% complete after an $800-million investment, according to Wednesday’s statement. 

"Burnstone potentially secures an additional source of low-cost production, thereby enhancing Sibanye Gold’s existing production profile and shifting its operating profile toward shallower operations," Froneman said. – Bloomberg

Topics In This Section

Comments

blog comments powered by Disqus