Tectonic Metals gets funding for gold exploration in Alaska
The company's Flat gold project is located 40 km north of the giant Donlin gold project.
South Africa’s Gold Fields (NYSE:GFI) the world’s 4th largest miner, announced Thursday it would remodel two of its more troubled operations into a new company, Sibanye Gold.
The new company will operate Kloof Driefontein Complex (KDC) and Beatrix gold mines, hotspots during the past months of labour unrest in the country’s mining sector.
The move was welcome by investors, who swiftly pushed the company’s shares up nearly 5% to 12.41 at 11:00 ET.
Gold Fields will retain the South Deep mine in South Africa, as well as its mining interests in other countries.
Neal Froneman, chief executive of Gold One International, will take the helm as chief executive of Sibanye Gold, while Nick Holland will remain chief executive of Gold Fields.
“Following the unbundling, Gold Fields will retain the balance of its current portfolio of assets, including the developing of South Deep Gold Mine located in South Africa,” Holland said in a presentation posted in the firm’s website.
“While some parts of the GFI Mining South Africa operations have been in production for as long as 70 years, these assets still have inherent quality and extensive resource and reserve potential,” Holland added.
“The separation will liberate Sibanye Gold into a fit-for-purpose, sustainable gold mining company best positioned to maximise long-term value for stakeholders.”
Froneman said Sibanye will be committed to maintaining profitable, stable and low cost operations that provide a high degree of leverage to the gold price. Following the transition, Gold Fields will focus on cash flow generation, more predictable dividend pay-outs and growth through expansion.
“The South Deep project is core to our expansion plans and we will continue to invest in this operation to secure the ramp-up to 700,000 ounces per year,” Holland said.
The company said the transaction does not require shareholder approval and the listings have been approved by the South African Reserve Bank. It also said there would be no job losses as a result of the spin-off.
Gold on the mend
Meanwhile, the yellow shiny metal recovered some of yesterday’s losses as traders came up with several theories on why the spot price dropped over 1% on Wednesday.
Spot gold climbed today $5.30 to $1,724.6 as the euro rallied against the dollar.
There was also more uplifting news coming from the U.S., as the government explores options to avoid the looming fiscal cliff and Republicans are reportedly willing to broker a deal to avoid a potential $600 million crunch in January.
