Sibanye Gold (JSE:SGL) (NYSE:SBGL), the biggest producer of the precious metal in South Africa, is actively considering more platinum acquisitions, as it seeks to take advantage of its strong current position and the weakness of most competitors.
In September, Sibanye acquired Anglo American Platinum’s (Amplats) Rustenburg mines for 4.5 billion rand ($330 million at the time). A few weeks later, it bought Aquarius Platinum for $294 million.
Platinum prices plummeted in 2015 but have recovered by about 19% since the beginning of the year.
The company’s chief executive, Neal Froneman, told Reuters that despite the collapse in platinum prices last year, he is confident that the sector has turned a corner.
“You are already seeing the platinum price move (up). In fact, I am concerned that we may even be too late (to take full advantage),” he said.
Froneman, who has been at the helm of Sibanye since it was spun out of Gold Fields in 2012, noted Sibanye would not make a move “just for the sake of making a move,” but rather would focus on acquiring operations that can enhance the miner’s cash flows.
The company, which will soon change its name to Sibanye Resources, is not only looking at buying platinum and gold assets, but has also expressed interest in coal, uranium and base metals.
Last month, Sibanye said it plans to spend R3.9 billion (about $260 million) this year boosting infrastructure at most of its assets. It also expects to invest R1.7 billion ($114 million) to develop its new Burnstone gold mine on the South Rand.
Comments
ddearborn
Hmmm
I heard rumor, which I am sure is completely unfounded, that a large percentage of Sibanye’s gold is derived from the purchase of Witts which had just months previous managed to “acquire” GBG’s crown jewel? You know the mine with over 6 Billion in the ground. The one that was literally at the point of production and then shut down. The court allowed this mine to be sold for a mere 10 million to Witts and then sold a few weeks after that for 100+ million to Sibanye (of course the entire process from start to finish took a lot longer- but you get the idea) Witts was run by a guy who had literally a few months earlier resigned as a board member of GBG. He left just before GBG went into bankruptcy. Most of which remains to this day. As I recall Sibanye was trading in the low single digits in those days. In fact, below what GBG was trading for 8 months before the “bankruptcy”. Come to think of it I don’t believe the Witts share holders were too thrilled about the sale……When it was all said and done GBG’s 2 mines with nearly 7 Billion in the
ground were sold for about 75 Million. The share holders and creditors
were left holding the bag to the tune of nearly 1/2 a Billion in debt.
Naturally people shouldn’t take any stock in rumors like these. Obviously these companies always operate totally above board. And I am sure that none of the officers of any of these companies did anything “wrong”.