Sibanye boosts DRDGold stake

SIBANYE-STILLWATER yesterday completed its 38.05 percent stake in DRDGold, equivalent to 265 million ordinary shares of the issued shares at R895.7 million.

Sibanye-Stillwater said it agreed to exchange selected surface gold-processing assets and tailing storage facilities (TSFs) for shares under the terms of the agreement that the two entered into in November last year.

The company said the agreement also allowed it to increase its shareholding in DRDGold in the next 24 months by exercising an option to buy more shares at a 10 percent discount to the 30-day volume weighted average price, which will give it up to 50.1 percent of the company.

Sibanye chief executive Neal Froneman said the group was excited about the partnership with DRDGold, which unlocks value for its underutilised surface infrastructure and TSFs, while retaining upside to the West Rand Tailings Retreatment Project (WRTRP) and future growth in DRDGold.

“Further value will be derived from the future development of this long-life surface reclamation project, which will benefit all of our stakeholders, particularly those in the region,” Froneman said.

Waiting

Sibanye is waiting for approval to merge with another mining giant, Lonmin.

The move was given the green light by Britain’s Competition and Markets Authority by unconditionally clearing Sibanye-Stillwater’s proposed takeover of Lonmin in June by stating that the mining merger would not require a secondphase investigation.

DRDGold also confirmed that its acquisition of Sibanye’s WRTRP assets had been finalised in an asset swop.

DRDGold’s chief executive, Niël Pretorius, said WRTRP was key to its growth strategy, increasing its reserves by 90 percent.

“Conclusion of the acquisition means that the way is clear for DRDGold to expedite phase one of its phased plan for the development of WRTRP, to be known going forward as Far West Gold Recoveries, a wholly owned subsidiary of DRDGold,” Pretorius said.

Phase one involved the upgrading of the Driefontein 2 plant to process tailings from the Driefontein 5 dump at a rate of between 400 000 and 600 000 tons a month and depositing the residue on the Driefontein 4 tailings dam.

“We have secured a R300m revolving credit facility from a South African financial institution for phase one, confirmed orders for most of the long lead items, and expect to be in production in the first quarter of calendar year 2019,” Pretorius said.

Sibanye-Stillwater rose 2.13 percent on the JSE yesterday to close at R8.17.