It’s roughly a month since Gold Fields made effective its bold unbundling, creating Sibanye Gold, a vehicle holding the group’s mature South African assets, except for South Deep, the 700 000 ounce/year mechanised mine.
So, what happened? Did one plus one equal three for Gold Fields and Sibanye Gold?
The answer is somewhat inconclusive, not helped by the fact that there was a major sell-down in gold-backed exchangetraded funds (ETFs) dating from the beginning of the year actually. It signalled broad antipathy to gold as an investment in any guise, especially as equities were recovering.
According to the Financial Times, 106 tons of gold sitting in ETFs were dumped in February, and more than 300 tons since the beginning of the year.
By mid-March, AngloGold Ashanti was 17% lower when compared to 11 February when Sibanye Gold was listed on the JSE. Harmony Gold fell 17% as well, while Gold Fields was some 24% lower. Sibanye Gold was largely unaffected by the selldown perhaps indicating, even at this early stage, it s shareholder base i s a bit different.
The fact is, however, it is early days. The gold shares have recovered somewhat, although it’s worth pointing out that adding together the share prices of Gold Fields and Sibanye Gold doesn’t equal the share price of Gold Fields before the unbundling. Although that’s a rudimentary way of looking at things, analysts say the reaction to Sibanye Gold has been somewhat negative.
“I don’t buy the argument that separating Gold Fields’ marginal assets from the group suddenly gives it new impetus. If you can liberate the mines separately, then