Sibanye changes name after Stillwater acquisition
GOLD and platinum miner Sibanye Gold, which has rebranded as Sibanye-Stillwater after the substantial $2.6-billion acquisition of US platinum group metals (PGM) producer Stillwater, still has an appetite for acquisitions in the gold sector.
Chief executive Neal Froneman said on Wednesday that Sibanye liked gold and it was not its intention to be a PGM company.
It made the Stillwater acquisition because PGMs were at an attractive point in the cycle. It had been difficult to find value-accretive gold transactions, but management was still looking.
Sibanye has grown from a market capitalisation of R10-billion in 2013 to a R44.9-billion after a series of acquisitions, including the Cooke shafts, Burnstone, Rustenburg Platinum, Aquarius Platinum and Stillwater.
Sibanye initially funded the Stillwater deal with a bridging loan and Stillwater’s own cash. It has refinanced this through a $1-billion rights issue and a $1.05-billion bond. It has still $361-million to refinance, which will be done before the end of 2017.
“Yes, our balance sheet at the moment is a restraint,” Froneman said. “If we were to do anything in the next 18 months it would have to be for equity, but our equity has not yet rerated sufficiently.”
In the six months to June, Sibanye’s revenue grew 31% to R19.2-billion compared with the same period in 2016 as the inclusion of PGM operations offset lower gold output.
After various one-off costs and impairments, a R1.1-billion provision for a settlement with silicosis claimants and higher finance costs and fees incurred on the Stillwater deal, its net loss was R4.8-billion, against R88-million profit previously.
Sibanye did not declare a cash dividend but will issue two capitalisation shares for every 100 held. Froneman said more capitalisation share issues were likely in the next couple of reporting periods as Sibanye focused on conserving cash for debt repayment. — BDLive