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Sibanye Gold to consider American listing along with more deals

Miner may look at New York or Toronto for primary listing.

Sibanye Gold will consider moving its primary listing to North America from Johannesburg to allow the miner to tap capital in that market and help fund future deals.

The company’s focus for now is on reducing debt following the $2.2 billion acquisition of US-based Stillwater Mining Co., ensuring operations perform well and “bedding down” the proposed takeover of Lonmin later this year, Chief Executive Officer Neal Froneman said in an interview Tuesday.

But that doesn’t mean Sibanye’s dealmaking days are over. Once the Lonmin transaction is wrapped up, Froneman said he’ll be looking for some more gold or silver assets, potentially in the US, where President Donald Trump’s policies have made investment more attractive, or elsewhere in the Americas.

“America has become a very friendly place from a mining point of view, that’s one good thing that Trump has done,” the CEO said on the sidelines of the African Mining Indaba in Cape Town. “We are already there, that could be another region for growth.”

The Lonmin purchase would result in platinum-group metals accounting for more than 70% of Sibanye’s production by 2021, according to a presentation Froneman gave earlier in the day. The company remains bullish on the outlook for gold, so will seek a more balanced split, but external growth options in South Africa are limited, the CEO said.

Sibanye would probably consider a primary listing in New York or Toronto to gain exposure to a wider set of investors, while maintaining its Johannesburg listing, he said.

Sibanye estimates it could reduce its ratio of net debt to earnings before interest, taxes, depreciation and amortization to 1 within about two years, depending on commodity prices, Froneman said earlier. That is the primary focus and would help boost the company’s market value and purchasing power, he said.

North America has good quality gold and silver assets “and I have no doubt that we will find value, that’s what we are good at,” he said.

Sibanye shares have declined 19% this year, more than the 8.5% drop in Johannesburg’s five-member FTSE/JSE Africa Gold Mining Index.

© 2018 Bloomberg

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