JOHANNESBURG – Neal Froneman has taken another step towards transforming Sibanye into a significant producer of Platinum Group Metals (PGM’s) with the announcement on the 6th of October to purchase the entire issued share capital of Aquarius Platinum. This could represent yet another step in Sibanye’s ambitions of becoming South Africa’s mining champion.
The offer has been made at $0.195/share, which based on yesterday’s rand/dollar exchange rate translates to R2.66/share. The board of Aquarius has unanimously endorsed the offer.
The transaction will allow Sibanye to consolidate the operations of Aquarius – which include the Kroondal and Mimosa mines – with those of the Rustenburg operations it recently acquired from Anglo American Platinum.
As per the SENS announcement, ” Synergies have been quantified in the following areas:
- Efficiency and cost savings derived from rationalisation of shared operational and overhead
cost structures, best practice benchmarking between operations and economies of scale across
the combined operations;
- Optimisation of surface infrastructure; and
- Removal of traditional lease boundaries, resulting in optimal use of existing underground
infrastructure and improved operational planning.”
The transaction will also provide an entry point for Sibanye into Zimbabwe, through Aquarius’ Mimosa mine. To year-end June, Aquarius produced 349 thousand ounces (Koz) of PGM’s.
The offer values Aquarius at $294m (R4bn) which represents a 56% premium over the closing price of the shares on the 5th of October. For Sibanye shareholders, the R4bn acquisition price – after cash on the balance sheet of Aquarius is subtracted (roughly R1bn) – means Sibanye is buying the operations of Aquarius for R3bn.
Sibanye Gold has no plans to cut jobs and will keep its dividend policy unchanged after its offer to acquire Aquarius Platinum, its chief executive said on Tuesday.
Sibanye Chief Executive Neal Froneman told a presentation in Johannesburg that the company had no intention of buying the assets of its rival Harmony Gold.
In September Sibanye purchased Anglo American’s South African platinum assets for $331 million.