Sibanye-Stillwater to exchange $93 million surface gold for a stake in DRD GOLD

For a 38 percent stake in DRD GOLD worth 1.3 billion rand, an equivalent of $93 million, Sibanye-Stillwater plans to exchange some of its surface gold processing assets and tailings storage facilities (TSF).

With the stake, the South African gold mine in Westonaria, hopes to realise immediate value for underutilised surface infrastructure and TSFs, while it retains upside to the West Rand Tailings Retreatment Project and future growth in DRDGOLD.

In April, Sibanye Gold’s shareholder’s approved a $2.2 billion buyout of U.S.-based Stillwater Mining ( SWC.N), a giant stride that moved the company a step closer in boosting its platinum portfolio.

About 82 percent of Sibanye shareholders voted in favor of the still-water buyout deal which cemented South Africa’s grip on global supply of platinum and boost its diversification away from gold and South Africa.

Having battled negative growth in both production and price of gold earlier this year, After acquiring still-water Sibanye Gold decided to adopt the still-water to its name, hence it trading as Sibanye-still water.

Not only a 38 percent stake in DRD GOLD, the platinum and gold producer also stands a chance of buying more shares in DRDGOLD to attain a 50.1 percent stake within 24 months, the company said.

The assets to be exchanged include a mine at Driefontein 2 and 3 and the West Rand Tailings Retreatment Project as well as tailings dams in Driefontein 3 and 5, Kloof 1, Venterspost North and South and Libanon.

“We are excited about the inherent potential in the investment and look forward to partnering with DRDGOLD in growing an international, industry leading, surface retreatment business,” Sibanye-Stillwater CEO Neal Froneman said in a statement.

As at August, the mine dumps and tailings dams have probable gold mineral reserves of 3.8ounces and probable uranium reserves of 42.9 million pounds.

DRDGOLD shares were up 2 percent to 5.06 rand at 0815 GMT, while Sibanye-Stillwater was up 1.44 percent to 18.33 rand.