Sibanye Bids $39 Million for Wits Gold to Secure BeatrixPaul Burkhardt
Sibanye Gold Ltd., a producer of the metal in South Africa, offered to buy Witwatersrand Consolidated Gold Resources Ltd. for 407 million rand ($39 million) in cash to acquire operations near its Beatrix site.
“Wits Gold owns significant exploration and project areas in the Wits Basin, containing approximately 157 million ounces of gold resources,” Sibanye Chief Executive Officer Neal Froneman said today in a statement from both companies. Wits’ projects “offer an opportunity to extend the operating life of Beatrix and unlock significant value in the region.”
The transaction would be at least the third by Sibanye since splitting off from Gold Fields Ltd. in February. The Westonaria-based company agreed in November to exchange two mining-right portions at Beatrix for two at Harmony Gold Mining Co.’s Joel operation. It also agreed in August to acquire a majority stake in Gold One International Ltd.’s Cooke complex.
Wits Gold rose 30 percent to 10.70 rand in Johannesburg trading, the biggest one-day gain in a year. Sibanye fell 2.1 percent to close at 12.42 rand.
Wits Gold itself made an offer for a gold-mining operation in July, bidding for Great Basin Gold Ltd.’s Burnstone mine to obtain its first bullion-producing asset. The mine, with a 6.4 million-ounce reserve, is 90 percent complete after an $800 million investment, according to today’s statement.
“Burnstone potentially secures an additional source of low-cost production, thereby enhancing Sibanye Gold’s existing production profile and shifting its operating profile toward shallower operations,” Froneman said.