Sibanye Gold EPS to Drop at Least 20% as Shares in Issue Rise

Sibanye Gold Ltd. said so-called headline earnings per share will probably decline at least 20 percent in the first half because of its unbundling from Gold Fields Ltd. last year.

“This is as a result of an increase in the weighted average number of shares in issue,” Westonaria, South Africa-based Sibanye said in a statement today. The stock dropped 1.2 percent to 27.18 rand at 10:44 a.m. in Johannesburg.

Gold Fields spun off most of its South African operations to create Sibanye Gold last year in an effort to insulate it from the labor strikes that have plagued the country and create a dividend-paying company with mature assets. The number of Sibanye shares increased after the unbundling and after the company bought the Cooke mines from Gold One International Ltd.

The company plans to pay 25 percent to 35 percent of its so-called normalized earnings as dividends.

The Cooke acquisition, coupled with various methods of increasing mine life at its Driefontein, Kloof and Beatrix mines, allowed Sibanye to increase its production target 17 percent to 1.4 million ounces a year to 2020, the company said in a separate statement.

Sibanye has changed shift patterns, accessed mined out areas and cut costs to increase the amount of ore it can profitably mine.

The company reiterated its willingness to buy platinum mines following South Africa’s longest and most costly strike that’s been running since Jan. 23.

“Growth in the platinum sector is consistent with Sibanye’s strategy to grow the business in order to sustain its dividend profile and with its South Africa focus,” it said in the statement. “Opportunities will be carefully assessed and will have to meet all internal investment criteria.”

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