Sibanye Gold acquires Cooke operations from Gold One
Westonaria, 21 August 2013: In a transaction which reinforces Sibanye Gold Limited’s (JSE: SGL & NYSE: SBGL) position in the West Witwatersrand, Sibanye Gold today announced that it had reached agreement with Gold One International Limited (“Gold One”) to acquire its Cooke underground and surface operations. The consideration for the acquisition will be approximately 150,000,000 new Sibanye Gold ordinary shares, or such number of shares that represents 17% of Sibanye Gold’s issued share capital, on a fully diluted basis on the closing of the transaction (“the Proposed Transaction”).
Gold One has over the last 18 months been re-engineering the shallow Cooke Operations and over the next 5 years has developed detailed plans to produce on average 260,000 ounces of gold per annum and 570,000 pounds of uranium co-product per annum at an average cash cost of $1,000/oz. Gold Reserves of 2.8 million ounces and Resources of 22.65 million ounces, support a projected operating life of approximately 13 years. Sibanye Gold’s West Rand Tailings Re-treatment Project will also benefit from the tailings retreatment expertise of the Cooke Surface Operations, which are building up to approximately 400,000 tons per month of surface tailings by the end of 2013.
Gold One has invested in turning the Cooke underground operations around since January 2012, with cost and operating efficiency improvements being clearly visible. Significant operational synergies exist between Sibanye Gold’s current mines and the Cooke operations resulting in considerable upside potential.
Neal Froneman, CEO of Sibanye Gold comments: "This is a cash flow accretive transaction for Sibanye Gold that will impact positively on projected cash flow per share."
The transaction also positions Sibanye Gold to reclaim the 6.4 million ounces of gold and 55 million pounds of uranium co-product contained in historical West Rand tailings deposits owned by the parties. These resources will be capable of supporting additional gold production of up to 300,000 ounces of gold per annum with uranium as a co-product.
Froneman added: “The addition of the Cooke Operations to the Sibanye Gold portfolio could potentially create the largest surface retreatment project in South Africa and provides Sibanye
Gold shareholders with exposure to a low cost gold and uranium project. The West Rand Tailings Retreatment Project also presents a unique, economically viable opportunity to clean up numerous environmental legacies in the region.”
In terms of the agreement reached between the companies, Sibanye Gold proposes, subject to various conditions precedent, to acquire Gold One’s 74% shareholding in, and the Gold One Group claims against, Newshelf 1114 (Pty) Limited (“Newshelf”). Newshelf holds a 100% shareholding in Rand Uranium Limited (“RUL”) and, after the completion of an internal restructuring, will hold 100% of Ezulwini Mining Company Limited (“EMC”), the activities of which companies include the Cooke Operations.
Froneman concluded: “Gold One and its 90% shareholder, the Chinese BCX Consortium, will be an anchor shareholder with a long term investment horizon, which will support Sibanye Gold’s long term growth strategy.”
James Wellsted Head of Corporate Affairs Sibanye Gold Limited +27 83 453 4014 firstname.lastname@example.org
Note to editors:
Sibanye Gold is a proudly South African gold mining company comprising three principal operations, namely Kloof and Driefontein in the West Wits area and Beatrix in the Free State. Sibanye Gold is one of the largest gold producers in South Africa and among the top 10 largest gold producers globally.
The BCX Consortium comprises of Baiyin Non-Ferrous Group Co. Limited, China-Africa Development Fund, Long March Capital and CITIC Kingview Capital Management Co. Limited.
Sibanye Gold Form 20-f filing
Sibanye Gold filed its annual report on Form 20-F for the year ended 31 December 2012 with the U.S. Securities and Exchange Commission (SEC) on 26 April 2013. The document can be accessed on the SEC's EDGAR system or the Sibanye Gold’s website at http://www.sibanyegold.co.za.
Sibanye Gold shareholders (including holders of Sibanye Gold’s American Depositary Receipts) may also receive hard copies of the Form 20-F Annual Report, free of charge, upon request. For a copy of the report, please contact James Wellsted, tel: +27 11 278 9656 or email: email@example.com.