Gold Fields has announced the unbundling of its subsidiary Sibanye Gold Limited, creating a new gold mining company to be listed on the Johannesburg Stock Exchange.
Sibanye Gold is 100 percent owned by Gold Fields, and operates the company’s KDC and Beatrix mines – operations which bore the brunt of recent strike actions.
However, Gold Fields will retain all other assets, including the South Deep Gold mine currently under development near Johannesburg.
The newly formed mining outfit will be primarily listed on the Johannesburg Stock Exchange (JSE) from February 2013, subject JSE approval, while a secondary listing will follow on the New York Stock Exchange (NYSE).
It is hoped that by separating the entities the independent companies will be able to concentrate of focusing their development strategies going forward, as the South African mining sector attempts to pull out of a challenging period which saw companies incur extensive losses as a result of industry unrest.
Chief Executive Officer of Gold Fields Nick Holland commented on the unbundling, saying: “The separation will liberate Sibanye Gold into a fit-for-purpose, sustainable gold mining company best positioned to maximise long-term value for stakeholders.”
He added: “By unbundling the cash-generative KDC and Beatrix mines into Sibanye Gold, its cash flows can be utilised to extend the life of the mines and improve dividend payouts to shareholders.”
In a reference to the slow return to output, following a complete halt at the KDC and Beatrix mines due to labour strikes which caused infrastructure deterioration within the mines, Holland said: “The first priority, however, will be to achieve stable and safe production.”
The company also announced that Neil Froneman will become the new Chief Executive Officer at Sibanye, with Froneman outlining his strategy, saying: “We will selectively pursue synergistic opportunities for consolidation in the South African gold industry and, as a separately listed entity, will be able to fully utilise our free cash flows for the benefit of the Company and its stakeholders.”
He went on to add that Sibanye would be laying out significant resources to improve staff accommodation at its KDC and Beatrix mines until 2014, having already contributed 500 million rand ($57 million) of a pledged 700 million rand ($79.7 million) to be spent on accommodation improvements.