JOHANNESBURG (miningweekly.com) – JSE-listed gold producer Sibanye Gold on Thursday declared a maiden interim dividend of 37c for the six months ended June, following the signing of a two-year wage agreement with three unions earlier this week. 

While the company had, in July, negotiated the terms of its bridge loan facilities, giving it the flexibility to declare an interim dividend of up to 25% of normalised earnings for the six months ended June, and a final dividend of 35% for the year to end December, it decided to delay the declaration of a dividend until the wage negotiations had been concluded.

Sibanye Gold’s board had elected to declare a dividend equivalent to 25% of normalised earnings, the maximum possible in terms of its current debt covenants and in keeping with the company’s policy of rewarding shareholders by paying regular, superior dividends, in addition to other value-adding activities, the company stated.

“We have consistently reiterated our policy of returning cash to shareholders through dividends and it is pleasing that Sibanye Gold has managed to do so in its first six months as an independent company," CEO Neal Froneman said in a statement on Thursday.

He added that the maiden dividend signalled the board and Sibanye’s lenders’ confidence in the company’s strategy and underpinned the consistent performance and cash generative ability of its South African operations.

“The annualised yield on this interim dividend is 6.5%, which positions Sibanye Gold as the top dividend yield company in the sector,” Froneman said.

Gold producers, under the auspices of the Chamber of Mines (CoM), on Tuesday, concluded a two-year wage agreement with the National Union of Mineworkers, Uasa and Solidarity. The agreement comprised an 8% increase for category four and five employees and rock-drill operators, and a 7.5% increase for all other employees, effective July 1, with employees receiving a further consumer price index-linked increase effective July 1, 2014.

The workers’ current monthly living-out allowance of R1 640 would increase to R2 000 in two R180 steps to take place on September 1, 2013 and September 1, 2014.

This agreement was expected to add, over the next 12 months, about R1.5-billion to the wage bill of the seven gold producers who had wage agreements for workers at their mines concluded by the CoM on their behalf.