Sibanye-Stillwater presells gold to Citibank
Precious metals mining company Sibanye-Stillwater announced this month that it had entered into an agreement to presell gold to Citibank for R1.75-billion ($125-million).
This follows the raising of a simi- lar amount on the sale of 5% of the issued shares of the company, which has R10-billion ($700- million) in undrawn facilities.
Sibanye-Stillwater CEO Neal Froneman said in a release that the gold prepayment and the equity raise were strategic and pre-emptive levers to enhance balance sheet flexibility, ensure appropriate positioning and render the company sufficiently robust to endure any exogenous challenges.
Itsgold mining operations have been affected by a five-month strike by the Association of Mineworkers and Construction Union members. Its domestic pla- tinum operations will enter wage negotiations towards midyear.
A total of 105 906 oz of gold has been presold to Citibank at a floor price of $1 200/oz and a cap price of $1 323/oz, and will be delivered in the last quarter of this year.
Sibanye-Stillwater expects to report gold production of 104 000 oz for the first quarter of this year, equating to 90% of what was planned under the strike conditions and 36% of the gold produced in the first quarter of 2018.
Its Kloof gold mine still has 15 years of life, parts of the Driefontein gold mine have five to ten years of remaining life, the Beatrix gold mine also has ten years of life, and South African platinum group metals mines have 30 to 40 years
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