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Wind of change in govt – Froneman

Sibanye Gold CEO Neal Froneman

Sibanye Gold CEO Neal Froneman

Photo by Duane Daws

1st June 2016

By: Martin Creamer

Creamer Media Editor

  

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A positive wind of change was blowing through government in South Africa, Sibanye Gold CEO Neal Froneman said on Wednesday.

Sibanye, which is mining gold and platinum and taking steps to generate its own coal-fired power at prices below the going rate, is showing faith in platinum while looking to benefit from a broader revival of commodities.

“I’ve experienced a wind of change in government and a willingness to engage with business and listen to business,” Froneman told the Junior Indaba.

“I’m a lot more positive,” he added.

Sibanye has made no bones about its ambition to be the new South African mining champion that government and ruling African National Congress have been calling for.

“We’ve basically put up our hand to say we’d like to be this new South African mining champion,” Froneman reiterated on Wednesday, when he shared the stage with Pangea chairperson Rob Still and Petra Diamonds CEO Johan Dippenaar.

In 2013, Sibanye paid out R823-million in dividends and in 2014 just over R1-billion, which is being retained as the dividend target.

The company has achieved a share price appreciation since listing three years ago of R31.34 a share, with R3.24 a share paid out in dividends, which brings the total return to shareholders from listing to R34.58 a share – a 275% return on investment amounting to roughly R38-billion of value created.

That is a 55% yearly return when expressed in compound annual growth rate terms.

Sibanye earlier this year announced a capital expenditure of R3.9-billion ($250-million) in its gold assets this financial year.

The company has complained abroad that despite its superior performance, its shares are trading significantly lower than its contemporaries active elsewhere in the world owing to its South African domicile.

The company’s mineral reserves increased by 9% to 31-million ounces for the period ended December 31, 2015.

This was the third consecutive yearly increase in gold mineral reserves, despite a depletion of 1.6-million ounces from mining activities during 2015.

The operating profit of Sibanye Gold was maintained at R4-billion in the six months to December 31, when gold production was 822 100 oz or 25 571 kg.

Edited by Creamer Media Reporter

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