Sibanye Gold and Harmony Exchange Some Mining Rights
Sibanye will also sell a further two mining right portions at its Beatrix operation to Harmony for a royalty of 3% of net revenue derived from underground mining from these portions.
The companies expect the transaction to create value by allowing the early and optimal extraction of resources currently not in their respective LOM plans. By utilizing available capacity at existing and adjacent infrastructure, the cost of extracting these resources will be lower and the operating lives of the shafts will be extended, facilitating job creation in the region.
Sibanye CEO Neil Froneman said, “Much has been said in the past about the potential to unlock value in the South African gold industry by breaking down the farm fences, and I believe that there remains significant potential to create meaningful value for shareholders through similar transactions in future.”