ABN - Sibanye Gold Ltd (JSE:SGL) said it might increase the size of a planned share to sale to US$1.3 billion, almost double the original figure for the sale, in order to fund the purchase of Stillwater Mining Co(NYSE:SWC).
The $2.2 billion acquisition of Stillwater, a Montana-based platinum and palladium mining firm, was announced in December 2016 and represents the largest international take over by a South African mining company since 2001.
However, Sibanye is now looking to divest in company shares equivalent to 60% of its total market value, to reduce the amount it has to borrow for the Stillwater takeover.
In a company statement, South Africa’s biggest gold producer said further shares may be sold after ‘taking into account the current strong rand environment, spot precious metals prices, and after feedback from certain shareholders’.
Sibanye expects the acquisition of Stillwater to be completed by the second quarter of this year.
The deal represents the firm’s attempt to expand out of the depleting South African gold sector and into platinum-group metals mining.
Sibanye produced 1.5 million ounces of gold in 2016 - around 2% lower than its target due to the planned closure of Cooke 4 shaft and power outages resulting from storms.