Sibanye Gold to Buy Aquarius Platinum for $294 Million

By Alex MacDonald

LONDON--South Africa's largest gold miner Sibanye Gold Ltd. (SGL.JO) said Tuesday it has entered into an agreement backed by Aquarius Platinum Ltd.'s (AQPTY) board to buy all of the South Africa-focused platinum producer's shares for $294 million in cash.

For Sibayne, the transaction represents a continued effort to diversify its business into platinum, where it believes it has the ability to extract value over the long term despite depressed platinum prices in the near term. Sibayne announced on Sept. 9 plans to purchase the Rustenburg platinum mine operations from Anglo American PLC (AAL.LN) for at least 4.5 billion South African rand ($324 million).

Under the transaction, which is forecast to close in the first quarter of next year, Aquarius shareholders will receive $0.195 a share, or roughly 12.9 pence a share in cash, representing a 60% premium to Aquarius' closing share price of GBP0.08 on Monday, the trading day prior to the announcement.

Aquarius' shares in London jumped 46% to 11.75 pence share as of 0753 GMT while Sibanye's shares were up 4.5% at ZAR18.73.

Neal Froneman, chief executive of Sibanye said his company should be able to extract significant cost savings by combining Aquarius Platinum's Kroondal mine with the adjacent Rustenburg mine, thereby justifying the premium offered for Aquarius.

The Aquarius deal would also give Sibanye a foothold in Zimbabwe, which hosts the second largest platinum reserves in the world, via Aquarius' Mimosa mine.

"At higher platinum group of metal prices, these assets also offer a substantial increase in earnings and value for Sibanye shareholders," Mr. Froneman added.

-Write to Alex MacDonald at [e-mail]

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October 06, 2015 04:42 ET (08:42 GMT)

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