Strong value, with a caveat
Behind the scenes of Sibanye's oversubscribed rights issue
Rising palladium prices are good news for Sibanye Gold but the shares have been hit by mining charter concerns
With the surge in palladium prices over the past month, it looks as if Neal Froneman is once again successfully calling the market, this time for palladium rather than uranium. Twelve years ago Froneman launched a spree of mergers and acquisitions around opportunities in the uranium market, shortly before the uranium price peaked at US$135/pound in 2007. But investors who stayed in the sector had their fingers burnt as uranium subsequently fell out of favour. As CEO of Sibanye Gold, which listed in early 2013, Froneman has taken it from a pure gold to a gold and platinum producer with the acquisitions of Aquarius Platinum and Rustenburg Platinum. Late last year Sibanye agreed to buy US platinum group metals (PGM) producer Stillwater for $2.2bn (about R27bn), an audacious acqui sition for a company whose own market capitalisation was about R24bn at the time.Stillwater mined 545,300oz of PGMs last year, mostly palladium, at an all-in sustaining cost of $622/oz. It has proven and proba...
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