Sibanye-Stillwater [JSE: SGL] has acquired a majority shareholding in DRDGold, in a deal the company described as creating an industry-leading surface mining partnership.
The company, which last year concluded a R5.17bn takeover of cash-strapped Lonmin, increased its shareholding in DRDGold from 38.05% to 50.1%, and the option was exercised on 8 January 2020, following approval by DRDGold shareholders in March 2018.
"By securing the majority holding in DRDGOLD, a leading surface mining and processing company, we continue to create value for all stakeholders in line with our vision," said Sibanye CEO Neal Froneman in a statement.
He said the company has a proven track record and has successfully implemented the Far West Rand Recoveries project, having reached its 500 000 tonne per month planned capacity for Phase 1.
The deal entails a subscription price for each option share at R6.46 per share, payable in cash, representing a 22.69% discount to the closing price of R8.35 per DRDGold share and a 10% discount to the 30-day volume weighted average traded price of DRDGold’s shares on the JSE.
The option shares will be listed on the JSE on 22 January and DRDGold will continue to be listed on the JSE with a secondary listing on the NYSE.
Formerly known as Sibanye Gold, after its founding in 2012, with only gold assets, the company has over the years been on massive acquisition trail locally and abroad, and in 2017 diversified into platinum mining following a merger with US PMG firm Stillwater.
In a production updated for the six months to end of December released on Friday, DRDGold, which in recent years abandoned underground mining operations to exploit surface gold tailings, announced that it produced slightly more than 3 tonnes of gold from its two operations, Ergo and Far West Gold Recoveries, tracking the higher end of its production guidance of 190 000 ounces for the year ending 30 June 2020.
The gold production of 3 037 kilograms for the period represents a 33% increase on the gold production of 2 280 kilograms for the six months ended 31 December 2018, in what is mainly attributed to increased contribution by Far West Gold Recoveries.