Sibanye Gold shed 2.04% yesterday to close at R15.82 per share, with gold mining shares still reeling from the release of the new Mining Charter late last week. Despite the decline, the group released a SENS confirming it had secured a two year wage agreement with the United Steel Workers of America, International Union, which is the representative union at its Stillwater operations in Montana, USA. In terms of the agreement there will be a 2% general wage increase for all job categories effective from 2 June 2017 to 1 January 2018, with a further 1% increase effective from 1 January 2018 to 1 June 2018 as well as a 2% increase during the next year.
Sibanye Gold shed 2.29%, despite the group confirming the $1bn rights issue was oversubscribed by nearly five times. This comes as the group attempts to raise capital to help fund the purchase of US platinum producer Stillwater Mining. It is part of Sibanye’s strategy to reduce exposure to the risks associated with South African mining operations. These risks were recently highlighted by the illegal strike at the group’s Cooke operations. The rights issue was offered at a 60% discount to its closing price on 17 May 2017.
Sibanye surged 6.84% on Friday, despite the group releasing a SENS announcement informing shareholders of the illegal strike at the group’s Cooke operations. The strike action comes after Sibanye implemented measures to combat illegal mining, whose activities threaten the sustainability of the Cooke operations. Despite communication with employees and agreement from NUM, employees at Cooke embarked on the unprotected strike prior to the nightshift on Tuesday, 6 June 2017. Even though an interdict has been granted, employees have not returned to work. Dismissal procedures have been implemented against the striking workers.
On Monday, Sibanye confirmed the group had secured a $2.65bn bridging loan in order to support the acquisition of the Stillwater Mining Company. Last December, Sibanye announced it would pay $2.2bn to purchase the US platinum and palladium miner. The deal will make Sibanye the world’s third largest palladium producer and the fourth largest platinum group metals miner. The loan syndication, which was underwritten by Citi and HSBC, was oversubscribed by $1bn. Sibanye CEO, Neal Froneman, noted the pleasing support for the transaction “from a significant number of leading banks, indicating their clear vote of confidence for the transaction”.
On Tuesday, Sibanye Gold ended sharply lower, down 6.42%, dragged down by a sector-wide decline and reports of violence at the group’s Cooke operation. In a SENS announcement, the group reported four of its employees were injured by unknown attackers in the early hours of the morning. Two of the four employees were seriously injured, following a union membership verification dispute. The membership verification process, which commenced two weeks ago, is still ongoing. Despite management engaging with unions and repeatedly explaining itself, the unions decided to embark on an illegal strike during the night shift on the 3rd of October 2016.
Sibanye Gold ended marginally lower on Wednesday, down 0.31%, despite an uptick in the gold index. Yesterday also brought news that SA’s Competition Tribunal had approved Sibanye’s proposed takeover of Aquarius Platinum and some of Anglo American Platinum’s Rustenburg mines. However, the approval comes with the condition that retrenchments must be limited to 260 staff over a two-year period. The two transactions, which are valued at R9.5bn, will see Sibanye Gold change its name to Sibanye Resources, with the group becoming a significant precious metals producer rather than just a gold miner.