Sibanye benefits from gold gains

Sibanye Gold has benefited from the surging gold price in the first six months of the year.

Johannesburg - South Africa’s biggest bullion producer, Sibanye Gold, has benefited from the surging gold price in the first six months of the year.

In a statement issued on Thursday, the miner says it bolstered gold production and operating profit in the first half of the year.

The listed miner, which is on its way to becoming a big platinum player, notes in the six months to June, its operating profit grew 128 percent to R5.4 billion as gold production gained 5 percent to 23 229 kg.

This was off revenue of R14.7 billion, which grew 44 percent thanks to the depreciating rand and a better gold price.

CEO Neal Froneman says the company “delivered a strong financial result for the six months ended 30 June 2016, driven largely by a higher prevailing rand gold price, but underpinned by solid operational delivery from both the gold and platinum divisions, despite both being impacted by numerous unanticipated operational disruptions”.

The average rand gold price gained 31 percent during the first half.

Read also: Zwane, mines clash over safety

It platinum division, which was incorporated from April 12 after it bought out Aquarius Platinum’s operations, delivered record quarterly production of 92 773oz (4E), resulting in an attributable operating profit of R72 million.

Sibanye is also buying Amplats’ Rustenburg operations.

Its normalised earnings were R2.2 billion, R1.9 billion higher year-on-year.

“Considering the solid operating performance and constructive outlook for precious metals prices for the remainder of the year, the board has declared an interim dividend of 85 cents per share, equivalent to 36 percent of normalised earnings,” it says.

A year ago, the dividend was 10c a share.

Read also: Sibanye Gold’s earnings set to jump

However, the miner notes it had 8 fatalities in the first half of the year at its gold division. “Sibanye management and the board express their sincere condolences to the families and colleagues of the deceased employees.”

It notes it has taken urgent steps to address this regression in safety.

Sibanye will spend R3.6 billion to add more than 4 million ounces of additional gold production and will extend the gold division’s life of mine beyond 2040. It expects to maintain gold production at well over a million ounces a year for at least 12 more years.

IOL

For more on this topic, pick up a copy of Business Report tomorrow.