Share prices soar as Sibanye bids R4bn cash for Aquarius Platinum

JOHANNESBURG (miningweekly.com) – The share prices of both Aquarius Platinum and Sibanye Gold rose sharply on Tuesday after precious metals mining company Sibanye offered R4-billion cash for the entire issued share capital of Aquarius - a bid Aquarius's board has unanimously endorsed.

By close, Aquarius's share price had risen by 36.47% on the Johannesburg Stock Exchange to R2.32 a share and Sibanye's by 10.65% to R19.84 a share.

"The market clearly likes the deal," Aquarius Platinum CEO Jean Nel commented to Mining Weekly Online.

JSE-listed Sibanye expects to be able to unlock synergies of R800-million a year both on a standalone basis and particularly when combined with the neighbouring Rustenburg platinum group metals (PGMs) operations being acquired from Anglo American Platinum.

In South Africa, the Sydney-, London- and Johannesburg-listed Aquarius runs the Kroondal platinum mine and the Platinum Mile tailings retreatment operation, both near Rustenburg, and has a joint venture with Impala Platinum at Mimosa in Zimbabwe.

Both Kroondal and Mimosa are mechanised mines, which in the 12 months to June 30, produced 349 426 oz of four-element (4E) PGMs that included 193 422 oz of platinum.

“At higher PGM prices, these assets will substantially increase earnings for our shareholders,” Sibanye CEO Neal Froneman outlined at a media conference attended by Creamer Media’s Mining Weekly Online.

Froneman placed emphasis on the proposed deal fitting Sibanye’s strategy of acquiring assets that provide additional free cash flow to ensure that the company can continue paying dividends.

Aquarius has attributable 4E reserves of 5.5-million ounces and attributable 4E resources of 47.1-million ounces.

Subject to the transaction completing, Aquarius shareholders will receive R2.66 a share at Monday’s closing prices and spot exchange rates, representing a premium of 60.3% to Aquarius’s closing share price of £0.08.

Aquarius will appoint an independent expert to determine whether the transaction is fair and reasonable and the expert’s report will be distributed to Aquarius shareholders in November.

Sibanye currently owns and operates four underground and surface gold operations – the Cooke, Driefontein and Kloof operations in the West Wits and Beatrix in the Free State.