The offer would have a cash consideration of 11.55 rand per [DATA WGR:Wits Gold] share, a 44.4 per cent premium to Wits Gold’s closing share price on the Johannesburg Stock Exchange (JSE) on 9 December 2013.
“Over the past 12 months the global gold sector has been under severe pressure, driven primarily by weakness in the gold price which has fallen over 25 per cent, exacerbated by labour tensions in South Africa and broader concerns of international investors regarding the South African mining environment,” said Wits Gold.
“Provided that all conditions precedent to the proposed transaction are met, the proposed transaction will result in Sibanye Gold becoming the registered and beneficial owner of 100 per cent of the Wits Gold shares.”
[DATA SGL:Sibanye Gold] also intends to terminate the listing of the Wits Gold Shares on the JSE and Toronto Stock Exchange (TSX) as well as terminating the Wits Gold ADR programme, once the scheme has been implemented.
“Wits Gold owns significant exploration and project areas in the Wits Basin, containing approximately 157 million ounces of gold resources. More importantly, its advanced De Bron Merriespruit and Bloemhoek projects in the Southern Free State, are adjacent to Sibanye Gold’s Beatrix Operations, and offer an opportunity to extend the operating life of Beatrix and unlock significant value in the region,” said Neal Froneman, the chief executive of Sibanye Gold.
“This is consistent with Sibanye Gold’s strategy of extending its life of mine production profile in order to sustain its industry leading dividend yield in the long term. Leveraging Beatrix’s existing infrastructure should significantly reduce the projected capital expenditure, thereby enhancing the already attractive economic potential of these Southern Free State projects and realising meaningful value for shareholders.”
The terms and conditions were set out in an implementation agreement executed between the parties on 10 December 2013.