Published: February 13, 2018 |

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South African competition authorities have approved DRDGold’s R1.3bn ($110m) worth acquisition of precious metal miner Sibanye-Stillwater portions in the West Rand Tailings Retreatment Project (WRTRP) assets.

As per the terms of the proposed deal made in late November 2017, DRDGold will issue 38 percent of its shares to Sibanye-Stillwater in exchange of the selected assets.

Additionally, the companies have agreed to an option under which Sibanye-Stillwater can increase its stake in DRDGold to 50.1 percent during the 24 months after the implementation of the transaction.

In a joint statement, the companies said: “Should Sibanye-Stillwater elect to exercise the option within a period of 24 months from the date of the approval of the Competition Authorities, Sibanye-Stillwater will inform the Competition Authorities of its decision within 20 business days of exercising the option.”

Apart from that, if Sibanye-Stillwater opts to exercise the option after a period of 24 months from the approval date, then it will notify of its decision for consideration by the competition authorities as a merger.

The two mining companies said that execution of the proposed transaction will be conditional on the satisfaction or waiver of certain conditions like the approval of DRDGold shareholders.

At the time of the proposal, DRDGold CEO Niël Pretorius said that the acquisition and option are for forming a major surface mining partnership.

For DRDGold, the acquisition of the assets would result in an increase of around 92 percent in its gold reserves from 2.99moz to 5.75moz. The company expects the acquisition of surface assets to deliver cash flows in the near term, with low initial investment and to help future growth and development of WRTRP.

DRDGold plans to establish infrastructure and a plan designed to mine the entire resource and execute the same over two phases.

Located in the South African province of Gauteng, the combined WRTRP reserves are estimated to be 677.3mt, comprising the Driefontein, Kloof and Cooke tailings storage facilities (TSFs) along with an estimated gold and uranium mineral reserves of 6.2moz and 97.2mlb, respectively.

Source: Energy Business Review

To stop by DRDGold’s website, CLICK HERE

To stop by Sibayne Stillwater’s website, CLICK HERE

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