Sibanye, Harmony Gold in mining pact

Picture: Boxer Ngwenya.

Picture: Boxer Ngwenya.

Published Nov 8, 2013

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Johannesburg - Sibanye Gold has entered into an agreement with Harmony Gold for the exchange and sale of mining rights portions, the company said on Friday.

The agreement was for certain mining rights portions of Sibanye's Beatrix operations in Free State for certain mining right portions of Harmony's Joel operation.

“Sibanye Gold will exchange two mining right portions at its Beatrix operation, which are not included in its current Life of Mine (LOM) profile, for two mining right portions at Harmony's Joel Operation, which will be more readily accessible from the Beatrix North and South Sections,” Sibanye said in a statement.

“The company will also sell a further two mining right portions at its Beatrix operation to Harmony for a royalty of three percent of net revenue derived from underground mining from these portions.”

This transaction would create value for both companies by allowing the early and optimal extraction of resources which was not currently in their respective LOM plans.

The cost of extracting these resources would be lower and the operating lives of the shafts would be extended, facilitating job creation in the region, Sibanye said.

Sibanye Gold chief executive Neal Froneman said: “Much has been said in the past about the potential to unlock value in the South African gold industry by breaking down the farm fences and I believe that there remains significant potential to create meaningful value for shareholders through similar transactions in future.” - Sapa

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