renjith krishnan

Johannesburg - Sibanye Gold, the South African producer spun off from Gold Fields, rose for a third day since it started trading in Johannesburg and the company said it’s still undervalued.

The stock advanced 1.8 percent to 14.98 rand at 2:40 pm, after gaining 8.5 percent yesterday.

Sibanye has climbed 13 percent since its opening trade of 13.20 rand on the Johannesburg stock exchange on February 11, the same day it listed shares in New York, increasing its market capitalisation to 10.9 billion rand ($1.2 billion).

“We still believe the fundamental value in the company is not yet fully reflected in the share price, but expect a period of volatility and some uncertainty for the next week or so,” James Wellsted, a company spokesman, said in an e-mailed response to questions.

Gold Fields on November 29 said it would place its deeper, more labour-intensive South African mines into Sibanye.

The company was partly reacting to strikes that began in the country’s platinum industry before spreading to other operations.

Sibanye shares are worth 10 rand to 15 rand, David Davis, a Johannesburg-based mining analyst at SBG Securities, said by phone February 11.

AngloGold Ashanti and Harmony Gold Mining also have mature assets and may follow a similar model to Gold Fields by unbundling, selling off or downsizing the operations to preserve value, Davis said.

Gold Fields rose 0.9 percent to 92.10 rand.

The stock closed at 105.80 rand on February 8, the last trading day before the spinoff.

Sibanye Gold’s American depository receipts will be distributed to Gold Fields ADR holders on February 20 and the Gold Fields ADRs will then trade without entitlement to Sibanye ADRs from February 21. - Bloomberg