Officials at South Africa’s Sibanye Gold have offered junior explorer and rival Witwatersrand Consolidated Gold Resources Ltd. $39 million in cash to acquire exploration and project area operations near its Beatrix site.
“Wits Gold owns areas containing approximately 157 million oz of gold resources,” Sibanye CEO Neal Froneman said in a dual-company statement. Wits’ projects, he added, “offer an opportunity to extend the life of Beatrix and unlock value in the region.”
The transaction would be the third by Sibanye since splitting off from Gold Fields in Q1 2013. The Westonaria-based producer agreed last month to exchange two mining-right portions at Beatrix for two at Harmony Gold Mining Co.’s Joel operation; Sibanye further agreed in August to majority interest acquisition in Gold One International Ltd.’s Cooke project.
Wits Gold officials said the bullion sector in sub-Saharan Africa’s No. 1 economy had suffered over 2013 under a precipitous drop in global demand, labor tensions in an election year and broad-based investor concern about the country’s overall business.
Wits Gold itself made an offer for a gold-mining operation in July, bidding for Great Basin Gold Ltd.’s Burnstone mine to obtain its first bullion-producing asset. The mine, with a 6.4 million oz. reserve, is 90% complete following $800 million in investments, according to the statement.
“Burnstone secures an additional source of low-cost production,” Froneman added, “enhancing Sibanye Gold’s production and shifting toward shallower operations;” the company seeks 1.4 million gold oz. production this year along with attention from Chinese investors.