Sibanye Gold agreed in late August to acquire Gold One’s Cooke underground and surface operations on South Africa’s West Witwatersrand for Sibanye shares representing 17% of Sibanye’s issued share capital. The all-share transaction is valued at about $120 million. 

The Cooke operations are located adjacent to Sibanye’s Kloof and Driefontein gold mines, reinforcing Sibanye’s position on the West Witwatersrand. The Cooke operations are expected to produce an average of 260,000 oz/y of gold and 570,000 lb/y of uranium co-product over the next five years at an average cash cost of $1,000/oz. Gold reserves of 2.8 million oz and resources of 22.65 million oz support a projected operating life of about 13 years. 

Sibanye Gold is forecast to produce 1.35 million oz of gold from its Kloof, Driefontein and Beatrix mines in 2013.

The Cooke transaction also positions Sibanye Gold to reclaim 6.4 million oz of gold and 55 million lb of uranium co-product contained in historical West Rand tailings deposits owned by the two companies. These resources are expected to support gold production of up to 300,000 oz/y. 

Sibanye CEO Neal Froneman said, “The addition of the Cooke operations to the Sibanye Gold portfolio could potentially create the largest surface retreatment project in South Africa and provide Sibanye Gold shareholders with exposure to a low-cost gold and uranium project. The West Rand Tailings Retreatment Project also presents a unique, economically viable opportunity to clean up numerous environmental legacies in the region.”  

Froneman added, “Gold One and its 90% shareholder, the Chinese BCX Consortium, will be an anchor shareholder of Sibanye Gold, with a long-term investment horizon that will support Sibanye’s long-term growth strategy.”