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Sibanye-Stillwater takes majority stake in DRDGold

Sibanye-Stillwater (JSE: SGL) has exercised its option to take a majority stake in South African surface mining and processing company DRDGold (JSE: DRD).
Sibanye-Stillwater takes majority stake in DRDGold Sibanye-Stillwater takes majority stake in DRDGold Sibanye-Stillwater takes majority stake in DRDGold Sibanye-Stillwater takes majority stake in DRDGold Sibanye-Stillwater takes majority stake in DRDGold

The R1 billion transaction will aid phase two at the Far West Gold Recoveries operation in South Africa

Staff reporter

The circa R1 billion (US$0.07 billion) investment is expected to help develop phase two at Far West Gold Recoveries, an asset DRDGold acquired from Sibanye-Stillwater in 2018.

Sibanye-Stillwater is set to increase its holding from 38.05% to 50.1%, in line with the 2017 agreement which had been approved by DRDGold shareholders in March 2018.

Sibanye-Stillwater said the subscription price for each option share was R6.46 in cash, a 22.69% discount to DRD's closing price of R8.35 on January 7 and a 10% discount to the 30-day volume weighted average traded price.

CEO Neal Froneman said by securing the majority holding, Sibanye-Stillwater would "continue to create value for all stakeholders in line with our vision".

"We are thrilled that the value of our initial shareholding has already increased by 147% over 17 months," he said.

"The DRDGold team has a proven track record and has successfully implemented the Far West Rand [sic] Recoveries project, having reached its 500,000 tonne per month planned capacity for phase one."

DRDGold CEO Niël Pretorius said Sibanye-Stillwater's further investment bore testimony "to a shared vision for the future of our enterprise".

"It will come in very handy in accelerating the further unlocking of value in DRDGold's business and will go a long way to fund the early-stage development of FWGR phase two," he said.
 
DRDGold said on Friday it had produced more than 3 tonnes of gold from its two operations, FWGR and Ergo, for the six months to December 31, a 33% rise on the previous corresponding period mainly due to the increased contribution by FWGR.

DRDGold would continue to be listed on the JSE with a secondary listing on the NYSE in the form of American depository receipts, Sibanye-Stillwater said.