Sibanye Believes Platinum Opportunities are on the Horizon
South-African mining company Sibanye Gold believes the platinum industry is ready for consolidation. With the top three South African platinum producers dealing with lengthy and costly labor unrest, the company’s CEO Neal Froneman says the time is now.
Platinum companies such as Lonmin, Impala Platinum (Implats) and Anglo American Platinum (Amplats) have been hit hard by a five-month strike by their employees, which has stopped production, allowing junior mining companies the ability of making a play for the platinum assets.
Froneman believes the platinum sector is 10 to 15 years behind the gold sector in terms of consolidation. The weak price environment complied with labor issues has put balance sheets under strain, forcing many companies to rethink strategies. The current state of platinum has created an abundance of possibility for acquisitions.
“Companies have made it clear that they plan to exit the platinum sector and are seeking responsible operators to take over,” said Froneman at a recent investor and stakeholder presentation in Randfontein.
Companies like Anglo American Platinum have suggested it could separate itself from its underperforming assets, which leads many spectators to believe Sibayne Gold could in the running to bring those operations back to life. The company has expressed interest in the past about buying struggling units to diversify into platinum.
“We believe the world is recovering and this will drive the aspect of platinum group metals (PGM) growth. The PGM market is robust,” he stated.
The platinum industry shares many similarities with the gold industry making it ripe for Sibayne’s South Africa-focused strategy.
The company is fully assessing opportunities to emerge into the platinum industry and will review any possible acquisition if it meets its internal investment criteria and the company’s dividend strategy.
“We are not desperate to run into platinum. We see it as an opportunity…but if it does not happen, we are happy where we are,” Froneman stated.
Newmont acquires Canada’s GT Gold in $325mn deal
Newmont, the world’s biggest gold miner, has acquired Canada’s GT Gold in a deal worth $325mn. The gold giant now controls the Tatogga gold-copper project in the Traditional Territory of the Tahltan Nation.
“With the acquisition of GT Gold and the Tatogga project in the highly sought-after Golden Triangle district of British Columbia, Canada, Newmont continues to strengthen our world-class portfolio,” commented Newmont President and CEO Tom Palmer.
“We look forward to continuing to build a respectful and meaningful relationship with the Tahltan Nation, including the community of Iskut. The relationships we have with Indigenous communities, First Nations and host communities are critical to the way we operate. We will partner with the Tahltan Nation at all levels, and with the Government of British Columbia to ensure a shared path forward as the Company understands and acknowledges that Tahltan consent is necessary for advancing the Tatogga project.”
Newmont’s acquisition includes the Tatogga project, comprised primarily of the Saddle North deposit, which has the potential to contribute future significant gold and copper annual production. There are also further exploration opportunities beyond the known deposits at Saddle North within the land package. The Tatogga project adds to Newmont’s existing interest in the prospective Golden Triangle through the company’s 50% ownership in the Galore Creek project.
Newmont is the world’s leading gold company and a producer of copper, silver, zinc and lead. A world-class portfolio of assets, prospects and talent is anchored in favourable mining jurisdictions in North America, South America, Australia and Africa. The American miner is celebrating its 100th anniversary this month.
With gold prices on the rise, the last six months has seen gold industry M&A activity accelerating. A recent Mckinsey report, advises that the industry need to be mindful of mistakes made during the previous gold price boom, when growth was chased unidirectionally by several companies.