[miningmx.com] – SIBANYE Gold unveiled a 46% increase in economically mineable gold reserves to 19.73 million ounces, an announcement its expansive CEO, Neal Froneman, will hope dispels the notion the company is in harvest mode.
Froneman has for the latter part of his career run companies on the premise of growth and he has repeatedly expressed the hope that Sibanye Gold had long-term prospects following its listing almost a year ago.
Sibanye Gold was created following the demerger of the Kloof and Driefontein mines of Gold Fields, and its Beatrix mine in the Free State province. The mines were thought to be entering their golden years.
The increase in gold reserves was borne of a combination of factors including the ‘new’ gold ounces of West Rand Tailings Retreatment Operation that Sibanye Gold bought in 2013, lower pay limits and, interestingly, a higher assumed gold price of R410,000/kg allowing the inclusion of just under one million ounces from secondary reefs.
The feasibility of mining WRTRP was investigated in 2013 with a more detailed study of the property’s prospects currently underway.
The increase in gold reserves also supports the counter-cyclical nature of Sibanye Gold which has been reporting profits from gold mining whilst other companies have been losing cash, increasing net debt, and writing down the value of their gold reserves.
On February 12, Canadian gold producer Kinross cut its store of unmined gold by an astonishing 33% to 39.7 million ounces of gold at the end of 2013, said Reuters. The cut was all the more surprising as Kinross had assumed a conservative gold price.
Other highlights of Sibanye Gold’s gold reserve calculation was that capital expenditure would be between R3bn and R3.5bn annually and a maiden gold and uranium mineral resource of 25.66 million pounds at its Beisa Reef Section at the Beatrix West Section.
This was following a concept study of mining uranium, the original purpose behind the sinking of the so-called Beisa mine by Gencor in the Eighties.
A pre-feasibility study was also completed on the possibility of mining about 500,000 ounces of gold at the Driefontein 1 shaft pillar extension, ounces that were included in the higher gold reserves announced by Sibanye Gold.
