SIBANYE-Stillwater was looking to buy gold mines outside South Africa, said Reuters citing the precious metal firm’s CEO, Neal Froneman.
“We really do like gold,” Reuters cited Froneman as saying at the Gold Forum Americas conference. The precious metal which has surged 27% this year only accounts for about 10% of Sibanye’s earnings at the moment, the newswire said.
Froneman said the aim was to diversify its geographical exposure, but it was difficult to do deals, he said.
Valuations on gold mines have increased following the improvement in the gold price. Gold producers globally have consistently said the focus is falling on organic replacement and growth projects although they remain watchful of the merger and acquisition market.
Froneman has also said that debt reduction and paying dividends are the priority calls on the firm’s capital. Sibanye-Stillwater in August reinstalled its dividend policy unveiling a 50 South African cents interim dividend (R1.3bn). This was after having reined-in net debt to 0.55 of earnings before interest, tax, depreciation and amortisation (EBITDA).
South Africa’s Harmony Gold has also expressed an interest in establishing gold production outside of the country, and believes potential may exist in Africa.
“We need to consolidate first. But if you want to be a pure gold company, you will have to look at other frontiers outside of South Africa,” said Peter Steenkamp, CEO of Harmony Gold at the firm’s full-year results presentation earlier this month.
