Sibanye Gold “’
is considering
a special dividend
after a substantial
profit increase
 
Johannesburg, South Africa — 14 August 2013

Sibanye Gold Limited “’ the spinoff from Gold Fields Limited earlier this year “’ says it may consider paying special dividends, after profit and output increased in the first half of the year from the previous six months.

Operating profit rose 63% to US$363 million in the six months to June 30, compared with the previous half-year period, reports Bloomberg News. Gold production advanced 23% to 656,300 ounces and available cash rose seven-fold to US$211 in the period.

“The improving operational performance and the debt restructuring has ensured that the company is well placed to declare a maiden dividend, once there is sufficient financial and operational stability,” the company said in the statement.

Sibanye, formed as a collection of South African gold-mining assets in February, has pledged to cut costs and improve productivity, paving the way for dividends. The company renegotiated the terms of its debt with its lenders earlier this year, removing the constraint on a potential half-year payout, which can be made once wage negotiations are completed.

Sibanye, alongside fellow South African miners AngloGold Ashanti Limited and Harmony Gold Mining Company, are battling labour unions over demands for wage increases of more than 100% with a gold price that has fallen 20% this year.

“We are well prepared for extended strikes and have made plans to limit losses should production disruptions occur,” Sibanye said. “We are aware of the critical need to control costs in order to stabilise production and extend the lives of the operations, and will not be coerced into unsustainable outcomes.”

All-in costs reduced to US$1,322 an ounce in the first half, compared with US$1,623 in the six months to December and US$1,275 an ounce in the first half of 2012, Sibanye said.
So-called headline earnings, which exclude one-time items, almost doubled to US$88 million in the first half from the previous six months, and dropped 65% from the US$253 million reported in the first half of 2012.

Source: Bloomberg News. For more information, click here.