Gold Fields Ltd. (NYSE: GFI) is set to spin off Sibanye Gold, a wholly-owned subsidiary, into an independently managed company. Sibanye holds the Kloof Driefontein Complex (KDC) and Beatrix gold mines; both locations have experienced major labor unrest in the mining sector this year.
From Mail and Guardian:
“Following the unbundling, Gold Fields will retain the balance of its current portfolio of assets, including the developing of South Deep Gold Mine located in South Africa,” Gold Fields said.
Gold One International (ASX: GDO) CEO Neal Froneman will become chief executive of Sibanye Gold, and Gold Fields’ CEO Nick Holland will maintain his position.
Gold Fields will shift its focus to cash flow generation, dividends, and growth, while Sibanye is expected to continue keeping operations at a low cost designed to provide high leverage to the gold price.
At the end of December last year, mineral reserves were 22 million ounces for Sibanye and 64 million gold-equivalent ounces for Gold Fields, the Mail and Guardian reports. Shareholders for the latter still receive some of the highest dividend yields in the entire sector.
According to Gold Fields, Sibanye’s 1.4 million ounces of production make it “one of the largest domestic gold producers in South Africa.”
Sibanye will also retain Gold Fields’ South African net debt—some R4 billion ($455.8 million)—and Gold Fields will keep around $1.4 billion in offshore net debt.
After offer approvals, Sibanye will be listed on both the JSE and the NYSE—hopefully sometime in February of 2013. All listings have been approved by the South African Reserve Bank, and shareholder approval is not necessary. No job losses are expected whatsoever.
