By Adam Clark
Sibanye Gold Ltd. (SGL.JO) said on Thursday that its liquidity remains sound and it is assessing options to reduce debt, following a fall in its share price.
The South African gold miner said it believes that a "significant drop" in its share price and market value has been driven by unwarranted concerns over its leverage and its proposed acquisition of Lonmin PLC.
"The group debt maturity profile has been carefully structured, with major debt repayments only due from mid-2022," said Sibanye in a statement.
The miner said it continues to target a net debt to adjusted earnings ratio of 1.0 times, down from 2.4 times at the end of March, but said it has "no intention" of issuing equity in order to reduce its debt.
Sibanye said its most likely financing options is raising up to $500 million via a streaming arrangement, which involves an upfront purchase of future production, or the financing of recycling inventory from its U.S. operations to release $100 million of working capital.
Sibanye also said its proposed acquisition of platinum producer Lonmin is proceeding according to plan, and it remains confident of the rationale for the deal. Sibanye agreed an all-share takeover of Lonmin in December, which at the time was valued at 285 million pounds ($380.1 million).
The deal has subsequently been questioned by analysts due to cash outflows at Lonmin. On Thursday, Sibanye said that mine restructuring and merger synergies will reduce operating costs at Lonmin.
Write to Adam Clark at [email protected]; @AdamDowJones