Gold Price Boosts Sibanye Profits

by Ina King (Potgieter)

Sibanye Gold, South Africa's largest individual gold producer, has recently reported strong financial results in the first half of 2016. This is a result of a higher Rand gold price, with reports of the operating profit increasing by 128% to R5.4 billion (from R2.4 billion).

Sibanye Gold reported that this is also underpinned by solid operational delivery from both its gold and platinum divisions.

A 31% increase in the average Rand gold price, rising to R603.427 / kg, contributed positively to Sibanye Gold’s earnings.

Its Platinum Division, which was incorporated in April 2016 following the conclusion of the Aquarius Platinum acquisition, delivered a record quarterly production of 92.773 ounces, resulting in an operating profit of R72 million.

Sibanye Gold declared an interim dividend of R785 million or 85 cents per share.

Neal Froneman, Chief Executive of Sibanye Gold, said the first half of 2016 had been very positive for mining companies and gold producers in particular: "The firmer gold and platinum prices and weak Rand have driven a very good financial result, underpinned by a solid operational performance. This has enabled Sibanye Gold to continue to generate strong cash flow, maintain a robust balance sheet and continue to deliver on its commitment to pay industry leading dividends."

Sibanye Gold also stated that, barring the unexpected, its gold division should deliver a significantly improved performance in the second half of the year as the production guidance of 50 000 kilograms remained unchanged.

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