South African miner Sibanye Gold has entered into an agreement with Gold One International to acquire its Cooke underground and surface operations.
As per the terms of the transaction, Sibanye will issue 150 million ordinary shares, or such number of shares that represents 17% of its issued share capital, on a fully diluted basis on the closing of the transaction.
The shares to be issued by Sibanye to Gold One were valued at about ZAR1.5bn ($144m), Bloomberg reported.
Sibanye Gold CEO Neal Froneman said that the deal is a cash flow accretive transaction for Sibanye Gold that will impact positively on projected cash flow per share.
"The addition of the Cooke Operations to the Sibanye Gold portfolio could potentially create the largest surface retreatment project in South Africa and provides Sibanye Gold shareholders with exposure to a low cost gold and uranium project," Froneman added.
The transaction also positions Sibanye Gold to reclaim the 6.4 million ounces of gold and 55 million pounds of uranium co-product in West Rand tailings deposits owned by the parties.
These resources will be capable of supporting additional gold output of nearly 300,000 ounces of gold per annum with uranium as a co-product.
"Gold One and its 90% shareholder, the Chinese BCX Consortium, will be an anchor shareholder with a long term investment horizon, which will support Sibanye Gold’s long term growth strategy," Froneman noted.