[miningmx.com] – SIBANYE Gold made good on its promise to become a
high-yield gold option paying a 37c per share interim dividend, equal to R271m, following agreement with the National Union of Mineworkers (NUM) for an 8% annual wage increase.
The payout is 25% of annualised earnings which gives the company scope to pay a much larger full-year dividend based on an agreement with lenders that allows it to pay up to 35% of annualised earnings.
“The yield Sibanye offers is about 6.5% which includes the fact that our share price has gained in the last month,” said James Wellsted, head of corporate affairs at Sibanye Gold.
Shares in the company gained 2.58% in the first few hours of trade on the JSE and was last trading at R11.50/share. The stock has gained 74.5% from its post-IPO low which it recorded in May.
Sibanye Gold said earlier this year it intended to pay a dividend once it had removed the risk of strike action. It’s a moot issue, however, whether strike action is over after the Association of Mineworkers & Construction Union (AMCU) said yesterday it would not accept an 8% wage offer extended to it by the Chamber of Mines (CoM).
The CoM had earlier signed the wage agreement with the National Union of Mineworkers (NUM) which represents about two-thirds of total employees in the gold sector. In terms of the Labour Relations Act, this entitles the CoM to extend the offer to minority unions.
BDLive said in a report today that AMCU would not accept the offer and was considering strike action after refusing to budge on 100% wage increase demands for entry-level employees.
If a strike materialised, it would be considered an unprotected, according to Sibanye Gold. AMCU has a majority following at Sibanye Gold’s Driefontein mine, as well as at Mponeng and Kusasalethu, mines owned by AngloGold Ashanti and Harmony Gold respectively. In total AMCU speaks for 20% of gold industry workers.
Neal Froneman, CEO of Sibanye Gold, said in August at the company’s interim results announcement that he had the firepower to see through a protracted strike; in any event, he believed employees hadn’t much appetite for a strike.
Sibanye Gold generated cash of R1.8bn for the interim period taking available cash to R2.1bn and reducing net debt to R1.9bn. Following its de-merger from Gold Fields in February, Sibanye Gold was carrying about R4bn in debt.
