IT’S curious that Sibanye-Stillwater hasn’t made a bid for AngloGold Ashanti.
Nonetheless with no everlasting CEO, and with a share worth that underperformed a lot of its friends for many of 2020, AngloGold ticks lots of the bins in an organization that Sibanye-Stillwater CEO, Neal Froneman, stated he scouting for in his subsequent gold M&A.
AngloGold doesn’t have a preponderance of belongings in South Africa (none in any respect after October) or central Africa (solely the very wealthy stake within the Congo’s Kibali held in three way partnership with Barrick Gold). It additionally has a market capitalisation that’s susceptible to gold trade consolidation which Froneman thought of an inevitability.
“There’s completely little doubt in my thoughts that consolidation is critical. It’ll occur,” he stated on the agency’s year-end presentation final month.
“You’re both going to be consolidated or you’ll be able to drive consolidation. It’s important to turn out to be related. Even at $13bn, we’re nonetheless not related. We must be no less than $20bn plus.” Sibanye-Stillwater is valued at $14.3bn.
He added: “We’ve executed very sensible M&A. And naturally what’s solely seen is what we’ve executed. We’ve walked away from many alternatives as nicely which aren’t well-known.”
Requested in an interview with Miningmx if an method to AngloGold Ashanti was one of many transactions that weren’t well-known, Froneman replied: “We checked out AngloGold a very long time in the past earlier than Randgold merged with Barrick”. That will need to have been circa 2018 or 2019.
AngloGold has belongings within the Americas, the place Sibanye-Stillwater is now firmly established, and Australia, in addition to ‘Continental Africa’ in locations like Tanzania. Given its stake in Kibali, an equally related query could be whether or not Barrick Gold hadn’t made comparable inquiries to these Sibanye-Stillwater made just a few years in the past?
Actually, Barrick has run the rule on AngloGold. Mark Bristow, CEO of Barrick Gold, stated in an interview with Miningmx final month that there was some logic to taking out AngloGold’s 40% stake in Kibali gold mine. “From a technical perspective, the very best belongings to prioritise are these you maintain in a three way partnership,” stated Bristow.
However he added: “On the identical time, operating a course of into South Africa … I’m unsure that’s applicable technique”. Barrick had stepped again from M&A exercise, and stopped wanting revisiting its dividend technique, till there was extra visibility on how the gold worth would possibly go, he stated.
It’s odd, although, that Froneman hasn’t set the telephones ringing at AngloGold’s Newtown places of work in Johannesburg. “In fact, we will get there by sitting on our palms and letting the earnings of this firm circulate by means of,” he stated of gold trade consolidation: “… however we’re not a administration staff that sits on our palms”.