Sibanye Gold Ltd., the South African producer spun off from Gold Fields Ltd., rose for a third day since it started trading in Johannesburg and the company said it’s still undervalued.
The stock advanced 1.8 percent to 14.98 rand at 2:40 p.m., after gaining 8.5 percent yesterday. Sibanye has climbed 13 percent since its opening trade of 13.20 rand on the Johannesburg stock exchange on Feb. 11, the same day it listed shares in New York, increasing its market capitalization (SGL:US) to 10.9 billion rand ($1.2 billion).
“We still believe the fundamental value in the company is not yet fully reflected in the share price, but expect a period of volatility and some uncertainty for the next week or so,” James Wellsted, a company spokesman, said in an e-mailed response to questions.
Gold Fields on Nov. 29 said it would place its deeper, more labor-intensive South African mines into Sibanye. The company was partly reacting to strikes that began in the country’s platinum industry before spreading to other operations.
Sibanye shares are worth 10 rand to 15 rand, David Davis, a Johannesburg-based mining analyst at SBG Securities Ltd., said by phone Feb. 11. AngloGold Ashanti Ltd. and Harmony Gold Mining Co. also have mature assets and may follow a similar model to Gold Fields by unbundling, selling off or downsizing the operations to preserve value, Davis said.
Gold Fields rose 0.9 percent to 92.10 rand. The stock closed at 105.80 rand on Feb. 8, the last trading day before the spinoff.
Sibanye Gold’s American depository receipts will be distributed to Gold Fields ADR holders on Feb. 20 and the Gold Fields ADRs will then trade without entitlement to Sibanye ADRs from Feb. 21.
To contact the reporter on this story: Paul Burkhardt in Johannesburg at email@example.com
To contact the editor responsible for this story: John Viljoen at firstname.lastname@example.org