Avior Capital Markets - Sibanye Stillwater Limited (SBGLF) SGL | Sibanye Gold | Proposed Lonmin acquisition

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Avior Capital Markets

Wade Napier

SGL | Sibanye Gold | Proposed Lonmin acquisition

The consolidation of LON into SGL has been a long time in the making and we view the rationale for the deal as sound. SGL's all-share offer of 0.967 SGL shares for each LON share represents a 41% premium to LON's VWAP and values the firm at GBP285m. We believe this represents a reasonable outcome for both parties. SGL gains significant synergies through scale and integrated processing. While LON likely avoids a fouth rights issue to fund project capex required to maintain production over the medium term. In this note, we discuss our views on SGL's proposed acquisition of LON

15/12/2017 9 EN

Underlying

Sibanye Stillwater Limited

Sibanye-Stillwater is a gold mining group based in South Africa. Co.'s operations consist of deep-level underground gold mines located along the northern and western margins of the Witwatersrand Basin in South Africa. These properties include the KDC operation and the Beatrix operation. Co. is engaged in mining only gold, with silver as a by-product. Co.'s mining process is divided into two principal activities: developing access to the ore body; and extracting the ore body once accessed. Co.'s exploration activities are focused on the extension of existing ore bodies and identification of new ore bodies at existing sites.

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ZAE000173951 Pink OTC Markets South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Analysts

Wade Napier

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