The shares of Sibanye-Stillwater (NYSE:SBGL) rose a dramatic 17% last month, with the shares heading higher throughout October. That an interesting trend given that the prices of gold and platinum were both pretty volatile during the month, with each metal spiking in the middle of October and then retreating. Barrick Gold, as a reference point, ended the month down 10%.
There's been a lot going on at Sibanye-Stillwater this year, including Sibanye completing its merger with Stillwater in May. And not all of the news has been good, including a large rights issue that didn't sit well with investors early in the year. In fact, 2017 has been filled with volatile ups and downs for the stock. But there was some good news at the start of October that helped to drive the shares notably higher.
On October 2, Sibanye-Stillwater announced that it had begun production from its U.S.-based Blitz project. The good news is that this project was completed three months ahead of schedule, and the ore from the mine is of a higher grade than initially expected. It's always nice to see company beat its internal targets on a project.
Perhaps the bigger takeaway, though, is that the merger of Sibanye and Stillwater didn't derail the Blitz project. It's was a good first showing for the combined company. Which is what may have led to the announcement that asset management company Van Eck Associates Corporation has taken an over 10% stake in Sibanye-Stillwater, news that came out on October 13.
October was a good month for Sibanye-Stillwater, but most investors will probably want to stay on the sidelines, here. It's too soon to tell if the combined company can chart a more stable course than it has so far (the shares are down over 20% so far this year). To be fair, commodity prices will play a big role in the stock's performance, as they would at any miner. But the decisions management makes from here are still important, and investors were particularly displeased with that rights issue. More time is needed to see if Sibanye-Stillwater is moving in the right direction.