Sibanye was created earlier this year when Gold Fields spun off the bulk of its South African assets and it had signaled it was looking to expand in South Africa, where the bullion industry has been in decline.

The addition of the underground and surface operations west of Johannesburg will add about 260,000 ounces of gold a year to Sibanye's production over the next five years, it said.

The company has previously targeted production of about 1.3 million ounces a year.

Sibanye did not give a price for the deal, but said the new shares would represent 17 percent of its issued share capital.

Eoin Treacy's view The South African mining sector has been plagued by labour disputes, and persistent speculation that nationalisation is a realistic possibility and declining ore grades. However, while these considerations are weighty, they should not be allowed to overshadow the fact that South Africa remains one of the world's most resource-rich countries.

In an environment where the majority of mines have been announcing billion dollar impairments, the Chinese are once again on the acquisition trail. However it is refreshing that a small number of non-Chinese miners are also in the market for acquisitions. Counter cyclical acquisition policies might seem a panacea when so many companies paid outlandish prices for access to resources, but I find it heartening to see that a small number of boards see value following such a steep decline.

South Africa and US listed Sibanye was spun off in February and has yet to pay a dividend. The US share has been ranging below $4 since May and broke upwards today. A clear downward dynamic would be required to question potential for additional upside.