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MarketScreener Homepage  >  Equities  >  Johannesburg Stock Exchange  >  Sibanye Gold Limited    SGL   ZAE000173951

SIBANYE GOLD LIMITED

(SGL)
SummaryChartsNewsRatingsCalendarCompany 
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A new chapter: H2 and full year 2019 presentation

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02/19/2020 | 12:40pm EDT

+258%¹ ZAR35.9

Pd

ZAR10.0

Pt

Rh

Au

A new chapter

H2 and full year 2019

Operating and financial results for the six months and year ended 31 December 2019

19 February 2020

1. Share price appreciation from 31 Dec 2018 to 31 Dec 2019

Disclaimer

The information in this presentation may contain forward-looking statements within the meaning of the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, among others, those relating to Sibanye Gold Limited's (trading as Sibanye-Stillwater)("Sibanye-Stillwater" or the "Group") financial positions, business strategies, plans and objectives of management for future operations, are necessarily estimates reflecting the best judgment of the senior management and directors of Sibanye-Stillwater.

All statements other than statements of historical facts included in this presentation may be forward-looking statements. Forward-looking statements also often use words such as "will", "forecast", "potential", "estimate", "expect" and words of similar meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and should be considered in light of various important factors, including those set forth in this disclaimer and in the Group's Annual Integrated Report and Annual Financial Report, published on 29 March 2019, and the Group's Annual Report on Form 20-F filed by Sibanye-Stillwater with the Securities and Exchange Commission on 5 April 2019 (SEC File no. 001-35785 and the Form F-4 filed by Sibanye Stillwater Limited with the Securities and Exchange commission on 4 October 2019 (SEC file no. 333-234096) and any amendments thereto. Readers are cautioned not to place undue reliance on such statements.

The important factors that could cause Sibanye-Stillwater's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, our future business prospects; financial positions; debt position and our ability to reduce debt leverage; business, political and social conditions in the United States,

United Kingdom, South Africa, Zimbabwe and elsewhere; plans and objectives of management for future operations; our ability to obtain the benefits of any streaming

arrangements or pipeline financing; our ability to service our bond Instruments (High Yield Bonds and Convertible Bonds); changes in assumptions underlying Sibanye-Stillwater's estimation of their current mineral reserves and resources; the ability to achieve anticipated efficiencies and other cost savings in connection with past, ongoing and future acquisitions, as well as at existing operations; our ability to achieve steady state production at the Blitz project; the success of Sibanye-Stillwater's business strategy; exploration and development activities; the ability of Sibanye-Stillwater to comply with requirements that they operate in a sustainable manner; changes in the market price of gold, PGMs and/or uranium; the occurrence of hazards associated with underground and surface gold, PGMs and uranium mining; the occurrence of labour disruptions and industrial action; the availability, terms and deployment of capital or credit; changes in relevant government regulations, particularly environmental, tax, health and safety regulations and new

legislation affecting water, mining, mineral rights and business ownership, including any interpretations thereof which may be subject to dispute; the outcome and consequence

of any potential or pending litigation or regulatory proceedings or other environmental, health and safety issues; power disruptions, constraints and cost increases; supply chain shortages and increases in the price of production inputs; fluctuations in exchange rates, currency devaluations, inflation and other macro-economic monetary policies; the occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance; the ability to hire and retain senior management or sufficient technically skilled employees, as well as their ability to achieve sufficient representation of historically disadvantaged South Africans' in management positions; failure of information technology and communications systems; the adequacy of insurance coverage; any social unrest, sickness or natural or man-made disaster at informal settlements in the vicinity of some of Sibanye-Stillwater's operations; and the impact of HIV, tuberculosis and other contagious diseases.

These forward-looking statements speak only as of the date of the content. Sibanye-Stillwater expressly disclaims any obligation or undertaking to update or revise any forward- looking statement (except to the extent legally required).

2

Key highlights 2019

Significant improvement in overall safe production performance

Transformation continues - precious metals player and reference producer in "green" metals

Gold strike re-set union relationship resulting in no industrial action at the SA PGM operations

Strong earnings

Balance sheet significantly de-risked

Strong shareholder value creation

  • Zero fatalities at SA gold operations
  • Restructured gold operations
  • Completed Lonmin acquisition with fair Competition Commission conditions
  • Increased strategic stake in DRDGOLD
  • Successful wage negotiations with zero industrial action
  • Successful 189 process at Marikana with zero industrial action
  • Adjusted EBITDA1 R15 bn/US$1bn4 (2018: R8bn/US$632m)
  • Net debt: adjusted EBITDA1 reduced to 1.25x (versus 2.5x year before) and ahead of 1.8x guidance target
  • 258%2 share price increase
  • Dividend payment is expected to resume3 in H1 2020
  • Undervalued versus peers based on market consensus

Consolidation during 2019 has positioned the Group for superior performance in 2020

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements

2. Share price appreciation from 31 Dec 2018 to 31 Dec 2019 3. Based on the current deleveraging trajectory and subject to current commodity prices, ongoing management review and approval by the 3 Board 4. Conversion based on the average exchange rate for the year of US$/R14.46

Embedding ESG

in line with our purpose of improving lives

Environmental, social and governance (ESG) - a key strategic focus

STRATEGIC THEMES

ENVIRONMENTALSOCIAL

Promoting natural resources

COMMUNITIES

STAKEHOLDER ENGAGEMENT

SAFETY AND HEALTH

and improving life -

Unlocking the potential of

Our stakeholders will be

Aiming to improve the

sustainable use through

communities affected by

heard through transparent

holistic wellbeing of our

increased environmental

our operations through

engagements and

workforce through the

consciousness and continual

economic empowerment,

incorporating the

pursuit of risk-based

improvement, minimising

institutional development

knowledge gained into

monitoring of safety and

environmental impacts and

and creating local benefit

our business

health factors and

a measured transition to a

that inspires sustainable

improvement in safety

low carbon future

living

and health performance.

GOVERNANCE

Respecting human rights of stakeholders and doing our business with integrity and from an ethical foundation by adherence to good governance principles and legal compliance

ESG

Creating sustainable value

5

ESG - our products combat climate change

Auto catalysts

Platinum (Pt), palladium (Pd) and rhodium (Rh) - unique catalytic properties transform noxious exhaust gasses - hydrocarbons (HC),

nitrogen oxide (NOx) and carbon monoxide

(CO) - into more benign components (water (H2O), carbon dioxide (CO2) and nitrogen gas (N2))

One of the world's largest recycler of auto

catalysts - re-use of critical metals. Treating more recycled ounces than mined ounces in the US operations

Renewable energy generation and conservation

Pt a component of wind turbine blades and

high-quality glass for photo voltaic (solar) panels

Pt utilised in energy efficient fiberglass which is widely used as an insulating material to reduce heat loss

Alternative power generation and storage

Pt's unique catalytic properties make it an

essential component of the hydrogen

economy.

An environmentally friendly source of energy - Pt's conductivity makes it ideal for the electrolysis of hydrogen from water

  • Hydrogen fuel cells - an efficient and environmentally friendly alternative for generating electricity

Making a difference - one PGM ounce at a time

6

E SG -Improving our leading safety performance

  • Industry leading safety performance in 2019
    • SA gold fatality free since Aug 2018
    • 519 days - 10 million fatality free shifts (26 Jan 2020)
  • US PGM operations fatality free since Oct 2011
    • 2,983 days - 2.6 million fatal free shifts
  • Sibanye-Stillwaterpeer recognition
    • SAMI Safety and health excellence awards
      • JT Ryan Award - mining company with the best safety improvement
      • Platinum - 1st place: Bathopele operations and

3rd place: Kroondal West

    • Processing - 1st place: ChromTech at the SA PGM
      operations and 2nd place: Precious Metals Refinery in South Africa
  • SA PGM operations regrettably had six fatalities during the 2019 year

Fatal injury frequency rate (SA gold operations)

0.25

0.20

0.15

0.10

0.05

0.065

0.108

0.086

0.237

0.000

0.00

2015

2016

2017

2018

2019

Source: Company information. Year End 2019

7

E SG - through our Zero harm strategic framework

OUR VALUES

Commitment

Accountability

ENGAGED LEADERSHIP

Respect

ENABLING ENVIRONMENT

Real risk reduction initiatives ongoing

Aim to maintain

- Working place layout improvements

a safe working environment with

› Focus on the elimination of 'A' Hazards

equipment, tools and material that

-

Infrastructure improvement

enable sustainably safe production

› Rail-bound equipment safety enhancements

-

Rock mass management

EMPOWERED PEOPLE

Safe Production leadership and culture

Continue to train

- Individual, team and organisation

people to apply relevant standards

- Mirror sessions at SA gold operations

and procedures to work safely

- Values-based decisions intervention

Safety days

- Section 23 withdrawals reinforcement

Enabling

Safety

OUR VALUES

FIT-FOR-PURPOSE SYSTEMS

Subscribing to international best practice principles and integrated systems with a view to certification in the longer term

Bow-tie risk management process

Enhanced Trigger Action Response Plan

introduced

(TARP) for improved rock mass

-

University of Queensland coaching

management

sessions on critical controls

ISO 45001 Occupational Health & Safety

-

Root cause analysis

Management System implementation on

Independent high potential incident reviews

track

Life-saving rules introduced

ICMM membership

8

A new base established

2013 - 2019: creating a leading precious metal company

Strategically transformed - a top tier diversified precious metals company

Moz

If we had made no further acquisitions

or implemented our operating model since unbundling

Base of gold operations' life of mine upon unbundling in 2013

5

4

3

2

1

0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

Beatrix Base

Driefontein Base

Kloof Base

Surface

Moz

Our life of mine profile post various value accretive acquisitions

Expected PGM and gold life of mine production plan

5 (next 10 years displayed)

4

3

2

1

0

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

SA PGM Operations (4E PGMs)

US PGM Operations (2E PGMs)

US Recycling (3E PGMs)

SA Gold Operations (oz)

Gold Projects (oz)

Source: Company information

10

…with quality assets and abundant reserves and resources*

2019:

Reserves

Resources

2019:

70Moz

1%

3%

494Moz

18%

16%

4%

6%

26%

2%

40%

8%

41%

38%

32%

2018:

2018:

3%

10%

63Moz

309Moz

10%

31%

7%

16%

0%

16%

9%

7%

44%

12%

DRDGOLD

US PGM operations

Americas projects (PGM&Au)

SA gold operations

Gold projects

SA PGM operations

SA PGM projects

SA PGM projects at Marikana add future optionality

Source: Company information

11

* Mineral Reserves and Mineral Resources are declared as at 31 December 2019, based on three year trailing price averages and currently a significant discount to spot prices

…by successfully concluding value accretive transactions

  • Built a leading and influential PGM business at a favourable stage
    in the precious metals cycle for a total of R45bn (US$3.06bn1) within four years

R4.0bn for Aquarius in Apr 2016

R4.5bn² for Rustenburg in Nov 2016

US$2.2bn for Stillwater in May 2017

R4.3bn³ for Lonmin in June 2019

Executed a clearly communicated acquisition strategy to create a unique precious metals mining company

  1. Converting R45bn to US dollar using a US$/R14.68 exchange rate as of closing prices on 18 September 2019
  2. Minimum payment of R4.5 billion (R1.5bn upfront payment made). Balance settled from 35% of free cash flows from the Rustenburg operations
  3. Estimate purchase price (not accounting value) of the Lonmin transaction based on Lonmin share capital figure of 290,394,531 shares in fixed ratio of 1:1 resulting in 290,394,531

new Sibanye- Stillwater shares. Considerations estimate based on spot Sibanye-Stillwater closing share price on the JSE of R14.83 per share on 7 June 2019. US$ price converted at R14.94

12

…at a low point in the PGM price cycle

Relative price performance (%)

Aquarius and

Stillwater

DRDGOLD

Lonmin

Rustenburg

transaction

transaction

transaction

250

transactions

announced -

announced -

announced -

announced -

US$/2E basket

R/kg gold

R/4E basket

R/4E basket

price up 170%

price up 29%

price up 145%

200

price up 180%

since

150

100

50

0

(50)

Sep 15

Mar 16

Sep 16

Mar 17

Sep 17

Mar 18

Sep 18

Mar 19

Sep 19

Gold US$/oz

Gold R/kg

PGM basket (R/4Eoz)

PGM basket (US$/4Eoz)

PGM basket (US$/2Eoz)

13

Source: IRESS

Sibanye-Stillwater is well positioned

7%

Group PGM

42%

production

51%

H2 2019

Pt Pd Rh

  • Relative to its peers, Sibanye-Stillwater has a production prill split that is most closely aligned to global demand

US PGM operations

35%

2019 Palladium

46%

2019 Platinum

54%

supply

supply

65%

Primary supply

Secondary supply

Primary supply

Secondary supply

(mined)

(recycled)

(mined)

(recycled)

  • Sibanye-Stillwateris one of the world's leading recyclers of PGMs
  • Recycling plays an increasingly important role in ESG

Source: Company data

14

Future trends

Balancing supply and demand of the basket

Tightening emission standards underpinning demand

Despite a forecast softening of expected Light Duty Vehicle Demand (global compound annual growth rate of 2.7% forecast to 2025) the continued tightening of emission standards and increases in market share of gasoline and hybrid vehicles continues to underpin the demand for palladium and rhodium

Expected increase in palladium loadings in 2019 due to stricter Emission Regulations and introduction of RDE despite engine downsizing

Average PGM loadings per

15-20%

vehicle, change in 2019 (%)

5-10%

3-5%

1-3%

China

India W. Europe USA

China palladium demand (koz)

China rhodium demand (koz)

1 200

150

800

100

400

50

0

0

(400)

(50)

2018

2019

2020E

2021E

2022E

2023E

2018

2019

2020E

2021E

2022E

2023E

Loss in demand (lower vehicle production)

Loss in demand (lower vehicle production)

Gain in demand (higher loadings)

Gain in demand (higher loadings)

Decreases in vehicle demand have been more than offset by increased loadings associated with tighter emission standards

Source: LMCA, IHS, Marklines, BASF Company data

Source: SFA Oxford

16

Notes: Light duty vehicles (up to 6 tons)

Source: SFA Oxford

Palladium to remain in sustained deficits

Primary palladium supply by region

9 000

6 000

Koz

3 000

0

2007A

2009A

2011A

2013A

2015A

2017A

2019E

2021E

2023E

2025E

South Africa

Russia

North America

Others

Palladium secondary supply

5 000

60%

4 000

3 000

40%

2 000

20%

1 000

0

0%

2007A

2009A

2011A

2013A

2015A

2017A

2019E

2021E

2023E

2025E

Recycling

Pall price (US$/oz) (lhs)

% of spent catalysts

% of Pd supply

  • Timing to bring on new primary supply is long dated
  • Secondary supply is critical to filling primary supply deficit but not sufficient to fill the demand deficit

Palladium market balance

2 500

2 500

2 000

1 500

2 000

1 000

Koz

500

1 500

0

US$/oz

(500)

1 000

(1 000)

(1 500)

500

(2 000)

(2 500)

0

1992A 1995A 1998A 2001A 2004A 2007A 2010A 2013A 2016A 2019E

2022E

2025E

Surplus / Deficit (koz)

Ex-ETF market balance

Pall Price (US $ / oz) (rhs)

Unsustainable deficits forecast that require greater interventions than traditional primary and secondary supply solutions

Sources include: Company data

17

Rhodium - the most precious of them all?

Primary rhodium supply by region

Rhodium market balance

900

300

9 000

200

600

100

6 000

0

(100)

300

(200)

3 000

(300)

0

(400)

0

2007A

2009A

2011A

2013A

2015A

2017A

2019E

2021E

2023E

2025E

1992A

1996A

2000A

2004A

2008A

2012A

2016A

2020E

2024E

South Africa

Russia

North America

Zimbabwe

Others

Surplus / (Deficit) (koz)

Rhodium price (US$/oz) (rhs)

  • Rhodium is a critical metal to meet environmental (NOx) emission standards
  • Rhodium supply falling faster than other metals due to lack of capital investment on rhodium rich (UG2) projects
  • Technically more difficult to substitute rhodium, requiring significant palladium metal which is also in deficit

Sources include: Company forecasts

ETF: Exchange traded fund

CAGR: Compound annual growth rate

4E: Platinum, Palladium, Rhodium, Gold

18

Note: All forward looking PGM prices are based on current broker consensus prices

Platinum: Preparing for a recovery

Primary platinum supply by region

8 000

6 000

Koz

4 000

2 000

0

2007A

2009A

2011A

2013A

2015A

2017A

2019E

2021E

2023E

2025E

South Africa

Russian Sales

North America

Zimbabwe

Others

Platinum secondary supply

2 000

60%

1 500

40%

1 000

20%

500

0

0%

2007A

2009A

2011A

2013A

2015A

2017A

2019E

2021E

2023E

2025E

Recycling

Pt price (US$/oz)

% of spent catalysts

% of Pt supply

South African capital expenditure

-R/t

500

400

MiningSustainingCapex

terms)(Real

300

200

100

0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019e

RBPlats

Impala Platinum

Lonmin Marikana

Anglo Platinum

Sibanye-Stillwater

Platinum market balance

1 000

2 000

500

1 500

US$/oz

Koz

0

1 000

(500)

500

(1 000)

0

1992A 1995A 1998A 2001A 2004A 2007A 2010A 2013A 2016A

2019E

2022E

2025E

Surplus / (Deficit)

Ex-ETF market balance

Pt Price (US $ / oz) (rhs)

Sources: Company data, SFA Oxford: SA Capital expenditure graph

19

Strategic operational delivery

H2 2019 and year end results

Benefits of strategic transformation clearly apparent

Profitability (adjusted EBITDA1) and R/US$ exchange rate

R million

  1. 000
  1. 000
  1. 000

8 000

  1. 000
  1. 000
  1. 000
    0

(2 000)

(4 000)

H1 2015

H2 2015

H1 2016

H2 2016

H1 2017

H2 2017

H1 2018

H2 2018*

H1 2019*

H2 2019

SA Gold

SA PGM

US PGM

Average rand: US dollar exchange rate (RHS)

16.00

15.00

14.00

13.00

R:US$

12.00

11.00

10.00

Record R15 billion (US$1 billion) adjusted EBITDA1 achieved despite build-up of gold operations post-strike in H2 2019

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant

21

formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements

*H2 2018 and H1 2019 at the SA gold operations have been impacted by the five month gold strike from Nov 2018 to April 2019 with subsequent gradual build up to new normalised levels

Balanced portfolio positioned to excel and underpinned by fundamentals

22%

17%

15%

31%

38%

33%

Reserves

Production

Adj EBITDA1

(Moz %)

(oz %)

(Rm %)

2019

H2 2019

H2 2019

SA gold (oz%)

40%

52%

52%

SA PGM (4E %)

US PGM (2E %)

PGM metal production % compared to % revenue contribution per metal*

Group (excl. SA gold operations)

SA PGM operations

US PGM operations

100%

86%

78%

80%

59%

60%

50%

41%

46%

36%

40%

30%

30%

34%

29%

22%

22%

20%

7%

9%

14%

1%

1%

2%

2%

0%

Platinum

Palladium

Rhodium

Gold

Platinum

Palladium

Rhodium

Gold

Platinum

Palladium

First bar: Metal produced as a % of 4E/2E basket

Second bar: Average revenue % contribution based on basket price per metal

Geographical and product diversification providing a balanced exposure to metal prices and the risk profile

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant

22

formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements

*Calculations based on H2 2019 production and average basket prices for H2 2019

US PGM operations - contributing 33% of Group adjusted EBITDA#

US PGM - production and recycling with adjusted EBITDA margin#

High grade and high margin

underground operations

800

70%

-

57% adjusted EBITDA margin#

60%

Operational recovery largely

complete by year end

productionkozPGM2E/3E

600

50%

%marginEBITDAAdjusted

-

Significant improvement

expected in 2020

40%

- Blitz build-up delayed by up

400

to eight months

30%

-

Fill the Mill (FTM) project

advancing as planned

200

20%

expected to commence

10%

ramp-up to annualised of

40koz per annum run rate

by late 2020

0

0%

Record Metallurgical Complex

H1 2017*

H2 2017

H1 2018

H2 2018

H1 2019

H2 2019

throughput

Mined production (2E)

Recycling production (3E)

Mined Adj EBITDA margin(%)#

- leveraging off growing

recycling volumes and

process enhancements

Benefitting from rising palladium price and providing strategic diversification

Source: Company results information. *H1 2017 only represents information from May 2017 when the Stillwater Mining Company was acquired.

# The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant

formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements. Adjusted

23

EBITDA margin is calculated by dividing adjusted EBITDA by revenue

SA PGM operations - contributing 52% of Group adjusted EBITDA

SA PGMs - Underground and surface production with adjusted EBITDA margin1

1 20035%

1 000

30%

%

margin

800

25%

4E koz

20%

Adjusted EBITDA

600

15%

400

10%

200

5%

0

0%

H1 2017

H2 2017

H1 2018

H2 2018

H1 2019

H2 2019

Underground(UG) production (4E)

Surface production (4E)

Total Adj EBITDA margin(%)

Consistent operational performance ensuring leverage to higher rand 4E PGM basket price

  • Steady operational performance
  • Significant gearing to record spot PGM basket prices - expected to drive cash flows in 2020
  • Marikana operations incorporated from June 2019
    • Successful restructuring ensuring sustainability
    • R2.3bn contribution to adjusted EBITDA in H2 2019

Source: Company results information

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant

formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements. Adjusted EBITDA

24

margin is calculated by dividing adjusted EBITDA by revenue

SA gold operations - contributing 15% of adjusted EBITDA1 from a smaller footprint

  • Excellent improvement in safe production since 2018
  • 10 million fatality free shifts achieved in Jan 2020 - more than 1.5 years fatality free
  • Production rates normalised for smaller footprint post H1 2019 restructuring and closures
    • 13 operating shafts
      and 6 processing facilities
      • compared to 19 shafts and 9 processing facilities in 2014

Kg

40 000

36 600

  1. 000
  1. 000
  1. 000
    0

2 418

103

Affected by

the strike

which

Lower grade

ended in

in surface

April, and

material

the build-up

processed,

thereafter.

Eskom load

Eskom load

curtailment

curtailment

impacted

4 418

Affected by

the strike

which ended

in April, and

the prolonged

build-up due to the cooling down period post-strike, closure of D6 & D7 shafts, seismicity following post- strike build-up, Eskom load curtailment and depletion of surface reserves

4 390

3 738

29 009

Affected

by the

strike

which

ended in

April,

increase in

Included

seismicity

for 5

following

months in

the post-

2018

strike build-

up, fire at

K4 shaft

and Eskom

load

curtailment

2018

Beatrix

Cooke

Driefontein

Kloof

DRDGOLD

2019

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant

25

formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements

Update on recent acquisitions

Integration of Marikana progressing well

10 Dec

Jan 2020

25 Sep

CCMA

Aug 2020E

10 Jun

consultation

Workforce

Issued S189

process

transition

Operational

Day 1

notice

complete

concluded

stabilisation

14 Jun

15 Nov

Marikana

Jul 2020E

AMCU sets

Signed

Christmas

System

Break

wage

wage

integration

demand

agreement

complete

Day 1-180 functional stream plan execution

Evaluation of projects (K4, Newman and Pandora)

Change and stakeholder impact assessment

Continued stakeholder engagement

Synergy Initiative identification and evaluation

Synergy initiative monthly tracking and reporting

Management of interdependencies and risks across functional streams

Integration management office (IMO) milestone

achievement tracking

Signed wage agreement and completion of restructuring (closure of the

Generation 1 shafts)

Delivery of anticipated synergies on track and ahead of initial expectations

27

…annualised synergies surpassing initial estimates

Estimated

Initial benefits

Realised benefits

annual

identified

since acquisition

benefits

Category

Summary of key initiatives

(Rm)

(Rm)

(Rm)*

Closure of London offices

Corporate rationalisation (closing London office and delisting)

138

17

198

Operating (mine) and

Employees and management configured to reflect the

374

68

818

regional shared services

Sibanye-Stillwater operating model

synergies (Labour savings)

Consolidation of duplicated production and support functions

Optimal use of surface

Footprint reduction

125

74

127

infrastructure

Concentrator consolidation/optimisation

Sourcing and stores

Improved procurement and supply chain management

30

4

7

management

ICT

Payroll system aligned to Sibanye-Stillwater

63

5

20

SAP system consolidation for South Africa

Infrastructure consolidation

Other

Functional optimisation

0

12

33

Total

Savings

R730m per annum

R180m

R1.2bn

(over 3 - 4 years)

(over 7 months)

(2020)

Additional possible savings

Processing synergies

550

0

0

Financing cost savings

Refinancing of the $169 million Lonmin PIM Prepay

0

120

210

Expected to realise 65% more annualised cost savings for the 2020 year

*Expected annual benefits have been calculated based on the current Marikana integration process

28

Global PGM cost curve (cash cost + capital)

Global PGM cash cost & capital curve (CY19E - at spot)

Cumulative annual production (4E Koz)

499

999

1 499

1 999

2 499

2 999

3 499

3 999

4 499

4 999

5 499

5 999

6 499

6 999

7 499

7 999

8 499

2 500

(USD/oz)

2 250

Spot PGM Basket price received

2 000

Marikana to move

Price

1 750

down the cost curve

1 500

as savings are

realised

basket

1 250

and

1 000

750

cost

500

Cash

250

-

(SGL/AMS)Kroondal

Stillwater(SGL)

(IMP)LDI

(NHM)Booysendal

Mogalakwena(AMS)

DumpsSylvania(SLP)

Zimplats(IMP)

BRPM(RBP)

Union(SIY)

Unki(AMS)

(IMP/SGL)Mimosa

(ARM/IMP)RiversTwo

(ARM/AMS)Modikwa

Amandelbult(AMS)

(GLEN/AMS)Mototolo

Marula(IMP)

Rustenburg(SGL)

(SGL)Marikana

Zondereinde(NHM)

MineImpala(IMP)

Boulder(SGL)

*

Realisation of synergies to move Marikana down the cost curve

  1. 500
  1. 250
  1. 000
  1. 750
  1. 500
  1. 250
  1. 000
    -

Source: Nedbank

29

*Excludes current growth capital from Blitz

Strategic stake in DRDGOLD - ESG focused dump retreatment specialist

About DRDGOLD

  • Specialist mining company delivering value through re-treatment of legacy surface tailings
  • Reduces environmental liabilities and potential health risks for surrounding communities
  • For more information, refer to https://www.drdgold.com
  • A strategic investment with a strong commercial underpin
    • 50.1% shareholding in listed entity currently worth
      R4.1 billon
    • Vended in selected surface assets for 38.05% stake
      • No value attributed to assets by market
      • Significant future rehabilitation liability and expense

- Paid cash of R1 billion to increase stake to 50.1% on 22 Jan 2020

Price paid R6.46 per share versus current price R9.50* value uplift = R511million

- Dividends received to date: R52m (Aug 2019) and R108m (Feb 2020)

Delivering value while addressing environmental liabilities

* DRDGOLD share price on 14 Feb 2020

30

Intellectual capacity into tomorrow's metals - SFA Oxford acquisition

  • About SFA (Oxford)
    • World-renownedauthority on platinum-group metals and provides in-depth market intelligence on battery raw materials and precious metals for industrial, automotive, and smart city technologies, as well as on jewellery and investment trends
    • For more information refer to https://www.sfa-oxford.com/
  • Acquired in March 2019
  • Expected an update on work done on battery metals for Sibanye- Stillwater in Q2 2020
  • In-depthmarket research and integrity are underpinned by extensive consulting from mine to market to recycler
  • Unrivalled understanding of industry dynamics

SFA works across the whole industry value chain

SFA Oxford is launching its first International PGM Hydrogen Forum in Tokyo in 2020, representing raw material producers (PGMs),

fabricators, trading houses, end-users and investors, to offer unique insights into industry opportunities and challenges.

Fast tracking our PGM insights & technology

31

Financial performance

Income statement for the year ended 31 Dec 2019

Rm

2019

2018

Revenue

72,925

50,656

Cost of sales, before amortisation and depreciation

(56,100)

(41,515)

Net other cash costs

(1,869)

(772)

Adjusted EBITDA1

14,956

8,369

Amortisation and depreciation

(7,214)

(6,614)

Net finance expense

(2,742)

(2,653)

(Loss)/gain on financial instruments

(6,015)

1,704

Gain on foreign exchange differences

326

1,169

Impairments

(86)

(3,041)

Gain on derecognition of borrowings and derivative financial

instrument

-

230

Gain on acquisition

1,103

-

Restructuring costs

(1,252)

(143)

Net other

68

(245)

Revenue increased by 44%. US PGM operations increased by 69% or R10,992m (37% higher average 2E basket price, 9% weaker ZAR exchange rate and increased recycling volumes), SA PGM increased by 82% or R12,425m (Marikana operations included, 44% higher average 4E basket price). The SA gold operations incl. DRDGOLD decreased by 5% (industrial action impact - 33% reduction in Oz sold, partially offset by higher gold price).

Cost of sales before amortisation and depreciation increased at the US PGM operations due to increased recycling volumes (R6,772 m) and decreased at both the SA PGM (excl. Marikana) and SA gold operations due to the transition to Toll processing and the impact of industrial action, respectively.

Net other cash costs include care and maintenance costs of R548m at Cooke operations; R154m at the Marikana operations and R46m at Burnstone. Also included are strike related costs of R402m, corporate social investment of R149m and lease payments of R132m.

Amortisation and depreciation increased mainly due the inclusion of the Marikana operations.

Net finance expense was flat.

Loss on financial instruments included fair value loss on the US$ Convertible Bond derivative financial instrument of R3,912m (258% higher share price), and an increase in fair value loss on the Rustenburg BEE share-based payment obligation and deferred payment at the Rustenburg operations of R1,218m and R867m, respectively (higher PGM basket prices).

Gain on acquisition of R1,103m arose on the acquisition of Lonmin.

Loss before royalties, carbon tax and tax

(856)

(1,224)

Restructuring costs - Marikana and SA gold operations of R692m and R386, respectively.

Royalties

(431)

(213)

Royalties include R357m at the SA PGM operations and R74m at the SA gold operations.

Carbon tax

(13)

-

Mining and income tax charge for 2019 comprised of R1,849m in current tax due to the increase in

Mining and income tax

1,733

(1,084)

taxable mining income from the US and SA PGM operations. This was offset by a R3,582m deferred tax

credit, resulting from tax reforms in the US PGM operations and deferred tax credit relating to the

Profit/(Loss)

433

(2,521)

Rustenburg BEE share-based payment obligation.

33

1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11

of the relevant notes in the condensed consolidated provisional financial statements

Share appreciation impact on the Convertible bond

ZAR Share Price (cents)

Convertible bond

4 000

10 000

3 500

9 000

8 000

Bond

3 000

7 000

ZAR

2 500

6 000

Value

2 000

5 000

1 500

4 000

ZAR -

(Millions)

3 000

1 000

2 000

500

1 000

-

0

19 Sep 2017

H2 2017

H1 2018

H2 2018

H1 2019

H2 2019

Share Price

Debt component

Equity component

Option redemption price

Conversion Price

  • Convertible bond of US$384 million due Sep 2023 valued at US$623 million at 31 Dec 2019 due to higher share price
    • resulted in a loss R3,359 million due to fair value movements of the derivative
  • Soft call option on convertible bond in Oct 2020

34

Normalised earnings enabling possible future dividends

Figures in million - SA rand

Six months ended

Year ended

Unaudited

Reviewed

Unaudited

Reviewed

Audited

Dec 2019

Revised

Dec 2018

Dec 2019

Dec 2018

Jun 2019

Profit/(loss) attributable to the owners of

316.9

(254.7)

(2,576.3)

62.2

(2,499.6)

Sibanye-Stillwater

Adjustments to normalise earnings

4,154.4

(1,856.3)

1,660.6

2,298.1

1,062.7

Normalised earnings1

4,471.3

(2,111.0)

(915.7)

2,360.3

(1,436.9)

1 Normalised earnings is a pro forma performance measure and is not a measure of performance under IFRS, may not be comparable to similarly titled measures of other companies, and should not be considered in isolation or as alternatives to profit before tax, profit for the year, cash from operating activities or any other measure of financial performance presented in accordance with IFRS

Dividend policy: Sibanye-Stillwater's dividend policy is to return at least 25% to 35% of normalised earnings to shareholders and after due consideration of future requirements the dividend may be increased beyond these levels.

The primary strategic priority for 2019 has been to deleverage the Balance sheet and to reduce gross debt over the 12- 24 month period from US$1.8bn to US$1bn.

The most likely time for a return to dividend payments is expected to be in H1 2020, subject to prevailing commodity prices.*

*Based on the current deleveraging trajectory and subject to current commodity prices, ongoing

35

management review and approval by the Board

Deleveraging in line with our strategic objectives

Net debt to adjusted EBITDA1

30 000

4.0

3.5

3.0

25 000

2.5

million

2.0

x

R

20 000

1.5

1.0

0.5

15 000

0.0

Jun 17 Sep 17 Dec 17 Mar 18 Jun 18

Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 Dec 19

Net debt balances (lhs)

Net debt: Adjusted EBITDA (rhs)

Covenant limit (rhs)

Linear (Net debt balances (lhs))

  • Accelerated de-leveraging
    • Net debt: adjusted EBITDA reduced to 1.25x* ahead of 1.8x targeted
  • Expected return to dividends after H1 20202
    • The company's dividend policy to return at least 25% to 35% of normalised earnings to shareholders
  • Covenant limit of 3.5x for 2019 steps down to 2.5x in 2020

Accelerated ND: adjusted EBITDA1 ratio, with net debt of US$1,497 million (R20.1 billion) as at 31 Dec 2019

  1. The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant formula. For a reconciliation of profit/loss before royalties and tax to adjusted EBITDA, see note 11 of the relevant notes in the condensed consolidated provisional financial statements
  2. Based on the current deleveraging trajectory and subject to current commodity prices, ongoing management review and approval by the Board
  3. *For covenant calculations Marikana's pro forma EBITDA is utilised (i.e. adjusted to represent a full 12-month period, rather than 7 month as consolidated for accounting purposes) in order to more accurately represent the 36 enlarged entity post an acquisition. This results in a 1.25x ratio for covenant calculation purposes, compared to a 1.4x ratio reported in the financial results

Available liquidity and limited near term debt maturities

2021 RCF

2022 RCF

2023 Convertible bond

LIBOR+1.85%-2.00%

JIBAR+2.4%-2.6%

1.875%

US$600m

R5,500m

US$450m

Outstanding value

Outstanding

Outstanding nominal value US$384m

US$408m

value R2,500m

Redemption option in October 2020

(Subject to

(Subject to

extension

extension

options)

options)

Due dates

2021

2022

2023

2025

2022 Senior note

2025 Senior note

6.125%

7.125%

$500m

$550m

Outstanding nominal value $354m

Outstanding nominal value $347m

Size of bubble = size of facility

Bubble fill = quantum drawn/due

Spot on timeline = facility due date

Available liquidity with no debt maturities during 2020

Net Debt in accordance with the financing facilities excludes the non recourse Burnstone facility and lease liabilities. Bubble sizes and summary information represents nominal values are for

37

illustrative purposes

Note: Debt/facility balances are at 31 Dec 2019

Extension options within the RCF's provide additional flexibility

Adjusted Debt maturity ladder (i.e. Capital repayment profile) as at 31 December 2019

  1. 500
  1. 000

million

$339

1 500

US$

$623

1 000

$348

500

$178

$178

$306

$408

0

$102

2020

2021

2022

2023

2024

2025

US$600m dollar RCF

R5.5bn ZAR RCF

US$354m 6.125% 2022 bonds

US$384m 1.875% 2023 convertible

US$347m 7.125% 2025 bonds

The US$354 million June 2022 High Yield bonds are expected to be the next debt maturity

  • The above tenor extensions and/or value uplifts may be approved by the lenders if requested by Sibanye-Stillwater
  • 3 year US$600 million USD RCF (R8.5 billion) includes option to extend* for two years and/or increase the facility value to US$750 million (R10.5 billion)
    • 75% of the USD RCF lenders approved the first one year extension of April 2021 maturity
  • 3 year R5.5 billion ZAR RCF (US$390 million) includes option to extend* for a further two years and/or increase the facility value to R7.5 billion (US$530 million)

38

A new chapter

Conclusion

Our strategic focus areas

Strengthen our position as a leading international precious metals mining company by:

ESG is central and integrated

40

Strong shareholder value creation returns - intention to resume dividends*

Significant value created

400

Relative share price performance

by share price increase

Outperformed peers over

350

14 months but came off

300

low base

Previous discount related

250

to safety incidents in 2018,

five months gold strike, high

200

gearing and delayed

%

150

Lonmin transaction

100

50

0

Jan-19

Feb-19Mar-19

Apr-19

May-19

Jun-19

Jul-19

Aug-19Sep-19

Oct-19

Nov-19

Dec-19Jan-20

Feb-20

-50

Sibanye-Stillwater

AngloGold

Gold Fields

Harmony

FTSE/JSE ALSI

AngloPlat

Implats

Source: IRESS

41

* Based on the current deleveraging trajectory and subject to current commodity prices, ongoing management review and approval by the Board

Undervalued compared to Peers

Market consensus analysis

EV / EBITDA (2020e / 2021e)

P / FCFPS (2020e / 2021e)

Net debt / 2020e EBITDA

Senior Gold¹

8.9x

Senior Gold¹

21.1x

Senior Gold¹

0.7x

8.9x

20.7x

Intermediate

5.7x

Senior PGM³

13.2x

Sibanye-

0.4x

Gold²

5.4x

19.0x

Stillwater

Senior PGM³

5.4x

Intermediate

12.7x

Intermediate

0.2x

5.6x

Gold²

10.2x

Gold²

Sibanye-

2.8x

Sibanye-

3.9x

Senior PGM³

0.1x

Stillwater

3.2x

Stillwater

3.2x

EV & market cap (USDm)

30 423

Senior Gold¹

24 421

15 962

Senior PGM³

15 815

Sibanye-

8 979

Stillwater

7 558

Intermediate

6 619

Gold²

6 025

Sources: Public information, FactSet, broker reports. Market data as of February 14, 2020

  1. Senior Gold consists of Newmont, Barrick, Newcrest and Agnico Eagle
  2. Intermediate Gold (excluding Sibanye - Stillwater) consists of Kirkland Lake, AngloGold, Northern Star, Kinross, Gold Fields, B2Gold, Evolution and Harmony

3. Senior PGM (excluding Sibanye - Stillwater) consists of Anglo American Platinum and Impala Platinum

42

2020 Annual guidance

Production

All-in sustaining costs

Total capital

US PGM operations

660 - 700 koz

US$785 - 820/oz

US$260 - 280 million

(2E mined)

SA PGM operations²

1.0 - 1.10 moz

R15,700 - 16,500/4Eoz

R1,450million

(excluding Marikana)

(4E PGMs)²

(US$1,083 - 1,138/4Eoz)¹

(US$100 million)¹

Marikana operation

700 -750 koz

16,600 - 17,300/4Eoz

R1,650 million

(US$1,144 - 1,193/4Eoz) ¹

(US$114 million)¹

SA Gold operations

29,000kg - 31,000kg

R635,000/kg and R670,000/kg

R3,340 million

(excluding DRDGOLD)

(932koz - 997koz)

(US$1,362/oz and US$1,437/oz)

(US$230 million)

Source: Company forecasts

1.

Estimates are converted at an exchange rate of R14.50/US$

43

2.

SA PGM operations' production guidance include the 50% attributable Mimosa production, although AISC and capital exclude Mimosa due it being equity accounted

In summary

  • Established ESG framework to guide the running of our business
    • To improve safety
    • To look after communities around us
    • To become a reference producer of "green" metals
  • Created a new precious metals leader through organic growth and M&A
    • Successful integration of past acquisitions bearing fruit (Rustenburg, Aquarius, Stillwater)
    • Momentum continued in 2019
      • Restructured gold operations
      • Completed Lonmin (Marikana) acquisition with fair Competition Commission conditions
      • Increased strategic stake in DRDGOLD
  • With certain balance sheet de-risking activities completed, a high priority for the company is to restart dividends in 2020*

* Based on the current deleveraging trajectory and subject to current commodity prices, ongoing management review and approval by the Board

44

Questions?

Contacts

James Wellsted/ Henrika Ninham

ir@sibanyestillwater.com

Tel:+27(0)83 453 4014/ +27(0)72 448 5910

JSE: SGL ticker changed to SSW from 19 February 2020

NYSE: Ticker SBGL will change to SBSW on 24 February 2020

Appendix

Competent persons' declaration

For the United States Region operations, the lead competent person designated in terms of the SAMREC Code, who takes responsibility for the consolidation and reporting of the Stillwater and East Boulder Mineral Resources and Mineral Reserves, and for the overall regulatory compliance of these figures, is Brent LaMoure, who gave his consent for the disclosure of the 2019 Mineral Resources and Mineral Reserves Statement. Brent [B.Sc Mining Eng] is registered with the Mining and Metallurgical Society of America (01363QP) and has 25 years' experience relative to the type and style of mineral deposit under consideration. For the US projects Resource estimation, the competent persons are Stanford Foy (Altar and Rio Grande) and Rodney N Thomas (Marathon). Stan is a full-time employee of Aldebaran Resources Inc. and a consultant to Sibanye-Stillwater, is registered with the Society for Mining, Metallurgy and Exploration Inc. (4140727RM) and has 28 years' experience relative to the type and style of mineral deposit under consideration. Rodney is registered with the Society for Professional Geoscientists (Ontario) and has 40 years' mineral industry experience, including several years relative to the type and style of mineral deposit under consideration and is the designated Qualified Person for Generation Mining Limited.

For the Southern African Platinum Operations, the lead competent person designated in terms of the SAMREC Code, who takes responsibility for the consolidation and reporting of the SA Platinum Operations Mineral Resources and Mineral Reserves, and for the overall regulatory compliance of these figures, is Andrew Brown, who gave

his consent for the disclosure of the 2019 Mineral Resources and Mineral Reserves Statement. Andrew [M.Sc Mining Eng] is registered with SAIMM (705060) and has 36 years'

experience relative to the type and style of mineral deposit under consideration.

For the Southern African Gold Operations, the lead competent person designated in terms of the SAMREC Code, with responsibility for the consolidation and reporting of the SA Gold Operations Mineral Resources and Mineral Reserves, and for overall regulatory compliance of these figures, is Gerhard Janse van Vuuren, who gave his consent for the disclosure of the 2019 Mineral Resources and Mineral Reserves Statement. Gerhard [GDE (Mining Eng), MBA, MSCC and B. Tech (MRM)] is registered with SAIMM (706705) and has 32 years' experience relative to the type and style of mineral deposit under consideration.

For the 38.05% attributable portion (as at 31 December 2019) of the DRDGOLD current surface tailings operations includes the ERGO and FWGR operations, the company was reliant on external competent persons as follows: For the ERGO Mineral Resources the Competent Person designated in terms of SAMREC is Mr M Mudau, MSc Eng, Pr. Sci. Nat., the Resource Geology Manager at the RVN Group. The Competent Person designated in terms of SAMREC who takes responsibility for the reporting of the surface Mineral Reserves, is Professor S Rupprecht, Principal Mining Engineer of the RVN Group. The Competent Person designated in terms of SAMREC who takes responsibility for the reporting of the Mineral Reserves for the Far West Gold Recoveries operation, is Mr Vaughn Duke of Sound Mining Proprietary Limited.

47

Disclaimer

Sibanye Gold Limited published this content on 19 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 February 2020 16:39:07 UTC


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