Wrap Text
Operating and financial results for the six months and financial year ended 31 December 2014
Sibanye Gold Limited
Incorporated in the Republic of South Africa
Registration number 2002/031431/06
Share code: SGL
Issuer code: SGL
ISIN – ZAE E000173951
Listings
JSE : SGL
NYSE : SBGL
Website
www.sibanyegold.co.za
OPERATING AND FINANCIAL RESULTS
FOR THE SIX MONTHS AND FINANCIAL YEAR ENDED 31 DECEMBER 2014
A PROUDLY SOUTH AFRICAN MINING COMPANY
WESTONARIA 19 February 2015: Sibanye Gold Limited (“Sibanye”) (JSE: SGL & NYSE: SBGL) is pleased to report operating and financial results for the six
months ended 31 December 2014, and reviewed condensed, consolidated preliminary financial statements for the year ended 31 December 2014.
Salient features for the 12 months ended 31 December 2014
- Final dividend of 62 SA cents per share declared, resulting in a total annual dividend of 112 SA cents per share amounting to approximately
R1 billion in cash returned to shareholders; equivalent to a 3.7% yield at 18 February 2015
Salient features for the six months ended 31 December 2014
- Gold production increased by 13% to 27,289kg (877,400oz) compared with the six months ended 31 December 2013
- Total cash cost of R298,520/kg (US$847/oz) and All-in sustaining cost of R376,687/kg (US$1,069/oz)
- R4.0 billion (US$364 million) operating profit
- Net debt of R1.5 billion (US$127 million) at 31 December 2014, resulting in a net debt to EBITDA ratio of 0.2 times
United States Dollars Key Statistics South African Rand
Year ended Six months ended Six months ended Year ended
Dec 2013 Dec 2014 Dec 2013 Jun 2014 Dec 2014 Dec 2014 Jun 2014 Dec 2013 Dec 2014 Dec 2013
1,429.9 1,589.3 773.6 711.9 877.4 000’oz Gold produced kg 27,289 22,143 24,061 49,432 44,474
13,624 18,235 7,188 7,783 10,452 000ton Ore milled 000ton 10,452 7,783 7,188 18,235 13,624
1,408 1,267 1,301 1,293 1,243 $/oz Revenue R/kg 437,979 443,865 420,423 440,615 434,663
92 73 85 76 70 $/ton Operating cost R/ton 763 815 852 785 879
766.5 690.3 398.7 326.6 363.7 $m Operating profit Rm 3,981.0 3,488.1 3,992.0 7,469.1 7,357.9
38 34 39 35 33 % Operating margin % 33 35 39 34 38
885 849 804 848 847 $/oz Total cash cost R/kg 298,520 291,212 259,919 295,246 273,281
1,148 1,071 1,043 1,070 1,069 $/oz All-in sustaining cost R/kg 376,687 367,322 336,848 372,492 354,376
18 15 20 17 14 % AISC margin % 14 17 20 15 18
176.3 143.3 144.8 49.9 93.4 $m Basic earnings Rm 1,018.8 532.7 1,402.4 1,551.5 1,692.4
27 17 20 6 10 c.p.s Basic earnings c.p.s 113 69 191 186 260
243.6 130.9 147.5 61.2 69.7 $m Headline earnings Rm 765.3 652.2 1,428.9 1,417.5 2,309.8
37 16 20 8 8 c.p.s Headline earnings c.p.s 85 84 195 170 355
Stock data for the six months ended 31 December 2014
Number of shares in issue JSE Limited – (SGL)
– at end of December 898,840,196 Price range per ordinary share ZAR19.05 to ZAR29.52
– weighted average 898,520,432 Average daily volume 2,465,559
Free Float 100% NYSE – (SBGL); one ADR represents four ordinary shares
ADR Ratio 1:4 Price range per ADR US$6.60 to US$10.98
Bloomberg/Reuters SGLS / SGLJ.J Average daily volume 916,644
STATEMENT BY NEAL FRONEMAN, CHIEF EXECUTIVE OFFICER OF SIBANYE GOLD
“2014 was a year of operational and financial consolidation for Sibanye. Our primary objective was to entrench the new operating model and operational
structures, which had been successfully implemented at the Beatrix, Driefontein and Kloof operations (“Beatrix, Driefontein and Kloof”) in 2013, whilst
integrating the newly acquired Cooke Operation (“Cooke”) into the Group. At the same time, cognisant of the importance of ensuring the consistency and
sustainability of our performance, we established dedicated internal capacity focused on securing the long term future of our company. A dedicated
projects team is assessing all organic opportunities within the group while a new business development function was established to consider external,
value accretive opportunities, ensuring that the operations focus on delivery. We have also established a Safe Technology function which will explore
ways to modernise the operations, by using new technologies to improve working conditions and make the working environment safer for employees, while
at the same time improving productivity and reducing costs.
Safety
Our focus on establishing a safe, production-friendly operating environment, through the ongoing implementation of our health and safety strategy and
initiatives to reduce risk continues, as we strive towards our goal of Zero Harm. Following specific management intervention (mentioned in the
September 2014 results report), Beatrix recorded a fatality free December 2014 quarter, with Driefontein and Kloof consecutively experiencing no
fatalities for seven and six months respectively. Fatalities at Beatrix, Driefontein and Kloof were, as a result, lower year-on-year, with eight
fatalities recorded during 2014, compared with nine during 2013. Cooke suffered a total of three fatal accidents during the seven months of
incorporation into Sibanye. The majority of these incidents were a result of avoidable human error and the safety performance at Cooke is being
addressed through ongoing implementation of Sibanye’s safety management systems and practices.
Operating review
Sibanye achieved record quarterly gold production of 14,079kg (452,700oz) during the December 2014 quarter at a 5% lower All-in cost compared with the
September 2014 quarter. Gold production from the Beatrix, Driefontein and Kloof operations for the same period increased by 5% to 12,108kg (389,300oz)
with Total cash cost at R272,266/kg (US$756/oz) and All-in cost at R362,603/kg (US$1,007/oz), 8% and 4% higher, well below South African inflation and
mining sector cost inflation.
Group gold production for the year ended 31 December 2014, was in line with guidance at 49,432kg (1.59Mozs). This is despite the loss of over 500kg
(16,100oz) due to an underground fire at Driefontein early in the year and persistent ESKOM load shedding in the latter half of the December 2014
quarter. Total cash cost for the year of R295,246/kg (US$849/oz) and All-in sustaining cost of R372,492/kg (US$1,071/oz) were also in line with
guidance, with annual increases maintained at well below historical mining inflation rates.
The original core operations, Beatrix, Driefontein and Kloof, produced 45,127kg (1.45Mozs) of gold during 2014, a 1.5% increase compared with 2013
annual production. Costs were well controlled, with Total cash cost of R285,716/kg (US$821/oz) and All-in cost of R367,722/kg (US$1,057/oz), 5% and 4%
higher respectively, than during 2013. The production build-up at Cooke was slower than forecast, primarily due to underperformance at the Cooke 4
Section (“Cooke 4”), which resulted in the initiation of a Section 189 restructuring process. Cooke contributed 4,305kg (138,400oz) during the seven
months of incorporation in Sibanye. Total cash cost and All-in cost for the Cooke operations were R395,168/kg (US$1,136/oz) and R461,045/kg
(US$1,325/oz), respectively.
The integration of Cooke also saw Sibanye achieve its strategic objective of bringing lower grade gold resources to account through the production of
by-product uranium. Sibanye is now well positioned to exploit extensive lower grade resources at the Cooke operations profitably. In addition, Sibanye
will now be able to enter into long term uranium contracts as a result of the regular and consistent delivery of ammonium diuranate (U308) to Nufcor.
Uranium production from Cooke continued uninterrupted from May 2014, resulting in a uranium inventory of approximately 180,000lbs U308 at year-end.
No uranium sales were made during the year. Uranium produced during 2014 was valued at R52 million (US$5 million) and carried as inventory on the
balance sheet at the direct cost of production.
Cooke 4 restructuring
As announced on SENS on 2 February 2015, the Group successfully completed the Cooke 4 Section 189 consultation process and reached agreement with
employees and organised labour on 12 November 2014, on implementing appropriate measures to minimise job losses and restore Cooke 4 to profitability.
Measures agreed to restore Cooke 4 to sustainable profitability included, inter alia: implementation of an alternative work cycle at Cooke 4; a
reduction of 392 employees in the Cooke 4 mining employee complement (approximately 16% of a total of 2,403 employees); a reduction of 38 employees at
the Ezulwini Plant (approximately 16% of a total of 238 employees); rationalisation of management structures at Cooke and a moratorium on strike action
in support of wage increases in 2015.
The outcome of the retrenchment avoidance measures being implemented was that from a possible 1,776 employees at risk at Cooke 4, no forced
retrenchments were implemented, with the required reduction in the employee complement primarily achieved through voluntary separation packages and
voluntary early retirements. The alternative work cycle has been successfully implemented since 24 November 2014 and should result in better
utilisation of the Cooke 4 asset, with the mine being worked Monday to Saturday (six days a week) every week, compared to the existing 11 shift
fortnight arrangement (eleven shifts over fourteen days). The net result of the implementation of the alternative work cycle will be an additional 22
working shifts per annum. Importantly, an additional 213 jobs were saved due to additional employees required to accommodate the extra shifts.
This was a positive outcome for all parties involved and illustrates the significant benefits that can arise for the industry and all of its
stakeholders from cooperative engagement between organised labour and business.
Financial review
The Sibanye operations generated an operating profit of R4 billion (US$364 million) for the six months ended 31 December 2014, which was the same as
that achieved for the same period in 2013. Profit before non-recurring items of R1.5 billion (US$133 million) was 26% lower year-on-year, primarily as
a result of the R330 million (US$30 million) share of losses reported by Rand Refinery following the difficulties it has been experiencing reconciling
its inventory. Profit before taxation benefited from a R474 million (US$44 million) reversal of the impairment of the Beatrix West Section, which was
partly offset by the R156 million (US$14 million) impairment of the Python processing plant where operations were suspended in July 2014.
Normalised earnings (from which dividends are calculated), exclude gains or losses on foreign exchange and financial instruments, non-recurring items
and share of associates after royalties and tax, and as a result tend to be more consistent than basic and headline earnings. For the six months ended
31 December 2014 normalised earnings decreased by 5% year-on-year, to R1.2 billion (US$106 million) and for the year ended 31 December 2014, normalised
earnings declined by 3% to R2.3 billion (US$206 million).
Cash generated by the operations for the six months ended 31 December 2014, of R3.8 billion (US$348 million) was consistent with the corresponding
period in 2013. Net cash flow from operating activities was R1.6 billion (US$140 million), 47% lower year-on-year due to an increase in dividends,
taxation and royalties paid, as well as higher working capital movements. The increase in tax and royalties was due to year end payments of
R594 million (US$55 million).
The extra tax and royalty payment in December also affected Group net debt as at 31 December 2014. Net debt for the Group, excluding R1.1 billion
(US$98 million) attributable to the Burnstone project which has no recourse to Sibanye’s balance sheet, increased from R499 million (US$48 million) at
31 December 2013, to R1.5 billion (US$127 million) at 31 December 2014. This increase is post cash outflows of approximately R3.0 billion
(US$278 million) in royalty, tax and dividend payments, the repayment of R2.3 billion (US$212 million) debt and the R415 million (US$40 million)
purchase consideration for Witwatersrand Consolidated Gold Resources Limited (“Wits Gold”). The debt repayment included R616 million (US$58 million)
debt associated with the Cooke Operations, R40 million (US$4 million) to settle an outstanding loan at Wits Gold and a further R900 million
(US$83 million) reduction in Sibanye Group debt.
Dividend declaration
Consistent with Sibanye’s strategic positioning and commitment to provide shareholders with meaningful dividends, the Board declared a final dividend
of 62 SA cents per share for the six months ended 31 December 2014. The approximate R1 billion (112 SA cents per share) total dividend declared for
2014 is 22% higher than the dividend declared in 2013 and equivalent to an industry leading 3.7% dividend yield at 18 February 2015.
Projects(1)
During the year significant progress was made in reviewing and classifying all Group organic projects by the centrally managed Projects team which was
established in mid-2014.
Following assessment and review, key projects have been identified and prioritised, with additional work required on others. Projects which have been
reviewed include:
- The Kloof 4 Shaft and Driefontein 5 Shaft below infrastructure projects: pre-feasibility studies on the viability of accessing resources below
current infrastructure, by means of the development of declines were completed in 2014. The pre-feasibility studies for both projects suggest robust
economic returns that exceed the Group’s internal investment hurdle rates. These projects have consequently been included in Group gold Reserves in
2015 and into the Life of Mine production plan. The below infrastructure projects add approximately 1.1Moz and 0.5Moz to the Driefontein and Kloof gold
Mineral Reserves respectively. Additional detailed feasibility studies are scheduled for completion during Q2 2015.
- The West Rand Tailing Retreatment Project: a phased development approach has been adopted for this significant surface dump retreatment project.
A detailed feasibility study, which is due for completion during Q1 2015, is specifically considering how to leverage available surface infrastructure,
including existing surface gold plants at Driefontein and Kloof and uranium processing capacity at the Ezulwini plant, in order to generate early cash
flow and enhance value.
- The Burnstone project: Capital expenditure of R286 million was approved by the Sibanye Board in 2014 to provide working capital, complete critical
infrastructure at the Burnstone project and to complete a feasibility study. The infrastructure development, which commenced in July 2014 and is
planned for completion in September 2015, involves two main areas of focus: completion of the shaft infrastructure and pumping facilities underground
to allow dewatering. A feasibility study reviewing and assessing the viability of the entire project is well advanced and is on schedule for completion
during Q2 2015. Revised geological modelling and mineral resource estimation underpinned an updated 8.9Moz gold Mineral Resource. This will form the
base for the feasibility study and associated development and life of mine plan.
- The Beatrix West Section, Beisa project: a pre-feasibility study on this gold and uranium resource was completed in December 2014. Various
regulatory approvals and permits are required before this project can be advanced. Applications for the various permits and approvals will commence
during 2015 and ongoing optimisation and review of the pre-feasibility study will continue in parallel with the permitting process.
Reserves and Resources(1)
The acquisition of the Cooke and Wits Gold assets in mid-2014 was the primary reason for the substantial year-on-year increase in Sibanye’s gold and
uranium Mineral Reserves and Resources declared at 31 December 2014. Gold Mineral Resources and Reserves increased by 60% to 103.9Moz and 44% to
28.4Moz respectively. Uranium Resources increased three fold to 227.4Mlb and uranium Reserves increased by 137% to 102.5Mlb.
The increase in Group gold Reserves was further enhanced by an increase in underground gold Reserves at the Beatrix, Driefontein and Kloof operations.
Gold Reserves at these operations increased by 11% to 21.9Moz (net of depletion in 2014), following the successful conclusion of feasibility studies on
various organic underground growth projects at the operations, complemented by reductions in planning cut-off grades. This follows a 46% year-on-year
increase to 17.9Moz at these operations in 2013, as a result of the successful application of Sibanye’s operating model, which resulted in lower costs
and cut-off grades at the operations. Cumulatively, this represents a 63% increase in gold Reserves, net of 2.9Moz of gold produced from the Beatrix,
Driefontein and Kloof operations, since Sibanye listed in February 2013, significantly extending their operating lives. This is a remarkable outcome
considering market perception at the time was that these operations had limited operating lives.
Sibanye will continue to review recently acquired and other organic growth projects in accordance with Group protocols and procedures, and consider
possible synergies which may exist with its current operations
Stakeholder relations
We recognise the importance that all our stakeholders play in ensuring the sustainability of our business and our efforts are guided and underpinned by
our vision of delivering superior value to all of our stakeholders through our culture of caring. Through continued delivery of this vision, we expect
that our employees and communities will come to appreciate the importance that a profitable and sustainable business has for them and the other
stakeholders who rely on the gold industry.
Electricity supply considerations
On listing in 2013, we stated that we would be exploring alternative sources of long term electricity supply in response to the risk that uncertain,
inconsistent and increasingly expensive power supplied by the state owned power utility, ESKOM, posed to our current operations and future development.
Ongoing delays at ESKOM’s new capacity build projects and a lack of critical maintenance at its existing stations, has resulted in regular supply
interruption, which is likely to continue for the foreseeable future.
Whilst we have identified and implemented numerous measures that have enabled us to reduce electricity consumption by approximately 20% since 2007,
spiralling capital costs have led to rapidly escalating power costs for consumers as ESKOM has consecutively implemented punitive annual electricity
tariff increases. Power costs as a percentage of operating costs at Sibanye, have swelled from approximately 9% in 2007 to a projected 20% in 2015.
In order to mitigate the short term risk, we have continued to work with ESKOM to manage and minimise the impact of load shedding on our operations.
It was already clear in 2013 though, that security of electricity supply and rising costs would remain an issue for many years to come and in order to
mitigate this risk, we began exploring a number of alternative supply options to reduce reliance on ESKOM.
In 2014 we completed a pre-feasibility study investigating the potential of solar power as an alternative source of electrical power. The pre-
feasibility study confirmed that solar power provides an economically competitive solution to Sibanye’s electricity requirements, which will partially
insulate us from the effects of interruptions in ESKOM supply. We are contemplating a phased R3 billion investment, with involvement of financial
partners, in establishing a solar photovoltaic generating plant with a peak generating capacity of 150MW. This represents a substantial portion of
Sibanye's overall 500MW power demand, and will provide around 10% of our electrical energy requirements when averaged over the course of a day. A site
large enough to host a 150MW installation with limited potential for other land use has been identified close to Driefontein. We intend to submit
permitting applications early in 2015, and anticipate that we will be able to start independent generation of captive electricity for our operations
during 2017.
Sibanye has undertaken several studies into other alternative energy sources that we consider reliable and over which we will be able to exercise some
control. To this end, we are completing an in depth investigation into coal fired power stations varying in size from 200MW to 600MW. A key aspect of
this will be ensuring reliable quality coal sources. We are also engaging with technology partners in order to develop a deeper insight into
independent power generation. It is our intention to become fully independent of Eskom over the next few years, as this will make a material difference
to production costs.
Outlook for 2015
Gold production for the year ending 31 December 2015 is forecast to be between 50,000kg and 52,000kg (1.61Moz and 1.67Moz). Total cash cost is forecast
at between R305,000/kg (US$850/oz) and R315,000/kg (US$875/oz). All-in sustaining cost is forecast to be between R380,000/kg (US1,055oz) and
R395,000/kg (US$1,100/oz), with All-in cost forecast to be between R385,000/kg (US$1,070/oz) and R400,000/kg (US$1,110/oz). Approximately 250,000lbs of
by-product uranium production is forecast.”
19 February 2015
Neal Froneman, Chief Executive Officer
(1) For further details relating to the Company’s Mineral Resources and Mineral Reserves, please refer to the SENS Announcement of 2 February 2015,
available on the Company’s Website
https://www.sibanyegold.co.za/investors/news/sens, or at the following link:
https://trade.sharenet.co.za/feeds/share_performance/sens_display.php?user=sibanye&key=meeinr&year=2015&link=20150205145100@23
FINANCIAL REVIEW OF THE GROUP
For the six months ended 31 December 2014 compared with the six months ended 31 December 2013
The financial results for the six months ended 31 December 2014 include combined production and costs from the Cooke operations acquired in the June
2014 quarter, and Beatrix, Driefontein and Kloof.
Revenue
Revenue is driven by the rand gold price and the level of gold produced and sold during the year.
Revenue increased by 18% to R11,952 million (US$1,093 million) for the six months ended 31 December 2014 from R10,116 million (US$1,007 million) for
the comparable period in 2013. This was primarily due to a 13% increase in gold production from 24,061kg (773,600oz) to 27,289kg (877,400oz). On a
like-for-like basis, excluding the contribution from Cooke, gold production was marginally lower period-on-period at 23,627kg (759,600oz), due to
operational disruptions linked to intermittent power supply and lower yields at Driefontein.
The average rand gold price was 4% higher at R437,979/kg compared with R420,423/kg, despite a 4% decline in the average dollar gold price from
US$1,301/oz to US$1,243/oz. Signs of an economic recovery in the United States of America and lower commodity prices contributed to the rand
depreciating 9% from R10.05/US$ to R10.96/US$.
Cost of sales
Operating costs
The increase in Group operating costs from R6,124 million (US$608 million) to R7,971 million (US$729 million) was primarily due to the incorporation of
the Cooke operations and higher underground production from Kloof, as well as reflecting the annual wage increase and higher electricity costs. Cooke
added R1,452 million (US$134 million) to costs for the six months ended 31 December 2014. Despite the increase in absolute costs, the unit cost per ton
milled decreased by 10% from R852/ton to R763/ton. Good cost control at Beatrix, Driefontein and Kloof is evident in the marginal year-on-year increase
in costs to R866/ton at these operations.
Revenue from uranium sales will be credited to costs once sold, however, there were no sales during 2014.
Total cash cost and All-in cost was in line with forecast, at R298,520/kg (US$847/oz) and R382,550/kg (US$1,086/oz) respectively.
Amortisation and depreciation
Group amortisation and depreciation increased by 3% to R1,767 million (US$162 million). This increase was as a result of the incorporation of Cooke,
which added R277 million (US$26 million) for the six months ended 31 December 2014. This increase was mostly offset by lower amortisation and
depreciation from Driefontein as a result of the increase in declared gold Mineral Reserves early in 2014. Amortisation is calculated over the
operating life and a units of production method is applied.
Operating margin
The Group operating margin decreased to 33% from 39%. The margin excluding Cooke was 37%.
Finance expenses
Finance expenses increased by 28% to R240 million (US$22 million) for the six months ended 31 December 2014, primarily due to a R44 million
(US$4 million) increase in the environmental rehabilitation obligation accretion expense and interest on the Burnstone debt of R39 million
(US$4 million) partially offset by a decrease in interest paid following a reduction in gross debt.
Share of results of associates
The loss from share of results of associates for the six months ended 31 December 2014 of R322 million (US$30 million) was primarily due to additional
share of losses of R330 million (US$30 million) relating to Sibanye’s 33.1% interest in Rand Refinery Proprietary Limited (“Rand Refinery”).
Following the adoption of a new Enterprise Resource Planning (“ERP”) system in 2013, Rand Refinery has been unable to reconcile its actual gold
inventory against its accounting records. Despite various internal projects undertaken and external reviews by experts, the root cause of the imbalance
has not yet been identified. The interim conclusion that Rand Refinery’s management has reached is that the imbalance arises from an unaccounted
processing inefficiency.
On 18 December 2014, Rand Refinery drew down under the terms of the shareholder loan, with Sibanye’s proportional share being R385 million
(US$33 million).
For additional information of Sibanye’s investment in Rand Refinery and the loss, refer to note 2 on page 12 of this report.
Share-based payments
Share-based payments increased by 10% to R210 million (US$19 million) for the six months ended 31 December 2014. This was mainly due to the fair value
of each option granted under the scheme increasing due to the appreciation in Sibanye’s share price between the allocation and vesting dates.
The share-based payment expense for the six months ended 31 December 2014 predominantly relates to R129 million (US$12 million) (31 December 2013:
R92 million (US$10 million)) of cash-settled share options (granted under the “Phantom Share Scheme”) and R81 million (US$7 million) (31 December 2013:
R99 million (US$9 million)) of equity-settled share options (granted under the Sibanye and Gold Fields Limited Share Plans).
Gain or loss on financial instruments
The cash-settled share options are valued at each reporting period based on the fair value of the instrument at that reporting date. The difference
between the reporting date fair value and the initial recognition fair value of these cash-settled share options is included in the gain/(loss) on
financial instruments in the income statement.
The net gain on financial instruments for the six months ended 31 December 2014 was R70 million (US$7 million) compared with a loss in the six months
ended 31 December 2013 of R18 million (US$2 million). This consists of a fair value gain of R51 million (US$5 million) (31 December 2013: loss of
R33 million (US3 million)) related to the Phantom Share Scheme options, a fair value gain of R3 million (US$nil million) (31 December 2013: Rnil
(US$nil)) on investments under the environmental rehabilitation obligation funds and a gain of R16 million (US$2 million) (31 December 2013:
R15 million (US$1 million)) relating to the financial guarantee liability.
Non-recurring items
Impairment
During the six months ended 31 December 2014 a decision was taken to impair the Python processing plant at Kloof by R156 million (US$14 million).
The Python plant was decommissioned in July 2014 due to process design flaws.
Reversal of impairment
During the six months ended 30 June 2013, the Beatrix West Section was impaired following a fire impacting its future commercial viability.
During the second half of the year Beatrix West underwent a restructuring process and has subsequently returned to profitability. As a result a
decision was taken to reverse the impairment by R474 million (US$44 million).
Restructuring costs
Significant restructuring during the year ended 31 December 2013 had resulted in R439 million (US$46 million) additional costs, of which R96 million
(US$8 million) was accounted for in the six months ended 31 December 2013. For the six months ended 31 December 2014 restructuring costs of R54 million
(US$5 million) were incurred at Cooke, and for voluntary separation packages at Driefontein and Corporate Services.
Transaction costs
The transaction costs incurred during the period mainly relate to the finalisation of the Burnstone acquisition.
Mining and income taxation
Mining and income taxation increased to R494 million (US$45 million) from R182 million (US$19 million) for the six months ended 31 December 2013.
Current taxation decreased by R94 million (US$14 million) to R445 million (US$41 million) due to the decrease in taxable profit. The Python plant
impairment and reversal of the Beatrix West Section impairment resulted in a deferred taxation charge of R72 million (US$7 million), increasing the
total taxation charge year-on-year. The change in the estimated long-term deferred tax rate at which the temporary differences reverse amounted to a
tax credit of R214 million (US$22 million) during the six months ended 31 December 2013.
Cash flow analysis
Sibanye defines free cash flow as cash from operating activities before dividends, less additions to property, plant and equipment.
Free cash flow of R96 million (US$7 million) was lower than for the six months ended 31 December 2013. This was largely due to the R317 million
(US$25 million) increase in investment in working capital, R766 million (US$65 million) increase in royalties and taxation paid, and R442 million
(US$29 million) increase in capital expenditure. The increase in tax and royalties was due to year end payments of R594 million (US$55 million).
Sibanye raised and repaid R1,624 million (US$150 million) and R1,391 million (US$128 million), respectively of debt during the period.
Capital expenditure
Capital expenditure increased by 30% to R1,905 million (US$174 million) from R1,463 million (US$145 million). This increase was due to the
incorporation of Cooke, which accounted for R200 million (US$19 million), R72 million (US$7 million) on infrastructure and pre-development at the
Burnstone project, and R90 million (US$8 million) on unplanned ore reserve development (“ORD”) due to the resumption of development at the Beatrix West
Section. The balance was mainly due to the carbon-in-leach (“CIL”) tank upgrade at the Driefontein processing plant, which amounted to R92 million
(US$8 million).
Acquisitions
The acquisition of Burnstone was completed during the period.
The total consideration for Burnstone was R77 million (US$7 million) compared with the fair value of assets acquired and liabilities assumed of
R77 million (US$7 million).
Dividend declaration
Sibanye’s policy is to return between 25% and 35% of normalised earnings as a dividend to shareholders. Sibanye defines normalised earnings as basic
earnings excluding gains and losses on foreign exchange and financial instruments, non-recurring items and its share of result of associates, after
taxation. The Board may also consider declaring a special dividend after due consideration of the Group’s cash position and future requirements.
The Board approved a Final dividend (number 2) of 62 SA cents per share (gross) in respect of the six months ended 31 December 2014. The full year
dividend of 112 SA cents per share is above the range defined by Sibanye’s dividend policy and reflects the Board’s confidence in the outlook for the
Group.
The final dividend is subject to the Dividends Withholding Tax. In accordance with paragraphs 11.17 (a) (i) and 11.17 (c) of the JSE Listings
Requirements the following additional information is disclosed:
- The dividend has been declared out of income reserves;
- The local Dividends Withholding Tax rate is 15% (fifteen per centum);
- The gross local dividend amount is 62 SA cents per ordinary share for shareholders exempt from the Dividend Withholding Tax;
- The Company has no STC credits available and the Dividend Withholding Tax of 15% will be applicable to this dividend;
- The net local dividend amount is 52.7000 SA cents (85% of 62 SA cents) per ordinary share for shareholders liable to pay the Dividends
Withholding Tax;
- Sibanye currently has 898,840,196 ordinary shares in issue;
- Sibanye’s income tax reference number is 9431 292 151; and
- Sibanye’s Auditors are KPMG Inc. and the individual auditor is Jacques Erasmus.
Shareholders are advised of the following dates in respect of the final dividend:
- Final dividend number 2: 62 SA cents per share
- Last date to trade cum dividend: Friday, 13 March 2015
- Sterling and US dollar conversion date: Monday, 16 March 2015
- Shares commence trading ex-dividend: Monday, 16 March 2015
- Record date: Friday, 20 March 2015
- Payment of dividend: Monday, 23 March 2015
Please note that share certificates may not be dematerialised or rematerialised between Monday, 16 March 2015, and Friday, 20 March 2015, both dates
inclusive.
SALIENT FEATURES AND COST BENCHMARKS
Salient features and cost benchmarks for the six months ended 31 December 2014, 30 June 2014 and 31 December 2013
Total Driefontein Kloof Beatrix Cooke#
Under Under Under Under Under
Group -ground Surface -ground Surface -ground Surface -ground Surface -ground Surface
Tons milled/treated 000’ton Dec 2014 10,452 4,532 5,920 1,353 1,522 1,034 1,115 1,375 916 770 2,367
Jun 2014 7,783 3,412 4,371 1,144 1,345 949 1,555 1,196 1,059 123 412
Dec 2013 7,188 3,692 3,496 1,347 1,433 959 1,267 1,386 796 - -
Yield g/t Dec 2014 2.61 5.53 0.37 6.38 0.47 7.93 0.57 3.70 0.39 4.10 0.21
Jun 2014 2.85 5.93 0.44 6.73 0.51 7.86 0.48 3.78 0.37 4.54 0.20
Dec 2013 3.35 6.01 0.53 7.04 0.60 7.76 0.56 3.80 0.37 - -
Gold produced/sold kg Dec 2014 27,289 25,074 2,215 8,634 719 8,195 636 5,085 358 3,160 502
Jun 2014 22,143 20,230 1,913 7,695 687 7,458 749 4,518 393 559 84
Dec 2013 24,061 22,195 1,866 9,485 858 7,446 713 5,264 295 - -
000’oz Dec 2014 877.4 806.2 71.2 277.6 23.1 263.5 20.5 163.5 11.5 101.6 16.1
Jun 2014 711.9 650.4 61.5 247.4 22.1 239.8 24.1 145.3 12.6 18.0 2.7
Dec 2013 773.6 713.6 60.0 304.9 27.6 239.4 22.9 169.3 9.5 - -
Gold price received R/kg Dec 2014 437,979 438,490 437,969 437,571 437,329
Jun 2014 443,865 444,798 442,927 444,838 436,236
Dec 2013 420,423 420,719 419,966 420,543 -
US$/oz Dec 2014 1,243 1,244 1,243 1,242 1,241
Jun 2014 1,293 1,295 1,290 1,296 1,270
Dec 2013 1,301 1,302 1,300 1,302 -
Operating cost R/ton Dec 2014 763 1,601 121 1,688 169 2,096 171 1,125 79 1,634 82
Jun 2014 815 1,693 129 1,873 169 2,023 144 1,258 75 1,683 83
Dec 2013 852 1,527 139 1,663 162 1,992 141 1,073 92 - -
Operating margin % Dec 2014 33 34 30 40 20 40 32 30 55 7 24
Jun 2014 35 36 33 37 26 42 32 25 55 15 7
Dec 2013 39 40 38 44 36 39 40 33 41 - -
Total cash cost R/kg Dec 2014 298,520 279,066 274,567 303,656 398,334
Jun 2014 291,212 287,664 267,747 325,229 377,138
Dec 2013 259,919 247,336 261,086 281,615 -
US$/oz Dec 2014 847 792 779 862 1,130
Jun 2014 848 838 780 947 1,098
Dec 2013 804 765 808 872 -
All-in sustaining
cost R/kg Dec 2014 376,687 355,223 359,676 370,733 448,252
Jun 2014 367,322 359,687 345,035 384,158 430,793
Dec 2013 336,848 312,472 351,195 338,586 -
US$/oz Dec 2014 1,069 1,008 1,021 1,052 1,272
Jun 2014 1,070 1,048 1,005 1,119 1,255
Dec 2013 1,043 967 1,087 1,048 -
All-in cost R/kg Dec 2014 382,550 355,223 359,676 372,460 446,357
Jun 2014 367,601 359,687 345,035 384,158 430,793
Dec 2013 336,848 312,472 351,195 338,586 -
US$/oz Dec 2014 1,086 1,008 1,021 1,057 1,323
Jun 2014 1,071 1,048 1,005 1,119 1,255
Dec 2013 1,043 967 1,087 1,048 -
All-in cost margin % Dec 2014 13 19 18 15 (7)
Jun 2014 17 19 22 14 2
Dec 2013 20 26 16 19 -
Total capital
expenditure* R’mil Dec 2014 1,905.1 631.0 679.6 311.9 200.3
Jun 2014 1,345.7 517.9 555.9 236.1 29.6
Dec 2013 1,462.9 560.3 654.4 227.6 -
US$’mil Dec 2014 174.5 57.7 62.1 28.5 18.5
Jun 2014 126.0 48.5 52.1 22.1 2.8
Dec 2013 145.0 56.0 64.8 22.1 -
Average exchange rates for the six months ended 31 December 2014, 30 June 2014 and 31 December 2013 were R10.96/US$, R10.68/US$ and R10.05/
US$ respectively.
Figures may not add as they are rounded independently.
* Included in total Group capital expenditure is Corporate expenditure of R82.3 million (US$7.6 million), R6.2 million (US$0.6 million) and
R20.6 million (US$2.1 milion), for the six months ended 31 December 2014, 30 June 2014 and 31 December 2013 respectively. Included in Corporate
capital expenditure for the six months to December 2014 is R71.6 milion (US$6.6 milion) relating to pre-development expenditure at our Burnstone
mine.
# Cooke’s results are included from acquisition, resulting in only one month’s results included for the six months ended 30 June 2014.
REVIEW OF OPERATIONS
Six months ended 31 December 2014 compared with the six months ended 31 December 2013 (except for the Cooke operations which compare successive
quarters)
Underground operations
Driefontein
Gold production of 8,634kg (277,600oz) was 9% lower than for the comparable period in 2013. This was primarily due to the average on-reef yield
decreasing to 6.4g/t from 7.0g/t. Ore milled was marginally higher at 1,353,000 tons.
Main development increased by 4% to 9,429 metres and on-reef development of 2,197 metres was 21% higher than the last six months of 2013.
Operating costs increased by 2% to R2,285 million (US$209 million), in line with the increase in volumes mined, as well as the increase in on-reef
development. Cost saving initiatives, including a further reduction in employees, largely offset the inflationary impact of the annual wage increases
and increased electricity tariffs.
Operating profit decreased by 14% to R1,497 million (US$137 million) as a result of the lower production and the increase in costs. The operating
margin decreased to 40% from 44% for the comparative period in 2013.
Capital expenditure decreased by 7% to R519 million (US$47 million), largely due to a decrease in ORD capitalised. Capital was predominantly spent on
ORD, stabilisation of the shaft barrel at Ya Rona shaft and development at Hlanganani shaft.
Kloof
Gold production increased by 10% to 8,195kg (263,500oz) due to an improvement in volumes mined and an improvement in grade.
Ore milled increased by 8% to 1,034,000 tons and the average yield increased by 2% to 7.9g/t due to improved recoveries. Unit cost per ton milled
increased by 5% to R2,096/ton.
Main development increased by 2% to 9,693 metres mostly due to a planned ramp-up at 8 shaft. To improve flexibility on-reef development increased by
13% to 2,064 metres.
Operating costs increased by 13% to R2,167 million (US$198 million), driven by an increase in stoping and development volumes and increases in wages
and electricity tariffs.
Operating profit, increased by 17% to R1,419 million (US$129 million). The operating margin increased marginally to 40%.
Capital expenditure increased by 10% to R670 million (US$61 million) largely due to the relative increase in on-reef development. Capital was
predominantly spent on ORD, safety related system upgrades, cable replacement for Thuthukani shaft and winder upgrades.
Beatrix
Gold production decreased by 3% to 5,085kg (163,500oz). This was primarily due to safety related stoppages which resulted in a shortfall in reef tons
from underground sources. This contributed to a 5% unit cost increase to R1,125/ton.
To improve flexibility, on-reef development increased across all the sections by 38% to 3,328 metres. Total development at 11,494 metres increased by
14% due to an increase in development on the West Section. The average development value increased to 1,070cm.g/t from 914cm.g/t.
Operating costs increased by 4% to R1,548 million (US$141 million) due to the annual wage increase, the annual electricity increase and the increased
development, partly offset by an increase in capitalised ORD.
Operating profit decreased by 7% to R674 million (US$62 million) as a result of the lower gold production and increase in operating costs, partly
offset by the higher gold price received. The operating margin decreased from 33% to 30% for the six months ended 31 December 2014.
Capital expenditure increased 38% to R308 million (US$28 million) due to the resumption of ORD at Beatrix West Section.
Cooke
Gold produced was 3,160kg (101,600/oz) for the six months ended 31 December 2014, with a 17% improvement quarter-on-quarter. Despite the increase,
production was slightly below the planned build up due to production disruptions at Cooke 4, which was affected by a seismic event in the shaft pillar,
and at Cooke 3, production was affected by a fatality and resultant Section 54 work stoppage.
Ore milled also showed a positive trend increasing by 3% quarter-on-quarter to 391,000 tons. The yield increased by 16% to 4.4g/t.
Uranium production which is still in a build-up phase, was 30,886kg (68,909lbs) for the quarter. Importantly, the unit cost continues to decrease with
an increase in throughput, with the average production cost of US$24/lb having been achieved in the last quarter.
Main development increased by 23% for the December quarter to 4,540 metres and on-reef development by 17% to 1,950 metres. The average development
value decreased by 1% to 533cm.g/t due to a relative increase in development in the uranium by-product areas.
Unit operating costs at R1,602/ton will continue to decline during the build up to full production by mid-2015.
Capital expenditure of R85 million (US$8 million) was similar to the previous quarter with the majority expended on ORD and the backfill project at
Cooke 2 shaft.
Surface operations
Driefontein
Gold production decreased by 16% to 719kg (23,100oz). This decrease was mainly as a result of a decline in the average yield due to depletion of higher
grade surface sources and short-term metallurgical issues, which impacted on recoveries. Surface ore processed increased by 6% to 1,522,000 tons.
Operating cost was 11% higher at R257 million (US$24 million), mainly due to increased surface ore handling costs, and above inflation increases in
electricity and lime costs, while unit costs were only 4% higher at R169/ton as a result of the increased throughput.
Capital expenditure of R112 million (US$10 million) was largely spent on the carbon-in-leach circuit installation, which was commissioned at
Driefontein number 2 plant in December 2014.
Kloof
Gold production decreased by 11% to 636kg (20,500oz) due to the decision to cease operation of the Python processing plant in July 2014. Surface ore
processed decreased by 12% to 1,115,000 tons as a result, while the yield was flat at 0.57g/t.
Operating costs increased by 7% to R191 million (US$17 million) and unit costs increased 21% to R171/ton due to lower volumes processed, and higher
electricity and surface ore handling costs.
Beatrix
Gold production from surface operations increased by 22% to 358kg (11,500oz) due to higher volumes processed from surface sources, which replaced
production lost from underground due to safety related stoppages. As a result, throughput increased by 15% to 916,000 tons. The yield increased
slightly to 0.39/g/t from 0.37g/t.
Operating costs decreased by 1% to R72 million (US$7 million) due to improved ore transport efficiencies; by establishing shorter rock transport routes
at both plants. As a result of these improvements, milling costs from surface operations were 14% lower at R79/ton.
Capital expenditure of R4 million was similar to the six months ended 31 December 2013.
Cooke
Production throughput at the Cooke plant continued to improve throughout the year from the commissioning of the Cooke optimisation project in the first
quarter of 2014. Tons processed in the final two quarters of 2014 averaged the design throughout with 1,287,000 tons processed in the December quarter.
Gold produced increased to 266kg in the December quarter from 236kg in the September quarter.
Yields were marginally lower than planned at 0.21g/t due to lower than planned head grades, and lower recoveries owing to a metallurgically complex
feed from the Millsite dump 20 resource.
Unit operating cost by year end had reduced to around R80/ton.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Condensed consolidated income statement
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Year ended Six month periods ended Six month periods ended Year ended
Audited Reviewed Reviewed Reviewed Reviewed Audited
December 2013 December 2014 December 2013 June 2014 December 2014 Notes December 2014 June 2013 December 2013 December 2014 December 2013
2,013.7 2,013.0 1,006.6 920.3 1.092.7 Revenue 11,952.0 9,828.5 10,115.8 21,780.5 19,331.2
(1,247.2) (1,322.7) (607.9) (593.7) (729.0) Operating costs (7,971.0) (6,340.4) (6,123.8) (14,311.4) (11,973.3)
766.5 690.3 398.7 326.6 363.7 Operating profit 3,981.0 3,488.1 3,992.0 7,469.1 7,357.9
(323.3) (300.8) (171.5) (139.3) (161.5) Amortisation and depreciation (1,766.5) (1,488.2) (1,715.1) (3,254.7) (3,103.9)
443.2 389.5 227.2 187.3 202.2 Net operating profit 2,214.5 1,999.9 2,276.9 4,214.4 4,254.0
16.7 16.9 10.4 8.3 8.6 Investment income 94.5 88.7 102.5 183.2 160.3
(43.8) (37.0) (18.4) (15.0) (22.0) Finance expenses (240.1) (159.9) (187.2) (400.0) (420.3)
(10.0) (8.7) (3.4) (2.8) (5.9) Net other costs (64.2) (29.8) (35.3) (94.0) (95.6)
- (1.4) - - (1.4) Exploration and feasibility costs (15.1) - - (15.1) -
5.4 (43.5) 1.7 (14.0) (29.5) Share of results of associates after tax (321.6) (149.1) 17.2 (470.7) 51.5
(31.9) (38.6) (19.3) (19.5) (19.1) Share-based payments (209.7) (208.2) (190.9) (417.9) (305.8)
(0.5) (10.0) (2.0) (16.6) 6.6 Gain/(loss) on financial instruments 70.1 (177.8) (18.0) (107.7) (4.6)
6.7 (5.9) 4.4 0.6 (6.5) (Loss)/gain on foreign exchange differences (68.5) 5.2 3.4 (63.3) 24.0
385.8 261.3 200.6 128.3 133.0 Profit before non-recurring items 1,459.9 1,369.0 1,968.6 2,828.9 3,663.5
Profit on disposal of property,
0.6 0.9 0.6 - 0.9 plant and equipment 9.3 0.2 5.1 9.5 5.5
(89.7) (25.4) - (11.3) (14.1) Impairments 3 (155.5) (119.6) - (275.1) (821.0)
43.8 - - 43.8 Reversal of impairment 4 474.1 - - 474.1 -
(3.1) - (3.1) - - Loss on loss of control of subsidiary - - (30.2) - (30.2)
(45.8) (14.8) (8.3) (9.9) (4.9) Restructuring costs (54.3) (106.0) (96.4) (160.3) (439.4)
(1.0) (10.3) (1.0) (7.6) (2.7) Transaction costs (30.1) (81.5) (9.3) (111.6) (9.3)
246.8 255.5 188.8 99.5 156.0 Profit before royalties and taxation 1,703.4 1,062.1 1,837.8 2,765.5 2,369.1
(43.2) (39.8) (24.9) (18.3) (21.5) Royalties (235.3) (195.2) (247.5) (430.5) (414.6)
203.6 215.7 163.9 81.2 134.5 Profit before taxation 1,468.1 866.9 1,590.3 2,335.0 1,954.5
(26.7) (76.5) (18.5) (31.3) (45.2) Mining and income taxation (493.9) (334.2) (181.6) (828.1) (256.2)
(84.4) (81.3) (54.8) (40.6) (40.7) - Current taxation (445.2) (434.0) (539.0) (879.2) (809.8)
57.7 4.8 36.3 9.3 (4.5) - Deferred taxation (48.7) 99.8 357.4 51.1 553.6
176.9 139.2 145.4 49.9 89.3 Profit for the period 974.2 532.7 1,408.7 1,506.9 1,698.3
Attributable to:
176.3 143.3 144.8 49.9 93.4 - Owners of Sibanye Gold 1,018.8 532.7 1,402.4 1,551.5 1,692.4
0.6 (4.1) 0.6 - (4.1) - Non-controlling interests (44.6) - 6.3 (44.6) 5.9
Earnings per ordinary share (cents)
27 17 20 6 10 Basic earnings per share 113 69 191 186 260
27 17 19 6 10 Diluted earnings per share 111 67 187 182 255
650,621 835,936 734,367 772,679 898,520 Weighted average number of shares (‘000) 898,520 772,679 734,367 835,936 650,621
Diluted weighted average number of
664,288 854,727 748,034 792,209 914,809 shares (‘000) 914,809 792,209 748,034 854,727 664,288
Headline earnings per ordinary share (cents) 5
37 16 20 8 8 Headline earnings per share 85 84 195 170 355
37 15 20 8 8 Diluted headline earnings per share 84 82 191 166 348
650,621 835,936 734,367 772,679 898,520 Weighted average number of shares (‘000) 898,520 772,679 734,367 835,936 650,621
664,288 854,727 748,034 792,209 914,809 Diluted weighted average number of shares (‘000) 914,809 792,209 748,034 854,727 664,288
9.60 10.82 10.05 10.68 10.96 Average R/US$ rate
The condensed consolidated financial statements have been prepared by the corporate accounting staff of Sibanye Gold Limited headed by
Pieter Henning, Vice President Corporate Finance. This process was supervised by Charl Keyter, the Group’s Chief Financial Officer.
Condensed consolidated statement of comprehensive income
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Year ended Six month periods ended Six month periods ended Year ended
Audited Reviewed Reviewed Reviewed Reviewed Audited
December 2013 December 2014 December 2013 June 2014 December 2014 December 2014 June 2013 December 2013 December 2014 December 2013
176.9 139.2 145.4 49.9 89.3 Profit for the period 974.2 532.7 1,408.7 1,506.9 1,698.3
(111.0) (148.4) (23.2) (30.9) (117.5) Other comprehensive income net of tax - - - - -
(111.0) (148.4) (23.2) (30.9) (117.5) Currency translation adjustments - - - - -
65.9 (9.2) 122.2 19.0 (28.2) Total comprehensive income 974.2 532.7 1,408.7 1,506.9 1,698.3
Total comprehensive income attributable to:
65.3 (1.5) 121.6 19.0 (20.5) - Owners of Sibanye Gold 1,018.8 532.7 1,402.4 1,551.5 1,692.4
0.6 (7.7) 0.6 - (7.7) - Non-controlling interests (44.6) - 6.3 (44.6) 5.9
9.60 10.82 10.05 10.68 10.96 Average R/US$ rate
Condensed consolidated statement of financial position
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Year ended Six month periods ended Six month periods ended Year ended
Audited Restated Reviewed Reviewed Restated Audited
December 2013 June 2014 December 2014 Notes December 2014 June 2013 December 2013
1,672.2 2,290.1 2,247.5 Non-current assets 25,981.4 24,229.2 17,289.9
1,465.3 2,001.7 1,964.0 Property, plant and equipment 22,704.0 21,177.4 15,151.0
- 69.6 63.7 Goodwill 6 736.7 736.7 -
26.6 0.6 6.0 Equity accounted investments 69.4 6.4 275.1
0.1 0.1 0.1 Investments 1.4 1.4 1.4
Environmental rehabilitation
153.6 192.4 189.7 obligation funds 2,192.8 2,035.7 1,588.1
23.1 21.3 19.5 Financial guarantee asset 225.5 224.9 238.5
3.5 4.4 4.5 Deferred taxation 51.6 46.7 35.8
261.7 222.7 167.8 Current assets 1,940.5 2,356.4 2,705.0
18.1 27.0 28.3 Inventory 327.7 285.3 187.1
94.3 75.2 85.9 Trade and other receivables 992.8 795.9 973.8
Current portion of financial
5.0 5.0 4.9 guarantee asset 57.1 53.2 51.7
- 1.7 - Assets held for sale - 18.3 -
144.3 113.8 48.7 Cash and cash equivalents 562.9 1,203.7 1,492.4
1,933.9 2,512.8 2,415.3 Total assets 27,921.9 26,585.6 19,994.9
911.4 1,359.2 1,296.3 Shareholders’ equity 14,985.9 14,380.8 9,423.4
675.1 738.2 810.2 Non-current liabilities 9,365.4 7,810.9 6,980.0
361.3 360.7 334.8 Deferred taxation 3,869.3 3,815.7 3,735.4
144.2 119.7 226.3 Borrowings 9 2,615.8 1,266.6 1,491.4
160.6 225.5 215.1 Environmental rehabilitation obligation 2,486.8 2,386.2 1,660.7
1.6 1.5 1.3 Post-retirement healthcare obligation 15.1 16.3 16.3
7.4 30.8 32.7 Share-based payment obligation 378.4 326.1 76.2
347.4 415.4 308.8 Current liabilities 3,570.6 4,393.9 3,591.5
200.5 279.2 234.8 Trade and other payables 2,714.6 2,953.6 2,073.0
20.0 18.5 17.0 Financial guarantee liability 197.0 195.7 206.6
74.2 56.3 7.3 Taxation and royalties payable 84.0 595.9 767.2
48.3 52.4 47.9 Current portion of borrowings 9 554.2 554.0 499.5
Current portion of share-based
4.4 9.0 1.8 payment obligation 20.8 94.7 45.2
1,933.9 2,512.8 2,415.3 Total equity and liabilities 27,921.9 26,585.6 19,994.9
48.2 58.3 225.5 Net debt 2,607.1 616.9 498.5
10.34 10.58 11.56 Closing R/US$ rate
Condensed consolidated statement of changes in equity
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Non- Non-
Stated Other Accumulated controlling Total Total controlling Accumulated Other Stated
capital Reserves loss interest equity equity interest loss Reserves capital
- 767.6 (1 895.7) (0.5) (1,128.6) Balance at 31 December 2012 (audited) (9,672.7) (4.6) (12,098.0) 2,429.9 -
- (111.0) 176.3 0.6 65.9 Total comprehensive income for the period 1,698.3 5.9 1,692.4 - -
- - 176.3 0.6 176.9 Profit for the period 1,698.3 5.9 1,692.4 - -
- (111.0) - - (111.0) Other comprehensive income net of tax - - - - -
1,955.3 - - - 1,955.3 Shares subscription 17,245.8 - - - 17,245.8
- - (27.1) - (27.1) Dividends paid (271.9) - (271.9) - -
- 22.2 - - 22.2 Share-based payments 213.4 - - 213.4 -
- - - 0.3 0.3 Transactions with non-controlling interests 3.0 3.0 - - -
- - - (0.2) (0.2) Loss of control of subsidiary (2.1) (2.1) - - -
- - 23.6 - 23.6 Transactions with shareholder 209.6 - 209.6 - -
1,955.3 678.8 (1,722.9) 0.2 911.4 Balance at 31 December 2013 (audited) 9,423.4 2.2 (10,467.9) 2,643.3 17,245.8
- (144.8) 143.3 (7.7) (9.2) Total comprehensive income for the period 1,506.9 (44.6) 1,551.5 - -
- - 143.3 (4.1) 139.2 Profit for the period 1,506.9 (44.6) 1,551.5 - -
- (144.8) - (3.6) (148.4) Other comprehensive income net of tax - - - - -
- - (93.6) - (93.6) Dividends paid (1,005.2) - (1,005.2) - -
- 16.2 - - 16.2 Share-based payments 175.8 - - 175.8 -
433.3 - - - 433.3 Shares issued 4,488.8 - - - 4,488.8
Acquisition of subsidiary with non-
- - - 38.2 38.2 controlling interest (refer to note 6) 396.2 396.2 - - -
- - 2.2 (2.2) - Transactions with non-controlling interests - (24.2) 24.2 - -
2,388.6 550.2 (1,671.0) 28.5 1,296.3 Balance at 31 December 2014 (reviewed) 14,985.9 329.6 (9,897.4) 2,819.1 21,734.6
Condensed consolidated statement of cash flows
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Year ended Six month periods ended Six month periods ended Year ended
Audited Reviewed Reviewed Reviewed Reviewed Audited
December 2013 December 2014 December 2013 June 2014 December 2014 December 2014 June 2013 December 2013 December 2014 December 2013
Cash flows from operating activities
716.7 654.5 390.4 306.1 348.4 Cash generated by operations 3,812.0 3,269.4 3,854.6 7,081.4 6,840.0
(0.3) (0.2) (0.2) - (0.2) Post-retirement healthcare payments (1.9) (0.5) (2.1) (2.4) (2.7)
(0.4) (15.4) (0.4) (5.9) (9.5) Cash-settled share-based payments paid (103.1) (63.5) (3.9) (166.6) (3.9)
59.2 19.8 (19.2) 63.7 (43.9) Change in working capital (465.9) 680.4 (149.0) 214.5 568.7
775.2 658.7 370.6 363.9 294.8 Cash generated by operating activities 3,241.1 3,885.8 3,699.6 7,126.9 7,402.1
5.0 5.0 5.0 2.5 2.5 Guarantee fee received 26.4 27.2 47.0 53.6 47.0
6.6 6.3 3.9 3.5 2.8 Interest received 31.0 37.5 38.3 68.5 63.3
(34.0) (17.9) (13.2) (8.3) (9.6) Interest paid (105.4) (88.6) (135.7) (194.0) (326.3)
(25.9) (60.1) (20.1) (23.7) (36.4) Royalties paid (397.1) (253.0) (195.8) (650.1) (249.0)
(31.8) (124.5) (23.7) (51.7) (72.8) Taxation paid (795.3) (551.8) (230.8) (1,347.1) (304.8)
(27.1) (93.6) (27.1) (52.0) (41.6) Dividends paid (450.0) (555.2) (271.9) (1,005.2) (271.9)
668.0 373.9 295.4 234.2 139.7 Net cash flows from operating activities 1,550.7 2,501.9 2,950.7 4,052.6 6,360.4
Cash flows from investing activities
(302.2) (300.4) (145.0) (126.0) (174.4) Additions to property, plant and equipment (1,905.1) (1,345.7) (1,462.9) (3,250.8) (2,901.5)
0.7 2.1 0.5 - 2.1 Proceeds on disposal of property, plant and equipment 22.4 0.2 5.2 22.6 6.9
Contributions to funds and payment of environmental
(19.0) (7.4) (9.0) - (7.4) rehabilitation obligation (80.2) - (91.1) (80.2) (182.8)
- (39.7) - (39.7) - Investment in subsidiary (refer to note 7) - (415.3) - (415.3) -
Loans granted to subsidiary prior to acquisition
- (22.8) - (15.6) (7.2) (refer to note 6, 7 and 8) (77.4) (161.2) - (238.6) -
Cash acquired on acquisition of subsidiaries
- 3.7 - 3.6 0.1 (refer to note 6 and 7) 0.7 37.4 - 38.1 -
- (33.3) - - (33.3) Loan advanced to equity-accounted investee (384.6) - - (384.6) -
0.6 - 0.6 - - Cash flow on loss of control of subsidiary - - 5.9 - 5.9
(319.9) (397.8) (152.9) (177.7) (220.1) Net cash flows from investing activities (2,424.2) (1,884.6) (1,542.9) (4,308.8) (3,071.5)
Cash flows from financing activities
1,955.3 - - - - Shares issued on unbundling - - - - 17,245.8
(1,025.0) (212.3) (386.7) (84.8) (127.5) Loans repaid (1,390.9) (906.0) (4,000.0) (2,296.9) (9,840.0)
793.8 150.1 179.5 - 150.1 Loans raised 1,623.6 - 2,000.0 1,623.6 7,620.0
(1,939.7) - - - - Related party loans repaid - - - - (17,108.0)
(0.9) - (0.9) - - Financing costs capitalised - - (9.1) - (9.1)
0.3 - 0.3 - - Shares issued to non-controlling interest - - 3.0 - 3.0
(216.2) (62.2) (207.8) (84.8) 22.6 Net cash flows from financing activities 232.7 (906.0) (2,006.1) (673.3) (2,088.3)
131.9 (86.1) (65.3) (28.3) (57.8) Net cash (utilised)/generated (640.8) (288.7) (598.3) (929.5) 1,200.6
(21.6) (9.5) 3.6 (2.2) (7.3) Effect of exchange rate fluctuations on cash held - - - - -
34.0 144.3 206.0 144.3 113.8 Cash and cash equivalents at beginning of period 1,203.7 1,492.4 2,090.7 1,492.4 291.8
144.3 48.7 144.3 113.8 48.7 Cash and cash equivalents at end of period 562.9 1,203.7 1,492.4 562.9 1,492.4
9.60 10.82 10.05 10.68 10.96 Average R/US$ rate
10.34 11.56 10.34 10.58 11.56 Closing R/US$ rate
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of accounting and preparation
The condensed consolidated preliminary financial information for the six months and year ended 31 December 2014 has been prepared and presented in
accordance with the requirements of the JSE Listings Requirements for preliminary reports and the requirements of the Companies Act of South Africa.
The JSE Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (“IFRS”) and the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by Financial Reporting Standards Council and to also, as a minimum, contain the information required
by IAS 34 Interim Financial Reporting. The accounting policies used in the preparation of the condensed consolidated preliminary financial statements
are in terms of IFRS and are consistent with those applied in the preparation of the audited consolidated financial statements of Sibanye (“the Group”)
for the year ended 31 December 2013, except for the adoption of applicable revised and/or new standards issued by the International Accounting
Standards Board. The newly adopted standards did not materially impact the Group’s financial results, other than disclosures.
The consolidated statement of financial position as at 30 June 2014 has been restated to reflect the adjustment of the initial accounting in respect of
the Cooke Operations acquired on 15 May 2014. Adjustments were made to the provisional calculation of the fair values resulting in an increase of
R141.6 million in the fair value of identifiable net assets acquired, an increase of R34.1 million in the non-controlling interest in the recognised
amounts of the assets and liabilities of the Cooke operations, and a decrease of R107.5 million in the reported value of goodwill. The adjustment had
no effect on the consolidated income statement and statements of other comprehensive income and cash flows. The impact of these adjustments is
presented in note 6.
The condensed consolidated income statement and statements of other comprehensive income and cash flows for the six months ended 31 December 2013 have
not been reviewed and were prepared by deducting the reviewed condensed consolidated financial statements for the six months ended 30 June 2013 from
the audited complete consolidated financial statements for the year ended 31 December 2013. The condensed consolidated income statement and statements
of other comprehensive income and cash flows for the six months ended 31 December 2014 have not been reviewed and were prepared by deducting the
reviewed condensed consolidated financial statements for the six months ended 30 June 2014 from the reviewed condensed consolidated preliminary
financial statements for the year ended 31 December 2014.
The translation of the Group financial statements into US Dollar is based on the average exchange rate for the period for the income statement and
statement of cash flows and the period-end closing exchange rate for the statement of financial position items. Exchange differences on translation are
accounted for in the statement of comprehensive income. This information is provided as supplementary information only.
2. Rand Refinery
Sibanye has a 33.1% interest in Rand Refinery Proprietary Limited (“Rand Refinery”) which is accounted for using the equity method.
As disclosed in Sibanye’s financial statements for the year ended 31 December 2013 in April 2013, Rand Refinery implemented a new Enterprise Resource
Planning (“ERP”) system; the customisation of this software was problematic with the result that Rand Refinery was not able to fully reconcile certain
accounts at 30 September 2013 being Rand Refinery’s year end. More specifically an imbalance was detected between physical gold and silver on hand
(physical inventory) and what Rand Refinery owed its depositors and bullion bankers (ownership) per the metallurgical trial balance. The uncertainty
around the true inventory position prevented Rand Refinery from finalising its annual financial statements for the year ended 30 September 2013 by the
time that Sibanye finalised its financial results for the year ended 31 December 2013. Accordingly, Sibanye’s estimated share of results of Rand
Refinery for the year ended 31 December 2013 was based on Rand Refinery’s unaudited management accounts. As further disclosed the maximum share of the
potential adjustment from the unaudited management accounts would be limited to the carrying value of the investment of R270.1 million.
Rand Refinery’s investigations to determine the root cause of the imbalance continued throughout of the 2014 calendar year and are still ongoing.
Based on information available at 30 June 2014, the gold imbalance was estimated at 87,000oz. Based on its detailed discussions and due diligence
Sibanye estimated a 50% probability that the gold imbalance was not recoverable. Sibanye’s share of this loss adjustment was R196.4 million. This
amount was partly offset by Sibanye’s R45.9 million share of Rand Refinery’s profits for the six month period, resulting in an estimated net loss share
of R150.5 million which was recognised in Sibanye’s profit and loss for the six months ended 30 June 2014. At 30 June 2014, the continued uncertainty
relating to the imbalance and discussions regarding the establishment of an irrevocable subordinated shareholder loan were an indicator of impairment.
As Sibanye’s proportional share of the proposed shareholder loan exceeded the carrying value of the investment at 30 June 2014, the remaining carrying
value of the investment in Rand Refinery was fully impaired and accordingly an impairment loss of R119.6 million was recognised.
On 23 July 2014 following discussion with the bullion bankers, AngloGold Ashanti Limited (42.4% shareholding), Sibanye, Harmony Gold Mining Company
Limited (11.3% shareholding) and Gold Fields Operations Limited (2.8% shareholding) (together, the “Financing Shareholders”) collectively agreed to
offer financial support to Rand Refinery in the form of an irrevocable subordinated loan of up to R1.2 billion (the “Facility”). Under the terms of
this agreement Rand Refinery could only draw on the Facility when there was confirmation that an actual imbalance exists. Sibanye’s proportional share
of the Facility amounted to R448.8 million.
On 18 December 2014, Rand Refinery drew down R1.029 billion under the Facility, with Sibanye’s proportional share of the Facility being R384.6 million.
Any amounts drawn under the Facility are repayable within two years from the first draw down date. If the loan is not repaid within the two years, it
will automatically convert into equity in Rand Refinery. Interest under the Facility will be at Jibar plus a margin of 3.5%. Sibanye has subordinated
all claims it might have against Rand Refinery as part of the Facility agreement.
On 19 December 2014, Rand Refinery issued its audited annual financial statements for the years ended 30 September 2013 and 30 September 2014 which
indicated a total loss of 71,000oz relating to the imbalance. The financial statements stated that despite various internal projects undertaken and
external reviews by experts, the root cause of the imbalance has not yet been identified. The interim conclusion that Rand Refinery’s management has
reached, is that the imbalance is a processing inefficiency. Further initiatives are being introduced to continue to try to identify the root cause of
the imbalance. Based on the latest information available, Sibanye prospectively reduced the carrying value of its investment in Rand Refinery by
R329.5 million.
The carrying value of Rand Refinery remains an area of estimation and uncertainty, until the root cause of the imbalance is determined.
The equity-accounted investment in Rand Refinery movement for the period is as follows:
Figures are in South African Rand millions unless otherwise stated
Six month periods ended Year ended
Reviewed Reviewed Audited
December 2014 June 2014 December 2013 December 2014 December 2013
Balance at the beginning of the period - 270.1 252.9 270.1 218.6
Share of results of Rand Refinery after tax (329.5) (150.5) 17.2 (480.0) 51.5
Impairment of investment in Rand Refinery - (119.6) - (119.6) -
Loan to Rand Refinery 384.6 - - 384.6 -
Balance at the end of the period 55.1 - 270.1 55.1 270.1
3. Impairment
The impairment of R275.1 million for the year ended 31 December 2014 consists of R119.6 million relating to the impairment of the Group’s investment
in Rand Refinery (refer to note 2) and R155.5 million relating to the impairment of the Python plant at Kloof.
4. Reversal of impairment at Beatrix West
During the six months ended 30 June 2013 the mining assets of Beatrix West Section were impaired by R821.0 million due to a fire during February 2013
which affected approximately 38% of the planned production area, impacting on the commercial viability of the Beatrix West Section. In addition
management entered into a Section 189 consultation with affected stakeholders, agreeing that ore reserve development would largely be suspended and
that the remaining ore reserves would be mined to completion.
Due to the positive results of the restructured Beatrix West Section it returned to profitability and as a result a decision was taken to reverse the
impairment recorded during the six months ended 30 June 2013. This resulted in a R474.1 million (R360.3 million net of deferred taxation) reversal of
impairment to the historical carrying value.
5. Reconciliation of headline earnings with profit for the period
Figures are in South African Rand millions unless otherwise stated
Six month periods ended Year ended
Reviewed Reviewed Audited
December 2014 June 2014 December 2013 December 2014 December 2013
Profit attributable to owners of Sibanye Gold 1,018.8 532.7 1,402.4 1,551.5 1,692.4
Profit on disposal of property, plant and equipment (9.3) (0.2) (5.1) (9.5) (5.5)
Impairment 155.5 119.6 - 275.1 821.0
Reversal of impairment (474.1) - - (474.1) -
Loss on loss of control of subsidiary - - 30.2 - 30.2
Taxation effect of re-measurement items 74.4 0.1 1.4 74.5 (228.3)
Headline earnings 765.3 652.2 1,428.9 1,417.5 2,309.8
6. Cooke acquisition
On 15 May 2014 all conditions precedent to the acquisition of Gold One’s 76% shareholding in, and the Gold One Group claims against, Newshelf 1114
Proprietary Limited (“Newshelf“) were fulfilled. Newshelf holds a 100% shareholding in Rand Uranium Proprietary Limited and Ezulwini Mining Company
Proprietary Limited, the activities of these companies include the Cooke Operations.
On completion of the Newshelf black economic empowerment structure, Sibanye will have a 74% interest in Newshelf. The current balance of 24% not owned
by Sibanye forms part of the Newshelf black economic empowerment structure and is reflected as the non-controlling interest.
As consideration for the acquisition of the Cooke Operations, Sibanye issued 156,894,754 new Sibanye ordinary shares at R28.61, representing 17% of
Sibanye's issued share capital, on a fully diluted basis to Gold One.
The acquisition is forecast to be earnings accretive, will increase Sibanye’s annual gold production, and enhance existing operational flexibility, by
leveraging Sibanye’s existing assets in the West Wits region. The transaction will also facilitate the optimal development of the West Rand Tailings
Retreatment Project, enhancing the return on investment from Sibanye’s surface processing facilities and reducing a future environmental liability.
For the month ended 30 June 2014, Cooke contributed revenue of R280.5 million and profit of R0.3 million to the Group’s results. For the six months
ended 31 December 2014, Cooke contributed revenue of R1.6 billion and a loss of R188.1 million to the Group’s results.
At 30 June 2014 the purchase price allocation (“PPA”) was prepared on a provisional basis in accordance with IFRS 3 Business Combinations (“IFRS 3”).
If new information, obtained within one year of the acquisition date, about facts and circumstances that existed at the acquisition date identifies
adjustments to the about amounts, or any additional provisions that existed at acquisition date, then the accounting for the acquisition will be
revised.
Subsequently the Group received new information above amounts that existed at acquisition date and adjustments were made to the provisional calculation
of the fair values resulting in an increase of R141.6 million in the fair value of identifiable net assets acquired, an increase of R34.1 million in
the non-controlling interest in the recognised amounts of the assets and liabilities of Cooke, and a decrease of R107.5 million in the reported value
of goodwill. Accordingly the PPA has been restated as permitted by IFRS 3.
Consideration transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred:
Figures are in South African Rand millions unless otherwise stated
Revised
Equity instruments (156,894,754 ordinary shares) 4,488.8
Loans advanced pre-acquisition 161.2
Total consideration transferred 4,650.0
Acquisition related costs
The Group incurred acquisition related costs of R81.5 million on advisory and legal fees. These costs are recognised as “transaction costs” in profit
and loss.
Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the acquisition date:
Figures are in South African Rand millions unless otherwise stated
Revised
Property, plant and equipment 5,556.4
Environmental rehabilitation obligation funds 341.7
Inventories 77.6
Trade and other receivables 156.8
Cash and cash equivalents 31.8
Deferred taxation (169.2)
Borrowings (696.2)
Environmental rehabilitation obligation (501.8)
Trade and other payables (486.2)
Taxation and royalties payable (1.4)
Total identifiable net assets acquired 4,309.5
Goodwill
Goodwill arising from the acquisition has been recognised as follows:
Figures are in South African Rand millions unless otherwise stated
Revised
Consideration transferred 4,650.0
Fair value of identifiable net assets (4,309.5)
Non-controlling interest in their proportionate interest in
the recognised amounts of the assets and liabilities of the
Cooke operations 396.2
Goodwill 736.7
The allocation of goodwill has been provisionally allocated to the various cash generating units. None of the goodwill recognised is expected to be
deducted for tax purposes.
7. Witwatersrand Consolidated Gold Resources Limited acquisition
Sibanye announced on 11 December 2013 that it had offered to acquire the entire issued share capital of Witwatersrand Consolidated Gold Resources
Limited (“Wits Gold”) for a cash consideration of R11.55 per Wits Gold share. The transaction was subject to the fulfilment of various conditions
precedent which were completed on 14 April 2014.
Sibanye was required to deposit the full Scheme Consideration into an escrow account to comply with regulations 111(4) and 111(5) of the Companies Act
Regulations, 2011. As at 31 December 2013, R410 million was held in the escrow account and formed part of the Group’s cash and cash equivalents balance
as reported at 31 December 2013.
On 13 March 2014, at the Wits Gold shareholders meeting, the shareholders of Wits Gold approved the proposed transaction by voting in favour of the
various resolutions to give effect to the transaction.
On 14 April 2014, Sibanye paid R400.5 million to the Wits Gold shareholders and obtained control (100%) of Wits Gold. Wits Gold is not a business as
defined in IFRS and thus the acquisition is considered to be outside the scope of IFRS 3 Business Combinations. The acquisition was accounted for as an
asset acquisition in which the consideration paid for the acquisition is allocated to the individual identifiable assets acquired and liabilities
assumed based on their relative fair values. Transaction related expenses of R14.8 million have been capitalised.
The majority of the Wits Gold resources are adjacent to Beatrix and, through synergies with existing operations and infrastructure, will secure the
long-term future of Beatrix.
The consideration paid and the assets acquired and liabilities assumed at the acquisition date are as follows:
Figures are in South African Rand millions unless otherwise stated
Cash 415.3
Total consideration paid 415.3
Figures are in South African Rand millions unless otherwise stated
Property, plant and equipment 472.7
Trade and other receivables 1.7
Cash and cash equivalents 5.6
Borrowings (40.0)
Trade and other payables (24.7)
Total identified net assets acquired 415.3
8. Burnstone acquisition
On 5 July 2013 Witwatersrand Consolidated Gold Resources Limited (“Wits Gold”) announced to its shareholders that it had submitted a final binding
offer (“the Offer”) to Mr Peter van den Steen, the business rescue practitioner of Sibanye Gold Eastern Operations Proprietary Limited (“SGEO”)
(previously Southgold Exploration Proprietary Limited), to acquire SGEO, the sole owner of the Burnstone gold mine (“Burnstone”) located in South
Africa’s Mpumalanga Province. The Offer was included in the business rescue plan that was approved by the creditors of SGEO on 11 July 2013.
All the outstanding conditions precedent were met on 1 July 2014, and Sibanye, through its subsidiary Wits Gold, took control (100%) of Burnstone from
this date, also the date on which SGEO came out of business rescue. Sibanye acquired all of the issued shares of SGEO together with all shareholder and
inter-group loans against SGEO for a purchase consideration of R100.00. Wits Gold was required to fund R77.4 million for the settlement of all
outstanding creditors of SGEO. As at 30 June 2014 R82.1 million was held in escrow accounts and forms part of the Group’s cash and cash equivalents.
Wits Gold has to fund up to R950 million by means of a loan (“Wits Gold Loan”), over time, as working capital to support the production plan. The Wits
Gold Loan will attract interest at the Johannesburg Interbank Agreed Rate (“JIBAR”) plus a margin of 4%.
The PPA has been prepared on a provisional basis in accordance with IFRS 3.
If new information, obtained within one year of the acquisition date, about facts and circumstances that existed at the acquisition date identifies
adjustments to the about amounts, or any additional provisions that existed at acquisition date, then the accounting for the acquisition will be
revised.
Consideration transferred
The following table summarises the acquisition date fair value of each major class of consideration transferred:
Figures are in South African Rand millions unless otherwise stated
Cash -
Loans advanced pre-acquisition 77.4
Total consideration transferred 77.4
Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the acquisition date:
Figures are in South African Rand millions unless otherwise stated
Property, plant and equipment 1,089.7
Environmental rehabilitation obligation funds 32.4
Inventories 0.4
Trade and other receivables 27.2
Cash and cash equivalents 0.7
Burnstone Debt (1,007.6)
Environmental rehabilitation obligation (42.2)
Trade and other payables (23.2)
Total identifiable net assets acquired 77.4
Burnstone Debt
SGEO had bank debt of R1,883.9 million (US$178.1 million) (the “Burnstone Debt”) of which R1.9 million (US$0.2 million) was settled on 1 July 2014.
The Burnstone Debt will be interest free at first and will attract interest at the London Interbank Offered Rate (“LIBOR”) plus a margin of 4% from
1 July 2017. The Burnstone Debt is fully secured against the assets of Burnstone and there is no recourse to the Sibanye Group.
The first 50% of Burnstone’s free cash flow will be used to repay the Wits Gold Loan and the balance of 50% to repay US$7.8 million of the Burnstone
Debt. On settlement of this US$7.8 million, 90% of Burnstone’s free cash flow will be used to repay the Wits Gold Loan and the balance of 10% to repay
the Burnstone Debt. On settlement of the Wits Gold Loan and interest, Burnstone Debt will be repaid from 30% of Burnstone’s free cash flow and the
balance will be paid to Wits Gold.
The Bank Lenders will continue to participate in 10% of Burnstone’s free cash flow after the Burnstone Debt has been repaid in full to a maximum amount
of US$63.0 million under a revenue participation agreement.
9. Borrowings
The Group’s borrowings movement during the period is as follows:
Figures are in South African Rand millions unless otherwise stated
Six month periods ended Year ended
Reviewed Reviewed Audited
December 2014 June 2014 December 2013 December 2014 December 2013
Balance at the beginning of the period 1,820.6 1,990.9 4,000.0 1,990.9 4,220.0
Borrowings acquired on acquisition of subsidiaries 1,007.6 736.2 - 1,743.8 -
Loans raised 1,623.6 - 2,000.0 1,623.6 7,620.0
- R4.5 billion Facilities 884.6 - 2,000.0 884.6 2,000.0
- Bridge Loan Facilities and other facilities - - - - 4,570.0
- Other committed and uncommitted facilities 739.0 - - 739.0 1,050.0
Loans repaid (1,390.9) (906.0) (4,000.0) (2,296.9) (9,840.0)
- Cooke borrowings - (616.0) - (616.0) -
- Wits Gold borrowings - (40.0) - (40.0) -
- Burnstone Debt (1.9) - - (1.9) -
- R4.5 billion Facilities (650.0) (250.0) - (900.0) -
- Bridge Loan Facilities and other facilities - - (4,000.0) - (4,570.0)
- Other committed and uncommitted facilities (739.0) - - (739.0) (5,270.0)
Franco-Nevada settlement (non-cash) (22.0) (4.2) - (26.2) -
Financing costs capitalised - - (9.1) - (9.1)
Unwinding of loans recognised at amortised cost 43.3 - - 43.3 -
Translation adjustment 87.8 3.7 - 91.5 -
Balance at the end of the period 3,170.0 1,820.6 1,990.9 3,170.0 1,990.9
Borrowings consist of:
- R4.5 billion Facilities 1,979.5 1,743.1 1,990.9 1,979.5 1,990.9
- Franco-Nevada liability 56.2 77.5 - 56.2 -
- Burnstone Debt 1,134.3 - - 1,134.3 -
Borrowings 3,170.0 1,820.6 1,990.9 3,170.0 1,990.9
Current portion of borrowings (554.2) (554.0) (499.5) (554.2) (499.5)
Non-current borrowings 2,615.8 1,266.6 1,491.4 2,615.8 1,491.4
10. Mineral Reserves and Resources(1)
On 5 February 2015 Sibanye declared updated Group Mineral Resources and Mineral Reserves as at 31 December 2014.
- Gold Mineral Reserves at the Group operations increased by 44% to 28.43Moz from 19.73Moz declared at 31 December 2013, despite depletion of 1.7Moz
in 2014;
- Underground gold Mineral Reserves at the operations increased by 2.3Moz (14%), net of depletion, following the successful conclusion of pre-
feasibility studies on various organic growth projects;
- A maiden gold Mineral Resource of 8.9Moz has been declared at the Burnstone project, following significant revision of the available data and
geological model; and
- Sibanye will continue to review recently acquired projects in accordance with Group protocols and procedures and assessing possible synergies which
may exist with its current operations.
11. Liquidity
The Group’s current liabilities exceeded its current assets by R1,630.1 million as at 31 December 2014. Current liabilities at 31 December 2014 include
the financial guarantee liability of R197.0 million which does not reflect the true liquidity of Sibanye per se, as Sibanye believes that Gold Fields
Limited (“Gold Fields“) is currently in the position to meet its obligations under its US$1 billion 4.875% guaranteed notes.
The current portion of borrowings of R554.2 million includes the two semi-annual repayments due and payable in June and December 2015 respectively.
Sibanye generated cash from operating activities of R4.1 billion for the year ended 31 December 2014. If the acquisition related cash outflows during
the year are added back to the cash flow, the Group would have had R1,311.8 million in additional cash on the statement of financial position,
confirming the strong cash generating ability of the Group. Over and above the Group has committed unutilised debt facilities of R2 billion at
31 December 2014.
The Directors believe that the cash generated by its operations and the remaining balance of the Company’s revolving credit facility will enable the
Group to continue to meet its obligations as they fall due.
12. Events after the reporting date
There were no events that could have a material impact on the financial results of the Group after 31 December 2014, other than what has already been
disclosed above and:
- The Board approved a final dividend of 62 cents per share (ZAR) for the six months ended 31 December 2014, resulting in a total dividend of
112 cents per share (ZAR) relating to the year ended 31 December 2014.
13. Auditors review
These preliminary condensed consolidated financial statements of Sibanye for the year ended 31 December 2014 as set out on pages 9 to 21 have been
reviewed by KPMG Inc., who expressed an unmodified review conclusion. A copy of the auditor’s review report is available for inspection at the
Company’s registered office together with the financial statements identified in the auditor’s report.
The auditor’s report does not necessarily report on all of the information contained in these financial results. Shareholders are therefore advised
that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of the auditor’s report together with
the accompanying financial information from the Company’s registered office.
(1) For further details relating to the Company’s Mineral Resources and Mineral Reserves, please refer to the SENS Announcement of 2 February 2015,
available on the Company’s Website
https://www.sibanyegold.co.za/investors/news/sens, or at the following link:
https://trade.sharenet.co.za/feeds/share_performance/sens_display.php?user=sibanye&key=meeinr&year=2015&link=20150205145100@23
SEGMENTAL FINANCIAL RESULTS
Segment income statement
Figures are in millions unless otherwise stated
For the six months ended
31 December 2014
United States Dollars South African Rand
Corporate Cooke Beatrix Kloof Driefontein Group Group Driefontein Kloof Beatrix Cooke Corporate
- 147.6 217.5 353.1 374.5 1,092.7 Revenue 11,952.0 4,101.1 3,867.7 2,381.7 1,601.5 -
- 124.4 202.9 327.4 345.4 999.9 Underground 10,940.9 3,781.4 3,585.6 2,221.3 1,348.4 -
- 23.2 14.8 25.7 29.1 92.8 Surface 1,011.1 319.7 282.1 160.4 253.1 -
- (133.8) (147.8) (215.4) (232.0) (729.0) Operating costs (7,971.0) (2,541.8) (2,357.8) (1,619.8) (1,451.6) -
- (116.0) (141.2) (198.0) (208.5) (663.7) Underground (7,257.3) (2,284.5) (2,166.8) (1,547.5) (1,258.5) -
- (17.8) (6.6) (17.4) (23.5) (65.3) Surface (713.7) (257.3) (191.0) (72.3) (193.1) -
- 13.8 69.7 137.7 142.5 363.7 Operating profit 3,981.0 1,559.3 1,509.9 761.9 149.9 -
- 8.4 61.5 129.4 136.9 336.2 Underground 3,679.4 1,496.9 1,418.8 673.8 89.9 -
- 5.4 8.2 8.3 5.6 27.5 Surface 301.6 62.4 91.1 88.1 60.0 -
(0.9) (25.5) (22.2) (59.7) (53.2) (161.5) Amortisation and depreciation (1,766.5) (582.2) (654.5) (242.8) (276.9) (10.1)
(0.9) (11.7) 47.5 78.0 89.3 202.2 Net operating profit 2,214.5 977.1 855.4 519.1 (127.0) (10.1)
2.0 1.1 1.2 2.0 2.3 8.6 Investment income 94.5 24.7 22.5 12.9 12.7 21.7
(1.4) (4.8) (2.1) (6.3) (7.4) (22.0) Finance expenses (240.1) (81.6) (68.3) (22.9) (51.5) (15.8)
(30.4) (0.1) (1.0) (0.9) (2.9) (35.3) Other costs (384.2) (31.6) (11.0) (11.2) (1.6) (328.8)
(11.0) - (2.1) (2.7) (3.3) (19.1) Share-based payments (209.7) (35.6) (29.7) (23.1) - (121.3)
- (0.5) (0.9) - - (1.4) Exploration costs (15.1) - - (9.4) (5.1) (0.6)
(3.9) (1.7) 43.2 (14.0) (0.6) 23.0 Non-recurring items 243.5 (8.9) (151.9) 467.5 (17.9) (45.3)
- (0.7) (4.3) (8.1) (8.4) (21.5) Royalties (235.3) (91.4) (89.7) (47.1) (7.1) -
3.7 - (8.9) (17.6) (17.9) (40.7) Current taxation (445.2) (195.9) (192.2) (97.5) - 40.4
1.3 1.0 (11.4) 4.8 (0.2) (4.5) Deferred taxation (48.7) (1.6) 51.9 (123.3) 9.4 14.9
(40.6) (17.4) 61.2 35.2 50.9 89.3 Profit for the period 974.2 555.2 387.0 665.0 (188.1) (444.9)
Profit attributable to:
(40.6) (13.3) 61.2 35.2 50.9 93.4 Owners of Sibanye 1,018.8 555.2 387.0 665.0 (143.5) (444.9)
- (4.1) - - - (4.1) Non-controlling interests (44.6) - - - (44.6) -
Capital expenditure
(7.6) (18.5) (28.5) (62.1) (57.7) (174.5) Total expenditure (1,905.1) (631.0) (679.6) (311.9) (200.3) (82.3)
(1.0) (3.2) (5.3) (21.0) (26.4) (56.0) Sustaining capital (620.0) (287.6) (229.1) (57.7) (34.9) (10.7)
- (9.6) (23.3) (41.1) (31.1) (105.3) Ore reserve development (1,152.3) (343.4) (450.5) (254.2) (104.2) -
(6.6) (5.7) - - - (12.3) Projects (132.8) - - - (61.2) (71.6)
The average exchange rate for the six months ended 31 December 2014 was R10.96/US$
Figures are in millions unless otherwise stated
For the six months ended
30 June 2014
United States Dollars South African Rand
Corporate Cooke Beatrix Kloof Driefontein Group Group Driefontein Kloof Beatrix Cooke Corporate
- 26.3 204.5 340.4 349.1 920.3 Revenue 9,828.5 3,728.3 3,635.1 2,184.6 280.5 -
- 22.8 188.1 309.1 320.1 840.1 Underground 8,972.0 3,418.8 3,301.7 2,007.5 244.0 -
- 3.5 16.4 31.3 29.0 80.2 Surface 856.5 309.5 333.4 177.1 36.5 -
- (22.6) (148.3) (200.8) (222.0) (593.7) Operating costs (6,340.4) (2,370.5) (2,144.5) (1,584.2) (241.2) -
- (19.4) (140.9) (179.8) (200.7) (540.8) Underground (5,774.9) (2,143.1) (1,920.2) (1,504.6) (207.0) -
- (3.2) (7.4) (21.0) (21.3) (52.9) Surface (565.5) (227.4) (224.3) (79.6) (34.2) -
- 3.7 56.2 139.6 127.1 326.6 Operating profit 3,488.1 1,357.8 1,490.6 600.4 39.3 -
- 3.4 47.2 129.3 119.4 299.3 Underground 3,197.1 1,275.7 1,381.5 502.9 37.0 -
- 0.3 9.0 10.3 7.7 27.3 Surface 291.0 82.1 109.1 97.5 2.3 -
(1.5) (3.0) (21.1) (62.5) (51.2) (139.3) Amortisation and depreciation (1,488.2) (547.1) (667.8) (225.6) (31.4) (16.3)
(1.5) 0.7 35.1 77.1 75.9 187.3 Net operating profit 1,999.9 810.7 822.8 374.8 7.9 (16.3)
2.9 0.2 1.1 1.9 2.2 8.3 Investment income 88.7 23.6 20.2 11.6 2.0 31.3
- (0.5) (1.8) (6.0) (6.7) (15.0) Finance expenses (159.9) (71.2) (64.3) (18.9) (5.0) (0.5)
(18.8) (0.4) (4.2) (4.3) (5.1) (32.8) Other costs (351.5) (54.7) (45.6) (45.3) (4.2) (201.7)
(11.6) - (2.1) (2.7) (3.1) (19.5) Share-based payments (208.2) (33.5) (28.5) (22.8) - (123.4)
(20.8) - 0.2 - (8.2) (28.8) Non-recurring items (306.9) (86.2) (0.1) 1.9 - (222.5)
- (0.1) (3.3) (8.0) (6.9) (18.3) Royalties (195.2) (74.1) (84.8) (35.0) (1.3) -
(4.4) - (5.3) (17.5) (13.4) (40.6) Current taxation (434.0) (143.3) (187.4) (56.4) - (46.9)
6.8 0.1 (0.5) 1.8 1.1 9.3 Deferred taxation 99.8 11.4 19.4 (5.2) 0.9 73.3
(47.4) - 19.2 42.3 35.8 49.9 Profit for the period 532.7 382.7 451.7 204.7 0.3 (506.7)
(47.4) - 19.2 42.3 35.8 49.9 Owners of Sibanye 532.7 382.7 451.7 204.7 0.3 (506.7)
- - - - - - Non-controlling interests - - - - - -
(0.5) (2.8) (22.1) (52.1) (48.5) (126.0) Total expenditure (1,345.7) (517.9) (555.9) (236.1) (29.6) (6.2)
(0.5) (1.6) (4.1) (11.9) (16.6) (34.7) Sustaining capital (371.5) (177.7) (126.6) (44.2) (16.8) (6.2)
- (1.2) (18.0) (40.2) (31.9) (91.3) Ore reserve development (974.2) (340.2) (429.3) (191.9) (12.8) -
The average exchange rate for the six months ended 30 June 2014 was R10.68/US$.
Segment income statement (continued)
Figures are in millions unless otherwise stated
United States Dollars For the six months ended South African Rand
31 December 2013
Corporate Beatrix Kloof Driefontein Group Group Driefontein Kloof Beatrix Corporate
- 233.9 338.9 433.8 1,006.6 Revenue 10,115.8 4,351.5 3,426.5 2,337.8 -
- 221.5 309.4 398.5 929.4 Underground 9,331.3 3,990.5 3,127.1 2,213.7 -
- 12.4 29.5 35.3 77 Surface 784.5 361.0 299.4 124.1 -
- (155.3) (207.4) (245.3) (607.9) Operating costs (6,123.8) (2,473.0) (2,089.8) (1,561.0) -
- (148.0) (189.6) (222.3) (559.8) Underground (5,639.1) (2,240.6) (1,910.8) (1,487.7) -
- (7.3) (17.8) (23.0) (48.1) Surface (484.7) (232.4) (179.0) (73.3) -
- 78.6 131.5 188.5 398.7 Operating profit 3,992.0 1,878.5 1,336.7 776.8 -
- 73.5 119.8 176.2 369.6 Underground 3,692.2 1,749.9 1,216.3 726.0 -
- 5.1 11.7 12.3 29.1 Surface 299.8 128.6 120.4 50.8 -
Amortisation and
(1.2) (23.7) (63.1) (83.5) (171.5) depreciation (1,715.1) (832.5) (628.6) (242.2) (11.8)
(1.2) 54.9 68.4 105.0 227.2 Net operating profit 2,276.9 1,046.0 708.1 534.6 (11.8)
2.0 2.0 3.1 3.3 10.4 Investment income 102.5 32.8 30.6 19.6 19.5
(0.1) (3.2) (6.5) (8.5) (18.4) Finance expenses (187.2) (87.0) (67.2) (31.9) (1.1)
3.6 2.5 (3.0) (2.4) 0.7 Other costs (32.7) (32.9) (30.1) (22.1) 52.5
(10.6) (2.5) (2.8) (3.4) (19.3) Share-based payments (190.9) (33.8) (28.0) (24.3) (104.8)
(8.7) (0.5) (2.8) 0.2 (11.8) Non-recurring items (130.8) 2.4 (31.5) (5.2) (96.6)
- (5.7) (6.7) (12.6) (24.9) Royalties (247.5) (124.3) (67.9) (55.3) -
(1.1) (10.0) (12.0) (31.6) (54.8) Current taxation (539.0) (309.3) (122.9) (96.4) (10.4)
4.2 10.6 6.6 14.9 36.3 Deferred taxation 357.4 143.5 61.7 113.0 39.2
(11.9) 48.1 44.4 64.8 145.4 Profit for the period 1,408.7 637.4 452.8 432.0 (113.5)
Profit attributable to:
(12.5) 48.1 44.4 64.8 144.8 Owners of Sibanye 1,402.4 637.4 452.8 432.0 (119.8)
0.6 - - - 0.6 Non-controlling interests 6.3 - - - 6.3
Capital expenditure
(2.1) (22.1) (64.8) (56.0) (145.0) Total expenditure (1,462.9) (560.3) (654.4) (227.6) (20.6)
(2.1) (9.4) (22.6) (20.0) (54.2) Sustaining capital (543.4) (198.3) (228.7) (95.8) (20.6)
- (12.7) (42.2) (36.0) (90.8) Ore reserve development (919.5) (362.0) (425.7) (131.8) -
The average exchange rate for the six months ended 31 December 2013 was R10.05/US$
SEGMENTAL OPERATING AND FINANCIAL RESULTS
Segmental operating and financial results
For the six months ended
United States Dollars 31 December 2014 South African Rand
Corporate Cooke Beatrix Kloof Driefontein Group Group Driefontein Kloof Beatrix Cooke Corporate
Operating results
- 3,672 4,546 4,653 5,364 18,235 000’tons Ore milled 000’tons 18,235 5,364 4,653 4,546 3,672 -
- 893 2,571 1,983 2,497 7,944 Underground 7,944 2,497 1,983 2,571 893 -
- 2,779 1,975 2,670 2,867 10,291 Surface 10,291 2,867 2,670 1,975 2,779 -
- 1.17 2.28 3.66 3.31 2.71 g/t Yield g/t 2.71 3.31 3.66 2.28 1.17 -
- 4.16 3.74 7.89 6.54 5.70 Underground 5.70 6.54 7.89 3.74 4.16 -
- 0.21 0.38 0.52 0.49 0.40 Surface 0.40 0.49 0.52 0.38 0.21 -
- 138.4 332.9 547.8 570.2 1,589.3 000’ozs Gold produced/sold kg 49,432 17,735 17,038 10,354 4,305 -
- 119.6 308.7 503.3 525.0 1,456.6 Underground 45,304 16,329 15,653 9,603 3,719 -
- 18.8 24.2 44.5 45.2 132.7 Surface 4,128 1,406 1,385 751 586 -
- 1,257 1,268 1,266 1,269 1,267 $/oz Gold price received R/kg 440,615 441,466 440,357 441,018 437,166 -
- 1,136 902 780 814 849 $/oz Total cash cost R/kg 295,246 283,129 271,282 313,888 395,168 -
- 1,325 1,087 1,014 1,027 1,080 $/oz All-in-cost R/kg 375,854 357,333 352,624 378,008 461,045 -
- (6) 14 20 19 15 % All-in-cost margin % 15 19 20 14 (6) -
- 43 65 89 85 73 $/ton Operating cost R/ton 785 916 968 705 461 -
- 152 110 190 164 152 Underground 1,641 1,773 2,061 1,187 1,641 -
- 8 7 14 16 11 Surface 124 169 156 77 82 -
US$’mil Financial results R’mil
- 173.9 422.0 693.5 723.6 2,013.0 Revenue 21,780.5 7,829.4 7,502.8 4,566.3 1,882.0 -
- 147.2 390.8 636.5 665.5 1,840.0 Underground 19,908.7 7,200.2 6,887.3 4,228.8 1,592.4 -
- 26.7 31.2 57.0 58.1 173.0 Surface 1,871.8 629.2 615.5 337.5 289.6 -
- (156.4) (296.1) (416.2) (454.0) (1,322.7) Operating costs (14,311.4) (4,912.3) (4,502.3) (3,204.0) (1,692.8) -
- (135.4) (282.1) (377.8) (409.2) (1,204.5) Underground (13,032.2) (4,427.6) (4,087.0) (3,052.1) (1,465.5) -
- (21.0) (14.0) (38.4) (44.8) (118.2) Surface (1,279.2) (484.7) (415.3) (151.9) (227.3) -
- 17.5 125.9 277.3 269.6 690.3 Operating profit 7,469.1 2,917.1 3,000.5 1,362.3 189.2 -
- 11.8 108.7 258.7 256.3 635.5 Underground 6,876.5 2,772.6 2,800.3 1,176.7 126.9 -
- 5.7 17.2 18.6 13.3 54.8 Surface 592.6 144.5 200.2 185.6 62.3 -
(2.4) (28.5) (43.3) (122.2) (104.4) (300.8) Amortisation and depreciation (3,254.7) (1,129.3) (1,322.3) (468.4) (308.3) (26.4)
(2.4) (11.0) 82.6 155.1 165.2 389.5 Net operating profit 4,214.4 1,787.8 1,678.2 893.9 (119.1) (26.4)
4.9 1.3 2.3 3.9 4.5 16.9 Investment income 183.2 48.3 42.7 24.5 14.7 53.0
(1.4) (5.3) (3.9) (12.3) (14.1) (37.0) Finance expenses (400.0) (152.8) (132.6) (41.8) (56.5) (16.3)
(49.2) (0.5) (5.2) (5.2) (8.0) (68.1) Other costs (735.7) (86.3) (56.6) (56.5) (5.8) (530.5)
(22.6) - (4.2) (5.4) (6.4) (38.6) Share-based payments (417.9) (69.1) (58.2) (45.9) - (244.7)
- (0.5) (0.9) - - (1.4) Exploration/feasibility costs (15.1) - - (9.4) (5.1) (0.6)
(24.7) (1.7) 43.4 (14.0) (8.8) (5.8) Non-recurring items (63.4) (95.1) (152.0) 469.4 (17.9) (267.8)
- (0.8) (7.6) (16.1) (15.3) (39.8) Royalties (430.5) (165.5) (174.5) (82.1) (8.4) -
(0.7) - (14.2) (35.1) (31.3) (81.3) Current taxation (879.2) (339.2) (379.6) (153.9) - (6.5)
8.1 1.1 (11.9) 6.6 0.9 4.8 Deferred taxation 51.1 9.8 71.3 (128.5) 10.3 88.2
(88.0) (17.4) 80.4 77.5 86.7 139.2 Profit for the period 1,506.9 937.9 838.7 869.7 (187.8) (951.6)
Profit attributable to:
(88.0) (13.3) 80.4 77.5 86.7 143.3 Owners of Sibanye 1,551.5 937.9 838.7 869.7 (143.2) (951.6)
- (4.1) - - - (4.1) Non-controlling interests (44.6) - - - (44.6) -
US$’mil Capital expenditure R’mil
(8.2) (21.2) (50.6) (114.2) (106.2) (300.4) Total expenditure (3,250.8) (1,148.9) (1,235.5) (548.0) (229.9) (88.5)
(1.6) (4.7) (9.4) (32.9) (43.0) (91.6) Sustaining capital (991.5) (465.3) (355.7) (101.9) (51.7) (16.9)
- (10.8) (41.2) (81.3) (63.2) (196.5) Ore reserve development (2,126.5) (683.6) (879.8) (446.1) (117.0) -
(6.6) (5.7) - - - (12.3) Projects (132.8) - - - (61.2) (71.6)
The average exchange rate for the year ended 31 December 2014 was R10.82/US$.
Segmental operating and financial results (continued)
United States Dollars For the year ended South African Rand
31 December 2013
Corporate Beatrix Kloof Driefontein Group Group Driefontein Kloof Beatrix Corporate
Operating results
- 4,091 4,223 5,310 13,624 000’tons Ore milled 000’tons 13,624 5,310 4,223 4,091 -
- 2,371 1,898 2,527 6,796 Underground 6,796 2,527 1,898 2,371 -
- 1,720 2,325 2,783 6,828 Surface 6,828 2,783 2,325 1,720 -
- 2.38 3.78 3.54 3.26 g/t Yield g/t 3.26 3.54 3.78 2.38 -
- 3.88 7.66 6.70 6.01 Underground 6.01 6.70 7.66 3.88 -
- 0.31 0.62 0.66 0.56 Surface 0.56 0.66 0.62 0.31 -
- 312.6 513.7 603.6 1,429.9 000’oz Gold produced/ sold kg 44,474 18,775 15,977 9,722 -
- 295.6 467.3 544.2 1,307.1 Underground 40,655 16,927 14,533 9,195 -
- 17.0 46.4 59.4 122.8 Surface 3,819 1,848 1,444 527 -
- 1,404 1,410 1,409 1,408 $/oz Gold price received R/kg 434,663 434,764 435,276 433,460 -
- 993 847 862 885 $/oz Total cash cost R/kg 273,281 265,997 261,570 306,593 -
- 1,222 1,147 1,078 1,148 $/oz All-in-cost R/kg 354,376 332,660 353,884 377,206 -
- 13 19 23 18 % All-in-cost margin % 18 23 19 13 -
- 76 101 96 92 $/ton Operating cost R/ton 879 919 971 731 -
- 125 206 182 169 Underground 1,623 1,750 1,982 1,201 -
- 9 15 17 14 Surface 138 165 146 84 -
US$’mil Financial results R’mil
- 439.0 724.4 850.3 2,013.7 Revenue 19,331.2 8,162.7 6,954.4 4,214.1 -
- 415.2 658.7 766.1 1,840.0 Underground 17,663.6 7,354.6 6,323.4 3,985.6 -
- 23.8 65.7 84.2 173.7 Surface 1,667.6 808.1 631.0 228.5 -
- (311.6) (427.2) (508.4) (1,247.2) Operating costs (11,973.3) (4,881.2) (4,100.7) (2,991.4) -
- (296.5) (391.9) (460.6) (1,149.0) Underground (11,030.5) (4,421.9) (3,762.1) (2,846.5) -
- (15.1) (35.3) (47.8) (98.2) Surface (942.8) (459.3) (338.6) (144.9) -
- 127.4 297.2 341.9 766.5 Operating profit 7,357.9 3,281.5 2,853.7 1,222.7 -
- 118.7 266.8 305.5 691.0 Underground 6,633.1 2,932.7 2,561.3 1,139.1 -
- 8.7 30.4 36.4 75.5 Surface 724.8 348.8 292.4 83.6 -
Amortisation and
(2.2) (55.0) (114.2) (151.9) (323.3) depreciation (3,103.9) (1,458.0) (1,096.5) (528.1) (21.3)
(2.2) 72.4 183.0 190.0 443.2 Net operating profit 4,254.0 1,823.5 1,757.2 694.6 (21.3)
3.2 2.9 4.9 5.7 16.7 Investment income 160.3 55.0 47.4 27.5 30.4
(0.3) (7.6) (15.8) (20.1) (43.8) Finance expenses (420.3) (193.6) (152.3) (72.8) (1.6)
15.8 - (7.3) (6.9) 1.6 Other costs (24.7) (67.0) (70.5) (40.4) 153.2
(16.2) (4.4) (4.9) (6.4) (31.9) Share-based payments (305.8) (61.1) (47.2) (41.8) (155.7)
(11.3) (98.0) (13.1) (16.6) (139.0) Non-recurring items (1,294.4) (159.5) (125.6) (900.1) (109.2)
- (7.2) (15.3) (20.7) (43.2) Royalties (414.6) (198.3) (147.1) (69.2) -
(1.2) (10.1) (28.5) (44.6) (84.4) Current taxation (809.8) (427.7) (273.5) (97.5) (11.1)
2.7 35.0 1.9 18.1 57.7 Deferred taxation 553.6 174.0 18.3 336.3 25.0
(9.5) (17.0) 104.9 98.5 176.9 Profit for the period 1,698.3 945.3 1,006.7 (163.4) (90.3)
Profit attributable to:
(10.1) (17.0) 104.9 98.5 176.3 Owners of Sibanye 1,692.4 945.3 1,006.7 (163.4) (96.2)
0.6 - - - 0.6 Non-controlling interests 5.9 - - - 5.9
US$’mil Capital expenditure R’mil
(3.9) (55.9) (135.8) (106.6) (302.2) Total expenditure (2,901.5) (1,023.0) (1,303.6) (537.0) (37.9)
(3.9) (20.9) (47.9) (33.4) (106.1) Sustaining capital (1,018.5) (320.2) (459.8) (200.6) (37.9)
- (35.0) (87.9) (73.2) (196.1) Ore reserve development (1,883.0) (702.8) (843.8) (336.4)
The average exchange rate for the year ended 31 December 2013 was R9.60/US$.
UNIT COST BENCHMARKING METRICS
Cost benchmarks for the six months ended 31 December 2014, compared with the six months ended 30 June 2014 and the six months ended 31 December 2013
Figures are in South African rand millions unless otherwise stated
Group Driefontein Kloof Beatrix Cooke Corporate
Operating cost(1) Dec 2014 7,971.0 2,541.8 2,375.8 1,619.8 1,451.6 -
Jun 2014 6,340.4 2,370.5 2,144.5 1,584.2 241.2 -
Dec 2013 6,123.8 2,473.0 2,089.8 1,561.0 - -
Less: General and admin Dec 2014 (60.0) (23.1) (22.8) (14.1) - -
Jun 2014 (87.3) (33.4) (31.9) (22.0) - -
Dec 2013 (117.4) (39.1) (27.5) (50.8) - -
Plus: Royalty Dec 2014 235.3 91.4 89.7 47.1 7.1 -
Jun 2014 195.2 74.1 84.8 35.0 1.3 -
Dec 2013 247.5 124.3 67.9 35.0 - -
Total cash cost(2) Dec 2014 8,146.3 2,610.1 2,424.7 1,652.8 1,458.7 -
Jun 2014 6,448.3 2,411.2 2,197.4 1,597.2 242.5 -
Dec 2013 6,253.9 2,558.2 2,130.2 1,565.5 - -
Plus: General and admin Dec 2014 60.0 23.1 22.8 14.1 - -
Jun 2014 87.3 33.4 31.9 22.0 - -
Dec 2013 117.4 39.1 27.5 50.8 - -
Community costs Dec 2014 23.8 8.2 6.5 9.9 (0.8) -
Jun 2014 13.8 4.5 4.6 3.9 0.8 -
Dec 2013 11.6 5.1 2.9 3.6 - -
Share based payments(3) Dec 2014 209.7 35.6 29.7 23.1 - 121.3
Jun 2014 208.2 33.5 28.5 22.8 - 123.4
Dec 2013 190.9 33.8 28.0 24.3 - 104.8
Rehabilitation Dec 2014 90.2 19.6 16.6 9.5 44.5 -
Jun 2014 48.2 19.2 16.8 8.1 4.1 -
Dec 2013 77.2 39.6 25.0 12.6 - -
Ore reserve development Dec 2014 1,152.3 343.4 450.5 254.2 104.2 -
Jun 2014 974.2 340.2 429.3 191.9 12.8 -
Dec 2013 919.5 362.0 425.7 131.8 - -
Sustaining capital
expenditure Dec 2014 609.3 287.6 229.1 57.7 34.9 -
Jun 2014 365.3 177.7 126.6 44.2 16.8 -
Dec 2013 543.4 198.3 228.7 95.8 - 20.6
Less: By-product credit Dec 2014 (12.2) (5.2) (3.6) (3.4) - -
Jun 2014 (11.7) (4.8) (3.4) (3.5) - -
Dec 2013 (9.0) (4.2) (2.6) (2.2) - -
Total All-in sustaining cost(4) Dec 2014 10,279.4 3,322.4 3,176.3 2,017.9 1,641.5 121.3
Jun 2014 8,133.6 3,014.9 2,831.7 1,886.6 277.0 123.4
Dec 2013 8,104.9 3,231.9 2,865.4 1,882.2 - 125.4
Plus: Corporate cost and growth Dec 2014 160.0 - - 9.4 66.3 84.3
capital expenditure Jun 2014 6.2 - - - - 6.2
Dec 2013 - - - - - -
Total All-in cost(5) Dec 2014 10,439.4 3,322.4 3,176.3 2,027.3 1,707.8 205.6
Jun 2014 8,139.8 3,014.9 2,831.7 1,886.6 277.0 129.6
Dec 2013 8,104.9 3,231.9 2,865.4 1,882.2 - 125.4
Gold sold kg Dec 2014 27,289 9,353 8,831 5,443 3,662 -
Jun 2014 22,143 8,382 8,207 4,911 643 -
Dec 2013 24,061 10,343 8,159 5,559 - -
000’ozs Dec 2014 877.4 300.7 283.9 175.0 117.7 -
Jun 2014 711.9 269.5 263.9 157.9 20.7 -
Dec 2013 773.6 332.5 262.3 178.7 - -
Total cash cost R/kg Dec 2014 298,520 279,066 274,567 303,656 398,334 -
Jun 2014 291,212 287,664 267,747 325,229 377,138 -
Dec 2013 259,919 247,336 261,086 281,615 - -
US$/oz Dec 2014 847 792 779 862 1,130 -
Jun 2014 848 838 780 947 1,098 -
Dec 2013 804 765 808 872 - -
All-in sustaining cost R/kg Dec 2014 376,687 355,223 359,676 370,733 448,252 -
Jun 2014 367,322 359,687 345,035 384,158 430,793 -
Dec 2013 336,848 312,472 351,195 338,586 - -
US$/oz Dec 2014 1,069 1,008 1,021 1,052 1,272 -
Jun 2014 1,070 1,048 1,005 1,119 1,255 -
Dec 2013 1,043 967 1,087 1,048 - -
All-in cost R/kg Dec 2014 382,550 355,223 359,676 372,460 466,357 -
Jun 2014 367,601 359,687 345,035 384,158 430,793 -
Dec 2013 336,848 312,472 351,195 338,586 - -
US$/oz Dec 2014 1,086 1,008 1,021 1,057 1,323 -
Jun 2014 1,071 1,048 1,005 1,119 1,255 -
Dec 2013 1,043 967 1,087 1,048 - -
DEFINITIONS
Total cash cost are calculated in accordance with the Gold Institute Industry standard.
(1) Operating costs – All gold mining related costs before amortisation/depreciation, taxation and non-recurring items.
(2) Total cash cost – Operating costs less off-mine costs, which include general and administration costs, as detailed in the table above.
DEFINITIONS
All-in costs are calculated in accordance with the World Gold Council guidance.
(1) Operating cost – As published and includes all mining and processing costs, third party refining costs, permitting costs and corporate
G&A charges.
(3) Share-based payments are calculated based on the fair value at initial recognition fair value and does not include the fair valuing adjustment of
the cash-settled share-based payment liability to the reporting date fair value.
(4) Total All-in sustaining costs – includes operating costs and costs detailed above, including sustaining capital expenditure, based on managed gold
sales.
(5) Total All-in costs includes sustaining and group costs, excluding income tax, M&A activity, working capital, impairments, financing costs, one-
time severance charges and items needed to normalise earnings.
Cost benchmarks for the year ended 31 December 2014 compared with the year ended 31 December 2013
Figures are in South African rand millions unless otherwise stated
Group Driefontein Kloof Beatrix Cooke Corporate
Operating cost(1) Dec 2014 14,311.4 4,912.3 4,502.3 3,204.0 1,692.8 -
Dec 2013 11,973.3 4,881.2 4,100.7 2,991.4 - -
Less: General and admin Dec 2014 (147.3) (56.5) (54.7) (36.1) - -
Dec 2013 (234.0) (85.4) (68.7) (79.9) - -
Plus: Royalty Dec 2014 430.5 165.5 174.5 82.1 8.4 -
Dec 2013 414.6 198.3 147.1 69.2 - -
Total cash cost(2) Dec 2014 14,594.6 5,021.3 4,622.1 3,250.0 1,701.2 -
Dec 2013 12,153.9 4,994.1 4,179.1 2,980.7 - -
Plus: General and admin Dec 2014 147.3 56.5 54.7 36.1 - -
Dec 2013 234.0 85.4 68.7 79.9 - -
Community costs Dec 2014 37.6 12.7 11.1 13.8 - -
Dec 2013 23.8 8.5 7.8 7.5 - -
Share based payments(3) Dec 2014 417.9 69.1 58.2 45.9 - 244.7
Dec 2013 305.8 61.1 47.2 41.8 - 155.7
Rehabilitation Dec 2014 138.4 38.8 33.4 17.6 48.6 -
Dec 2013 164.6 83.7 54.3 26.6 - -
Ore reserve development Dec 2014 2,126.5 683.6 879.8 446.1 117.0 -
Dec 2013 1,883.0 702.8 843.8 336.4 - -
Sustaining capital
expenditure Dec 2014 974.6 465.3 355.7 101.9 51.7 -
Dec 2013 1,018.5 320.2 459.8 200.6 - 37.9
Less: By-product credit Dec 2014 (23.9) (10.0) (7.0) (6.9) - -
Dec 2013 (23.1) (10.1) (6.7) (6.3) - -
Total All-in sustaining cost(4) Dec 2014 18,413.0 6,337.3 6,008.0 3,904.5 1,918.5 244.7
Dec 2013 15,760.5 6,245.7 5,654.0 3,667.2 - 193.6
Plus: Group exploration and other Dec 2014 16.5 - - 9.4 5.1 2.0
Dec 2013 - - - - - -
Corporate cost and growth Dec 2014 149.7 - - - 61.2 88.5
capital expenditure Dec 2013 - - - - - -
Total All-in cost(5) Dec 2014 18,579.2 6,337.3 6,008.0 3,913.9 1,984.8 335.2
Dec 2013 15,760.5 6,245.7 5,654.0 3,667.2 - 193.6
Gold sold Kg Dec 2014 49,432 17,735 17,038 10,354 4,305 -
Dec 2013 44,474 18,775 15,977 9,722 - -
000’ozs Dec 2014 1,589.3 570.2 547.8 332.9 138.4 -
Dec 2013 1,429.9 603.6 513.7 312.6 - -
Total cash cost R/kg Dec 2014 295,246 283,129 271,282 313,888 395,168 -
Dec 2013 273,281 265,997 261,570 306,593 - -
US$/oz Dec 2014 849 814 780 902 1,136 -
Dec 2013 885 862 847 993 - -
All-in sustaining cost R/kg Dec 2014 372,492 357,333 352,624 377,101 445,645 -
Dec 2013 354,376 332,660 353,884 377,206 - -
US$/oz Dec 2014 1,071 1,027 1,014 1,084 1,281 -
Dec 2013 1,148 1,078 1,147 1,222 - -
All-in cost R/kg Dec 2014 375,854 357,333 352,624 378,008 461,045 -
Dec 2013 354,376 332,660 353,884 377,206 - -
US$/oz Dec 2014 1,080 1,027 1,014 1,087 1,325 -
Dec 2013 1,148 1,078 1,147 1,222 - -
QUARTERLY SALIENT FEATURES AND DEVELOPMENT RESULTS
Salient features and cost benchmarks for the quarters ended 31 December 2014 and 30 September 2014
Total Driefontein Kloof Beatrix Cooke
Under Under Under Under Under
Group -ground Surface -ground Surface -ground Surface -ground Surface -ground Surface
Tons milled/treated 000’ton Dec 2014 5,401 2,304 3,097 656 790 539 542 718 478 391 1,287
Sept 2014 5,051 2,228 2,823 697 732 495 573 657 438 379 1,080
Yield g/t Dec 2014 2.61 5.60 0.38 6.36 0.50 8.15 0.61 3.66 0.39 4.36 0.21
Sept 2014 2.62 5.46 0.37 6.40 0.44 7.68 0.54 3.74 0.39 3.76 0.22
Gold produced/sold kg Dec 2014 14,079 12,901 1,178 4,170 396 4,395 328 2,631 188 1,705 266
Sept 2014 13,210 12,173 1,037 4,464 323 3,800 308 2,454 170 1,455 236
000’oz Dec 2014 452.7 414.8 37.9 134.1 12.7 141.3 10.6 84.6 6.0 54.8 8.6
Sept 2014 424.7 391.4 33.3 143.5 10.4 122.2 9.9 78.9 5.5 46.8 7.6
Gold price received R/kg Dec 2014 433,973 433,990 433,856 433,877 434,348
Sept 2014 442,255 442,762 442,697 441,540 440,804
US$/oz Dec 2014 1,205 1,205 1,205 1,205 1,206
Sept 2014 1,283 1,285 1,284 1,281 1,279
Operating cost R/ton Dec 2014 725 1,554 108 1,693 161 2,013 156 1,057 75 1,602 67
Sept 2014 803 1,652 133 1,684 178 2,186 186 1,201 83 1,668 99
Total cash cost R/kg Dec 2014 285,006 279,019 255,177 289,926 363,318
Sept 2014 312,922 279,110 296,860 318,407 439,030
US$/oz Dec 2014 791 775 709 805 1,009
Sept 2014 908 810 861 924 1,274
Operating margin % Dec 2014 36 36 35 39 26 43 41 34 56 15 26
Sept 2014 31 32 17 41 9 36 22 27 51 - 7
All-in sustaining cost R/kg Dec 2014 365,076 357,030 343,468 362,221 412,227
Sept 2014 384,777 353,449 378,311 379,878 497,575
US$/oz Dec 2014 1,014 992 954 1,006 1,145
Sept 2014 1,116 1,026 1,098 1,102 1,444
All-in cost R/kg Dec 2014 373,365 357,030 343,468 365,555 439,371
Sept 2014 392,339 353,499 378,311 379,878 497,575
US$/oz Dec 2014 1,037 992 954 1,015 1,220
Sept 2014 1,138 1,026 1,098 1,102 1,440
All-in cost margin % Dec 2014 14 18 21 16 (1)
Sept 2014 11 20 15 14 (13)
Ore reserve development R’mil Dec 2014 588.2 171.2 227.0 139.2 50.8
Sept 2014 564.1 172.2 223.5 115.0 53.4
Sustaining capital Dec 2014 381.6 156.6 162.3 41.8 15.7
Sept 2014 238.4 131.0 66.8 15.9 19.2
Corporate and project Dec 2014 95.0 - - - 48.4
expenditure# Sept 2014 37.8 - - - 12.8
Total capital expenditure R’mil Dec 2014 1,064.8 327.8 389.3 181.0 114.9
Sept 2014 840.3 303.2 290.3 130.9 85.4
Total capital
expenditure US$’mil Dec 2014 90.4 29.4 35.0 16.3 2.3
Sept 2014 78.5 28.3 27.1 12.2 8.0
The average exchange rate for the quarters ended 31 December 2014 and 30 September 2014 were R11.20/US$ and R10.72/US$ respectively.
# Included in the Group corporate and project expenditure is pre-development expenditure at Burnstone of R46.6 million (US$4.2 million) and R25.0 million (US$2.3 million) for the
quarters ended 31 December 2014 and 30 September 2014 respectively, and corporate expenditure of R5.2 million (US$0.5 million) and R5.5 million (US$0.5 million) respectively.
Development results
Development values represent the actual results of sampling and no allowance has been made for any adjustments which may be necessary when estimating
ore reserves. All figures below exclude shaft sinking metres, which are reported separately where appropriate.
Driefontein Quarter ended 31 December 2014 Quarter ended 30 September 2014 Year ended 31 December 2014
Reef Carbon leader Main VCR Carbon leader Main VCR Carbon leader Main VCR
Total advanced (m) 2,251 1,045 1,241 2,749 884 1,259 9,627 3,533 4,216
Advanced on-reef (m) 458 311 184 477 422 345 1,789 1,301 850
Channel width (cm) 79 40 72 114 28 58 103 38 59
Average value (g/t) 21.9 14.1 25.1 17.6 19.1 25.4 18.6 14.9 28.7
(cm.g/t) 1,733 563 1,805 2,002 539 1,472 1,903 563 1,694
Kloof Quarter ended 31 December 2014 Quarter ended 30 September 2014 Year ended 31 December 2014
Reef VCR Kloof Main Libanon VCR Kloof Main Libanon VCR Kloof Main Libanon
Total Advanced (m) 3,130 821 877 204 3,026 626 947 62 12,131 2,558 3,556 498
Advanced on-reef (m) 551 235 145 164 470 214 238 47 2,048 731 783 427
Channel width (cm) 109 165 121 161 127 159 77 173 117 161 82 116
Average value (g/t) 21.5 5.0 8.5 5.3 16.7 5.4 13.4 3.4 19.4 8.3 11.8 5.3
(cm.g/t) 2,343 817 1,034 847 2,116 855 1,031 590 2,278 1,325 971 610
Beatrix Quarter ended 31 December 2014 Quarter ended 30 September 2014 Year ended 31 December 2014
Reef Beatrix Kalkoenkrans Beatrix Kalkoenkrans Beatrix Kalkoenkrans
Total advanced (m) 4,562 1,328 3,995 1,028 15,980 3,753
Advanced on-reef (m) 1,244 335 1,451 298 4,915 1,205
Channel width (cm) 128 115 103 129 116 128
Average value (g/t) 7.7 13.2 8.9 12.5 7.7 12.7
(cm.g/t) 990 1,511 924 1,621 890 1,623
Cooke Quarter ended 31 December 2014 Quarter ended 30 September 2014 Year ended 31 December 2014
Elsburg Elsburg Kimberly Elsburg Elsburg Kimberly Elsburg Elsburg Kimberly
Reef VCR Reefs Massive Reefs VCR Reefs Massive Reefs VCR Reefs Massive Reefs
Total advanced (m) 675 3,495 41 329 521 2,882 20 278 1,376 7,336 72 724
Advanced on-reef (m) 306 1,441 22 181 194 1,288 20 160 565 3,275 53 402
Channel width (cm) 37 135 237 132 66 120 232 92 52 131 234 136
Average value (g/t) 10.5 9.3 2.1 7.2 7.9 5.5 11.2 6.1 8.6 7.7 6.6 6.9
(cm.g/t) 390 1,260 501 956 524 665 2,596 555 452 1,009 1,549 941
ADMINISTRATION AND CORPORATE INFORMATION
Investor Enquiries
James Wellsted
Head of Investor Relations
Sibanye Gold Limited
Tel: +27 83 453 4014
+27 11 278 9656
james.wellsted@sibanyegold.co.za
Corporate Secretary
Cain Farrel
Tel: +27 10 001 1122
Fax: +27 11 278 9863
cain.farrel@sibanyegold.co.za
Registered Office
Libanon Business Park
1 Hospital Street,
(Off Cedar Ave),
Libanon, Westonaria,
1780
South Africa
Private Bag X5
Westonaria,
1780
South Africa
Tel: +27 11 278 9600
Fax: +27 11 278 9863
Sibanye Gold Limited
Incorporated in the Republic of South Africa
Registration number 2002/031431/06
Share code: SGL
Issuer code: SGL
ISIN – ZAE E000173951
Listings
JSE : SGL
NYSE : SBGL
Website
www.sibanyegold.co.za
Directors:
Sello Moloko* (Chairman)
Neal Froneman (CEO)
Charl Keyter (CFO)
Chris Chadwick#
Robert Chan*
Timothy Cumming*
Barry Davison*
Rick Menell*
Nkosemntu Nika*
Keith Rayner*
Zola Skweyiya*
Susan van der Merwe*
Jerry Vilakazi*
Cain Farrel (Company Secretary)
*Independent Non-Executive
#Non-Executive
JSE Sponsor
J.P. Morgan Equities South Africa Proprietary Limited
Registration number 1995/011815/07
1 Fricker Road
Illovo, Johannesburg
2196
South Africa
(Private Bag X9936, Sandton, 2196, South Africa)
American Depository Receipts Transfer Agent
Bank of New York Mellon
BNY Mellon Shareowner Services
P O Box 358516
Pittsburgh, PA15252-8516
US toll-free telephone:
+1 888 269 2377
Tel: +1 201 680 6825
e-mail: shrrelations@bnymellon.com
Office of the United Kingdom Secretaries
London
St James’s Corporate Services Limited
Suite 31, Second Floor
107 Cheapside
London
EC2V 6DN
United Kingdom
Tel: +44 20 7796 8644
Fax: +44 20 7796 8645
Transfer Secretaries
United Kingdom
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
England
Tel: 0871 664 0300
[calls cost 10p a minute plus network extras,
lines are open 8.30am – 5pm Mon-Fri] or
[from overseas]
+44 20 8639 3399
Fax: +44 20 8658 3430
e-mail: ssd@capitaregistrars.com
Transfer Secretaries
South Africa
Computershare Investor Services (Proprietary) Limited Ground Floor
70 Marshall Street
Johannesburg, 2001
P O Box 61051
Marshalltown, 2107
Tel: +27 11 370 5000
Fax: +27 11 688 5248
MINERAL RESOURCES AND MINERAL RESERVES
The lead Competent Person designated in terms of SAMREC, who take responsibility for the consolidation and reporting of Sibanye Gold’s Mineral
Resources and Mineral Reserves and of the overall regulatory compliance of these figures is Mr. Gerhard Janse van Vuuren, who gave his consent for
the disclosure of the C2015 Mineral Resource and Mineral Reserve Statement. Mr Janse van Vuuren [BTech (MRM), GDE (Mining Eng.), MBA and MSCoC] is
registered with Plato (PMS No 243) and has 27 years’ experience relative to the type and style of mineral deposit under consideration. He is the
current Vice President: Mine Planning and Mineral Resource Management and is a full time employee of Sibanye Gold. Mr. van Vuuren consents to the
inclusion of all information in this release relating to mineral resources and mineral reserves in the form in which it appears.
The respective business unit based Mineral Resource Managers, relevant project managers and the respective Mineral Resource Management discipline heads
have been designated as the Competent Persons in terms of SAMREC and take responsibility for the reporting of Mineral Resources and Mineral Reserves
for their respective area(s) of responsibility. Additional information regarding these personnel, as well as the teams involved with the compilation
of the Mineral Resource and Mineral Reserve declaration is incorporated in the Mineral Resources and Mineral Reserves Supplement that will be published
in conjunction with the 2014 Sibanye Gold Integrated Report.
FORWARD LOOKING STATEMENTS
Certain statements in this document constitute “forward looking statements” within the meaning of Section 27A of the US Securities Act of 1933 and
Section 21E of the US Securities Exchange Act of 1934.
These forward-looking statements, including, among others, those relating to Sibanye’s future business prospects, revenues and income, wherever they
may occur in this document and the exhibits to this document, are necessarily estimates reflecting the best judgment of the senior management of
Sibanye and involve a number of known and unknown risks and uncertainties that could cause actual results, performance or achievements of the Group to
differ materially from those suggested by the forward-looking statements. As a consequence, these forward looking statements should be considered in
light of various important factors, including those set forth in this document. Important factors that could cause the actual results to differ
materially from estimates or projections contained in the forward looking statements include without limitation: economic, business, political and
social conditions in South Africa and elsewhere; changes in assumptions underlying Sibanye’s estimation of its current mineral reserves and resources;
the ability to achieve anticipated efficiencies and other cost savings in connection with past and future acquisitions as well as existing operations;
the success of exploration and development activities; changes in the market price of gold and/or uranium; the occurrence of hazards associated with
underground and surface gold and uranium mining; the occurrence of labour disruptions and industrial action; the availability, terms and deployment of
capital or credit; changes in government regulations, particularly environmental regulations and new legislation affecting water, mining and mineral
rights; the outcome and consequence of any potential or pending litigation or regulatory proceedings or other environmental, health and safety issues;
power disruptions and cost increases; fluctuations in exchange rates, currency devaluations, inflation and other macro-economic factors; the occurrence
of temporary stoppages of mines for safety incidents and unplanned maintenance reasons; Sibanye’s ability to hire and retain senior management or
sufficient technically skilled employees, as well as its ability to attract sufficient historically disadvantaged South Africans representation in its
management positions; failure of Sibanye’s information technology and communications systems; the adequacy of Sibanye’s insurance coverage; any social
unrest, sickness or natural or man-made disaster at informal settlements in the vicinity of some of Sibanye’s operations; and the impact of HIV,
tuberculosis and other contagious diseases. These forward looking statements speak only as of the date of this document.
The Group undertakes no obligation to update publicly or release any revisions to these forward looking statements to reflect events or circumstances
after the date of this document or to reflect the occurrence of unanticipated events.
Date: 19/02/2015 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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