Wrap Text
Operating and financial results for the six months ended 30 June 2015
Sibanye Gold Limited
Incorporated in the Republic of South Africa
Registration number 2002/031431/06
Share code: SGL
Issuer code: SGL
ISIN – ZAE000173951
Listings
JSE : SGL
NYSE : SBGL
Website
www.sibanyegold.co.za
Operating and Financial Results
For the six months ended 30 June 2015
WESTONARIA 6 August 2015: Sibanye Gold Limited (“Sibanye”) (JSE: SGL & NYSE: SBGL) is pleased to report operating results and
reviewed condensed, consolidated interim financial statements for the six months ended 30 June 2015.
Salient features for the six months ended 30 June 2015
- Gold production of 22,204kg (713,900oz) reflects a strong June quarter recovery
- June quarter All-in sustaining cost of R409,027/kg (US$1,054/oz), 6% lower than for the full six month period
- Operating profit increased from R744 million in the March quarter to R1.62 billion in the June quarter
- Annual production and cost guidance maintained
- Interim Dividend of 10 cents per share (ZAR) declared payable on 7 September 2015
- Net debt to EBITDA undemanding at 0.26 times
- Gold Reserves at the operations increased by 12% to 19.9Moz as at 31 December 2014
United States Dollars Key Statistics South African Rand
Six months ended Six months ended
Jun Dec Jun Jun Dec Jun
2014 2014 2015 2015 2014 2014
711.9 877.4 713.9 000’oz Gold produced kg 22,204 27,289 22,143
7,783 10,452 9,732 000ton Ore milled 000ton 9,732 10,452 7,783
1,293 1,243 1,207 $/oz Revenue R/kg 461,426 437,979 443,865
76 70 68 $/ton Operating cost R/ton 810 763 815
326.6 363.7 199.0 $m Operating profit Rm 2,366.0 3,981.0 3,488.1
35 33 23 % Operating margin % 23 33 35
848 847 935 $/oz Total cash cost R/kg 357,508 298,520 291,212
1,070 1,069 1,137 $/oz All-in sustaining cost R/kg 434,769 376,687 367,322
17 13 4 % All-in cost margin % 4 13 17
49.9 93.4 15.1 $m Basic earnings Rm 179.8 1,018.8 532.7
61.2 69.7 14.3 $m Headline earnings Rm 169.6 765.3 652.2
100.6 107.4 20.5 $m Normalised earnings Rm 243.3 1,185.4 1,065.2
13 12 2 cps Normalised earnings cps 27 132 138
Stock data for the six months ended 30 June 2015
Number of shares in issue JSE Limited - (SGL)
- at 30 June 2015 913,925,046 Price range per ordinary share ZAR18.75 to ZAR32.26
- weighted average 909,295,336 Average daily volume 2,671,918
Free Float 100% NYSE - (SBGL); one ADR represents four ordinary shares
ADR Ratio 1:4 Price range per ADR US$6.20 to US$11.35
Bloomberg/Reuters SGLS / SGLJ.J Average daily volume 995,809
STATEMENT BY NEAL FRONEMAN, CHIEF EXECUTIVE OFFICER OF SIBANYE GOLD
“After a difficult start to the year, with the March 2015 quarter disrupted by a number of operational events, it has been pleasing to
note the strong operational recovery in the June 2015 quarter. Most of Sibanye’s operations are once again operating at planned levels.
Fewer public holidays in the second half of the calendar year, result in seasonally higher production for the South African gold
industry and, barring any unplanned disruptions, Sibanye should deliver a significantly improved second half performance.
Safety
The increased emphasis and focus on safety in the latter half of 2014 is evident in a sharp reduction in the Group Fatality Injury
Frequency Rate (FIFR) for 2015. The recorded FIFR for the six months ended 30 June 2015 of 0.07 (per million man hours worked), was 40%
lower than recorded during the same period in 2014. This is a commendable outcome considering the depths and labour intensive nature of
our mines. Regrettably there were four fatalities during the period. Sibanye management and Board wish to express sincere condolences to
the families of the four employees: David Matsie, Bonno Keiditswe, Thomas, Bhekuyise Ndzimande and Vuyisile Sikoko. Every effort is
being made to ensure Zero Harm at our operations.
Operating review
Group gold production of 22,204kg (713,900oz) for the six months ended 30 June 2015 was marginally higher than for the comparable period
in 2014, with additional production from the inclusion of the Cooke Operations for the full period, offset by the low production in the
March 2015 quarter. Total cash cost of R357,508/kg (US$935/oz), All-in sustaining cost of R434,769/kg (US$1,137/oz) and All-in cost of
R441,348/kg (US$1,155/oz) for the period are slightly higher than the average costs forecast for the year, primarily due to the lower
production in the March 2015 quarter, as well as a 12% annual electricity cost increase. Unit costs declined significantly during the
June quarter as production reverted to normal levels, and should again be lower in the seasonally better second half of the year. Group
capital expenditure for the six months ended 30 June 2015 was 16% higher than for the comparable period in 2014 due to an increase in
ore reserve development and project expenditure.
Gold production of 12,396kg (398,500oz) for the June 2015 quarter was 26% higher than gold production for the March 2015 quarter.
Importantly, underground grades at all of the operations recovered as anticipated, increasing on average by 16%, following restocking of
the gold pipeline in the March 2015 quarter and are again more consistent with declared gold Reserve grades. The increase in production
also impacted positively on unit costs; Total cash cost for the quarter of R335,883/kg (US$866/oz), All-in sustaining cost of
R409,027/kg (US$1,054/oz) and All-in cost of R415,836/kg (US$1,071/oz) were between 12% and 13% lower than for the March 2015 quarter,
notwithstanding the annual electricity cost increase from April and higher winter tariffs. The Group operating margin increased sharply
from 17% for the March 2015 quarter to 28% for the June 2015 quarter.
Despite ongoing disruptions from load shedding, the Kloof, Driefontein and Beatrix operations produced 10,917kg (351,000oz) of gold for
the June 2015 quarter, which is only marginally lower than gold production in the same period of 2014. The Cooke operation contributed
1,479kg (47,550oz) of gold, 8% higher than for the March 2015 quarter. The Cooke operation produced approximately 88,000lbs of uranium
for the six-months ended 30 June 2015.
Load shedding impacted more significantly on the operations during the June 2015 quarter, with a total of 344 hours of load curtailment
experienced. These were mostly at a stage 2 level involving a 10% reduction in power usage but occasionally progressing to stage 3,
which requires a 20% cut in power. This compares with 173 hours almost exclusively at stage 2 during the March 2015 quarter. Processing
of surface material had to be suspended on a number of occasions to enable compliance with the curtailment directives received from
Eskom. This resulted in a direct production loss of 209kg (6,700oz) for the June 2015 quarter amounting to approximately R97 million of
lost revenue, compared with 61kg (1,960oz), translating to approximately R28 million of lost revenue during the March 2015 quarter. This
does moreover, influence the ratio of underground to surface tons milled, which results in a higher unit cost (R/ton). Additional losses
from stopping and starting of milling circuits have not been quantified.
Financial review
The financial results for the six months ended 30 June 2015 reflect the impact of the lower first quarter gold production.
The average rand gold price increased by 4% year-on-year to R461,426/kg, as a result of an 11% depreciation in the USD:ZAR exchange
rate, which offset a 7% year-on-year decline in the average dollar gold price (to an average of US$1,207/oz for the six months ended
30 June 2015). As a result of the operational difficulties in the March 2015 quarter, the benefit of additional production from the
Cooke Operation for the full period was not fully realised, with revenue increasing by only 4% to R10.3 billion. Operating costs at
Beatrix, Driefontein and Kloof were well contained, increasing by 6% year-on-year. However, the inclusion of the Cooke Operation for the
full six month period added R1.1 billion to Group operating costs, which increased to R7.9 billion, resulting in a 32% decline in
operating profit, to R2.4 billion. The R46 million operating profit from Cooke 1,2 and 3 for the period was offset by losses at Cooke 4,
which is still building to full production.
The operations collectively generated R2.3 billion of cash, of which R1.6 billion was deployed into sustaining capital and Ore Reserve
Development (“ORD”). After servicing royalties, taxes, interest and the payment of the final dividend from 2014, Sibanye was marginally
cash negative for the six months ended 30 June 2015, with a net cash outflow of R158 million. Additional loan finance of R450 million
was drawn down, increasing gross debt to R2.5 billion (excluding the Burnstone Debt, which does not have recourse to Sibanye). Available
cash at 30 June 2015 amounted to R855 million. Net debt, excluding Burnstone, now stands at R1.7 billion compared with R1.5 billion at
the end of 2014. Net debt to EBITDA remains undemanding at a ratio of 0.26 times.
Gold Fields Guarantee
On 29 April 2015 Sibanye announced that it had been released as guarantor of Gold Fields’ US$1 billion bond. Sibanye had remained a
guarantor of the bond after its unbundling by Gold Fields in February 2013, and this had restricted Sibanye‘s debt capacity.
The agreement by the note holders of Gold Fields’ bond, to release Sibanye of its obligations as a guarantor under the bond, completes
the unbundling by Gold Fields and improves Sibanye’s credit profile. As part of the release agreement, Sibanye paid a guarantee release
fee of US$5 million. From an accounting perspective the payment of the release fee and derecognition of the financial guarantee asset
and liability resulted in a net loss of R158 million.
Mineral Reserves
On 5 February 2015, Sibanye declared Gold Mineral Reserves of 28.4Moz and Uranium Mineral Reserves of 102.5Mlb as at
31 December 2014. The Gold Mineral Reserves included a 12% increase in gold Mineral Reserves at its underground and surface operations,
(refer to the company’s website www.sibanyegold.co.za, for details pertaining to the company’s Mineral Resources and Mineral Reserve
statements).
- Gold Mineral Reserves for the Groups operations increased by 2.1Moz to 19.9Moz, despite the depletion of 1.7Moz in 2014
- Underground gold Mineral Reserves increased by 2.3Moz (14%), net of depletion. The increases were primarily from:
- an additional 1.0Moz from secondary sources including supplementary “secondary reefs” and previously unmined “white areas” at
the Kloof and Driefontein operations. This follows a previous 3.8Moz increase from these sources which were brought to account
in 2013. Ongoing studies on these Resources are expected to result in further incremental additions to gold Mineral Reserves in
coming years
- an additional 1.7Moz of gold Mineral Reserves was declared at the Kloof 4 and Driefontein 5 shafts, following the completion of
pre-feasibility studies on below infrastructure “drop-down projects”. Development of these projects will substantially enhance
the life of these key operations
- 8.5Moz of Mineral Reserves was declared at the Groups projects, including the De Bron project in the Free State and the West Rand
Tailings Retreatment Project
- A maiden gold Mineral Resource of 8.9Moz was declared at the Burnstone project, following significant revision of the available data
and geological model
Sibanye is currently reviewing its organic projects in accordance with Group protocols and procedures and assessing possible synergies
which may exist with its current operations. Completion of these studies is likely to result in further additions to gold Reserves and
extension to the Group operating life.
Projects
Progress in quarter 2 on the Group internal organic growth projects was as follows:
- The Kloof 4 shaft and Driefontein 5 shaft below infrastructure projects: Feasibility studies were concluded in the June 2015
quarter, that enhanced the pre-feasibility studies completed on these projects in December 2014, delivering favorable forecasted
returns in excess of internal project hurdle rates. The results of the feasibility studies will be included in the Kloof and
Driefontein life of mine plans. Site preparation and development at Kloof 4 shaft commenced in January 2015 and is proceeding in
line with plan, with preparation activities scheduled to commence at Driefontein during the September 2015 quarter.
- The West Rand Tailing Retreatment Project (“WRTRP”): The integration in 2014 of extensive gold Resources contained in surface
tailings storage facilities (“TSFs”) at Sibanye’s Driefontein and Kloof operations, together with the uranium rich Cooke TSFs has
significantly enhanced the economic viability of the WRTRP. The WRTRP consists of some 800Mt of TSF Resources, containing
approximately 6.5Moz of gold and approximately 100Mlb of uranium, located on surface at Sibanye’s West Rand operations.
An internal technical and financial review of the feasibility of the WRTRP completed during the June 2015 quarter, confirmed the robust
economic viability of this project. An outcome of the review concluded that to enhance value, the uranium module envisaged in the pre-
feasibility study as part of phase 2 of the project, be included as part of the initial execution phase.
In terms of the revised project plan and as part of the first phase, relatively high gold grade TSFs at Driefontein will be
simultaneously processed with Cooke’s relatively high grade uranium TSFs. These “anchor” resources, represent approximately 30% of the
total TSF Sibanye resource base by volume and contain approximately 35% of the gold and 53% of the uranium contained in the total
Sibanye TSF surface resource base respectively.
Phase 1 of the project currently envisages processing approximately 1.5Mt/month of anchor resource, yielding approximately 1.2Moz of
gold and 35Mlb of uranium over the 16 year life, at an average steady state production of 100koz/annum of gold and 2.2Mlb/annum of
uranium. The average gold All-in cost is estimated at approximately US$800/oz, with an average uranium All-in cost of approximately
US$40/lb.
On a stand-alone basis, phase 1 of the project covers the majority of the total project capital required, and in its own right meets
Sibanye’s internal hurdle rates. Phase 1 of the project has an NPV equating to some R3.2 billion, an IRR of 15% and a payback of 9
years. Significant value engineering opportunities identified during the feasibility study are currently being reviewed as part of a
“design integration phase”, which has the potential to add a further R400 million to the phase 1 NPV (i.e. R3.6 billion) and increase
the IRR to 16%.
This project valuation ignores the potential benefits of the longer term “annuity” cash flow derived from processing the remaining
Sibanye TSF resource, potential by-product sulphuric acid sales and taxation benefits relating to capital expenditure offsets at
Driefontein and Kloof, which on a combined basis, could conservatively add an additional R2.5 billion in value to the project, resulting
in a total combined NPV of approximately R5.5 billion to R6.0 billion. Furthermore, various capital financing structures may further
enhance project equity returns and ameliorate funding risks. Several possible funding options are currently being evaluated.
The permitting process for the WRTRP has been initiated. During the estimated 300 day regulatory period required for permitting, further
value engineering opportunities to reduce capital and operating costs related to the integrated uranium and gold processing plant design
will be assessed.
- The Burnstone project: The feasibility study was completed in the June 2015 quarter, and delivered returns that met the Group’s
investment hurdle rates. An external peer review of the feasibility study will take place in the September 2015 quarter.
In anticipation of an investment decision to develop the mine as planned in the feasibility study, a capital budget of approximately
R230 million was approved in 2014 to complete selected critical infrastructure. This work is on track to be completed during the
fourth quarter of 2015, within budget. In addition, a further R100 million was approved to commence underground development. This was
achieved by refurbishing two suites of mechanised mining equipment and by June 2015, 411 development metres had been completed. The
development is the critical path on the feasibility study and this initial work will thus facilitate de-risking the feasibility
build-up plan.
- The Wits Gold Southern Free State Resources and Reserves, DBM and Bloemhoek projects: The DBM project review will be undertaken
during the second half of 2015. In addition to a technical review, synergistic opportunities with the adjacent Beatrix operations
will also be considered. Going forward, the Bloemhoek project will be considered for life extension opportunities for the Beatrix
North shaft with a potential below infrastructure depth extension project into the Bloemhoek resource.
Further detail on these projects will be provided during the course of the September 2015 quarter.
Corporate activity
In addition to reviewing the potential of its organic projects, Sibanye continues to assess value accretive acquisitive opportunities to
enhance the dividend yield profile and cement Sibanye’s position at the lower end of the mining cost curve. Our strategic focus remains
in South Africa and primarily in sectors where we are able to leverage our deep level, hard rock mining experience and operating model
in order to unlock value. We believe that value can be realised in the South African gold and platinum sectors in particular, through
further reduction in overhead costs, rationalisation of replicated services and an increased operational focus, particularly with regard
to quality of mining factors.
In order to assess compliance with the Mining Charter, the Chamber of Mines (“CoM”), with input from Sibanye and other South African
mining companies, has submitted the necessary documentation as requested by the Department of Mineral Resources (“DMR”). There were
however, a number of differences in interpretation between the companies represented by the CoM and the DMR, the most important being
the interpretation of the principle of continuing consequences (often referred to as “once empowered, always empowered”). The DMR and
the CoM agreed to approach the South African courts in order to achieve certainty on the principle of continuing consequences, via a
declaratory order. The Chamber has made application to court. At this stage it is not clear when the issue will be resolved, but
stakeholders will be informed of any progress. After initial calibration and rounding off, all of Sibanye’s operations achieved top
quartile scores for the three years up to and including 2014. Sibanye’s operations therefore fall into the “Excellent Performance”
category as per the DMR’s electronic based scorecard.
As a result of the increasing cost and inconsistent supply of electricity from the state utility Eskom, Sibanye is exploring alternative
sources of electricity supply. In addition to the solar power project detailed below, investigations continue into independent power
generation alternatives, including coal fired power stations and associated sources of reliable, quality coal, continue.
Photovoltaic project
The deterioration in the security of electricity supply, coupled with strong indications that the Eskom tariff trajectory is likely to
exceed earlier projections, has further strengthened the business case for developing an independent photovoltaic electricity supply for
the Sibanye operations as announced in February 2015. This has reinforced our confidence in the returns available to third party equity
and debt capital, while Sibanye secures captive electricity at a discount to Eskom tariffs. An environmental impact assessment study has
been launched with an accredited independent consultant appointed to drive the process, and arrangements to have high level engineering
design work conducted during 2015 are being put in place. Our target date for first generation from a first phase of the envisaged 150MW
installation remains towards the end of 2017.
Director changes
The following changes have occurred in relation to the appointed directors of Sibanye:
- Mr Jiva Yuan was appointed as a non-independent, non-executive director with effect from 12 May 2015, and
- Dr Zola Skweyiya resigned as an independent, non-executive director on 21 May 2015.
Outlook
The general decline in commodity prices to multiyear lows continues to place considerable financial stress on mining companies globally.
An extended period of low prices will generally result in a supply side response, as projects are deferred and higher cost, loss making
production is taken off the market.
While Sibanye is not immune to these macroeconomic factors and faces numerous other challenges it is able to weather lower gold prices
and remains well positioned to benefit from any opportunities which may arise during such cycles.
Despite the recent decline in the dollar gold price to below US$1,100/oz, a corresponding depreciation of the Rand relative to the US
Dollar has ensured that the Rand gold price has remained well above the R420,000/kg level assumed for Life of Mine planning and the
declaration of gold Mineral Reserves. All-in costs of US$1,071/oz for the June 2015 quarter remain globally competitive and still
provide scope for further reduction.
Despite their relative maturity, Sibanye’s core operations still rank among the highest grade gold mines in the world and the resultant
inherent operational flexibility of the ore bodies will ensure that they can be restructured for profitability at a significantly lower
gold price. While a review of the current production plan is not yet warranted, various production scenarios at different gold prices
are currently being considered and remedial plans being developed.
On the basis of normal operational performance during the second half of the year, production guidance remains unchanged, albeit that,
as a result of the March 2015 performance, full year production is likely to be closer to the bottom end of the guided 50,000kg to
52,000kg range.”
6 August 2015
Neal Froneman
Chief Executive Officer
FINANCIAL REVIEW OF THE GROUP
For the six months ended 30 June 2015 compared with the six months ended 30 June 2014
Financial review of the Group
Production from the South African gold mining industry during the first half of the calendar year is seasonally weak due to fewer
production shifts over the Christmas/New Year period and the Easter public holidays. It is therefore more relevant to compare the
operating and financial results for the six months ended 30 June 2015 with the corresponding period in the previous year, rather than
the preceding six months ended 31 December 2014.
Group profit decreased from R533 million (US$50 million) for the six months ended 30 June 2014 to R85 million (US$7 million) for the six
months ended 30 June 2015. The reasons for the decrease are discussed below.
Operating performance
After a challenging March 2015 quarter, where disruptions at most of the operations negatively impacted on production (as detailed in
our March 2015 quarter’s operating update), gold production returned to more historic levels of 22,204kg for the six months ended
30 June 2015 (2014: 22,143kg). The 2015 results included a full six months of Cooke, compared with only one months’ production for the
six months ended 30 June 2014. The inclusion of production from Cooke offset lower production at the legacy operations in the first
quarter of 2015.
Revenue
Revenue increased by 4% to R10,246 million (US$862 million), driven primarily by the Rand gold price which increased to R461,426/kg from
R443,865/kg. This increase was despite a 7% lower Dollar gold price which decreased to US$1,207/oz from US$1,293/oz, as the Rand was on
average 11% weaker at R11.89/US$.
There were no uranium sales for the six months to 30 June 2015.
Operating costs
Group operating costs increased from R6,340 million (US$594 million) to R7,880 million (US$663 million) due to the inclusion of the
Cooke Operation for a full six months compared with only one month for the six months ended 30 June 2014, as well as reflecting the
annual wage increase and higher electricity costs. Cooke added R1,140 million (US$94 million) to costs for these additional five months.
Excluding Cooke, costs were well controlled, increasing by just 6% year-on-year, despite above inflation wage and electricity cost
increases.
Total cash cost and All-in cost was higher than the corresponding period in 2014, at R357,508/kg (US$935/oz) and R441,348/kg
(US$1,155/oz) respectively. This was mostly due to lower production in the first quarter of 2015 and the inclusion of Cooke, which is
still building to full production. Unit costs in the June 2015 quarter were on average 12% lower than those of the first quarter.
Operating profit
Operating profit decreased to R2,366 million (US$199 million) from R3,488 million (US$327 million) due to lower production in the March
2015 quarter and losses incurred at Cooke 4 shaft as it builds to full production. Cooke 1,2 and 3 shafts reported an operating profit
of R46 million for the period. The Group operating margin decreased to 23% from 35%.
Amortisation and depreciation
Group amortisation and depreciation increased 8% to R1,609 million (US$135 million). This increase was as a result of the incorporation
of Cooke, which added R281 million (US$23 million), partly offset by lower amortisation and depreciation at Kloof due to the lower
production, and at Driefontein as a result of the increase in declared gold Mineral Reserves as at 31 December 2014. Amortisation is
calculated over the operating life and a unit of production method is applied.
Capital expenditure
Capital expenditure of R1,557 million (US$131 million) was 16% higher than for the six months ended 30 June 2014, due to the inclusion
of Cooke for an additional five months and expenditure at our Burnstone project of R124 million (US$10 million). Excluding these items
expenditure was marginally lower year-on-year. Sustaining capital expenditure of R305 million (US$26 million) was 18% lower following
the completion of the capital intensive carbon-in-leach (“CIL”) plant upgrade and winder upgrades at Driefontein last year. Ore reserve
development (“ORD”) expenditure increased by some R144 million due to the inclusion of Cooke, and increased 3% at the Kloof, Driefontein
and Beatrix (“KDB”) operations.
Investment income
Investment income increased by 32% to R117 million (US$10 million) due to interest earned on the higher environmental rehabilitation
obligation funds.
Finance expenses
Finance expenses increased to R263 million (US$22 million) for the six months ended 30 June 2015, due to interest on the Burnstone Debt
of R47 million (US$4 million), a R26 million (US$2 million) increase in the environmental rehabilitation obligation accretion expenses
and a R27 million (US$1 million) increase in interest paid following an increase in gross debt.
Sibanye’s average gross debt outstanding, excluding the Burnstone Debt, during the first half of 2015 was approximately R2.3 billion
compared with R2.0 billion during the first half of 2014.
Share of result of associates
The R29 million (US$2 million) gain from share of results of associates for the six months ended 30 June 2015, was primarily due to
Sibanye’s 33.1% interest in Rand Refinery Proprietary Limited (“Rand Refinery”).
For additional information of Sibanye’s investment in Rand Refinery see note 2 of the financial statements of this report.
Share-based payments
Share-based payments decreased by 30% to R145 million (US$12 million) for the six months ended 30 June 2015. This was mainly due to the
number of performance shares that vested on 1 March 2015, with no new allocations during the six months ended 30 June 2015.
The share-based payment expense for the six months ended 30 June 2015 predominantly relates to R85 million (US$7 million) (30 June 2014:
R110 million (US$10 million)) of cash-settled share options (“Phantom Share Scheme”) with R60 million (US$5 million) (30 June 2014:
R95 million (US$9 million)) relating to the Sibanye Share Plan.
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 gain/(loss) on financial instruments in the income statement.
The R25 million (US$2 million) net gain for the six months ended 30 June 2015 compares with a R178 million (US$17 million) net loss on
financial instruments for the six months ended 30 June 2014. This consists of a R9 million (US$1 million) fair value gain (30 June 2014:
R253 million (US$24 million) fair value loss) related to the Phantom Share Scheme options, a R4 million (US$nil million) (30 June 2014:
R59 million (US$6 million)) fair value gain on investments under the environmental rehabilitation obligation funds and a R12 million
(US$1 million) (30 June 2014: R16 million (US$2 million)) gain relating to the financial guarantee liability.
Non-recurring items
Net loss on derecognition of financial guarantee asset and liability
On 24 April 2015, Sibanye was released as guarantor by the note holders of Gold Fields Limited’s US$1 billion bond, resulting in a net
loss on derecognition of the financial asset and liability of R158 million (US$13 million).
For additional information on the derecognition of the financial asset and liability see note 3 of this report.
Restructuring cost
During the six months ended 30 June 2015 restructuring cost, including voluntary separation packages, of R31 million (US$3 million) were
incurred at Cooke, Driefontein and Corporate Services (30 June 2014: R106 million (US$10 million) at Driefontein and St Helena Private
Hospital).
Impairment
There were no impairments for the six months ended 30 June 2015. For the corresponding period in 2014 the request by Rand Refinery for
its shareholders to provide a subordinated loan resulted in a decision to fully impair the remaining R120 million (US$11 million)
carrying value of Sibanye’s investment in Rand Refinery.
For additional information of Sibanye’s investment in Rand Refinery see note 2 of this report.
Transaction costs
There were no transaction costs for the six months ended 30 June 2015. The transaction costs incurred during the six months ended
30 June 2014 related to the Cooke acquisition.
Royalties
Royalties decreased by 29% to R139 million (US$12 million) due to the decline in earnings before interest and taxes. The royalty tax
rate decreased to 1.4% from 2.0% of revenue.
Mining and income taxation
Current taxation decreased to R162 million (US$14 million) from R434 million (US$41 million) due to the decline in taxable profit. The
deferred taxation credit increased to R167 million (US$14 million) from R100 million (US$9 million) due to the inclusion of Cooke.
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 R391 million (US$33 million) compares with R1,711 million (US$160 million) for the six months ended 30 June 2014. This
was largely due to the R1 billion decline in cash generated from the operations.
Available cash at 30 June 2015 (after net loans raised of R450 million) increased to R855 million (US$70 million) from R563 million
(US$49 million) at 31 December 2014.
Dividend declaration
The Sibanye Board approved an Interim Dividend, number 3, of 10 SA cents per share (gross) for the six months ended 30 June 2015.
Sibanye‘s dividend policy is to return between 25% and 35% of normalised earnings to shareholders. The Board may also consider declaring
a special dividend after due consideration of the Group cash position and future requirements. Normalised earnings are defined 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 Interim 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 10 SA cents per ordinary share for shareholders exempt from the Dividends 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 8.5000 SA cents (85% of 10 SA cents) per ordinary share for shareholders liable to pay
the Dividends Withholding Tax;
- Sibanye currently has 913,925,046 ordinary shares in issue;
- Sibanye’s Auditors are KPMG Inc. and the individual auditor is Jacques Erasmus; and
- Sibanye’s income tax reference number is 9431 292 151.
Shareholders are advised of the following dates in respect of the Interim Dividend:
- Interim Dividend number 3: 10 SA cents per share.
- Last date to trade cum dividend: Friday, 28 August 2015.
- Sterling and US dollar conversion date: Monday, 31 August 2015.
- Shares commence trading ex-dividend: Monday, 31 August 2015.
- Record date: Friday, 4 September 2015.
- Payment of dividend: Monday, 7 September 2015.
Please note that share certificates may not be dematerialised or rematerialised between Monday, 31 August 2015, and Friday, 4 September
2015, both dates inclusive.
SALIENT FEATURES AND COST BENCHMARKS
Salient features and cost benchmarks for the six months ended 30 June 2015, 31 December 2014 and 30 June 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 Jun 2015 9,732 4,045 5,687 1,209 1,596 915 1,002 1,282 840 639 2,249
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
Yield g/t Jun 2015 2.28 4.90 0.42 6.04 0.60 6.55 0.60 3.27 0.37 3.67 0.22
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
Gold produced/sold kg Jun 2015 22,204 19,838 2,366 7,302 955 5,996 601 4,193 308 2,347 502
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
000’oz Jun 2015 713.9 637.8 76.1 234.8 30.7 192.8 19.3 134.8 9.9 75.4 16.2
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
Gold price received R/kg Jun 2015 461,426 461,063 460,997 461,942 462,654
Dec 2014 437,979 438,490 437,969 437,571 437,329
Jun 2014 443,865 444,798 442,927 444,838 436,236
US$/oz Jun 2015 1,207 1,206 1,206 1,209 1,210
Dec 2014 1,243 1,244 1,243 1,242 1,241
Jun 2014 1,293 1,295 1,290 1,296 1,270
Operating cost R/ton Jun 2015 810 1,770 126 1,929 164 2,332 163 1,173 125 1,864 84
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
Operating margin % Jun 2015 23 22 34 31 41 23 42 22 27 (9) 17
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
Total cash cost R/kg Jun 2015 357,508 320,165 348,507 358,609 484,872
Dec 2014 298,520 279,066 274,567 303,656 398,334
Jun 2014 291,212 287,664 267,747 325,229 377,138
US$/oz Jun 2015 935 838 912 938 1,269
Dec 2014 847 792 779 862 1,130
Jun 2014 848 838 780 947 1,098
All-in sustaining cost R/kg Jun 2015 434,769 377,837 436,774 432,482 564,058
Dec 2014 376,687 355,223 359,676 370,733 448,252
Jun 2014 367,322 359,687 345,035 384,158 430,793
US$/oz Jun 2015 1,137 988 1,143 1,131 1,476
Dec 2014 1,069 1,008 1,021 1,052 1,272
Jun 2014 1,070 1,048 1,005 1,119 1,255
All-in cost R/kg Jun 2015 441,348 378,334 437,062 432,482 565,356
Dec 2014 382,550 355,223 359,676 372,460 466,357
Jun 2014 367,601 359,687 345,035 384,158 430,793
US$/oz Jun 2015 1,155 990 1,143 1,131 1,479
Dec 2014 1,086 1,008 1,021 1,057 1,323
Jun 2014 1,071 1,048 1,005 1,119 1,255
All-in cost margin % Jun 2015 4 18 5 6 (22)
Dec 2014 13 19 18 15 (7)
Jun 2014 17 19 22 14 2
Total capital R’mil Jun 2015 1,556.9 415.1 531.2 295.8 182.6
expenditure1 Dec 2014 1,905.1 631.0 679.6 311.9 200.3
Jun 2014 1,345.7 517.9 555.9 236.1 29.6
US$’mil Jun 2015 130.9 34.9 44.7 24.9 15.4
Dec 2014 174.5 57.7 62.1 28.5 18.5
Jun 2014 126.0 48.5 52.1 22.1 2.8
Average exchange rates for the six months ended 30 June 2015, 31 December 2014 and 30 June 2014 were R11.89/US$, R10.96/US$ and
R10.68/US$ respectively.
Figures may not add as they are rounded independently.
1 Included in total Group capital expenditure is Corporate expenditure of R132.2 million (US$11.1 million), R82.3 million
(US$7.6 million) and R6.2 million (US$0.5 million) for the six months ended 30 June 2015, 31 December 2014 and 30 June 2014
respectively. The majority of this expenditure was spent on our growth project at Burnstone.
REVIEW OF OPERATIONS
Six months ended 30 June 2015 compared with the six months ended 30 June 2014
Underground Operations
Driefontein
Gold production of 7,302kg (234,800oz) was 5% lower than the comparable period in 2014. This was primarily due to lower underground face
grades which have declined in line with the plan at mining units 1 and 2. This resulted in the average yield for the period decreasing
to 6.0g/t from 6.7g/t. Ore milled was 6% higher at 1.20 million tons. However, the increase in milling was not aligned with the increase
in underground tons mined, indicating an increase in underground stock, which contributed to a lower MCF. In line with this, the cost of
underground ore milled increased by 3% to R1,929/ton for the six months ended 30 June 2015.
Total main development decreased marginally to 7,617 metres, which included an increase in on-reef development of 12% to 1,528 metres
relative to the comparable period in 2014. Development is planned to decrease in 2015, in line with current reserve development
requirements.
Operating costs increased by 9% to R2,332 million (US$196 million), in line with the increase in volumes mined, together with above
inflation annual wage increases and electricity tariff increases .
Operating profit decreased by 19% to R1,034 million (US$87 million) as a result of the lower gold production and the increase in costs.
The operating margin decreased to 31% from 37%.
Capital expenditure decreased by 14% to R405 million (US$34 million) due to a decrease in capitalised ORD, completion of the winder
upgrades and projects such as the locomotive guard communication system, self-rescue packs and the relocation of the assay laboratory.
Capital was predominantly spent on ORD, stabilisation of the shaft barrel at Ya Rona shaft, an upgrade of IT infrastructure, a new
settler at Masakhane shaft and development at Hlanganani shaft.
Kloof
Gold production for the six months ended 30 June 2015 decreased by 20% to 5,996kg (192,800oz), mostly due to a lower realised yield and
lower volumes processed.
Ore milled decreased by 4% to 915,000 tons despite an increase in square metres mined, indicating an accumulation of underground ore.
This contributed to a lower MCF and a 16% decrease in the underground yield to 6.6g/t.
Main on-reef development increased by 11% to 2,144 metres and total main development increased by 3% to 9,322, metres, as planned. The
average development value increased to 1,768cm.g/t from 1,714cm.g/t.
Operating costs increased by 11% to R2,134 million (US$179 million) due to a decrease in capitalised ORD owing to the proportional
increase in working cost development, and above inflation annual wage and electricity price increases.
Operating profit declined by 54% to R630 million (US$53 million) and the operating margin decreased to 23% from 42% relative to the
comparable period in 2014.
Capital expenditure decreased by 3% to R523 million (US$44 million) due to less capitalised ORD and various capital projects which were
completed in 2014, such as the locomotive guard communication system. Capital was predominantly spent on ORD, the 45 level decline
project at 4 shaft, as well as IT infrastructure, winder and electrical upgrades.
Beatrix
Gold production was 7% lower at 4,193kg (134,800oz) for the six months ended 30 June 2015. This was mostly due to a lower underground
yield, which declined by 13% to 3.3g/t predominantly due to lower face values at mining unit 3.
Ore milled increased by 7% to 1.28 million tons, resulting in a 7% decline in unit milling costs to R1,173/ton.
Total main development increased by 17% to 10,307 metres across all the sections. On-reef development was constant at 2,763 metres.
Average development grades increased to 1,158cm.g/t from 991cm.g/t.
Operating costs were flat at R1,503 million (US$126 million) despite the annual wage and electricity cost increase.
Operating profit fell by 14% to R434 million (US$37 million) as a result of the lower gold production, partly offset by the higher gold
price received. The operating margin decreased to 22% from 25%.
Capital expenditure increased by 26% to R293 million (US$25 million) mainly due to increased capitalised ORD.
Cooke
Gold production of 2,347kg (75,400oz) for the six months ended 30 June 2015 was lower than plan, mainly as a result of a slow start-up
following the Christmas break, a delay in accessing the high grade pillars at Cooke 1 shaft and production disruptions due to a fatality
at Cooke 2 shaft.
Ore milled was 639,000 tons at a yield of 3.7g/t. Operations at Cooke 4 shaft have increased slowly but steadily following the
restructuring and implementation of the alternative working arrangements. The backfill project at Cooke 2 shaft is now complete,
allowing for the secondary extraction of ore from higher grade areas. This is expected to facilitate a 0.5g/t increase in the recovered
grade from mid-September.
Main development amounted to 7,094 metres, of which 2,923 metres was on-reef development. Development at mining units 1 and 2 was
according to plan, but a seismic event in the Cooke 4 shaft pillar late last year continues to affect development and flexibility.
The Cooke Operation recorded a unit cost of R1,864/ton for the period under review. Electricity costs increased by approximately 12% in
April, exacerbated by one winter tariff month which significantly inflates electricity costs in the second and third quarters of the
year.
The operating loss for the period of R102 million (US$9 million) was due to losses incurred at Cooke 4 shaft as it builds to full
production.
Capital expenditure of R174 million (US$15 million) was mainly spent on ORD, the backfill project and SLP projects.
Surface Operations
Driefontein
Gold production increased by 39% to 955kg (30,700oz). Volumes processed increased by 19% to 1.60 million tons due to the commissioning
in December 2014 of the CIL circuit at number 2 plant and the processing of surface rock dump at 1 plant. This increase was partly
offset by the recent load shedding being experienced across all our operations. Yields increased to 0.60g/t from 0.51g/t due to higher
grade surface dump material processed.
Operating cost was 15% higher at R261 million (US$22 million), due to the increased surface volumes processed, however, unit costs
decreased by 3% to R164/ton. The operating margin increased to 41% from 26% for the six months ended 30 June 2014.
Capital expenditure of R6 million (US$1 million) compares with the R42 million (US$4 million) spent in the first half of 2014, mostly on
the CIL plant commissioned in December 2014.
Kloof
Gold production decreased by 20% to 601kg (19,300oz), year-on-year, mainly due to the effects of Eskom load shedding. As a result,
surface ore processed decreased by 36% to 1.0 million tons, partly offset by higher yields which increased by 25% to 0.60g/t, compared
with 0.48g/t the previous year.
Operating costs decreased by 27% to R163 million (US$14 million), while unit costs increased by 13% to R163/ton, both due to the lower
volumes. The operating margin increased to 42% from 32%.
Capital expenditure of R6 million (US$1 million) was lower than in 2014, when critical spares for the plants were ordered.
Beatrix
Gold production declined by 22% to 308kg (9,900oz) as a result of a decrease in surface volumes milled to 840,000 tons, as lower grade
surface material was replaced by higher grade underground volumes, as well as Eskom load shedding. The yield remained constant at
0.37g/t.
Operating costs increased to R105 million (US$9 million) and milling unit costs increased to R125/ton. Operating profit more than halved
to R37 million (US$3 million). Capital expenditure of R3 million was similar to 2014.
Cooke
Production throughput at the Cooke plant since the commissioning of the Cooke optimisation project early in 2014 has stabilised at
around 4.6 million tons per year. Gold production was 502kg (16,200/oz).
Unit costs averaged R84/ton and should remain fairly constant going forward. Yields of 0.22g/t were slightly lower than forecast due to
the mining mix to the plant, which impacted on recoveries, but were slightly higher than prior periods.
Capital expenditure of R5 million was largely spent on upgrading the tower crane.
CONDENSED CONSOLIDATED INCOME STATEMENT
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Six month periods ended Six month periods ended
June December June June December June
2014 2014 2015 Notes 2015 2014 2014
920.3 1,092.7 861.7 Revenue 10,245.5 11,952.0 9,828.5
(593.7) (729.0) (662.7) Operating costs (7,879.5) (7,971.0) (6,340.4)
326.6 363.7 199.0 Operating profit 2,366.0 3,981.0 3,488.1
(139.3) (161.5) (135.3) Amortisation and depreciation (1,608.6) (1,766.5) (1,488.2)
187.3 202.2 63.7 Net operating profit 757.4 2,214.5 1,999.9
8.3 8.6 9.8 Investment income 116.9 94.5 88.7
(15.0) (22.0) (22.1) Finance expenses (262.9) (240.1) (159.9)
(2.8) (5.9) (5.3) Net other costs (63.1) (64.2) (29.8)
- (1.4) (1.1) Exploration and feasibility costs (12.9) (15.1) -
Share of results of associates after
(14.0) (29.5) 2.4 taxation 28.8 (321.6) (149.1)
(19.5) (19.1) (12.2) Share-based payments (145.0) (209.7) (208.2)
(16.6) 6.6 2.1 Gain/(loss) on financial instruments 25.0 70.1 (177.8)
(Loss)/gain on foreign exchange
0.6 (6.5) (4.2) differences (49.8) (68.5) 5.2
128.3 133.0 33.1 Profit before non-recurring items 394.4 1,459.9 1,369.0
Profit on disposal of property, plant
- 0.9 1.2 and equipment 14.2 9.3 0.2
Net loss on derecognition of financial
- - (13.3) guarantee asset and liability 3 (158.3) - -
(11.3) (14.1) - Impairment - (155.5) (119.6)
- 43.8 - Reversal of impairment - 474.1 -
(9.9) (4.9) (2.6) Restructuring costs (31.2) (54.3) (106.0)
(7.6) (2.7) - Transaction costs - (30.1) (81.5)
99.5 156.0 18.4 Profit before royalties and taxation 219.1 1,703.4 1,062.1
(18.3) (21.5) (11.7) Royalties (139.4) (235.3) (195.2)
81.2 134.5 6.7 Profit before taxation 79.7 1,468.1 866.9
(31.3) (45.2) 0.4 Mining and income taxation 5.3 (493.9) (334.2)
(40.6) (40.7) (13.6) - Current taxation (161.7) (445.2) (434.0)
9.3 (4.5) 14.0 - Deferred taxation 167.0 (48.7) 99.8
49.9 89.3 7.1 Profit for the period 85.0 974.2 532.7
Profit/(loss) for the period to:
attributable to:
49.9 93.4 15.1 - Owners of Sibanye 179.8 1,018.8 532.7
- (4.1) (8.0) - Non-controlling interests (94.8) (44.6) -
Earnings per ordinary share (cents)
6 10 2 Basic earnings per share 20 113 69
6 10 2 Diluted earnings per share 20 111 67
772,679 898,520 909,295 Weighted average number of shares (‘000) 909,295 898,520 772,679
Diluted weighted average number of
792,209 914,809 913,536 shares (‘000) 913,536 914,809 792,209
Headline earnings per ordinary share
(cents) 4
8 8 2 Headline earnings per share 19 85 84
8 8 2 Diluted headline earnings per share 19 84 82
Normalised earnings1 (cents)
13 12 2 Normalised earnings per share 27 132 138
772,679 898,520 909,295 Weighted average number of shares (‘000) 909,295 898,520 772,679
Diluted weighted average number of
792,209 914,809 913,536 shares (‘000) 913,536 914,809 792,209
10.68 10.96 11.89 Average R/US$ rate
1 Normalised earnings is defined as basic earnings excluding gains and losses on foreign exchange and financial
instruments, non-recurring items and share of results of associates, after taxation.
The condensed consolidated financial statements for the six months ended 30 June 2015 have been prepared by Sibanye Gold Limited’s
group financial reporting team headed by Alicia Brink. This process was supervised by the Group’s Chief Financial Officer,
Charl Keyter and approved by the board of Sibanye Gold Limited.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Six month periods ended Six month periods ended
June December June June December June
2014 2014 2015 2015 2014 2014
49.9 89.3 7.1 Profit for the period 85.0 974.2 532.7
(30.9) (117.5) (64.1) Other comprehensive income, net of tax - - -
(30.9) (117.5) (64.1) Currency translation adjustments1 - - -
19.0 (28.2) (57.0) Total comprehensive income 85.0 974.2 532.7
Total comprehensive income
attributable to:
19.0 (20.5) (47.8) - Owners of Sibanye 179.8 1,018.8 532.7
- (7.7) (9.2) - Non-controlling interests (94.8) (44.6) -
10.68 10.96 11.89 Average R/US$ rate
1 The currency translation adjustment arises on the convenience translation of the South African Rand amount to the
United States Dollar. These gains and losses will never be reclassified to profit and loss.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Restated1
June December June June December June
2014 2014 2015 Notes 2015 2014 2014
2,290.1 2,247.5 2,120.0 Non-current assets 25,800.2 25,981.4 24,229.2
2,001.7 1,964.0 1,861.1 Property, plant and equipment 22,648.6 22,704.0 21,177.4
69.6 63.7 60.5 Goodwill 736.7 736.7 736.7
0.6 6.0 8.1 Equity accounted investments 98.2 69.4 6.4
0.1 0.1 0.1 Investments 1.4 1.4 1.4
192.4 189.7 186.0 Environmental rehabilitation obligation funds 2,263.9 2,192.8 2,035.7
21.3 19.5 - Financial guarantee asset 3 - 225.5 224.9
4.4 4.5 4.2 Deferred taxation 51.4 51.6 46.7
222.7 167.8 187.7 Current assets 2,284.8 1,940.5 2,356.4
27.0 28.3 31.8 Inventories 386.5 327.7 285.3
75.2 85.9 85.7 Trade and other receivables 1,043.8 992.8 795.9
5.0 4.9 - Current portion of financial guarantee asset 3 - 57.1 53.2
1.7 - - Assets held for sale - - 18.3
113.8 48.7 70.2 Cash and cash equivalents 854.5 562.9 1,203.7
2,512.8 2,415.3 2,307.7 Total assets 28,085.0 27,921.9 26,585.6
1,359.2 1,296.3 1,196.7 Shareholders’ equity 14,563.7 14,985.9 14,380.8
738.2 810.2 785.7 Non-current liabilities 9,561.5 9,365.4 7,810.9
360.7 334.8 304.2 Deferred taxation 3,702.1 3,869.3 3,815.7
119.7 226.3 260.8 Borrowings 5 3,174.0 2,615.8 1,266.6
225.5 215.1 212.3 Environmental rehabilitation obligation 2,583.1 2,486.8 2,386.2
1.5 1.3 1.2 Post-retirement healthcare obligation 15.0 15.1 16.3
30.8 32.7 7.2 Share-based payment obligations 87.3 378.4 326.1
415.4 308.8 325.3 Current liabilities 3,959.8 3,570.6 4,393.9
279.2 234.8 235.1 Trade and other payables 2,861.7 2,714.6 2,953.6
18.5 17.0 - Financial guarantee liability 3 - 197.0 195.7
56.3 7.3 14.3 Taxation and royalties payable 174.3 84.0 595.9
52.4 47.9 44.6 Current portion of borrowings 5 542.3 554.2 554.0
9.0 1.8 31.3 Current portion of share-based payment obligations 381.5 20.8 94.7
2,512.8 2,415.3 2,307.7 Total equity and liabilities 28,085.0 27,921.9 26,585.6
58.3 130.3 136.8 Net debt2 1,664.8 1,506.0 616.9
1 As disclosed in the provisional results released on 19 February 2015, the condensed consolidated statement of financial position
as at 30 June 2014 was 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.
2 Net debt represents borrowings and bank overdraft less cash and cash equivalents. Borrowings are only those borrowings that have
recourse to Sibanye and therefore exclude the Burnstone Debt. Net debt excludes Burnstone cash and cash equivalents.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Accumu- Non- Non- Accumu-
Stated Other lated controlling Total Total controlling lated Other Stated
capital Reserves loss interests equity equity interests loss Reserves capital
1,955.3 678.8 (1,722.9) 0.2 911.4 Balance at 31 December 2013 9,423.4 2.2 (10,467.9) 2,643.3 17,245.8
Total comprehensive income
- (30.9) 49.9 - 19.0 for the period 532.7 - 532.7 - -
- - 49.9 - 49.9 Profit for the period 532.7 - 532.7 - -
Other comprehensive income
- (30.9) - - (30.9 net of tax - - - - -
- - (51.6) - (51.6) Dividends paid (555.2) - (555.2) - -
433.3 - - - 433.3 Shares issued 4,488.8 - - - 4,488.8
Acquisition of subsidiary
- - - 38.2 38.2 with non-controlling interest 396.2 396.2 - - -
- 8.9 - - 8.9 Share-based payments 94.9 - - 94.9 -
Balance at 30 June 2014
2,388.6 656.8 (1,724.6) 38.4 1,359.2 (restated)1 14,380.8 398.4 (10,490.4) 2,738.2 21,734.6
Total comprehensive income
- (113.9) 93.4 (7.7) (28.2) for the period 974.2 (44.6) 1,018.8 - -
- - 93.4 (4.1) 89.3 Profit for the period 974.2 (44.6) 1,018.8 - -
Other comprehensive income
- (113.9) - (3.6) (117.5) net of tax - - - - -
- - (42.0) - (42.0) Dividends paid (450.0) - (450.0) - -
- - - - - Shares issued - - - - -
Transactions with
- - 2.2 (2.2) - non-controlling interests - (24.2) 24.2 - -
- 7.3 - - 7.3 Share-based payments 80.9 - - 80.9 -
2,388.6 550.2 (1,671.0) 28.5 1,296.3 Balance at 31 December 2014 14,985.9 329.6 (9,897.4) 2,819.1 21,734.6
Total comprehensive income
- (62.9) 15.1 (9.2) (57.0) for the period 85.0 (94.8) 179.8 - -
- - 15.1 (8.0) 7.1 Profit for the period 85.0 (94.8) 179.8 - -
Other comprehensive income
- (62.9) - (1.2) (64.1) net of tax - - - - -
- - (47.6) - (47.6) Dividends paid (567.1) - (567.1) - -
Transactions with
- - 1.7 (1.7) - non-controlling interests - (20.0) 20.0 - -
- 5.0 - - 5.0 Share-based payments 59.9 - - 59.9 -
2,388.6 492.3 (1,701.8) 17.6 1,196.7 Balance at 30 June 2015 14,563.7 214.8 (10,264.7) 2,879.0 21,734.6
1 As disclosed in the provisional results released on 19 February 2015, the condensed consolidated statement of financial position
as at 30 June 2014 was 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.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Figures are in millions unless otherwise stated
United States Dollars South African Rand
Six month periods ended Six month periods ended
June December June June December June
2014 2014 2015 2015 2014 2014
Cash flows from operating activities
306.1 348.4 189.6 Cash generated by operations 2,253.8 3,812.0 3,269.4
- (0.2) (0.1) Post-retirement healthcare payments (0.7) (1.9) (0.5)
(5.9) (9.5) (0.5) Cash-settled share-based payments paid (6.4) (103.1) (63.5)
63.7 (43.9) 3.1 Change in working capital 37.3 (465.9) 680.4
363.9 294.8 192.1 Cash generated from operating activities 2,284.0 3,241.1 3,885.8
2.5 2.5 (4.4) Net (guarantee release fee paid)/guarantee fee received (51.8) 26.4 27.2
3.5 2.8 3.8 Interest received 45.1 31.0 37.5
(8.3) (9.6) (10.0) Interest paid (118.5) (105.4) (88.6)
(23.7) (36.4) (9.0) Royalties paid (106.5) (397.1) (253.0)
(51.7) (72.8) (8.8) Taxation paid (104.3) (795.3) (551.8)
(52.0) (41.6) (47.6) Dividends paid (567.1) (450.0) (555.2)
234.2 139.7 116.1 Net cash from operating activities 1,380.9 1,550.7 2,501.9
Cash flows from investing activities
(126.0) (174.4) (130.9) Additions to property, plant and equipment (1,556.9) (1,905.1) (1,345.7)
- 2.1 1.5 Proceeds on disposal of property, plant and equipment 17.9 22.4 0.2
Contributions to funds and payment of
- (7.4) - environmental rehabilitation obligation (0.3) (80.2) -
(39.7) - - Investment in subsidiary - - (415.3)
(15.6) (7.2) - Loans granted to subsidiary prior to acquisition - (77.4) (161.2)
3.6 0.1 - Cash acquired on acquisition of subsidiaries - 0.7 37.4
- (33.3) - Loan advanced to equity-accounted investee - (384.6) -
(177.7) (220.1) (129.4) Net cash used in investing activities (1,539.3) (2,424.2) (1,884.6)
Cash flows from financing activities
(84.8) (127.5) (92.7) Loans repaid (1,102.0) (1,390.9) (906.0)
- 150.1 130.5 Loans raised 1,552.0 1,623.6 -
(84.8) 22.6 37.8 Net cash from/(used in) financing activities 450.0 232.7 (906.0)
(28.3) (57.8) 24.5 Net increase/(decrease) in cash and cash equivalent 291.6 (640.8) (288.7)
(2.2) (7.3) (3.0) Effect of exchange rate fluctuations on cash held - - -
144.3 113.8 48.7 Cash and cash equivalents at beginning of period 562.9 1,203.7 1,492.4
113.8 48.7 70.2 Cash and cash equivalents at end of period 854.5 562.9 1,203.7
10.68 10.96 11.89 Average R/US$ rate
10.58 11.56 12.17 Closing R/US$ rate
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1.Basis of accounting and preparation
The condensed consolidated interim financial statements for the six months ended 30 June 2015 has been prepared and presented in
accordance with the requirements of the JSE Listings Requirements for interim reports and the requirements of the Companies Act of
South Africa. The JSE Listings Requirements require interim 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 interim 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 2014.
There were no changes during the six months ended 30 June 2015 to the provisional purchase price allocation performed at the time of the
Burnstone acquisition.
The condensed consolidated income statement and statements of comprehensive income and cash flows for the six months ended 31 December
2014 were prepared by subtracting the reviewed condensed consolidated financial statements for the period ended 30 June 2014 from the
audited comprehensive consolidated financial statements for the year ended 31 December 2014. The US dollar consolidated comprehensive
income statement, statement of changes in equity and the statement of cash flows have not been audited. The statement of financial
position for 31 December 2014 was extracted from the audited comprehensive consolidated financial statements for the year ended
31 December 2014.
The translation of the financial statements into US Dollar is based on the average exchange rate for the period for the income
statement, statement of other comprehensive income 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. Investment in Rand Refinery Proprietary Limited
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 2014 in April 2013, Rand Refinery implemented a new
Enterprise Resource Planning system. 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.
Rand Refinery’s investigations to determine the root cause of the imbalance are still ongoing.
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
June 2015 December 2014 June 2014
Balance at beginning of the period 55.1 - 270.1
Share of results of Rand Refinery
after taxation 28.5 (329.5) (150.5)
Impairment - - (119.6)
Loan to Rand Refinery - 384.6 -
Balance at end of the period 83.6 55.1 -
3. Financial guarantee
As of 18 February 2013, the Gold Fields Limited (“Gold Fields”) group no longer guaranteed any debt of Sibanye, similarly Sibanye was
released from all of its obligations as guarantor under Gold Fields group debt, except, Sibanye remained a joint guarantor of the
US$1 billion 4.875% guaranteed notes (“the Notes”) issued by Gold Fields Orogen Holding (BVI) Limited (“Orogen”), a subsidiary of Gold
Fields.
An indemnity agreement was entered into between Gold Fields, Sibanye, Gold Fields Operations Limited and Gold Fields Holding Company
(BVI) Limited (collectively “the Guarantors”), pursuant to which the Guarantors (other than Sibanye) held Sibanye harmless from and
against any and all liabilities and expenses which may be incurred by Sibanye under or in connection with the Notes, including any
payment obligations by Sibanye to the note holders or the trustee of the Notes pursuant to the guarantee of the Notes.
The Group initially recognised the financial guarantee liability at fair value of the guarantee in connection with the Notes and
subsequently amortised over the remaining period of the Notes.
As of 18 February 2013, the Group raised a receivable under the financial guarantee asset for the future guarantee fee income that
Orogen is obliged to pay bi-annually to Sibanye until it has been released as a guarantor under the Notes.
During March 2015 Gold Fields approached the note holders through a consent solicitation process to release Sibanye of its obligations
as a guarantor under the Notes. On 22 April 2015 the note holders approved the various resolutions to release Sibanye as a guarantor.
The release became effective on 24 April 2015 when all the conditions to the extraordinary resolution were met. As part of the agreement
Sibanye paid a guarantee release fee of US$5 million to Orogen, and derecognised the financial guarantee asset and liability.
Net loss on derecognition of the financial guarantee asset and liability
Figures are in South African Rand millions unless otherwise stated
Six month periods ended
June 2015 December 2014 June 2014
Loss on derecognition of
financial guarantee asset (293.8) - -
Gain on derecognition of
financial guarantee liability 196.9 - -
Guarantee release fee (61.4) - -
Net loss on derecognition of
financial guarantee asset and
liability (158.3) - -
Financial guarantee asset
Figures are in South African Rand millions unless otherwise stated
Six month periods ended
June 2015 December 2014 June 2014
Balance at beginning of the period 282.6 278.1 290.2
Guarantee fee received (9.6) (26.4) (27.2)
Interest earned 4.9 7.3 7.7
Foreign exchange gain 15.9 23.6 7.4
Loss on derecognition of
financial guarantee asset (293.8) - -
Balance at end of the period - 282.6 278.1
Reconciliation of the non-current
and current portion of the
guarantee asset:
Financial guarantee asset - 282.6 278.1
Current portion of financial
guarantee asset - (57.1) (53.2)
Long-term potion of financial
guarantee asset - 225.5 224.9
Financial guarantee liability
Figures are in South African Rand millions unless otherwise stated
Six month periods ended
June 2015 December 2014 June 2014
Balance at beginning of the period 197.0 195.7 206.6
Amortisation of guarantee
liability (11.7) (16.0) (15.8)
Foreign exchange loss 11.6 17.3 4.9
Gain on derecognition of
financial guarantee liability (196.9) - -
Balance at end of the period - 197.0 195.7
4. Reconciliation of headline earnings with profit for the period
Figures are in South African Rand millions unless otherwise stated
Six month periods ended
June 2015 December 2014 June 2014
Profit attributable to owners of
Sibanye 179.8 1,018.8 532.7
Profit on disposal of property,
plant and equipment (14.2) (9.3) (0.2)
Impairment - 155.5 119.6
Reversal of impairment - (474.1) -
Taxation effect of re-measurement
items 4.0 74.4 0.1
Headline earnings 169.6 765.3 652.2
5. Borrowings
Figures are in South African Rand millions unless otherwise stated
Six month periods ended
June 2015 December 2014 June 2014
Balance at beginning of the period 3,170.0 1,820.6 1,990.9
Borrowings acquired on
acquisition of subsidiaries - 1,007.6 736.2
Loans raised 1,552.0 1,623.6 -
- R4.5 billion Facilities 1,000.0 884.6 -
- Other uncommitted facilities 552.0 739.0 -
Loans repaid (1,102.0) (1,390.9) (906.0)
- R4.5 billion Facilities (550.0) (650.0) (250.0)
- Other uncommitted facilities (552.0) (739.0) -
- Burnstone Debt - (1.9) -
- Cooke borrowings - - (616.0)
- Wits Gold borrowings - - (40.0)
Franco-Nevada settlement
(non-cash) (14.4) (22.0) (4.2)
Unwinding of loans recognised at
amortised cost 47.2 43.3 -
Translation adjustment 63.5 87.8 3.7
Balance at end of the period 3,716.3 3,170.0 1,820.6
Borrowings consist of:
- R4.5 billion Facilities 2,431.2 1,979.5 1,743.1
- Franco-Nevada liability 44.3 56.2 77.5
- Burnstone Debt 1,240.8 1,134.3 -
Borrowings 3,716.3 3,170.0 1,820.6
Current portion of borrowings (542.3) (554.2) (554.0)
Non-current borrowings 3,174.0 2,615.8 1,266.6
6. Events after the reporting date
There were no events that could have a material impact on the financial results of the Group after 30 June 2015, other than those
disclosed below:
Dividend declared
An interim dividend in respect of the six months ended 30 June 2015 of 10 cents per share (ZAR) was approved by the Board on 5 August
2015. This dividend will be paid on 7 September 2015. The interim dividend will be subject to Dividend Withholding Tax.
7. Liquidity
The Group’s current liabilities exceeded its current assets by R1,675.0 million as at 30 June 2015 (30 June 2014: R2,037.5 million).
Current liabilities at 30 June 2015 includes the current portion of borrowings of R542.3 million which is the two semi-annual repayments
due and payable in December 2015 and June 2016 respectively; and the current portion of the share-based payment obligation of
R381.5 million which mainly relates to the cash-settled performance instruments that vest during May 2016.
Sibanye generated cash from operating activities of R1,380.9 million for the six months ended 30 June 2015. The Group has committed
unutilised debt facilities of R1,315.0 million at 30 June 2015.
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.
8. Mineral Reserves and Resources
There were no changes to the Reserves and Resources from what was previously reported by the Group at 31 December 2014.
9. Auditors review
The condensed consolidated interim financial statements of Sibanye for the six month period ended 30 June 2015 have been reviewed by
the Company’s auditor, KPMG Inc., on which an unmodified review conclusion was expressed. A copy of their review report is available for
inspection at the Company’s registered office.
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.
SEGMENT REPORTING
Segment income statements
Figures are in millions unless otherwise stated
United States Dollars For the six months ended 30 June 2015 South African Rand
Corporate Cooke Beatrix Kloof Driefontein Group Group Driefontein Kloof Beatrix Cooke Corporate
- 110.9 174.8 255.8 320.2 861.7 Revenue 10,245.5 3,807.0 3,041.2 2,079.2 1,318.1 -
- 91.7 162.9 232.4 283.1 770.1 Underground 9,156.4 3,366.3 2,763.7 1,937.0 1,089.4 -
- 19.2 11.9 23.4 37.1 91.6 Surface 1,089.1 440.7 277.5 142.2 228.7 -
- (116.1) (135.3) (193.2) (218.1) (662.7) Operating costs (7,879.5) (2,593.0) (2,297.3) (1,608.4) (1,380.8) -
- (100.2) (126.4) (179.5) (196.1) (602.2) Underground (7,160.3) (2,331.9) (2,133.9) (1,503.2) (1,191.3) -
- (15.9) (8.9) (13.7) (22.0) (60.5) Surface (719.2) (261.1) (163.4) (105.2) (189.5) -
- (5.2) 39.5 62.6 102.1 199.0 Operating profit 2,366.0 1,214.0 743.9 470.8 (62.7) -
- (8.5) 36.5 52.9 87.0 167.9 Underground 1,996.1 1,034.4 629.8 433.8 (101.9) -
- 3.3 3.0 9.7 15.1 31.1 Surface 369.9 179.6 114.1 37.0 39.2 -
(0.9) (26.3) (23.0) (40.9) (44.2) (135.3) Amortisation and depreciation (1,608.6) (525.1) (485.5) (274.8) (312.3) (10.9)
(0.9) (31.5) 16.5 21.7 57.9 63.7 Net operating profit 757.4 688.9 258.4 196.0 (375.0) (10.9)
3.4 1.2 1.0 1.9 2.3 9.8 Investment income 116.9 27.6 22.9 11.5 13.8 41.1
(3.6) (4.3) (2.2) (5.8) (6.2) (22.1) Finance expenses (262.9) (73.9) (69.9) (25.6) (51.2) (42.3)
1.0 (1.5) (0.8) (1.9) (1.8) (5.0) Other costs (59.1) (21.5) (22.6) (8.4) (18.1) 11.5
(0.3) (0.2) - - (0.6) (1.1) Exploration costs (12.9) (6.6) - (0.5) (1.8) (4.0)
(8.3) - (1.0) (1.3) (1.6) (12.2) Share-based payments (145.0) (19.1) (15.6) (12.2) - (98.1)
(14.0) (1.4) (0.1) 0.7 0.1 (14.7) Non-recurring items (175.3) 1.4 9.0 (1.6) (16.9) (167.2)
- (0.7) (2.0) (2.4) (6.6) (11.7) Royalties (139.4) (78.9) (28.7) (23.3) (8.5) -
0.1 - (0.6) (0.3) (12.8) (13.6) Current taxation (161.7) (152.5) (3.2) (7.7) - 1.7
8.1 5.1 (0.3) (1.4) 2.5 14.0 Deferred taxation 167.0 29.6 (16.9) (3.5) 61.9 95.9
(14.5) (33.3) 10.5 11.2 33.2 7.1 Profit for the period 85.0 395.0 133.4 124.7 (395.8) (172.3)
Profit/(loss) attributable to:
(14.5) (25.3) 10.5 11.2 33.2 15.1 Owners of Sibanye 179.8 395.0 133.4 124.7 (300.7) (172.6)
- (8.0) - - - (8.0) Non-controlling interests (94.8) - - - (95.1) 0.3
Capital expenditure
(11.1) (15.3) (24.9) (44.7) (34.9) (130.9) Total expenditure (1,556.9) (415.1) (531.2) (295.8) (182.6) (132.2)
(0.7) (4.6) (3.9) (9.4) (7.1) (25.7) Sustaining capital (305.4) (84.1) (111.2) (46.7) (54.9) (8.5)
- (10.4) (21.0) (35.1) (27.5) (94.0) Ore reserve development (1,118.1) (326.9) (418.1) (249.1) (124.0) -
(10.4) (0.3) - (0.2) (0.3) (11.2) Growth projects (133.4) (4.1) (1.9) - (3.7) (123.7)
The average exchange rate for the six months ended 30 June 2015 was R11.89/US$.
United States Dollars For the six months ended 31 December 2014 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/(loss) 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) Growth projects (132.8) - - - (61.2) (71.6)
The average exchange rate for the six months ended 31 December 2014 was R10.96/US$.
United States Dollars For the six months ended 30 June 2014 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)
Profit/(loss) attributable to:
(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$.
COST BENCHMARKS
Cost benchmarks for the six months ended 30 June 2015, 31 December 2014 and 30 June 2014
Figures are in South African rand millions unless otherwise stated
Group Driefontein Kloof Beatrix Cooke Corporate
Operating cost1 Jun 2015 7,879.5 2,593.0 2,297.3 1,608.4 1,380.8 -
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 -
Less: General and admin Jun 2015 (80.7) (28.3) (26.9) (17.6) (7.9) -
Dec 2014 (60.0) (23.1) (22.8) (14.1) - -
Jun 2014 (87.3) (33.4) (31.9) (22.0) - -
Plus: Royalty Jun 2015 139.4 78.9 28.7 23.3 8.5 -
Dec 2014 235.3 91.4 89.7 47.1 7.1 -
Jun 2014 195.2 74.1 84.8 35.0 1.3 -
Total cash cost2 Jun 2015 7,938.2 2,643.6 2,299.1 1,614.1 1,381.4 -
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 -
Plus: General and admin Jun 2015 80.7 28.3 26.9 17.6 7.9 -
Dec 2014 60.0 23.1 22.8 14.1 - -
Jun 2014 87.3 33.4 31.9 22.0 - -
Community costs Jun 2015 16.9 5.2 3.0 1.3 7.4 -
Dec 2014 23.8 8.2 6.5 9.9 (0.8) -
Jun 2014 13.8 4.5 4.6 3.9 0.8 -
Share based payments3 Jun 2015 145.0 19.1 15.6 12.2 - 98.1
Dec 2014 209.7 35.6 29.7 23.1 - 121.3
Jun 2014 208.2 33.5 28.5 22.8 - 123.4
Rehabilitation Jun 2015 63.7 10.2 10.5 7.5 34.8 0.7
Dec 2014 90.2 19.6 16.6 9.5 44.5 -
Jun 2014 48.2 19.2 16.8 8.1 4.1 -
Ore reserve development Jun 2015 1,118.1 326.9 418.1 249.1 124.0 -
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 -
Sustaining capital Jun 2015 296.9 84.1 111.2 46.7 54.9 -
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 -
Exploration Jun 2015 8.9 6.6 - 0.5 1.8 -
Dec 2014 - - - - - -
Jun 2014 - - - - - -
Less: By-product credit Jun 2015 (14.8) (4.2) (3.0) (2.4) (5.2) -
Dec 2014 (12.2) (5.2) (3.6) (3.4) - -
Jun 2014 (11.7) (4.8) (3.4) (3.5) - -
Total All-in sustaining costs4 Jun 2015 9,653.6 3,119.8 2,881.4 1,946.6 1,607.0 98.8
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
Plus: Corporate and growth Jun 2015 145.9 4.1 1.9 - 3.7 136.2
capital expenditure Dec 2014 160.0 - - 9.4 66.3 84.3
Jun 2014 6.2 - - - - 6.2
Total All-in cost5 Jun 2015 9,799.5 3,123.9 2,883.3 1,946.6 1,610.7 235.0
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
Gold sold kg Jun 2015 22,204 8,257 6,597 4,501 2,849 -
Dec 2014 27,289 9,353 8,831 5,443 3,662 -
Jun 2014 22,143 8,382 8,207 4,911 643 -
000’ozs Jun 2015 713.9 265.5 212.1 144.7 91.6 -
Dec 2014 877.4 300.7 283.9 175.0 117.7 -
Jun 2014 711.9 269.5 263.9 157.9 20.7 -
Total cash cost R/kg Jun 2015 357,508 320,165 348,507 358,609 484,872 -
Dec 2014 298,520 279,066 274,567 303,656 398,334 -
Jun 2014 291,212 287,664 267,747 325,229 377,138 -
US$/oz Jun 2015 935 838 912 938 1,268 -
Dec 2014 847 792 779 862 1,130 -
Jun 2014 848 838 780 947 1,098 -
All-in sustaining cost R/kg Jun 2015 434,769 377,837 436,774 432,482 564,058 -
Dec 2014 376,687 355,223 359,676 370,733 448,252 -
Jun 2014 367,322 359,687 345,035 384,158 430,793 -
US$/oz Jun 2015 1,137 988 1,143 1,131 1,476 -
Dec 2014 1,069 1,008 1,021 1,052 1,272 -
Jun 2014 1,070 1,048 1,005 1,119 1,255 -
All-in cost R/kg Jun 2015 441,348 378,334 437,062 432,482 565,356 -
Dec 2014 382,550 355,223 359,676 372,460 466,357 -
Jun 2014 367,601 359,687 345,035 384,158 430,793 -
US$/oz Jun 2015 1,155 990 1,143 1,131 1,479 -
Dec 2014 1,086 1,008 1,021 1,057 1,323 -
Jun 2014 1,071 1,048 1,005 1,119 1,255 -
Average exchange rates for the six months ended 30 June 2015, 31 December 2014 and 30 June 2014 were R11.89/US$, R10.96/US$ and
R10.68/US$ respectively.
Figures may not add as they are rounded independently.
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.
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.
SALIENT FEATURES AND COST BENCHMARKS
Salient features and cost benchmarks for the quarters ended 30 June 2015 and 31 March 2015
Figures are in millions unless otherwise stated
Total Driefontein Kloof Beatrix Cooke
Under- Under- Under- Under- Under-
Group ground Surface ground Surface ground Surface ground Surface ground Surface
Operating results
Tons milled/treated 000’ton Jun 2015 4,867 2,151 2,716 614 791 503 503 700 369 334 1,053
Mar 2015 4,865 1,894 2,971 595 805 412 499 582 471 305 1,196
Yield g/t Jun 2015 2.55 5.25 0.41 6.35 0.54 7.14 0.60 3.66 0.38 3.72 0.23
Mar 2015 2.02 4.51 0.42 5.72 0.66 5.84 0.60 2.81 0.35 3.62 0.22
Gold produced/sold kg Jun 2015 12,396 11,291 1,105 3,901 426 3,589 300 2,559 142 1,242 237
Mar 2015 9,808 8,547 1,261 3,401 529 2,407 301 1,634 166 1,105 265
000’oz Jun 2015 398.5 363.0 35.5 125.4 13.7 115.4 9.6 82.3 4.6 39.9 7.6
Mar 2015 315.3 274.8 40.5 109.3 17.0 77.4 9.7 52.5 5.4 35.6 8.4
Gold price received R/kg Jun 2015 462,891 462,122 462,124 462,718 467,410
Mar 2015 459,564 459,873 459,343 460,778 457,518
US$/oz Jun 2015 1,193 1,191 1,191 1,192 1,204
Mar 2015 1,222 1,223 1,221 1,225 1,216
Operating cost R/ton Jun 2015 846 1,746 133 1,962 168 2,247 162 1,137 145 1,872 88
Mar 2015 774 1,798 121 1,894 159 2,436 164 1,216 109 1,856 81
Total cash cost R/kg Jun 2015 335,883 315,969 313,860 318,067 484,652
Mar 2015 384,839 324,784 398,264 419,444 485,109
US$/oz Jun 2015 866 814 809 819 1,249
Mar 2015 1,023 863 1,059 1,115 1,290
Operating margin % Jun 2015 28 28 29 33 32 32 41 33 18 (7) 14
Mar 2015 17 13 38 28 48 9 41 6 33 (12) 20
All-in sustaining cost R/kg Jun 2015 409,027 376,011 391,309 386,486 563,218
Mar 2015 467,302 379,847 502,068 501,500 564,964
US$/oz Jun 2015 1,054 969 1,008 996 1,451
Mar 2015 1,242 1,010 1,335 1,333 1,502
All-in cost R/kg Jun 2015 415,836 376,959 391,797 386,486 565,720
Mar 2015 473,573 379,847 502,068 501,500 564,964
US$/oz Jun 2015 1,071 971 1,009 996 1,458
Mar 2015 1,259 1,010 1,335 1,333 1,502
All-in cost margin % Jun 2015 10 18 15 16 (21)
Mar 2015 (3) 17 (9) (9) (24)
Ore reserve development Jun 2015 568.5 170.6 203.6 134.3 60.0
Mar 2015 549.6 156.3 214.5 114.8 64.0
Sustaining capital Jun 2015 185.9 55.5 72.1 32.1 26.2
Mar 2015 111.0 28.6 39.1 14.6 28.7
Corporate and projects1 Jun 2015 81.6 4.1 1.9 - 3.7
Mar 2015 60.3 - - - -
Total capital expenditure R’mil Jun 2015 836.0 230.2 277.6 166.4 89.9
Mar 2015 720.9 184.9 253.6 129.4 92.7
US$’mil Jun 2015 69.3 19.1 23.0 13.8 7.5
Mar 2015 61.6 15.8 21.7 11.1 7.9
Average exchange rates for the quarters ended 30 June 2015 and 31 March 2015 were R12.07/US$ and R11.70/US$ respectively.
Figures may not add as they are rounded independently.
1 Corporate and projects includes capital expenditure at Burnstone of R65.2 million (US$5.4 million) for the quarter ended
30 June 2015 and R58.5 million (US$5.0 million) for the quarter ended 31 March 2015.
Driefontein Quarter ended 30 June 2015 Quarter ended 31 March 2015 Six months to 30 June 2015
Reef Carbon leader Main VCR Carbon leader Main VCR Carbon leader Main VCR
Advanced (m) 1,808 928 1,277 1,695 879 1,030 3,503 1,807 2,307
Advanced on reef (m) 363 237 146 474 207 101 837 444 247
Channel width (cm) 68 66 45 107 66 98 90 66 67
Average value (g/t) 23.9 12.5 59.2 17.6 11.4 18.0 19.6 12.0 34.5
(cm.g/t) 1,622 820 2,681 1,878 755 1,763 1,767 790 2,307
Kloof Quarter ended 30 June 2015 Quarter ended 31 March 2015 Six months to 30 June 2015
Reef VCR Kloof Main Libanon VCR Kloof Main Libanon VCR Kloof Main Libanon
Advanced (m) 2,850 431 953 332 3,078 609 768 301 5,928 1,040 1,721 633
Advanced on reef (m) 626 188 148 99 584 199 109 191 1,210 387 257 290
Channel width (cm) 113 86 145 149 116 117 78 172 114 102 116 164
Average value (g/t) 22.2 13.6 8.3 2.1 21.6 8.0 9.0 2.0 21.9 10.3 8.5 2.0
(cm.g/t) 2,505 1,171 1,205 306 2,510 932 701 351 2,507 1,048 990 336
Beatrix Quarter ended 30 June 2015 Quarter ended 31 March 2015 Six months to 30 June 2015
Reef Beatrix Kalkoenkrans Beatrix Kalkoenkrans Beatrix Kalkoenkrans
Advanced (m) 4,528 1,152 3,559 1,068 8,087 2,220
Advanced on reef (m) 1,290 254 979 240 2,269 494
Channel width (cm) 136 127 122 93 130 111
Average value (g/t) 7.5 8.8 9.1 20.6 8.2 13.6
(cm.g/t) 1,025 1,113 1,112 1,924 1,062 1,507
Cooke Quarter ended 30 June 2015 Quarter ended 31 March 2015 Six months to 30 June 2015
Elsburg Elsburg Kimberly Elsburg Kimberly Elsburg Elsburg Kimberly
Reef VCR Reefs Massives Reefs VCR Reefs Reefs VCR Reefs Massives Reefs
Advanced (m) 617 2,597 20 258 662 2,651 289 1,279 5,248 20 547
Advanced on reef (m) 486 795 12 117 329 1,004 180 815 1,799 12 297
Channel width (cm) 75 97 240 112 124 109 73 95 104 240 88
Average value (g/t) 9.8 6.6 5.0 4.7 6.4 8.7 11.8 6.4 7.8 5.0 8.2
(cm.g/t) 738 637 1,200 522 796 950 859 321 812 1,200 726
ADMINISTRATION AND CORPORATE INFORMATION
Investor Enquiries
James Wellsted
Head of Corporate Affairs
Sibanye Gold Limited
+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*
Susan van der Merwe*
Jivu Yuan#
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
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 and directors 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, including any interpretations thereof which may be subject to dispute; the
outcome and consequence of any potential or pending litigation or regulatory proceedings or other environmental, health and safety
issues; power disruptions and cost increases; fluctuations in exchange rates, currency devaluations, inflation and other macro-economic
monetary policies; the occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance; Sibanye’s ability to
hire and retain senior management or sufficient technically skilled employees, as well as its ability to achieve sufficient
representation of historically disadvantaged South Africans’ 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.
6 August 2015
Date: 06/08/2015 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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