Wrap Text
Sibanye Gold Limited operating update for the quarter ended 31 March 2016
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
A PROUDLY SOUTH AFRICAN MINING COMPANY
WESTONARIA 25 April 2016:Sibanye Gold Limited (Sibanye or the Group) (JSE: SGL & NYSE: SBGL) is pleased
to present an operating update for the quarter ended 31March 2016. Detailed financial and operating
results are provided on a six monthly basis i.e. at the end of June and December each year.
United States Dollars Key Statistics South African Rand
Quarter ended Quarter ended
March Dec March March Dec March
2015 2015 2016 2016 2015 2015
315.3 411.5 360.8 000'oz Gold produced kg 11,221 12,799 9,808
4,865 5,025 4,978 000 tons Ore milled 000 tons 4,978 5,025 4,865
1,222 1,106 1,182 $/oz Revenue R/kg 600,267 505,094 459,564
66 57 54 US$/ton Operating cost R/ton 845 813 774
63.6 174.1 160.3 US$m Operating profit Rm 2,530.6 2,378.4 744.4
17 37 38 % Operating margin % 38 37 17
1,023 720 759 $/oz Total cash cost R/kg 385,117 329,166 384,839
61.6 64.1 46.8 $m Capital expenditure Rm 739.0 915.0 720.9
1,242 882 895 $/oz All-in sustaining cost R/kg 454,282 402,797 467,302
(2) 20 24 % AISC margin % 24 20 (2)
Overview and update for the quarter ended 31 March 2016 compared with the quarter ended 31 March 2015
Sibanye's operational performance for the March 2016 quarter was a significant improvement on that
reported for the comparative quarter in 2015, despite the inclusion of the Easter holiday period in
March 2016, which normally falls in the second quarter. Group gold production of 11,221kg (360,800oz)
for the March 2016 quarter, was 14% higher than for the comparable quarter in 2015. This reflects a
solid and expected recovery from the March 2015 quarter which was impacted by a number of one off events.
Underground yields recovered at all the operations due to improving quality of mining factors and mining
volumes at Beatrix, Kloof and Cooke increasing year-on-year. Salient points include:
· Revenue increased 50% due to the higher gold price and the increase in production;
· Operating profit increased by 240% to R2.5 billion, with the operating margin more than
doubling to 38%;
· All-in sustaining cost (AISC) was 3% lower at R454,282/kg and was 28% lower in dollar terms at
US$895/oz, due to the weaker rand;
· The AISC margin increased from negative 2% to a positive 24%.
· The Aquarius transaction was successfully concluded in April 2016; and
· Net debt, excluding Burnstone, reduced from R1,362 million to R591 million at the end of the
quarter. This is post the dividend payment of R916 million.
Kloof produced 3,557kg (114,400oz), an increase of 31% compared with the same quarter in 2015, mostly
Sibanye Gold Operating and Financial Report 2015 | 0
due to improved underground yields. Beatrix produced 2,269kg (73,000oz), an increase of 26% due to
increased underground yields and volumes. Cooke produced 1,536kg (49,300oz), an increase of 12%, also
due to increased underground yields and volumes. Driefontein's production was similar year-on-year at
3,859kg (124,100oz), as improved underground mining values offset lower mining volumes, which were
impacted by a seismic event at the Hlanganani (5) shaft and shaft issues at Masakhane (1) shaft during
the quarter.
As a result of the increase in gold production and an increase in the gold price, from R459,564/kg
(US$1,222/oz) to R600,267/kg (US$1,182/oz), revenue increased by 50% to R6,736 million (US$427 million).
Stock data for the three months ended 31 March 2016
Number of shares in issue JSE LIMITED - (SGL)
at 31 March 2016 916,645,291 Price range per ordinary share ZAR24.57 to ZAR61.20
weighted average 916,295,856 Average daily volume 8,106,968
Free Float 80% NYSE - (SBGL); One ADR represents four ordinary shares
ADR Ratio 1:4 Price range per ADR US$6.09 to US$15.71
Bloomberg/Reuters SGLS / SGLJ.J Average daily volume 1,825,829
Annual costs increased by 12% as a result of wage increases implemented in mid-2015, Eskom’s tariff
increase effective from 1 April 2015, and overtime worked during the Christmas break. Despite the
increase in costs, Total cash cost remained similar to the March 2015 quarter at R385,117/kg and
significantly lower in dollar terms, decreasing from US$1,023/oz to US$759/oz due to the weakening
of the rand/dollar exchange rate. The All-in sustaining cost at R454,282/kg (US$895/oz) was 3%
lower when compared with the same period in 2015.
As a result of the increase in production and higher rand gold price received, operating profit
from the operations increased by 240% from R744 million (US$64 million) to R2,531 million
(US$160 million) and the operating margin more than doubled to 38%.
Capital expenditure increased by 3% to R739 million (US$47 million) when compared with the March
2015 quarter. This was mostly due to the increased underground development at the Burnstone project.
Regrettably, there was a regression in the safety performance during the quarter which is being
urgently addressed. Four fatalities were recorded during the March 2016 quarter, Sibanye management
and the Board wish to express sincere condolences to the families and colleagues of these employees:
Messrs Moreruoa Mahao, Tanki Sebolai, Elliot Kenosi and Luis Massango.
Corporate activity
Platinum acquisitions
Shareholders overwhelmingly approved the Rustenburg and Aquarius transactions in January 2016 and
Competition authority approval for both transactions was obtained in March 2016. The acquisition of
Aquarius Platinum Limited (Aquarius) was concluded on 12 April 2016, with Aquarius delisting from
all Stock Exchanges on this date. The acquisition of the Rustenburg assets remains subject to Section
11 approval for the transfer of mineral rights by the Department of Mineral Resources, which is
anticipated in the second half of 2016. The section 11 was submitted to the DMR on 4 February 2106.
As an unlisted subsidiary of Sibanye, Aquarius is no longer required to produce independent quarterly
Results and its operational and financial results will be consolidated by Sibanye from April 2016.
Purely for information purposes, Aquarius’ operational results for the March 2016 quarter are provided
below.
Quarter Total Kroondal Mimosa Platinum Mile
Attributable production Mar 2016 90,843 57,135 30,483 3,225
PGM's (4E) Dec 2015 89,399 57,421 29,010 2,968
Mar 2015 84,792 53,545 28,696 2,552
Average basket price Mar 2016 752 769 712 834
US$/4E PGM ounce Dec 2015 802 797 818 756
Mar 2015 1,053 1,062 1,036 1,039
Cash cost per PGM (4E) Mar 2016 10,213 9,353 758 8,810
ZAR US$/4E PGM ounce Dec 2015 9,651 9,112 772 8,377
Mar 2015 9,487 9,560 799 9,327
Aquarius recorded a solid operational result for the March 2016 quarter, delivering record quarterly
production, from Kroondal and Mimosa. Aquarius’ attributable 4E PGM production increased by 7%
year-on-year to 90.8koz, with Kroondal, Mimosa and Platinum Mile delivering year-on-year growth of 7%,
6% and 26%, respectively. The March 2016 quarter production result is notable given the seasonal
disruptions that generally occur during the first quarter of a calendar year.
Costs were also well controlled during the quarter, comparing favourably to prevailing South African
inflation. Kroondal's unit on-mine cash cost was approximately R9,353/oz (4E), declining by 2%
year-on-year, while Platinum Mile delivered unit cost deflation of6% to R8,810/oz (4E). Despite
currency volatility, Mimosa reported unit cash costs at US$758/oz, a 5% year-on-year decline.
Despite a 29% lower US$ basket price achieved for the quarter, Kroondal and Platinum Mile reported
positive cash margins after capex, benefitting from the weaker rand/dollar exchange rate. Kroondal
delivered a cash margin of 17% during the quarter with Platinum Mile delivering 12%. Mimosa reported
a negative cash margin of 5% for the period.Capital spend approximated US$11 million (R174 million) of
which US$6 million (R89 million) was attributable for the quarter, with the majority of this capital
incurred at Kroondal, leaving Aquarius with net cash of US$36 million (R530 million). There was no debt
at the end of March 2016.
INDUSTRIAL RELATIONS
On Monday 4 April 2016, Association of Mineworkers and Construction Union (AMCU) served the company with
notice to commence industrial action in respect of the 2015 wage negotiations. Constructive engagement
between AMCU and management subsequently resulted in the strike being averted. The settlement premiums
offered to all Sibanye employees in the bargaining units, are separate and in addition to the wage
increases agreed in 2015 and comprise:
· R25 per person per month for the period 1 July 2015 to 30 June 2016;
· R25 per person per month for the period 1 July 2016 to 30 June 2017; and
· R75 per person per month for the period 1 July 2016 to 30 June 2017.
Engagement continues with all other unions in order to reach final agreement.
MINING CHARTER
On Friday 15 April 2016, the Minister of Mineral Resources published a new draft of the Broad-based
socio-economic empowerment charter for the South African mining industry (Mining Charter).
The draft Mining Charter was published without prior consultation with the South African mining
industry, but, as per current legislation will be available for public comment for a 30 day period.
During this time, and possibly beyond if required, the Minister of Mineral Resources has committed to
engaging with the mining industry, organised labour and other affected parties. The Chamber and the
mining companies are studying the draft Mining Charter and will respond in due course. Sibanye is
committed to supporting the Chamber in its engagement and will vigorously oppose any elements which
are unconstitutional or threaten the sustainability of the company.
Outlook
Forecast gold production for the year ending 31 December 2016 remains unchanged at 50,000kg (1.61Moz).
Total cash cost is forecast at approximately R355,000/kg (US$735/oz) and the All-in sustaining cost at
approximately R425,000/kg (US$880/oz). The All-in cost forecast also remains unchanged at approximately
R440,000/kg (US$915/oz). The dollar costs are based on an average exchange rate of R15/US$.
As previously mentioned, Aquarius’ results will be consolidated from April 2016. Attributable production
for the June 2016 quarter is forecast at 87,500oz (4E), at an average cash cost of R10,300/oz (4E).
Attributable capital expenditure is forecast at approximately R95 million.
25 April 2016
N. Froneman
Chief Executive Officer
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 Mar 2016 4,978 1,975 3,003 537 953 441 593 656 425 341 1,032
Dec 2015 5,025 2,200 2,825 571 891 564 501 661 412 404 1,021
Mar 2015 4,865 1,894 2,971 595 805 412 499 582 471 305 1,196
Yield g/t Mar 2016 2.25 5.06 0.41 6.18 0.57 7.17 0.66 3.28 0.28 3.99 0.17
Dec 2015 2.55 5.31 0.40 6.96 0.58 6.53 0.60 3.99 0.30 3.42 0.18
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 Mar 2016 11,221 9,991 1,230 3,318 541 3,163 394 2,149 120 1,361 175
Dec 2015 12,799 11,675 1,124 3,974 518 3,684 300 2,635 123 1,382 183
Mar 2015 9,808 8,547 1,261 3,401 529 2,407 301 1,634 166 1,105 265
000'oz Mar 2016 360.8 321.2 39.6 106.7 17.4 101.7 12.7 69.1 3.9 43.7 5.6
Dec 2015 411.5 375.4 36.1 127.8 16.6 118.4 9.7 84.8 3.9 44.4 5.9
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 Mar 2016 600,267 601,555 599,353 602,556 595,768
Dec 2015 505,094 503,851 505,447 505,221 507,540
Mar 2015 459,564 459,873 459,343 460,778 457,518
US$/oz Mar 2016 1,182 1,185 1,181 1,187 1,174
Dec 2015 1,106 1,103 1,106 1,106 1,111
Mar 2015 1,222 1,223 1,221 1,225 1,216
Operating cost R/ton Mar 2016 845 1,932 129 2,211 168 2,592 163 1,262 118 1,930 79
Dec 2015 813 1,699 124 1,906 158 2,002 156 1,248 121 1,719 79
Mar 2015 774 1,798 121 1,894 159 2,436 164 1,216 109 1,856 81
Operating margin % Mar 2016 38 36 47 41 51 40 59 36 30 19 22
Dec 2015 37 37 39 46 46 39 48 38 21 1 13
Mar 2015 17 13 38 28 48 9 41 6 33 (12) 20
Total cash cost R/kg Mar 2016 385,117 361,907 360,866 397,708 481,120
Dec 2015 329,166 286,821 315,236 327,339 489,393
Mar 2015 384,839 324,784 398,264 419,444 485,109
US$/oz Mar 2016 759 713 711 783 948
Dec 2015 720 628 690 716 1,071
Mar 2015 1,023 863 1,059 1,115 1,290
All-in sustaining cost R/kg Mar 2016 454,282 421,845 435,001 463,729 535,156
Dec 2015 402,797 360,530 388,554 393,981 548,498
Mar 2015 467,302 379,847 502,068 501,500 564,964
US$/oz Mar 2016 895 831 857 913 1,054
Dec 2015 822 789 850 862 1,201
Mar 2015 1,242 1,010 1,335 1,333 1,502
All-in cost R/kg Mar 2016 464,602 424,151 438,712 463,729 536,979
Dec 2015 413,548 363,201 398,519 393,981 555,911
Mar 2015 473,573 379,847 502,068 501,500 564,964
US$/oz Mar 2016 915 836 864 913 1,058
Dec 2015 905 795 872 862 1,217
Mar 2015 1,259 1,010 1,335 1,333 1,502
All-in cost margin % Mar 2016 23 29 27 23 10
Dec 2015 18 28 21 22 (10)
Mar 2015 (3) 17 (9) (9) (24)
Ore reserve development R'mil Mar 2016 550.9 191.1 195.2 120.4 44.2
capitalised Dec 2015 561.2 196.3 191.0 126.1 47.8
Mar 2015 549.6 156.3 214.5 114.8 64.0
Sustaining capital Mar 2016 72.3 19.7 33.0 10.2 9.4
Dec 2015 223.8 98.7 72.8 26.0 21.7
Mar 2015 111.0 28.6 39.1 14.6 28.7
Corporate and project Mar 2016 115.8 8.9 13.2 - 2.8
capital expenditure1 Dec 2015 130.0 12.0 39.7 - 11.6
Mar 2015 60.3 - - - -
Total capital R'mil Mar 2016 739.0 219.7 241.4 130.6 56.4
expenditure(1) Dec 2015 915.0 307.0 303.5 152.1 81.1
Mar 2015 720.9 184.9 253.6 129.4 92.7
US$'mil Mar 2016 46.8 13.9 15.3 8.3 3.6
Dec 2015 64.1 21.9 21.2 10.4 5.6
Mar 2015 61.6 15.8 21.7 11.1 7.9
1 Total capital expenditure includes Corporate and project expenditure for the March 2016, December 2015
and March 2015 quarters of R90.9 million (US$5.7 million), R71.3 million (US$5.0 million) and R60.3
million (US$5.2 million, respectively. The majority of this expenditure was at Burnstone of
R88.9 million, R66.7 million and R58.5 million for March 2016, December 2015 and March 2015 quarters,
respectively. The average exchange rates for the March 2016, December 2015 and March 2015 quarters were
R15.79/US$, R14.21/US$ and R11.70/US$, respectively
DEVELOPMENT RESULTS
Development values represent the actual results of sampling and no allowance has been made for any
adjustments which may be necessary when estimating ore reserves. All figures below exclude shaft
sinking metres, which are reported separately where appropriate.
Driefontein
Quarter ended Quarter ended Quarter ended
31 March 2016 31 December 2015 31 March 2015
Carbon Carbon Carbon
Reef leader Main VCR leader Main VCR leader Main VCR
Advanced (m) 1,653 702 1,307 1,674 915 1,305 1,695 879 1,030
Advanced on reef (m) 214 173 135 319 132 289 474 207 101
Channel width (cm) 81 53 52 78 134 45 107 66 98
Average value (g/t) 14.0 9.6 58.5 16.0 3.9 35.8 17.6 11.4 18.0
(cm.g/t) 1,139 509 3,062 1,251 519 1,613 1,878 755 1,763
Kloof
Quarter ended Quarter ended Quarter ended
31 March 2016 31 December 2015 31 March 2015
Reef VCR Kloof Main Libanon VCR Kloof Main Libanon VCR Kloof Main Libanon
Advanced (m) 2,240 723 666 87 802 780 41 2,488 3,078 609 768 301
Advanced on reef (m) 520 210 144 10 303 155 13 540 584 199 109 191
Channel width (cm) 117 173 133 138 221 136 248 130 116 117 78 172
Average value (g/t) 21.6 9.0 5.1 6.8 5.0 5.7 7.9 25.3 21.6 8.0 9.0 2.0
cm.g/t) 2,530 1,563 682 932 1,099 778 1,959 2,604 2,510 932 701 351
Beatrix
Quarter ended Quarter ended Quarter ended
31 March 2016 31 December 2015 31 March 2015
Reef Beatrix Kalkoenkrans Beatrix Kalkoenkrans Beatrix Kalkoenkrans
Advanced (m) 4,176 947 4,225 1,110 3,559 1,068
Advanced on reef (m) 1,358 249 1,443 202 979 240
Channel width (cm) 115 126 145 138 122 93
Average value (g/t) 8.1 11.7 6.9 11.2 9.1 20.6
(cm.g/t) 938 1,470 994 1,547 1,112 1,924
Cooke
Quarter ended Quarter ended Quarter ended
31 March 2016 31 December 2015 31 December 2015
Elsburg Elsburg Kimberly Elsburg Elsburg Kimberly Elsburg Elsburg Kimberly
Reef VCR Reefs Massive Reefs VCR Reefs Massive Reefs VCR Reefs Massive Reefs
Advanced (m) 379 1,675 104 146 352 2,064 57 183 662 2,651 - 289
Advanced on reef (m) 211 618 69 44 133 879 49 149 329 1,004 - 180
Channel width (cm) 281 250 343 205 85 143 193 46 124 109 - 73
Average value (g/t) 2.2 4.1 5.2 3.2 6.7 7.8 8.8 8.5 6.4 8.7 - 11.8
(cm.g/t) 622 1,037 1,784 665 567 1,116 1,704 387 796 950 - 859
INVESTOR ENQUIRIES
James Wellsted
Senior Vice President:
Investor Relations
Sibanye Gold Limited
Cell: +27 83 453 4014
Tel: +27 11 278 9656
james.wellsted@sibanyegold.co.za
COMPANY 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
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*
Jerry Vilakazi*
Jiya Yuan#
*Independent Non-Executive
#Non-Executive
JSE SPONSOR
J.P. Morgan Equities South Africa Proprietary Limited
Registration number 1995/011815/07
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Illovo, Johannesburg
2196
South Africa
(Private Bag X9936, Sandton, 2196, South Africa)
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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, Zimbabwe 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 at
existing operations; the ability of Sibanye to successfully integrate acquired businesses and operations
(whether in the gold mining business or otherwise) into its existing businesses; the success of Sibanye's
business strategy, exploration and development activities; the ability of Sibanye to comply with
requirements that it operate in a sustainable manner; changes in the market price of gold, platinum
group metals (PGMs) and/or uranium; the occurrence of hazards associated with underground and surface
old, PGMs and uranium mining; the occurrence of labour disruptions and industrial action; the
availability, terms and deployment of capital or credit; changes in relevant government regulations,
particularly environmental, tax health and safety regulations and new legislation affecting water,
mining, mineral rights and business ownership, including any interpretations thereof which may be
subject to dispute; the outcome and consequence of any potential or pending litigation or regulatory
proceedings or other environmental, health and safety issues; power disruptions, constraints and cost
increases; supply chain shortages and increases in the price of production inputs; fluctuations in
exchange rates, currency devaluations, inflation and other macro-economic monetary policies; the
occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance; 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
dequacy of Sibanye's insurance coverage; any social unrest, sickness or natural or man-made disaster
at informal settlements in the vicinity of some of Sibanye's operations; and the impact of HIV,
tuberculosis and other contagious diseases. These forward-looking statements speak only as of the date
of this document.
The Group undertakes no obligation to update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after the date of this document or to reflect the
occurrence of unanticipated events.
Date: 25/04/2016 08:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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