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Sibanye-Stillwater releases Competent Person’s Report on its US PGM assets
SIBANYE GOLD LIMITED
Trading as Sibanye-Stillwater
Reg. No. 2002/031431/06
Incorporated in the Republic of South Africa
Share Code: SGL
ISIN Code: ZAE000173951
Issuer Code: SGL
(“Sibanye-Stillwater” or “the Company” or “the Group”)
Sibanye-Stillwater releases Competent Person’s Report on its US PGM assets
Salient features
_ Maiden PGM Mineral Resource declaration under SAMREC Code - 80.8 million
2E*oz at an average grade of 16.8g/t
_ Updated PGM Mineral Reserves increase by 5% from 2016 declaration, to 22.2
million 2Eoz at a grade of 16.3g/t
_ Based on the preferred Income Approach¹ in accordance with the SAMVAL code,
the valuation for the US PGM assets is US$ 2.7 billion
Johannesburg, 14 November 2017: Sibanye-Stillwater is pleased to advise that a
Competent Person’s Report (CPR) on its US PGM mineral assets, located in Montana,
United States of America (“US PGM assets”), has been completed by the Mineral
Corporation Consultancy (Pty) Limited and is now available on its website:
www.sibanyestillwater.com.
The report, with an Effective Date of 31 July 2017, has been compiled in terms
of the 2016 edition of the South African Code for the Reporting of Exploration
Results, Mineral Resources and Mineral Reserves (the “SAMREC Code”)and the 2016
edition of the South African Code for the Reporting of Mineral Asset Valuation
(the “SAMVAL Code”).
A PGM Mineral Resource of 80.8 Million 2E ounces at a grade of 16.8g/t has been
declared for the first time for the US PGM assets under the SAMREC Code. The
Mineral Resource comprises 49.4 Million 2E ounces at a grade of 16.6g/t in the
Inferred category and 31.3 Million 2E ounces at a grade of 17.0g/t in the
Measured and Indicated categories. PGM Mineral Reserves of 22.2 Million 2E
ounces at a head grade of 16.3g/t have been declared, a 5% increase from those
declared by the Stillwater Mining Company (“Stillwater”) in 2016. Mineral
Reserve grades have remained consistent year-on-year, reaffirming the quality
of the US PGM assets acquired by Sibanye-Stillwater in May 2017. Mineral Reserve
economic viability testing was based on three year trailing average commodity
prices as per the US Securities and Exchange Commission (SEC) guideline. This
includes a US$704 palladium price and US$1,047/oz platinum price assumed. The
average 2E prill split at the US PGM operations is 78% palladium to 22% platinum.
The CPR includes a SAMVAL Code compliant Mineral Asset valuation of the US PGM
assets.
On the basis of the Income Approach¹, underpinned by a discounted cash flow
model, a value of US$2.7 billion (post tax, but pre-financing) has been
established for the US PGM assets, (assuming a real discount rate of 5% for the
US region), which compares favourably to the US$2.2 billion equity price paid
for Stillwater. For valuation purposes, the average real palladium price of
US$888/oz from 2018-2021 (thereafter a real long term price of US$850/oz) and
an average real platinum price of US$1,133/oz from 2018-2021 (thereafter a real
long term price of US$1,150/oz) have been assumed.
Sibanye-Stillwater’s CEO, Neal Froneman commented: “The outcome of the CPR
confirms the value accretive nature of the transaction and our decision to
purchase Stillwater. It is also exciting to note that there is still further
value upside from the very substantial mineral resource base and other non-core
assets acquired along with the US PGM assets.”
The CPR has been published as per an undertaking to the JSE Limited which was
recorded in the acquisition circular (posted on 20 March 2017), which included
an executive summary of The US Competent Person’s Guide 7 Report on Stillwater,
compiled in terms of Industry Guide 7 published by the SEC, and not the SAMREC
Code.
For more detailed information, please refer to the detailed CPR on our website
at https://www.sibanyestillwater.com/investors/transactions/stillwater-
acquisition/publications.
Note: Units are displayed in metric terms
*2E consists of palladium and platinum
¹ The SAMVAL Code describes the Income Approach valuation approach as follows: The Income Approach
relies on the ‘value-in-use’ principle and requires determination of the present value of future
cash flows over the useful life of the Mineral Asset. It provides an indication of value by
converting future cash flows to a single current capital value. For the estimation of Market
Value, the present value capitalisation shall be generated using a discount rate derived from
market conditions. The Income Approach is most often applied to properties in development or
production.
Ends.
Investor relations contact:
James Wellsted
Tel: +27 (0) 83 453 4014
Email: ir@sibanyestillwater.com
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
COMPETENT PERSONS’ AND COMPETENT VALUATOR’S STATEMENT
The Lead Competent Persons for Mineral Resources and Mineral Reserves and the
Competent Valuator are employees of Mineral Corporation Consultancy (Pty)
Limited and consent to the publication of this announcement and the CPR for the
US PGM assets as at 31 July 2017. Mineral Corporation Consultancy (Pty) Limited
is an independent technical advisory and consulting firm based in Johannesburg,
South Africa. The Lead Competent Person with responsibility for reporting
Mineral Resources is Coniace Madamombe and the Lead Competent Person with
responsibility for reporting Mineral Reserves is Jonathan Buckley. Coniace and
Jonathan are Competent Persons as defined by the SAMREC Code and have sufficient
experience relative to the type and style of mineral deposit under consideration.
John Murphy is the Competent Valuator as defined by the SAMVAL Code, by way of
qualifications and relevant experience. The Competent Persons’ and Competent
Valuator’s consent and confirmation signatures are presented in the Competent
Person’s Report.
Competent Persons responsible for the estimation of the Mineral Resources and
Mineral Reserves for the US PGM assets are employees of Stillwater and consent
to the publication of this announcement and the CPR for the US PGM assets as at
31 July 2017. The Competent Persons responsible for the estimation of the Mineral
Resources are Jennifer Evans, Jim Dahy and Michael Koski. The Competent Person
responsible for the estimation of the Mineral Reserves is Brent LaMoure.
Jennifer, Jim, Michael and Brent are Competent Persons as defined by the SAMREC
Code and have sufficient experience relative to the type and style of mineral
deposit under consideration.
FORWARD LOOKING STATEMENTS
This announcement includes “forward-looking statements” within the meaning of
the “safe harbour” provisions of the United States Private Securities
Litigation Reform Act of 1995, including the statements related to expected
production volumes. Forward-looking statements may be identified by the use of
words such as “target”, “will”, “forecast”, “expect”, “potential”, “intend”,
“estimate”, “anticipate”, “can” and other similar expressions that predict or
indicate future events or trends or that are not statements of historical
matters. The forward-looking statements set out in this announcement involve a
number of known and unknown risks, uncertainties and other factors, many of
which are difficult to predict and generally beyond the control of Sibanye-
Stillwater, that could cause Sibanye-Stillwater’s actual results and outcomes
to be materially different from historical results or from any future results
expressed or implied by such forward-looking statements. These forward-looking
statements speak only as of the date of this announcement. Sibanye-Stillwater
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 announcement or to reflect the occurrence of unanticipated events,
save as required by applicable law.
Date: 14/11/2017 10:36:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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