Sibanye final results December 2018

Revenue for the year increased to R50.656 billion (2017: R45.912 billion), loss before royalties and tax improved to R1.224 billion (2017: loss of R6.981 billion), loss for the period attributable to owners of Sibanye narrowed to R2.500 billion (2017: loss of R4.437 billion), while headline loss per share lowered to 1 cents per share (2017: headline loss of 12 cent per share).

Company outlook
Mined 2E PGM production from the US PGM operations for 2019, is forecast at between 645 000oz and 675 000oz, due to the continued production buildup from Blitz. AISC is forecast to be between USD690/2Eoz - USD730/2Eoz, with the majority of the expected AISC increase attributed to increased capital expenditure and as a result of higher royalties due to the higher PGM basket price.

Total capital spend for the year is guided at between USD235 million and USD245 million for the year. Approximately half of this anticipated spend is growth capital in nature, including expenditure on the FTM.

4E PGM production from the SA PGM operations for 2019 is forecast at between 1 000 000oz and 1 100 000oz with AISC between R12 500/4Eoz and R13,200/4Eoz (USD922/4Eoz and USD974/4Eoz), reflecting the transition to the toll processing arrangement. Capital expenditure is forecast at R1400 million (USD103 million), which includes approximately R230 million (USD17 million) of project capital. Guidance for the SA gold operations will be provided once the protracted AMCU strike has been terminated and the S189 process has been completed.

The dollar costs are based on an average exchange rate of R13.55/USD.

The extent and severity of the challenges that Sibanye-Stillwater faced, and dealt with, in 2018 is unprecedented, and whilst a number of challenges still face us, the manner in which the Sibanye-Stillwater team has responded to and dealt with the various crises, gives me confidence that we are well positioned to continue delivering superior value to all of our stakeholders.

Our significant investment in the PGM industry was not made lightly and was against conventional market wisdom. The fruits of this contrarian, but carefully considered strategy have already delivered tangible benefits, which are not yet reflected in our market valuation. A positive and sustainable fundamental outlook for PGMs is increasingly being accepted and Sibanye-Stillwater's commodity mix and geographical diversification offers a unique investment opportunity.

I am confident that the Section 189A consultations with stakeholders regarding the future of certain shafts at our SA gold operations, will result in a more stable and profitable business segment, which will contribute positively to Group earnings in future.

Precious metal prices, particularly palladium and rhodium, have surged in 2019, with the recent depreciation of the rand US dollar rate, which is a significant revenue driver, boosting revenues for South African mining companies. The operating environment in South Africa remains challenging, though recent political changes and a seemingly more investment oriented approach by the Government, is positive. While structural changes are yet to be seen, general sentiment around the country's prospects for economic stability and growth have improved.

I am convinced that Sibanye-Stillwater offers tangible fundamental value and is strategically positioned to benefit from any further upside in precious metals prices.

2019-02-21 08:46:10