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Audited Annual Results for the year ended 31 December 2019
ROYAL BAFOKENG PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/015696/06)
JSE share code: RBP ISIN: ZAE000149936
JSE bond code: RBPCB ISIN: ZAE000243853
("RBPlat" or the "Company")
AUDITED ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019
KEY FEATURES OF OUR PERFORMANCE
Financial capital
- Balance sheet optimisation through rights offer and gold streaming agreement
- Headline earnings per share of 50.4 cents (2018: 25.0 cents)
- 68.1% of capital expenditure funded from cash generated by operations (2018: 37.3%)
- Net debt1 position of R491.3 million (2018: R832.4 million)
- Cash position2 of R814.2 million (2018: R883.5 million)
1 Calculated as interest-bearing borrowings less cash and cash equivalents
2 Includes restricted cash and housing
Manufactured capital
- 12.8% increase in tonnes delivered to 3 829kt (2018: 3 395kt)
- 12.5% increase in tonnes milled to 3 847kt (2018: 3 420kt)
- 9.3% increase in Styldrift built-up head grade to 3.77g/t (4E) (2018: 3.45g/t (4E))
- 9.0% increase in 4E metals in concentrate to 401koz (2018: 368koz)
- 12.2% year-on-year increase in BRPM cost per tonne milled to R1 361 (2018: R1 213)
Human capital
- Regrettably two fatalities
- 38.1% improvement in RBPlat’s SIFR year-on-year
- 23.2% improvement in RBPlat’s LTIFR year-on-year
- 14.9% improvement year-on-year in total training and development costs
Social capital
- 11.8% increase year-on-year in local HDSA procurement spend to R1.7 billion
- R65.8 million investment in our social and labour plan (2018: R63.2 million)
Natural capital
- Awarded CDP B scores for our voluntary disclosure in the CDP water and climate change 2019
- R7.3 million cost savings in potable water using our water treatment plant
- Disappointing 25.3% increase in GHG emissions due to inclusion of Maseve data and increased
production at Styldrift
OPERATING AND FINANCIAL STATISTICS
Description Unit 2019 2018 % change
Revenue R’m 7 491.9 3 627.1 106.6
4E ounces produced koz 401 368 9.0
Pt ounces produced koz 261 239 9.2
Cash operating cost/tonne milled R/t 1 475 1 213 (21.6)
Cash operating cost/4E ounce R/oz 14 139 10 468 (35.1)
Cash operating cost/platinum ounce R/oz 21 770 16 145 (34.8)
Capital expenditure3 R’m 1 661 3 459 (52.0)
EBITDA margin % 23.4 13.9 68.7
Earnings per share cents/ share 26.3 78.1 (66.3)
Headline earnings per share cents/ share 50.4 25.0 101.6
3
Total Group capital expenditure amounted to R1 695.3 million
OVERVIEW
RBPlat witnessed a recovery and strengthening of the macro-PGM market fundamentals, resulting in a healthy
basket price, however, the domestic environment remained challenging. From an operational perspective, the
year represented a continued transitionary phase across the Group as Styldrift moved from a project
environment to commercial operating status, and BRPM was required to maintain steady results despite a
rapidly depleting South shaft Merensky reserve.
Given this context our key focus for the year was on:
- achieving meaningful and sustainable improvements in our key safety performance in our pursuit of
zero harm
- continuing to ramp up Styldrift with the aim of achieving a 230ktpm run rate in the third quarter of
2020
- onboarding of artisans and skills training initiatives
- recommencing UG2 mining at our South shaft operation and ramping it up to 20ktpm by the fourth
quarter of 2019
- initiating long lead concentrator projects that will allow us to optimise recovery and sustain
production in the longer term. These include the Maseve 160ktpm MF2 expansion as well as the
BRPM and Maseve tailings storage facility expansions
- initiating a review of corporate costs
- optimising the balance sheet through a rights offer and a gold streaming agreement.
Our lost time injury frequency rate (LTIFR) decreased by 23.2% and total injury frequency rate (TIFR) decreased
by 6.7%. Regrettably, despite all our efforts to keep our people safe, we did not achieve our goal of zero harm.
There were two fatalities in our operations in 2019. On 24 June Mr Joao Antonio Machava sadly lost his life in a
scraper-related accident at BRPM’s South shaft. On 22 November Ms Bontle Sitoe passed away from a
pulmonary embolism. The Board of Directors, management as well as colleagues at RBPlat extend their sincere
condolences to the families and friends of Mr Machava and Ms Sitoe.
While we achieved significant production and construction milestones at our operations, the overall volume
and cost performance did not meet expectations, largely driven by the operational complexity we have faced
this year. Over 2019, we witnessed a 12.5% and 9.0% increase in tonnes milled and 4E metals in concentrate,
respectively. 4E metals in concentrate amounted to 401koz (6.7% below the lower end of our guidance) and
the unit cost per 4E ounce exceeded guidance by 6.3% at R14 139.
2020 COMPANY GUIDANCE
Our key focus area for 2020 is the effective resourcing and ongoing alignment of our operations in line with
the growing contribution of Styldrift, at the same time as the mining mix at BRPM extracts more lower grade
UG2. The contribution of UG2 mining at BRPM will increase to approximately 35% of our overall production
during 2020. Operational flexibility at BRPM remains a key challenge as South shaft Merensky reserves are
depleted and the shaft transitions to mining the more complex UG2 ore body. Productivity and mining
efficiencies on the UG2 reef are lower than the Merensky reef. The lower grades of the UG2 will create upward
unit cost pressures at BRPM, which during 2020 will only partially be offset by the increasing scale of the
business as well as operational reorganisation. We therefore expect BRPM cost inflation to be consistent with
mining inflation of 8% in 2020 as we opportunistically extract UG2.
Group production guidance for 2020, subject to any unforeseen operational disruptions and market
conditions, is forecast to increase to between 4.2Mt and 4.5Mt at a 4E built-up head grade of 3.90g/t to
4.00g/t, yielding 450koz to 485koz 4E metals in concentrate. Unit cost guidance for the Group is forecast to be
between R13 300 and R14 400 per 4E ounce.
Group capital expenditure for 2020, including escalation contingencies, is forecast to be approximately R2.2
billion. Styldrift mining and infrastructure for the 230ktpm ramp-up footprint (R0.8 billion), the Maseve
overland conveyor belt (R0.1 billion), the Maseve plant expansion (R0.3 billion) and tailings storage facility
upgrades (R0.3 billion) will be the main drivers. SIB expenditure for the Group is expected to be between 6%
and 7% of total operating costs.
DIVIDEND POLICY
Shareholder returns are an important expression of capital allocation, with our preference being to return
excess cash to shareholders through sustainable dividend payments. While the development of Styldrift has
presented a significant investment phase for RBPlat, the successful ramp up of Styldrift together with the
ongoing cash generation from BRPM and the Impala royalties, is expected to underpin strong cash flow
generation that will support sustainable dividends. As such, the Board has approved a policy of distributing a
minimum of 10% of free cash flow, before growth capital, while maintaining discretion to consider balance
sheet flexibility, and prevailing market conditions. This will be done through an annual dividend each financial
year, with consideration also given to special dividends, where appropriate.
SHORT FORM ANNOUNCEMENT
This short-form announcement is the responsibility of the directors. It is only a summary of the information
contained in the full announcement and does not contain full or complete details. Any investment decision
should be based on the full announcement accessible from Tuesday, 03 March 2020, via the JSE link
https://senspdf.jse.co.za/documents/2020/jse/isse/RBP/FY19Result.pdf and also available on the Company’s
website at www.bafokengplatinum.co.za.
These annual results have been audited by the Group’s auditors, PricewaterhouseCoopers Inc. who expressed
an unmodified opinion thereon. A key audit matter relating to the cut-off between development and
production phases of mining; and impairment assessment of long-lived assets is addressed in the unmodified
opinion. This audit opinion is available, along with the annual financial statements on the Company’s website
at https://www.bafokengplatinum.co.za/integrated-reports.php.
Copies of the full announcement may also be requested by contacting Royal Bafokeng Platinum Investor
Relations by email at lindiwe@bafokengplatinum.co.za and are available for inspection at the Company’s
registered office and the offices of the Sponsor at no charge, weekdays during office hours. The forecast
information contained in this short form announcement has not been audited or reviewed by the Company’s
auditors.
The Company will be hosting an analyst roundtable after the results presentation at 10h45 with a
simultaneous webcast https://78449.themediaframe.com/links/rbplat200305_1045.html. The presentation
will be available on the website at http://www.bafokengplatinum.co.za/conference-and-site-visit-
presentations.php at the start of the presentation.
Johannesburg
03 March 2020
JSE Sponsor
Merrill Lynch South Africa Proprietary Limited
For further information, please contact:
Lindiwe Montshiwagae
Executive: Investor Relations
Tel: +27 (0)10 590 4510
Email: lindiwe@bafokengplatinum.co.za
Date: 03-03-2020 07:05:00
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