Wrap Text
Quarterly Review and Production Report for the period 1 January 2020 to 1 March 2020
ROYAL BAFOKENG PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/015696/06)
JSE share code: RBP
ISIN: ZAE000149936
Company code: RBPD
Bond code: RBPCB
ISIN: ZAE000243853
(“RBPlat” or “the Company” or “the Group”)
ROYAL BAFOKENG PLATINUM LIMITED QUARTERLY REVIEW AND PRODUCTION REPORT FOR THE PERIOD
1 JANUARY 2020 TO 31 MARCH 2020 (“REPORTING PERIOD”)
OVERVIEW
Production
- Zero fatalities with marked improvements in our total injury (“TIFR”), lost time injury (“LTIFR”) and serious injury
(“SIFR”) frequency rates:
- 40.6% improvement in SIFR
- 27.3% improvement in LTIFR
- Stable production output despite significant operational headwinds related to power grid stability, Anglo
American Platinum (“Amplats”) force majeure declaration and COVID-19 pandemic:
- 8.7% increase in tonnes hoisted
- 0.4% decrease in tonnes milled
- 1.3% reduction in 4E and platinum metal in concentrate to 90.1koz and 58.6koz, respectively
- 112kt ore stockpile (equating to 11.9koz 4E metals in concentrate)
- Unit cost reduction of 6.4% to R12 999 per 4E ounce (2019: R13 883), on a stock adjusted basis
- Capital expenditure in line with operational and project requirements
COVID-19 impact and response:
- Operations placed on care and maintenance from midnight on 26 March 2020 until midnight on 19 April 2020
and partially recommenced on 20 April 2020
- Employee salaries were paid during the lockdown period however, executives and senior management waived
33% of their remuneration during the lockdown period
- Relief provided to our communities including food, hygienic and educational support
- Financial assistance provided to certain contractors that are critical to our operations
- Deferral of R400 million planned capex spend for the remainder of the year
- Strong net cash position of R209.5 million
SAFETY
No fatalities were recorded during the reporting period with improvements of 21.1%, 27.3% and 40.6% respectively,
recorded in our TIFR, LTIFR and SIFR year-on-year.
Our safety, health and environmental strategy remains firmly based on the principle of continuous improvement and the
vision of achieving zero harm through the establishment of a resilient safety culture, underpinned by a strict safety code
of conduct, discipline and teamwork.
No safety-related production losses were incurred during the quarter under review.
PRODUCTION
Overall production for the reporting period was negatively impacted by:
- a five-day production loss at the BRPM concentrator during the initial post festive season start-up resulting from
an electrical failure in the primary mill motor circuit
- Amplats force majeure declaration on 6 March 2020
- Eskom load curtailment restrictions
Page 1 of 6
- the mandatory COVID-19 national lockdown which came into effect at midnight on 26 March 2020 (“National
Lockdown”)
Notwithstanding the winding down of mining activities to ensure that our underground operations were safely and
effectively placed into a care and maintenance cycle for the duration of the initial 21-day National Lockdown, total reef
tonnes hoisted for the quarter increased by 8.7% to 954kt. BRPM tonnes hoisted were 1.5% lower at 520kt and Styldrift
tonnes hoisted increased by 24.0% to 434kt.
Total tonnes milled for the reporting period reduced marginally by 0.4% to 843kt resulting in surface stocks of 112kt of
ore. Merensky milled volumes reduced by 6.6% or 49kt to 693kt, while UG2 tonnes milled increased to 150kt. Merensky
and UG2 ore surface stocks at the end of the reporting period are estimated at 83kt and 29kt, respectively.
The built-up head grade amounted to 4.04g/t (4E) remaining unchanged compared to the first quarter of 2019. Merensky
built-up head grade increased by 0.7% while the UG2 built-up head grade decreased by 3.9%. The key contributor to
the reduction in the UG2 grade was the increase in lower grade South shaft UG2 to the overall ore mix. The reduction
in UG2 head grade and impact of load curtailments on overall concentrator float stability resulted in a 0.7% reduction in
recovery to 82.40% compared to the 82.97% achieved in the comparative 2019 reporting period.
Milled volumes, built-up head grade and associated recoveries yielded 4E and platinum metal in concentrate of 90.1koz
and 58.6koz, respectively. Equivalent 4E and platinum metals in surface stocks is estimated at 11.9koz and 7.6koz,
respectively.
On 6 March 2020 Amplats announced the temporary shutdown of the Anglo Converter Plant (ACP) and declared force
majeure. Subsequent to the initial suspension of concentrate deliveries to the Waterval Smelter complex in line with the
force majeure declaration, an interim arrangement between Amplats and RBPlat was agreed to with revised concentrate
delivery and payment terms during the shutdown.
Concentrate that was delivered to Rustenburg Platinum Mines Limited (RPM), a wholly owned subsidiary of Amplats,
up to the force majeure announcement, will be bound by the terms as set out in the Disposal of Concentrate Agreement
(DOCA) with RPM. All subsequent concentrate deliveries to RPM will be subject to newly agreed payment terms,
whereby RBPlat will continue to receive a significant majority of the related proceeds during 2020 with the outstanding
payments being settled in full before 30 April 2021. Payment terms are set to revert to the original DOCA terms once
the ACP Phase B unit is once again operational, which is currently estimated to be 80 days from 6 March 2020.
BRPM
Total tonnes milled for the reporting period decreased by 49kt or 9.5% to 467kt, with closing surface stocks estimated at
53kt Merensky tonnes milled for the quarter amounted to 317kt, equating to a 90kt reduction compared to the comparative
2019 period. UG2 tonnes milled increased by 47kt to 150kt.
The reduction in Merensky volumes is attributable to the combined impact of Merensky reserve depletion at South shaft
and reduction in mining shifts experienced due to the National Lockdown and lower productivity experienced during the
winding down of operations ahead of the lockdown.
The increase in UG2 tonnes milled is directly attributable to increased UG2 production from South shaft. UG2 volumes
constituted 32.1% of total tonnes milled for the quarter.
The built-up head grade for the quarter was 4.10g/t (4E) compared to 4.18g/t (4E) achieved in the comparative period in
2019, equating to a 1.9% reduction. The reduction in head grade is mainly attributable to the increase in lower grade
South shaft UG2 contribution with the UG2 built-up head grade amounting to 3.90g/t (4E) compared to 4.06g/t (4E) in
2019. Merensky built-up head grade for the reporting period remained relatively unchanged at 4.20g/t (4E) compared
to the 4.21g/t (4E) achieved in the 2019 comparative period.
STYLDRIFT
Despite the lower than planned performance as a result of the impact of the National Lockdown, we are encouraged by
the continued improvement in key operating metrics during the first quarter. As such we remain confident that the
strategies and action plans initiated to address operational challenges are delivering the intended results in support of
our 230ktpm steady state run rate.
A total of 434kt of ore was hoisted, equating to a 24.0% increase against the comparative 2019 period. Tonnes milled
for the quarter increased by 13.6% to 375kt resulting in closing surface stocks of approximately 59kt.
The built-up head grade improved by 3.4% to 3.96g/t (4E) compared to 2019 as the stoping tonnage contribution to overall
tonnes mined increases in line with the ramp-up profile.
CASH OPERATING COSTS
Cash operating costs for the quarter amounted to R1 365 million, representing a 11.6% increase compared to 2019.
The increase in expenditure is attributable to the combination of increases in Styldrift cash costs during ramp up and
industry-related inflation.
Page 2 of 6
Increase in surface stocks as a result of Eskom load curtailment and the National Lockdown on milling volumes has
resulted in double digit year-on-year unit cost increases of 12.0% and 12.9% per tonne milled and 4E ounce, respectively
to R1 620 and R15 146. On a stock adjusted basis, cost per tonne milled increased by 5.9% to R1 485 (2019: R1 402)
and cost per 4E ounce reduced by 6.4% to R12 999 (2019: R13 883).
BRPM operating cash costs for the quarter increased 6.4% to R716 million in line with volume and on-mine inflation
related increases for labour, utilities and stores. Eskom load curtailment, National Lockdown requirements and lower
built-up head grade negatively impacted unit cash costs with cost per tonne milled and 4E ounce increasing by 17.5%
and 21.4% to R1 533 and R13 952, respectively. Stock adjusted year-on-year increases per tonne milled and 4E ounce
equate to 11.9% and 15.5%, respectively to R1 432 (2019: R1 280) and R13 030 (2019: R11 280).
Styldrift cash costs for the reporting period amounted to R649 million, resulting in unit operating cost increase per tonne
milled of 3.7% to R1 728 and a decrease per 4E ounce of 0.7% to R16 726, respectively. Stock adjusted unit costs
reflect year-on-year decreases per tonne milled and 4E ounce of 2.5% and 6.6%, respectively to R1 551 (2019: R1 591)
and R15 012 (2019: R16 080).
CAPITAL
Total capital expenditure for the reporting period increased by 16.2% to R327.1 million in line with project and operational
stay-in-business (SIB) capital requirements. Expansion capital of R244.8 million was 6% lower than 2019 and aligned
with project schedule and construction progress at Styldrift, Maseve concentrator MF2 upgrade and required expansion
of our tailing storage facilities.
Replacement capital expenditure amounted to R28.2 million for the quarter, an increase of R27.1 million compared to
2019. The increase is directly attributable to the Styldrift replacement project progress related to extending the footwall
declines to the north, south and east as part of establishing and securing the required ore-reserves to sustain production
in the longer term.
SIB capital increased by R34.3 million to R54.1 million equating to 4.0% of cash operating costs.
COVID-19 RESPONSE AND OPERATIONAL FORECAST
A national state of disaster was declared by the President of South Africa followed by an announcement on 23 March
2020 of a 21-day national lockdown commencing from midnight on 26 March 2020 until 16 April 2020. RBPlat
successfully ramped down and placed all its operations on care and maintenance, with only essential services in place.
On 9 April 2020, the President announced a further two weeks extension to the National Lockdown beyond the initial 21
days until 30 April 2020.
On 16 April 2020, the regulations issued in terms of the Disaster Management Act were amended, inter alia, to allow
mining operations to resume up to a maximum of 50% of capacity. RBPlat operations have restarted and will ramp up
consistent with the production capacity guidelines. As announced on 17 April 2020, we are committed to ensuring the
safety of our employees and that all practicable measures to reduce the risk, exposure and spread of COVID-19 are
implemented to secure their wellbeing.
We are aware of the negative impact that COVID-19 has had on our employees, contractors as well as communities.
As such we:
- continued to pay our employees their salaries during the National Lockdown period including medical aid and
the risk benefit portion of their pension and provident fund contributions, and where applicable homeowners
allowances and living out allowances
- provided financial assistance to certain contractors that are critical to our operations
- are providing relief to our communities including food, hygienic and educational support
As part of our detailed COVID-19 response plan, RBPlat has implemented cash preservation measures to ensure that
we remain financially robust and flexible to respond to continuous changes. A key aspect of the plan is the reduction in
our controllable fixed costs, especially during lockdown periods or other periods during which production is restricted.
As a gesture of goodwill, executives and senior management waived 33% of their salaries during the lockdown period.
In addition, shift allowances, production bonuses and other variable payments have also been curtailed.
As part of our cash preservation strategy the Company has reviewed current and planned future capital expenditure
with the view of securing immediate reductions and optimising cashflows. The review included:
- identifying non-critical items which could be deferred without impacting on operational flexibility and asset
integrity
- aligning SIB and replacement capital with revised production profiles and associated construction schedules
- considering the impact of the National Lockdown on both local and international equipment deliveries
Page 3 of 6
The process has enabled the business to identify and defer approximately R400 million in capital expenditure, consisting
of R60 million saving in SIB, R50 million in replacement capital and R290 million in expansion capital.
4E metals in concentrate losses due to the impact of the National Lockdown process on underground production is
estimated at 10.0koz for the quarter and 46.3koz for the total extended lockdown period ending 30 April 2020. Given
the evolving nature of the COVID-19 pandemic, it is too early to accurately gauge the cumulative impact on our
operations.
Although our mining and concentrating operations are being restarted there will be limited production in the first two
weeks as employees go through the screening process and testing where required. There are further uncertainties with
respect to:
- the ongoing impact of COVID-19 both domestically and internationally
- the timing and nature of further government announcements
- the ability of suppliers of equipment, spares and consumables to deliver and support mining operations
Given these dynamics, RBPlat withdraws its previously stated 2020 guidance to the market. However, Group capital
expenditure for 2020, including escalation and contingencies, is forecast to be approximately R1.8 billion. We will
continue to actively monitor developments and provide an update when we have greater clarity.
STRONG FINANCIAL POSITION
As at 31 March 2020, the Company is in a net cash position of R209.5 million, compared to a net debt position of R491.3
million as at 31 December 2019. At the period end, RBPlat had approximately R800 million of general banking facilities
available with cash and cash equivalents on hand of R2 194.4 million.
During the reporting period, RBPlat received a US$145 million cash prepayment from Triple Flag Mining Finance
Bermuda Limited (“Triple Flag”) in exchange for the future delivery of gold from the RBPlat mining operations.
Consequently, RBPlat fully settled the deferred consideration owing to RPM, amounting to R1 851 million including
accrued interest.
Unaudited quarter Unaudited quarter Quarter 1 2020 vs.
Description Unit ended 31 March ended 31 March Quarter 1 2019
2020 2019 % Change
Safety
TIFR (/1 000 000 hrs) rate 6.62 8.39 21.1
SIFR (/1 000 000 hrs) rate 0.95 1.60 40.6
LTIFR (/1 000 000 hrs) rate 1.89 2.60 27.3
Production
Total tonnes hoisted kt 954 878 8.7
BRPM kt 520 528 (1.5)
Styldrift kt 434 350 24.0
Tonnes delivered to concentrators kt 865 862 0.4
BRPM kt 476 525 (9.3)
Styldrift kt 389 337 15.4
Total tonnes milled kt 843 846 (0.4)
BRPM kt 467 516 (9.5)
Styldrift kt 375 330 13.6
Merensky kt 693 742 (6.6)
UG2 kt 150 103 45.6
% UG2 of total tonnes milled % 18 12 50.0
Closing surface stocks kt 112 32 246.9
BRPM kt 53 12 341.7
Styldrift kt 59 20 195.0
4E built-up head grade g/t 4.04 4.04 0.0
BRPM g/t 4.10 4.18 (1.9)
Styldrift g/t 3.96 3.83 3.4
Page 4 of 6
Unaudited quarter Unaudited quarter Quarter 1 2020 vs.
Description Unit ended 31 March ended 31 March Quarter 1 2019
2020 2019 % Change
Merensky g/t 4.07 4.04 0.7
UG2 g/t 3.90 4.06 (3.9)
Concentrator recovery (4E) % 82.40 82.97 (0.7)
BRPM concentrator % 84.08 84.58 (0.6)
Maseve concentrator % 78.70 78.70 0.0
Metals in concentrate produced
RBPlat
4E koz 90.1 91.3 (1.3)
Platinum koz 58.6 59.4 (1.3)
Palladium koz 23.8 24.2 (1.7)
Rhodium koz 5.1 4.8 6.3
Gold koz 2.6 2.9 (10.3)
Iridium koz 1.7 1.5 13.3
Ruthenium koz 8.6 7.9 8.9
Nickel kt 0.593 0.597 (0.7)
Copper kt 0.366 0.368 (0.5)
BRPM
4E koz 51.3 58.5 (12.3)
Platinum koz 33.1 38.1 (13.1)
Palladium koz 13.6 15.5 (12.3)
Rhodium koz 3.3 3.0 10.0
Gold koz 1.2 1.9 (36.8)
Iridium koz 0.9 0.9 0.0
Ruthenium koz 4.8 5.0 (4.0)
Nickel kt 0.271 0.366 (26.0)
Copper kt 0.172 0.247 (30.4)
Styldrift
4E koz 38.8 32.8 18.3
Platinum koz 25.5 21.3 19.7
Palladium koz 10.2 8.7 17.2
Rhodium koz 1.7 1.8 (5.6)
Gold koz 1.4 1.0 40.0
Iridium koz 0.8 0.6 33.3
Ruthenium koz 3.8 2.9 31.0
Nickel kt 0.321 0.231 39.0
Copper kt 0.194 0.121 60.3
Cash operating costs
RBPlat cash operating cost R’m 1 365 1 223 (11.6)
BRPM R’m 716 673 (6.4)
Styldrift R’m 649 550 (18.0)
RBPlat cash operating cost / tonne milled R/t 1 620 1 446 (12.0)
BRPM R/t 1 533 1 305 (17.5)
Styldrift R/t 1 728 1 667 (3.7)
RBPlat cash operating cost / 4E ounce R/oz 15 146 13 413 (12.9)
BRPM R/oz 13 952 11 497 (21.4)
Styldrift R/oz 16 726 16 845 0.7
RBPlat cash operating cost / Pt ounce R/oz 23 287 20 600 (13.0)
BRPM R/oz 21 622 17 655 (22.5)
Page 5 of 6
Unaudited quarter Unaudited quarter Quarter 1 2020 vs.
Description Unit ended 31 March ended 31 March Quarter 1 2019
2020 2019 % Change
Styldrift R/oz 25 453 25 881 1.7
Stock adjusted unit costs*
RBPlat cash operating cost / tonne milled R/t 1 485 1 402 (5.9)
BRPM R/t 1 432 1 280 (11.9)
Styldrift R/t 1 551 1 591 2.5
RBPlat cash operating cost / 4E ounce R/oz 12 999 13 883 6.4
BRPM R/oz 13 030 11 280 (15.5)
Styldrift R/oz 15 012 16 080 6.6
Capital expenditure
Total capital R'm 327.1 281.4 (16.2)
Expansion R'm 244.8 260.5 6.0
Replacement R'm 28.2 1.1 (2 463.6)
Stay-in-business (SIB) R'm 54.1 19.8 (173.2)
BRPM R'm 22.0 12.6 (74.6)
Styldrift R'm 24.8 6.3 (293.7)
Concentrators R'm 7.2 0.9 (700.0)
BRPM SIB as a % of operating cost % 3.1 1.9 (63.2)
Styldrift SIB as a % of operating cost % 3.8 1.2 (216.7)
* Stock adjusted unit costs are calculated based on cash operating cost net of cost of mining, transport, services and overheads incurred in the
development of the stockpiles
** Please note any difference in totals in this table is due to rounding
The information set out in this announcement has not been reviewed or reported on by the Company’s external auditors.
Johannesburg
29 April 2020
JSE Sponsor:
Merrill Lynch South Africa (Pty) Ltd
For further information, please contact:
Lindiwe Montshiwagae
Executive: Investor Relations and Corporate Communications
+27 (0) 10 590 4510
lindiwe@bafokengplatinum.co.za
Page 6 of 6
Date: 29-04-2020 10:07:00
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.
Sharenet Sites 
