A unique, exciting, precious metals company - CEO, Neal Froneman European Gold Forum, 17 April 2018 - The Vault
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A unique, exciting,
precious metals company
CEO, Neal Froneman
European Gold Forum, 17 April 2018
Disclaimer
NOT FOR RELEASE, PRESENTATION, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.
This presentation is for informational purposes only and does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the
United States or any other jurisdiction nor a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The shares to be issued in connection with the offer for Lonmin plc (“Lonmin” and the “New Sibanye Shares”, respectively) have not been and will not be registered
under the US Securities Act of 1933 (the “Securities Act”) and, accordingly, may not be offered or sold or otherwise transferred in or into the United States except
pursuant to an exemption from the registration requirements of the Securities Act. The New Sibanye Shares are expected to be issued in reliance upon the
exemption from the registration requirements of the Securities Act provided by Section 3(a)(10) thereof.
This presentation is not a prospectus for purposes of Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to the extent implemented in
any relevant Member State) (the “Prospectus Directive”). In any EEA Member State that has implemented the Prospectus Directive, this presentation is only
addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. This presentation is not directed to, or
intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such
distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.
No statement in this presentation should be construed as a profit forecast.
Forward looking statements
This presentation contains forward-looking statements within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform
Act of 1995. These forward-looking statements, including, among others, those relating to Sibanye Gold Limited trading as Sibanye-Stillwater (“Sibanye-Stillwater”)’s
financial positions, business strategies, plans and objectives of management for future operations, are necessarily estimates reflecting the best judgment of the
senior management and directors of Sibanye-Stillwater and Lonmin. All statements other than statements of historical facts included in this Presentation may be
forward-looking statements. Forward-looking statements also often use words such as “will”, “forecast”, “potential”, “estimate”, “expect” and words of similar
meaning. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and should be
considered in light of various important factors, including those set forth in this disclaimer. Readers are cautioned not to place undue reliance on such statements.
The important factors that could cause Sibanye-Stillwater’s and Lonmin’s actual results, performance or achievements to differ materially from those in the forward-
looking statements include, among others, economic, business, political and social conditions in the United Kingdom, South Africa, Zimbabwe and elsewhere;
changes in assumptions underlying Sibanye-Stillwater’s and Lonmin’s estimation of their current mineral reserves and resources; the ability to achieve anticipated
efficiencies and other cost savings in connection with past, ongoing and future acquisitions, as well as at existing operations; the success of Sibanye-Stillwater’s and
Lonmin’s business strategy, exploration and development activities; the ability of Sibanye-Stillwater and Lonmin to comply with requirements that they operate in a
sustainable manner; changes in the market price of gold, PGMs and/or uranium; the occurrence of hazards associated with underground and surface gold, 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; their ability to hire and retain senior management or sufficient technically skilled
employees, as well as their ability to achieve sufficient representation of historically disadvantaged South Africans’ in management positions; failure of information
technology and communications systems; the adequacy of insurance coverage; any social unrest, sickness or natural or man-made disaster at informal settlements
in the vicinity of some of Sibanye-Stillwater’s operations; and the impact of HIV, tuberculosis and other contagious diseases. These forward-looking statements speak
only as of the date of this Presentation. Sibanye-Stillwater and Lonmin expressly disclaim any obligation or undertaking to update or revise any forward-looking
statement (except to the extent legally required).
2
www.sibanyestillwater.com
Agenda
Corporate overview and vision statement
Track record of smart transactions
Significant value created post unbundling & acquisitions
More value unlock to come: DRDGOLD and Lonmin transactions
Outlook and the way forward
3
www.sibanyestillwater.com
Corporate overview
Shares in issue 2,265,793,015* Major shareholders*
Shares in ADR form 656,793,152*(ADR ratio 1:4 ordinary share)
Gold One Limited 19.43%
Market cap¹ c.R25 billion (US$2.1billion)
Listings JSE Limited share ticker: SGL Van Eck Associates Corporation 11.07%#
NYSE ADR programme share ticker: SBGL
Public Investment Corporation 9.61%
Net Debt R23 billion (US$1.88billion)3
at 31 December Net debt : adjusted EBITDA4 = 2.6x Investec Asset Management 5.75%
2017 R4.1 billion (US$334 million) available
facilities
Black Rock Inc 4.34%
Reserves2 Gold Reserves of 25.7moz
at 31 December 4E SA PGM5 Reserves of 22.4moz
2017 2E US PGM5 Reserves of 21.9moz Shareholder geographic distribution*
Uranium Reserves of 96.1mlb China/ Gold One
Contact details James Wellsted
SVP: Investor Relations South Africa
29%
Tel: +27 (0)10 493 6923 /+27(0)83 453 4014 38%
ir@sibanyestillwater.com USA
Registered office: Constantia Office Park,
Bridgeview House, Building number 11, United Kingdom
Ground Floor, Corner 14th Avenue &
Potgieter Road, South Africa 19% 8% Europe excl UK
5%
*Shares in issue as at 11 April 2018 (post capitalisation issue), ADRs as at 13 April 2018 (before cap issue)
¹ Market cap as at 5 April 2018, sources: JSE, Factset Others
1%
2 Refer to the Integrated Report or Mineral Resources and Reserves statement, issued on 29 March 2018 at
https://www.sibanyestillwater.com/investors/financial-reporting/annual-reports/2017
3 Converted using exchange rate on 31 December 2017 of US$/R12.36
4 Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included
in the facility agreements for compliance with the debt covenant formula
5 The Platinum Group Metals (PGM) production in the SA Region is principally platinum, palladium, rhodium and
gold, referred to as 4E (3PGM+Au), and in the US Region is principally platinum and palladium, referred to as 2E *Shareholder information as at end February 2018
(2PGM) # As per Van Eck’s declaration on 23 March 2018
A leading global precious metal company 4
www.sibanyestillwater.com
Our vision and purpose dictates our actions
PURPOSE: Our mining improves lives
VISION:
SUPERIOR VALUE CREATION
FOR ALL OUR STAKEHOLDERS
Through there responsible mining and
beneficiation of our mineral resources
Underpinned by our C.A.R.E.S. VALUES
Commitment Accountability Respect Enabling Safety
Sibanye-Stillwater cares 5
www.sibanyestillwater.com
Track record
of smart transactions
6
Implementing a value accretive PGM strategy
• First entry into the SA PGM sector – April 2016
• Lean, well run company
Aquarius • Operational performance has increased further to record levels
since acquisition
• Effective from November 2016
• Smart transaction structure aligned with expectations of platinum
market outlook
Rustenburg • Significant synergies with Aquarius and the gold central services
• Realised synergies of ~R1bn pa in 14 months, well ahead of
previous target of R800m over a 3-4 year period
• Tier one US PGM producer acquired in May 2017
• High grade, low cost assets with Blitz, a world class growth
project
Stillwater • Provides geographic, commodity and currency diversification
• 78% palladium content provides upside to robust
palladium market
• Attractive acquisition price at low point in platinum price cycle
• Combination with Sibanye-Stillwater SA PGM assets results in
significant potential synergies
Lonmin • Aligns with Sibanye-Stillwater’s mine-to-market strategy in SA and
adds commercially attractive smelting and refining
• Sizeable resources provide long-term optionality
A unique, leading precious metals mining company offering scale and sustainability 7
www.sibanyestillwater.com
Based on our Palladium market outlook…
Palladium supply vs demand fundamentals
2 500 1 100
• We are structurally bullish with palladium 2 000 1 000
1 500 900
set for sustained record deficits 1 000
800
500
700
US$/oz
– Palladium excess inventories already
Koz
0
600
-500
closing in on normalised levels -1 000
500
-1 500 400
– Gasoline expected to maintain a >70% -2 000 300
-2 500 200
market share through to 2025, 2007A 2012A 2017E 2022E
Surplus / Deficit (koz) Ex-ETF market balance
– Long term producer supply CAGR* of Pall Price (US $ / oz) (rhs)
-1.2% lags a net-demand CAGR of 2.0% Excess PGM above ground stock drawdown profile
1 000
– Long-term substitution is anticipated to 800
provide more balance to the overall 600
Days of excess inventory
400
PGM basket 200
excess Palladium inventories reduce to nil 0
-200
by 2022E
-400
-600
1992A 1995A 1998A 2001A 2004A 2007A 2010A 2013A 2016A 2019E 2022E 2025E
Platinum Palladium Rhodium
*CAGR: Compound annual growth rate
Source: Internal demand and supply model based on WPIC information, broker consensus and other sources
Palladium outperformance set to continue 8
www.sibanyestillwater.com
..and our outlook for Platinum
Platinum supply vs demand fundamentals
• Despite ongoing diesel and electric 1 000 2 000
800 1 800
vehicle (EV) concerns, we believe 600 1 600
platinum’s fundamentals remain robust 400 1 400
200 1 200
– Limited primary and secondary supply
US$/oz
Koz
0 1 000
-200 800
growth anticipated globally -400 600
-600 400
– Significant producer capital -800 200
-1 000 0
underinvestment since the global financial 2007A 2012A 2017E 2022E
crisis to result in long term South Africa Surplus / (Deficit) Ex-ETF market balance Pt Price (US $ / oz) (rhs)
primary producer supply instability
Global average PGM loadings profile
4.5
– Demand remains well supported, even in 4.0
diesel markets 3.5
3.0
grams per vehicle
2.5
• Platinum likely to be mostly balanced for 2.0
the remainder of this decade, thereafter
1.5
1.0
reverting to material deficits as primary 0.5
production from SA contracts 0.0
2010A 2013A 2016A 2019E 2022E 2025E
Pt Pall Rhod
Source: Internal demand and supply model based on WPIC information, broker consensus and other sources
Despite declining diesel market share and EV concerns, we remain fundamentally bullish 9
www.sibanyestillwater.com
There is more to Platinum than anti-diesel
Light passenger vehicles by engine type
• Diesel remains critical to the global automakers 140 25%
reaching CO2 emission targets 120
20%
• Decline in diesel penetration rates and growth in EVs 100
and hybrids already factored in 80 15%
Millions
– Diesel’s global market share to decline to 14% by 2025, 60 10%
from 19% in 2017 40
Light passenger diesel units expected to remain 5%
20
relatively constant at c.18m units
0 0%
EV’s and hybrids to grow at a CAGR* of 25% 2010A 2013A 2016A 2019E 2022E 2025E
through to 2025 (c.20m units)
Diesel Gasoline
• Increased PGM loadings are inevitably required to Hybrids BEVs
reach more stringent global emission thresholds Diesel market share (%, rhs)
– Likely move towards real world driving testing
25 Hybrid vs Battery electric vehicles (BEV) growth
• Heavy duty diesel (HDD), hybrid vehicle growth and 20
the potential substitution of platinum in gasoline
autocats provide bottom line platinum demand 15
growth
Millions
– Contrary to bearish platinum market sentiment 10
– Heavy duty diesel demand expected to double by
2025E (to c.850koz), offsetting passenger vehicle losses 5
– Hybrid vehicles expected to account for 50% of total
EVs by 2025E 0
2010A 2013A 2016A 2019E 2022E 2025E
Hybrids BEVs
*CAGR: Compound annual growth rate
Source: Internal demand and supply model based on WPIC information, broker consensus and other sources
Despite declining diesel market share and EV concerns, we remain fundamentally bullish 10
www.sibanyestillwater.comBecoming a leading precious metals company
Sibanye-Stillwater global PGM ranking Sibanye-Stillwater global gold ranking
2017A platinum 2017A palladium 2017A gold and gold
production (moz) production (moz) equivalents
production (moz)
1 Barrick 5.3
Amplats 2.4 Norilsk 2.8
Newmont 5.3
2
Sibanye-Stillwater
1.6 Amplats 1.6 AngloGold 3.8
(post-transaction)
2, 3, 4
Sibanye-Stillwater
2 3.8
Sibanye-Stillwater (post-transaction)
Impala 1.5 1.3
(post-transaction)
Kinross 2.7
Lonmin 0.7 Impala 0.9 Gold Corp 2.6
Newcrest 2.4
1
Norilsk 0.7 Lonmin 0.3
Gold Fields 2.2
Northam 0.3 Northam 0.1 Polyus 2.2
Agnico-Eagle 1.7
RBPlats 0.2 RBPlats 0.1
Sibanye-Stillwater 1.4
Lonmin’s contribution to Sibanye-Stillwater
Source: Company filings
Note:
1. Includes PGM by-products only
2. Rustenburg + Aquarius + Stillwater + Lonmin. Blitz at full ramp up.
3. Sibanye –Stillwater gold equivalents included
4. Gold equivalent ounces calculated as PGM basket price in the period / average gold price in the period multiplied by PGM production
Positioned globally as a leading precious metals producer 11
www.sibanyestillwater.comSignificant
value created
post unbundling &
acquisitions
12Our value-creation journey 1 Enterprisevalue, or EV, is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalisation. Enterprise value is calculated as the market capitalisation plus debt and minority interests and preferred shares, minus total cash and cash equivalents. It is calculated as at 31 December of each year Delivering growth and value while diversifying risk at the bottom of the cycle 13 www.sibanyestillwater.com
Proven operating model yields results
2017 SA gold industry UG operating unit costs (SA only)
3 500 3 344
3 300
3 100
2 900
2 700
R/tonne
2 466
2 500
2 300 2 224
2 111
2 100
1 900
1 700
1 500
Anglogold Gold Fields (South Harmony Sibanye-Stillwater
Deep)
2017 SA gold industry all-in sustaining costs (SA only)
1400
1 340
1350
1300
1 242
1250
US$/oz
1 195
1200
1150 1 128
1100
1050
1000
Gold Fields (South Anglogold Harmony Sibanye-Stillwater
Deep)
Source: Company reports for 12 months ended 31 December 2017
Sibanye-Stillwater is the lowest cost major gold producer in South Africa 14
www.sibanyestillwater.comLarge, low cost SA PGM acquisitions Source: Various companies’ disclosures Note: Bubble size represents PGM Resources A sizeable resource base at a compelling price 15 www.sibanyestillwater.com
Aquarius and Rustenburg realised synergies
Realised
Realised benefits
Initial benefits benefits since
Category Summary of key initiatives
identified (Rm) At 30 June acquisition at
2017 (Rm) 31 Dec 2017
(Rm)
• Employees and management configured to
Resource reflect the Sibanye-Stillwater operating model 200
optimisation • Consolidation of duplicated production and 246 456
support functions 237
• Improved procurement and supply chain
Sourcing and stores management 137
management 26 166
• Owner Maintenance 98
Closure of • Rosebank, Centurion and Perth offices
corporate offices 69 62 62
• Property
Optimisation • Consolidation of training footprint
268 68 164
• Engineering
• Other
Total Operating cost synergies R800m (over 3 R542m R918m
years) (over 8 (over 14
months) months)
Additional savings • Real capital savings realised (not deferred) 98 116
Realised integration synergies R800m (over 3 ~ R640m ~ R1,034m
years) (over 8 (over 14
months) months)
*Source: Company data
Kroondal baseline was 2016 actual (July 2015 to June 2016),Rustenburg: Baseline was the PFS – re-based as a standalone company
Savings identified include those related to decrease in labour numbers
Integration of Aquarius and the Rustenburg operations has exceeded expectations 16
www.sibanyestillwater.comStillwater CPR – confirms value
• CPR released in November 2017
– NPV of US$2.7 billion vs acquisition price of US$2.2 billion confirmed, at assumed
palladium price of US$704/oz and platinum price of US$1,047/oz
– AISC and AIC converge to approximately US$530/2Eoz from 2021 as capital at
Blitz declines and production builds up
US PGM Operations production and cost profile
1 100 900 000
Ave spot 2E basket price YTD ~ US$1,019/2Eoz
1 000 800 000
19%
900
700 000
34%
800
50% 600 000
US$/2Eoz
2Eoz
700
500 000
600
400 000
500
400 300 000
300 200 000
2018 2019 2020 2021 2022 2023 2024 2025 2026
2E production (oz) AISC AIC Spot prices for 2E basket
Source: Stillwater CPR 2017
Note: Production and costs are in line with the published CPR for the Stillwater operations (available on https://www.sibanyestillwater.com/investors/documents-circulars)
The Stillwater operations have a PGM 2E prill split of 3.4 palladium: 1 platinum ounce
A value accretive and well timed acquisition 17
www.sibanyestillwater.comStillwater – a well-timed acquisition
100
80
Relative price performance (%)
Stillwater Transaction
concluded
60
Stillwater Transaction
announced
40
Discussions with
Stillwater begin
20
0
-20
Gold (LHS) Palladium (RHS) Platinum (LHS)
Source: Inet BFA
Fundamental outlook for palladium remains robust 18
www.sibanyestillwater.comMoving down the PGM AIC curves ‘16 – ‘17
20 000 Jun-16 all-in costs1 chart, by mine (R/6E ounce)2
18 000
Avg. basket price R12,699/ounce (6E)
16 000 Avg. all-in costs = R12,277/ounce (6E)
14 000
Cost R/Oz
12 000
10 000
8 000
6 000
4 000
2 000
0
Amandelbult
Two rivers
Rustenburg
East Boulder
Mototolo
Stillwater
Zimplats
Union
Lonmin
Marula
Impala
Modikwa
Mimosa
Mogalakwena
Boschkoppie
Zondereinde
Kroondal
Unki
Booysendal
20 000
Jun-17 all-in costs1 chart, by mine (R/6E ounce)2
Avg. basket price R12,128/ounce (6E)
18 000 Avg. all-in costs = R12,589/ounce (6E)
16 000
Cost R/Oz
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
Amandelbult
Two rivers
Rustenburg
East Boulder
Stillwater
Mototolo
Zimplats
Union
Lonmin
Mogalakwena
Impala
Modikwa
Mimosa
Marula
Boschkoppie
Zondereinde
Kroondal
Unki
Booysendal
Sibanye-Stillwater mines3 Other PGM mines
Source: Citi Research, Company reports,
Note:
1. Includes cash costs, all capex exploration, corporate costs, cash taxes and other operating costs
2. Excluding base metal credits
3. Mines acquired by Sibanye-Stillwater in the Aquarius acquisition include Kroondal and Mimosa
Clear cost benefits realised at Kroondal and Rustenburg operations from integration with Sibanye-Stillwater 19
www.sibanyestillwater.comClear benefits from recent diversification
1200
US$/2Eoz PGM basket YTD ave = 23% higher than H1 2017
24 000
R/4Eoz PGM basket YTD ave = 6% higher than H1 2017
1100
22 000
Ave H2 2017:
US$946/2Eoz 1000
20 000
Ave 2018 YTD:
US$1,019/2Eoz
Ave H1 2017: 900
18 000 US$830/2Eoz
Ave 2018 YTD:
R/oz
US$/oz
R15,001/oz
Ave H2 2017: 800
16 000 R17,087/oz
Ave H1 2017:
R16,331/oz 700
14 000
Ave H2 2017: 600
12 000 Ave 2018 YTD:
R13,074/4Eoz
Ave H1 2017: R12,799/4Eoz
R12,063/4Eoz
10 000 500
Gold R/oz (LHS) PGM Basket R/4Eoz (LHS) PGM Basket US$/2Eoz (RHS)
Source: Inet BFA
*2E and 4E basket prices are based on Sibanye-Stillwater SA PGM and US PGM prill split
Dollar metal prices gains partially offset by rand strength – Stillwater basket price benefiting 20
www.sibanyestillwater.comLiquidity position robust – US$ RCF refinanced
• US$350 million RCF refinanced (was due to mature in August 2018) and upsized to US$600
million on improved terms
– Three year facility with option to extend through two one year loans
– Option to increase by further US$150 million
– Interest rate of Libor plus 1.85% and Libor plus 2.00% dependent on gearing
• Strong support from group of various international banks – continued confidence in
Sibanye-Stillwater’s business plan
• Facility is not currently materially utilised but extended facility maturity, and increased size,
improves Group’s liquidity position
• Net Debt:EBITDA covenant remains as a maximum of 3.50x up to and including 31
December 2018, and a maximum of 2.50x thereafter
Debt Maturity ladder* - R millions
R10 000
R5 000
R5 537 R5 945 R5 451 R6 651
R0 (R1 545) R1 137
2018 2019 2020 2021 2022 2023 2024 2025
(R4 124)
(R5 000)
(R3 090)
(R10 000)
Cash (incl GBF's) Available Facilities ZAR RCF (R6bn) New USD RCF ($600m) 2022 Bonds ($500m) 2023 Convertible ($450m) 2025 Bonds ($550m)
*Balances as at 31 December 2017 adjusted for the New USD RCF
21
www.sibanyestillwater.comMore value unlock to
come: DRDGOLD and
Lonmin transactions
22Transaction overview
• Sibanye-Stillwater
– Will vend selected gold surface processing assets and tailings storage facilities (TSFs)
into DRDGOLD for a 38% stake worth c.R1.3 billion*
– Has an option to increase its ownership in DRDGOLD to 50.1% within 24 months by
acquiring additional shares at a 10% discount to the 30 day VWAP
– Retains ownership of the Cooke and Ezulwini plants and associated uranium and gold
TSFs with the ability to deposit processed surface material onto the Regional Tailings
Storage Facility (RTSF), subject to paying an appropriate share of capital and costs
• DRDGOLD
– Will develop the West Rand Tailings Retreatment Project (WRTRP) in phases,
commencing with initial production through the Driefontein DP2 and DP3 plants and
culminating in the development of a Central Processing Plant (CPP) and RTSF
* DRDGOLD’s closing share price of R4.96 on 20 November 2017 multiplied by the 265 million shares to be issued to Sibanye-Stillwater
An innovative and value accretive partnership 23
www.sibanyestillwater.comThe proposed Lonmin acquisition
• Sibanye-Stillwater has made an all equity
offer to acquire 100% of Lonmin
1. Northam
• Neutral to Sibanye-Stillwater debt profile – 2. Anglo America
Platinum
will not add debt to the balance sheet 2 1
3. Siyanda Resources
4. Sedibelo Platinum
• R1.5 billion in annualised pre-tax cost and 3 5. Wesizwe Platinum
operational synergies* expected by 2021 6. Royal Bafokeng
Platinum
• Benefits of transaction include 4 7. Impala Platinum
2 8. Eastern Platinum
– Value accretive to Sibanye-Stillwater 9. Glencore Xstrata
shareholders
Sibanye-Stillwater
– Downstream processing business with a 6 Lonmin
replacement value significantly higher than 5
acquisition cost 6
6
– Significant synergies between Sibanye- Western Bushveld
Stillwater and Lonmin’s contiguous PGM Joint Venture 7
Sable project
9
assets 8
7 1
– Sizeable PGM Resources with potential
upside from advanced brownfield projects Pandora Joint
and greenfield project pipeline Venture
• Should Sibanye-Stillwater shareholders not
approve the transaction, agreement in
principle to discuss asset acquisition
*For further information in relation to the expected synergies, please refer to page 17 and pages 58 to 60 of the offer announcement dated 14 December 2017, available on
https://www.sibanyestillwater.com/investors/transactions/lonmin/documents.
A logical value accretive transaction 24
www.sibanyestillwater.comRevised Lonmin operational plan1
• Lonmin mining plan revised after detailed due diligence
• Planned for current economic and market conditions
– “Lower for longer” plan
• Conservative plan not contingent on expenditure of project capital thereby
ensuring affordability
• Generation one shafts to be put on care and maintenance as per Lonmin plan
• Flexibility to delay project capital investment
– Optionality to significantly extend operating life in a higher PGM price environment
Revised plan - adjusted 4E PGM ounces Revised capital by category compared to Lonmin
in concentrate plan (Real terms)
1 200 000 4 000
3 500
1 000 000
4E PGM ounces
3 000
800 000
R million
2 500
600 000 2 000
1 500
400 000
1 000
200 000
500
0 0
2018 2021 2024 2027 2030 2033 2036 2018 2021 2024 2027 2030 2033 2036
K3 Saffy Rowland E3 4B K4 Mining capex Concentrator capex Smelter and refinery capex
W1 E1 E2 Hossy Newman BTT Other capex New furnace capex Total LoM Capex
Lonmin LoM 4E PGM ounces in concentrate
1 Source: Lonmin’s company information and due diligence performed by Sibanye-Stillwater
Affordable mining plan with optionality 25
www.sibanyestillwater.comMaterial synergies with Lonmin operations
Pre-tax synergies of approx. R1.5bn per annum by 20211
Quantified synergies 2 Incremental synergy potential 2
• Overhead costs (R730m per annum by • Ability to mine through existing mine
2021) boundaries
– Corporate office rationalisation (closing • Optimal use of surface infrastructure
the London office and delisting)
• Optimising the mining mix
– Regional shared services
• Prioritisation of projects and new
– Operational (mining) services growth capital
– One-off R80m cost required to achieve • Capital reorganisation in line with new
these synergies
consolidated regional plan
• Processing synergies
– Differential cost benefits of R780m by
2021 and an average of approximately
R550 per annum from 2021
– Approximately R1bn of capex required
for the purchase of a new furnace
Note:
1. For further information in relation to expected synergies, please refer to page 17 and pages 58 to 60 of the offer announcement,
dated 14 December 2017, available at https//sibanyestillwarer.com/investors/transactions/lonmin/documents
2. For overhead synergies, total savings anticipated when fully implemented in FY21; varies per toll agreement production
throughput for processing synergies with average calculated between 2021 and 2032
3. Synergies which are unquantifiable at this point in time
Realisation of synergies will ensure operational viability 26
www.sibanyestillwater.comOutlook and
the way forward
27South African “green shoots” • The political environment in South Africa has recently undergone significant change and we anticipate this will be complemented by tangible actions • While the strong rand creates short term headwinds we have confidence in the longer term benefits • Starting to see an improvement in relations in contrast to the fractious environment of recent years • A policy and regulatory environment conducive to business competitiveness will promote investment and growth in the South African mining industry which remains a critical part of the national economy and a significant employer • Recent judicial ruling on “once empowered always empowered” another positive outcome for the industry • Sibanye-Stillwater is committed to support inclusive growth in South Africa through mining • Our recent South African investments provide significant exposure to South Africa and our company and its stakeholders stand to benefit significantly from this improving environment A vastly more favourable outlook for investment 28 www.sibanyestillwater.com
Our three-year strategic goal
Maintaining
Deleveraging
our focus on
our balance
operational
sheet
excellence
Improving
Strengthen our position as a our position
Addressing
on the
leading international precious global
our SA
discount
metals mining company by: industry cost
curves
Pursuing value
accretive Consistently
growth based delivering on
on our market
strengthened commitments
equity rating
Well positioned to benefit from any upside in metal prices 29
www.sibanyestillwater.comContacts
James Wellsted/ Henrika Ninham
ir@sibanyestillwater.com
Tel:+27(0)83 453 4014/ +27(0)72 448 5910
Website: sibanyestillwater.com
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