A UNIQUE, GLOBAL PRECIOUS METALS COMPANY - CEO, Neal Froneman African Mining Indaba - The Vault
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A UNIQUE, GLOBAL
PRECIOUS METALS
COMPANY
CEO, Neal Froneman
African Mining Indaba
6 February 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.
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 and Lonmin Plc (“Lonmin”)’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
Five years of
value creation
3
Our vision and purpose dictates our actions
PURPOSE: Our mining improves lives
VISION:
SUPERIOR VALUE CREATION
FOR ALL OUR STAKEHOLDERS
Through mining our multi-commodity resources
in a safe and healthy environment
Underpinned by our C.A.R.E.S. VALUES
Commitment Accountability Respect Enabling Safety
Sibanye-Stillwater cares 4
www.sibanyestillwater.com
We have transformed significantly
• Reduced costs
2013¹ Market • Improved flexibility and quality of
cap: ~ R10 billion mining
Perceived high • Substantial increase in reserves
cost, short life SA enhanced by synergistic acquisitions
gold company • Significantly extended operating life
• Reduced debt/gearing
• Delivered consistent, industry leading
returns
• High quality PGM acquisitions at the bottom of
the PGM price cycle
Value accretive
• Innovatively financed strategic growth enhancing value
and high quality
PGM acquisitions • Implementation of operating model and realisation of
synergies yielding superior value ahead of schedule
• Stillwater transaction transformative, creating a globally
competitive and unique SA mining company
• Unique commodity mix and global geographic presence
A major, global • Lonmin Transaction, if completed, will conclude 4th step in
precious metal PGM strategy
company • Adds commercially attractive smelting and refining as well
as providing significant optionality to PGM prices
2018² Market • Well positioned for further success
cap: ~R35 billion
¹ 11 February 2013, Source: IRESS
² Ave YTD 2018, Source: IRESS
Delivering growth and value while diversifying risk at the bottom of the cycle 5
www.sibanyestillwater.com
We have a proven operating model
2017 SA gold industry unit costs¹
3 400
3 147
3 200
3 000
R/tonne
2 800 2 730
2 600
2 400
2 201
2 200 2 081
2 000
Anglogold Gold Fields (South Harmony Sibanye-Stillwater
Deep)
2017 SA gold industry all-in sustaining cost¹
1 550 1 521
1 500
1 450
1 400
US$/oz
1 350
1 300 1 259
1 250
1 200 1 177
1 143
1 150
1 100
Gold Fields (South Anglogold Harmony Sibanye-Stillwater
Deep)
¹ Source: Company reports for 6 months ended 30 June 2017, except Harmony for 12 months ended 30 June 2017
Sibanye-Stillwater is the lowest cost gold producer in South Africa 6
www.sibanyestillwater.com
Completing 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
• Annual synergies of R1bn by 2018, 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.comWell-timed acquisitions at low in the price cycle
100
80
Relative price performance (%)
60
Stillwater Transaction
announced
40
Discussions with
Stillwater begin
20
0
-20 Gold $/oz Palladium $/oz Platinum $/oz
Source: Inet BFA
Fundamental outlook for palladium remains robust 8
www.sibanyestillwater.com…providing valuable diversification
1200
24 000 Ave 2018 YTD:
US$1,072/2Eoz
1100
22 000
Ave H2 2017:
US$946/2Eoz 1000
20 000
Ave H1 2017: 900
18 000 US$830/2Eoz
R/oz
US$/oz
800
16 000 Ave H2 2017:
R16,331/oz Ave 2018 YTD:
Ave H1 2017:
R16,331/oz R16,287/oz
700
14 000 Ave H1 2017:
R12,063/4Eoz
12 000 Ave H2 2017: Ave 2018 YTD: 600
R12,063/4Eoz R13,265/4Eoz
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 fully 9
www.sibanyestillwater.comThe 4th PGM step – offer for Lonmin
• Sibanye-Stillwater has made an offer
to acquire 100% of Lonmin 1. Northam
2. Anglo America
• Value accretive to Sibanye-Stillwater Platinum
2 1
shareholders given relevant rating 3. Siyanda Resources
4. Sedibelo Platinum
• Neutral to Sibanye-Stillwater debt 3 5. Wesizwe Platinum
6. Royal Bafokeng
profile – will not add debt to the Platinum
balance sheet 4 7. Impala Platinum
2 8. Eastern Platinum
• Anticipated to be NAV accretive on 9. Glencore Xstrata
completion and earnings and cash Sibanye-Stillwater
6
flow accretive on a per share basis Lonmin
5
from 2021 6
6
• R1.5 billion in annualised pre-tax cost Western Bushveld
Joint Venture 7
and operational synergies* expected 9 Sable project
by 2021 7
8 9
• Should Sibanye-Stillwater shareholders Pandora Joint
not approve the transaction, Venture
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 10
www.sibanyestillwater.com…unique commodity and regional diversification
Revenue by geography (%) Production by metal (%)
SA Lonmin (SA) US Gold Lonmin (PGMs) PGMs
23% 23% 28%
25% 42%
56% 54%
19% 77% 58% 18%
100 77%
%
2017F¹ 2021F² 2016A 2017F 2021F
2016A
Copper
Source: Company Guidance
Notes:
• Year 2021 Includes revenues and PGM production from Lonmin
• ¹ 2017 forecast assumptions: R/US$13.67 exchange rate, Pt:US$997/oz, Pd: US$829/oz, Rhodium: US$ 949/oz, Gold: US$1 200/oz, Ruthenium: US$/oz 42/oz; Iridium: US$ 666/oz,
Cobalt US$26/lb, Nickel US$5/lb, Copper US$ 3 /lb; Uranium US$22/lb; Chrome (Met) US$ 180 /t, Chrome (chemical) US$250/t
• ² 2021 forecast assumptions: R/US$15.15 exchange rate, Pt:US$1249/oz, Pd: US$917/oz, Rhodium: US$ 1220/oz, Gold: US$1 216/oz, Ruthenium: US$/oz 39/oz; Iridium: US$ 548/oz,
Cobalt US$20/lb, Nickel US$7/lb, Copper US$ 3 /lb; Uranium US$42/lb; Chrome (Met) US$ 180 /t, Chrome (chemical) US$250/t
SA remains a key earnings driver but geographic diversification reduces risk 11
www.sibanyestillwater.comMaking us a leading precious metals company
Sibanye-Stillwater global PGM ranking Sibanye-Stillwater global gold ranking
2016A platinum 2016A palladium 2016A gold and gold
production (moz) production (moz) equivalents
production (moz)
Barrick 5.5
Amplats¹ 2.0 Norilsk² 2.6
Newmont 5.2
Sibanye-Stillwater Sibanye-Stillwater Sibanye-Stillwater
3,4,5
1.6 1.3 3.8
(post-transaction)³ (post-transaction) ³ (post-transaction)
AngloGold 3.6
Impala 1.4 Amplats¹ 1.3
Gold Corp 2.9
Lonmin 0.7 Impala 0.9 Kinross 2.8
Newcrest 2.4
Norilsk² 0.6 Lonmin 0.3
Gold Fields 2.1
Northam 0.3 Northam 0.1 Polyus 2.0
Agnico-Eagle 1.7
RBPlats 0.2 RBPlats 0.1
Sibanye-Stillwater 1.5
Source: Company filings Lonmin’s contribution to Sibanye-Stillwater
Note:
1. Exclusive of Rustenburg Mine
2. Includes PGM by-products only
3. Rustenburg + Aquarius + Stillwater + Lonmin. Rustenburg, Kroondal, Platinum Mile and Mimosa as of FY16, per public disclosure. Figures include Blitz at full ramp-up
4. Includes Sibanye –Stillwater gold equivalents
5. Lonmin’s 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 12
www.sibanyestillwater.comRelative peer share price performance
South African precious metal peers
500%
400%
300%
200%
99%
100%
26%
0% (22%)
(36%)
(47%)
(65%)
(78%)
-100% (98%)
2013 2014 2015 2016 2017 2018
Sibanye-Stillwater AngloGold Gold Fields
Harmony AngloPlats Impala
Northam RBPlat Lonmin
Source: Bloomberg
Note: Share prices have been adjusted for spin-offs, stock splits/consolidations, stock dividend/bonus, and rights offerings/entitlements
Outperforming and rerating against peers through period of significant growth 13
www.sibanyestillwater.comRelative peer market capitalisation
Selected South African mining company market capitalisations
600%
500%
400%
300%
224%
200%
100%
67%
0% -22%
-100%
2013 2014 2015 2016 2017 2018
Sibanye-Stillwater AngloGold Gold Fields Harmony Anglo Plat Impala Northam RBPLat
Source: Inet BFA
* Cash dividends declared from listing in 2013 to end 2016, source: company
Sibanye-Stillwater has significantly grown its market value while returning to shareholders, R4bn* in dividends 14
www.sibanyestillwater.comWay forward
and conclusion
15…and aligned with 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
Lonmin acquisition consistent with our strategy 16
www.sibanyestillwater.comA unique value proposition
Largest Top 3 Stillwater – Leading
GLOBAL only sizeable
A leading precious producer primary GLOBAL
PRODUCER of
metal company of South platinum and producer of PGM
African gold Palladium
palladium recycler
Copper
Delivery of superior Operational Gold mine life Proudly South The PURPOSE
value to all excellence >15 years African while of our mining
and innovative
stakeholders drives growth to create
PGM mine life competing on is to IMPROVE
strategy sustainability > 30 years a global stage LIVES
Source: Company information 17
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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