A unique precious metals company - European road show, April 2018 - Swiss Resource Capital
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A unique precious metals company European road show, 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
Corporate overview
Shares in issue 2,178,647,129* Major shareholders*
Shares in ADR form 583,520,236*(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$334 million) available
facilities
Black Rock Inc 4.34%
Reserves2 Gold Reserves of 25.7moz
at 31 December 4E SA PGM Reserves of 22.4moz
2017 2E US PGM Reserves of 21.9moz Shareholder geographic distribution*
Uranium Reserves of 96.1mlb China/ Gold One
Contact details James Wellsted
SVP: Investor Relations South Africa
29%
Tel: +27 (0)10 493 6923 /+27(0)83 453 4014 38%
ir@sibanyestillwater.com USA
Registered office: Constantia Office Park,
Bridgeview House, Building number 11, United Kingdom
Ground Floor, Corner 14th Avenue &
Potgieter Road, South Africa 19% 8% Europe excl UK
5%
*Shares in issue as at 14 March 2018, ADRs as at 23 February 2018
¹
Market cap as at 5 April 2018, sources: JSE, Factset Others
2 Refer to the Integrated Report or Mineral Resources and Reserves statement, issued on 29 March
1%
2018 at https://www.sibanyestillwater.com/investors/financial-reporting/annual-reports/2017
3 Converted using exchange rate on 31 December 2017 of US$/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
*Shareholder information as at end February 2018
# As per Van Eck’s declaration on 23 March 2018
A leading global precious metal company 3
www.sibanyestillwater.com
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
Location of SA region assets
ZIMBABWE
Mimosa
Rustenburg operations
Platinum Mile
Kroondal
JOHANNESBURG
South Rand project
(Burnstone)
West Wits operations
and projects:
• Driefontein
• Kloof
• Cooke surface
Key • WRTRP
Bushveld Complex SOUTH AFRICA Free State operations and projects
Great Dyke • Beatrix
• Beisa project
Witwatersrand Basin
• Bloemhoek project
Platinum operations • De Bron Merriespruit project
Gold operations • Hakkies project
• Robijn project
5
www.sibanyestillwater.com
Location of US region assets
Marathon project
(PGM-copper)
Stillwater mine
East Boulder mine
Columbus Metallurgical
complex
Altar project
(Copper-gold)
6
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
industry cost
metals mining company by: 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 7
www.sibanyestillwater.com
We have significantly transformed and grown
• 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
• Significant PGM acquisitions at the bottom of
the PGM price cycle
Value accretive • Innovatively financed strategic growth enhancing
and high quality value
PGM acquisitions
• Implementation of operating model and realisation
of consolidation synergies yielding superior value
ahead of schedule
• Stillwater transaction transformative, creating a
globally competitive and unique SA mining
A major, global company
precious metal
• Unique commodity mix and global geographic
company presence
2018² Market • Proposed Lonmin Transaction concludes 4th step in
PGM strategy
cap: ~R25 billion • Will secure entire beneficiation chain in SA as well
as providing significant optionality to PGM prices
¹
11
February
2013,
Source:
IRESS
• Well positioned for further success
² 5
April
2018,
source:
JSE
Delivering growth and value while diversifying risk at the bottom of the cycle 8
www.sibanyestillwater.com
Becoming 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
2.2 Amplats 1,6 AngloGold 3,8
(post-transaction)
2, 3, 4
Sibanye-Stillwater
2 3.7
Sibanye-Stillwater (post-transaction)
Impala 1,5 1.2
(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 9
www.sibanyestillwater.com
We have a proven operating model
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
2 224
2 300 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 10
www.sibanyestillwater.comPrecious metals strategy
• PGM industry in SA shares many operational similarities with gold mining
• Opportunity to leverage Sibanye’s successful operating model and hard rock,
tabular, labour intensive mining competency to realise further value
• Long-term PGM supply and demand fundamentals remain robust
• Low PGM prices and escalating costs (labour, utilities) had put balance sheets
under strain
• The SA PGM sector offered a number of consolidation opportunities
• Innovative approach to structuring transactions and projects
Platinum a logical first step 11
www.sibanyestillwater.comPalladium market outlook
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
– Palladium excess inventories already 0
600
-500
500
closing in on normalised levels -1.000
-1.500 400
300
– Gasoline expected to maintain a >70% -2.000
-2.500 200
2007A 2012A 2017E 2022E
market share through to 2025, supporting
Surplus / Deficit (koz) Ex-ETF market balance
demand Pall Price (US $ / oz) (rhs)
– Long term producer supply CAGR of
1.000
-1.2% significantly lags a net-demand 800
CAGR of 2.0% 600
400
– Over the long term substitution is 200
anticipated to provide more balance to 0
-200
the overall PGM basket
-400
-600
1992A 1995A 1998A 2001A 2004A 2007A 2010A 2013A 2016A 2019E 2022E 2025E
Platinum Palladium Rhodium
Source: Internal demand and supply model based on WPIC information, broker consensus and other sources
Palladium outperformance set to continue 12
www.sibanyestillwater.comPlatinum: Short term headwinds
• Despite ongoing diesel and EV concerns, 1.000 1.800
800
we believe platinum’s fundamentals 600
1.700
remain robust 400
1.600
200 1.500
– Limited primary and secondary supply 0 1.400
growth anticipated globally -200 1.300
– Demand remains well supported, even in -400
1.200
diesel markets -600
1.100
-800
• Decline in diesel penetration rates and -1.000 1.000
2007A 2012A 2017E 2022E
growth in EVs and hybrids already
factored in Surplus / (Deficit) Ex-ETF market balance Pt Price (US $ / oz) (rhs)
– Diesel’s global market share to decline to
14% by 2025, from 19% 140 25%
Millionen
! Light passenger diesel units expected 120
to remain relatively constant at c.18m 20%
100
units per annum 15%
80
– EV’s and hybrids to grow at a CAGR* of
60
25% through to 2020 (c.11m units) 10%
40
• Platinum likely to be mostly balanced for 5%
20
the remainder of this decade, thereafter
0 0%
reverting to material deficits as primary 2010A 2013A 2016A 2019E 2022E 2025E
production from SA contracts Diesel Gasoline
Hybrid (Mild and Full) PEV+PHEV
Diesel market share (%, rhs)
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 13
www.sibanyestillwater.comImplementing 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 14
www.sibanyestillwater.com2017 – a transformative year strategically
• Concluded acquisition of Stillwater in May 2017
• Successfully refinanced US$2.65 billion bridge loan
– Oversubscribed US$1 billion rights issue
– Competitively priced US$1.05 billion Eurobond (two tranches)
– US$450 million flexible, low cost convertible instrument
• Proposed sale of certain WRTRP assets to DRDGold
– Realises immediate value and ensures continued exposure to the WRTRP
• Proposed acquisition of Lonmin
– Downstream processing business with a replacement value significantly higher than
acquisition cost
– Significant synergies between Sibanye-Stillwater and Lonmin’s contiguous PGM
assets
– Sizeable PGM Resources with potential upside from advanced brownfield projects
and greenfield project pipeline
Significant, value accretive transactions at an attractive point in the commodity price cycle 15
www.sibanyestillwater.comClear benefits from recent diversification
1200
US$/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: US 900
18.000 $830/2Eoz
Ave 2018 YTD:
R/oz
US$/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$/2Eoz (RHS)
Source: Inet BFA
*2E and 4E basket prices are based on Sibanye-Stillwater SA PGM and US PGM prill split
Dollar metal prices gains partially offset by rand strength – Stillwater basket price benefiting 16
www.sibanyestillwater.comLarge, low cost South African PGM acquisitions Source: Various companies’ disclosures Note: Bubble size represents PGM Resources A sizeable resource base at a compelling price 17 www.sibanyestillwater.com
2017 – a transformative year operationally
Adjusted
Ebitda*
contribu3on
(H2
2017)
• Integration of Rustenburg exceeding expectations
– Over R1 billion annual synergies realised over 14 months
US
PGM,
30%
– Operational results continue to improve – profitability
SA
Gold,
51%
restored
SA
PGM,
19%
– Sustainable move into lower half of industry cost curve
• Smooth integration of Stillwater
SA
Gold
SA
PGM
US
PGM
– Solid operational performance sustained
Produc3on
contribu3on
(H2
2017)
– Blitz project commissioned 3 months ahead of schedule
– Record recycling rates achieved US
PGM,
18%
• Gold operations restructured for sustainability SA
Gold,
44%
– Cooke closed, Beatrix West on watch list SA
PGM,
38%
– Expected R15,000/kg (U$S36/oz) (in 2017 terms) reduction in
total SA gold operation’s AISC in 2018
SA
Gold
SA
PGM
US
PGM
*Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) is based on the formula included in the facility agreements for compliance with the debt covenant
formula. Full detail is contained in Sibanye-Stillwater’s 2016 Annual Financial Report
Transformational acquisitions balancing and de-risking the business 18
www.sibanyestillwater.comAquarius 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
reflect the Sibanye-Stillwater operating model 200
Resource
optimisation 246 456
• Consolidation of duplicated production and
support functions 237
• Improved procurement and supply chain
management 137
Sourcing and stores
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 19
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
Booysendal
Mototolo
East Boulder
Stillwater
Two rivers
Zimplats
Kroondal
Union
Marula
Modikwa
Amandelbult
Mogalakwena
Lonmin
Mimosa
Rustenburg
Impala
Boschkoppie
Unki
Zondereinde
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
East Boulder
Booysendal
Stillwater
Two rivers
Mototolo
Kroondal
Zimplats
Rustenburg
Mogalakwena
Modikwa
Mimosa
Union
Lonmin
Amandelbult
Unki
Impala
Boschkoppie
Zondereinde
Marula
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 20
www.sibanyestillwater.comStillwater acquisition
• High grade, low-cost PGM producer
• Favourable geographic location
• Steady state operations (~550,000 2Eoz)
with more than 20 year mine life Headquarters
(Littleton, CO)
• Near term growth from Blitz project
– first production in Q4 2017
Marathon
Stillwater Mine
– full run rate of ~300,000 2Eoz by (Montana)
(Ontario, Canada)
late 2021/early 2022
East Boulder Mine Blitz Development
(Montana)
• Established large, low risk, recycling (Montana)
business Smelter & Base
Metals Refinery
• Acquired at a favourable time of the (Montana)
palladium price cycle Stillwater Recycling Altar
(Montana) (San Juan Province,
• Further growth potential in lower East Argentina)
Boulder and lower Blitz
World-class assets, stable jurisdiction, high-grade PGM operations 21
www.sibanyestillwater.comStillwater – a well-timed acquisition
100
76%
80 42%
Relative price performance (%)
Stillwater Transaction
concluded
60
Stillwater Transaction
announced
34%
40
Discussions with
Stillwater begin
20
0
-20
Gold (LHS) Palladium (RHS) Platinum (LHS)
Source: Inet BFA
Fundamental outlook for palladium remains robust 22
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
OperaMons
producMon
and
cost
profile
1.100
900.000
Ave
spot
2E
basket
price
YTD
~
US$1,019/2Eoz
1.000
800.000
19%
900
700.000
34%
800
50%
US$/2Eoz
600.000
2Eoz
700
500.000
600
400.000
500
400
300.000
300
200.000
2018
2019
2020
2021
2022
2023
2024
2025
2026
2E
producMon
(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 23
www.sibanyestillwater.comStillwater offers significant growth potential
• 2E PGM Mineral Reserves of 21.9Moz and Mineral Resources of 80.5Moz1
• Lower East Boulder and lower Blitz projects offer additional production growth
potential
• 12.2 kilometres of undeveloped mineralised section between Stillwater and
East Boulder mines
191
Sweet Grass Yellowstone 87
72
89
Big Timber
Yello
Metallurgical Billings
wsto
90 298
ne R
iver Complex,
Recycling Facilities
Columbus Laurel
Livingston McLeod
East
E. Bou
iver
a ter R
89 Stillw
Boulder
Absarokee
lder R
420
NYE
310
Fishtail 212
Mine
iver
419 Big Horn
Carbon
Park
Stillwater
Stillwater Mine 78
Bear Tooth Mo
untain Range Mine Red Lodge
12.2km
Source: Stillwater Mining
1. At 31 December 2017
Quality reserves with further upside 24
www.sibanyestillwater.comThe proposed Lonmin acquisition
• Sibanye-Stillwater has made an all
equity offer to acquire 100% of Lonmin 1. Northam
2. Anglo America
• Value accretive to Sibanye-Stillwater Platinum
2 1
shareholders 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
• R1.5 billion in annualised pre-tax cost 9. Glencore Xstrata
and operational synergies* expected Sibanye-Stillwater
6
by 2021 Lonmin
5
• Should Sibanye-Stillwater shareholders 6
6
not approve the transaction, Western Bushveld
Joint Venture 7
agreement in principle to discuss asset 9 Sable project
acquisition 7
8 1
Pandora Joint
Venture
*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 25
www.sibanyestillwater.comLonmin production and capex profile
• Significant capital investment required to maintain flat production profile
– Substantial capital hump
• Placing of generation one shafts on care and maintenance, which are coming
to the end of their lives, results in an expected retrenchment of approximately
12 6001 employees over the next 3 years
Lonmin LoM - 4E PGM ounces in concentrate Lonmin LoM - Total capital by category (real terms)
1.200.000 4.000
1.000.000 3.500
3.000
4E PGM ounces
800.000
R
million
2.500
600.000 2.000
400.000 1.500
1.000
200.000
500
0 0
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
K3 Saffy Rowland E3 Total Mining Capex Total Conc. Capex
4B K4 W1 E1
E2 Hossy Newman BTT Total S&R Capex Total Other Capex
Source: Lonmin’s company information
Note:
1. Numbers include contractors
Challenging financial requirements under current economic conditions 26
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 27
www.sibanyestillwater.comProcessing considerations
4E
PGM
oz
by
Source
• Ability to treat Rustenburg
2000
000
concentrate in Lonmin
4E
oz
in
conc
/
4E
oz
produced
processing facilities from 2021
1500
000
• Benefit of treating own
1000
000
concentrate through owned
facilities
500
000
• Optimising capacity positively
-‐
impacts processing unit costs
2018
2019
2021
2023
2025
2026
2027
2028
2029
2031
2033
2035
2036
2037
2020
2022
2024
2030
2032
2034
Lonmin
4E
contained
in
conc
Sibanye-‐SMllwater
4E
Produced
• Allows for better mine planning
flexibility enhancing profitable Concentrate
by
Source
mining mix
600
000
500
000
Tonnes
of
Concentrate
• Potential to build DC ARC
furnace (approximate capital
400
000
300
000
cost of R1bn) to cater for total
Rustenburg concentrate
200
000
100
000
– Other potential solutions also
being investigated
-‐
-‐100
000
2018
2019
2021
2023
2025
2026
2027
2028
2029
2031
2033
2035
2036
2037
2020
2022
2024
2030
2032
2034
Sibanye-‐SMllwater
Concentrate
tonnes
Lonmin
Concentrate
produced
tonnes
1 For
further information in relation to the expected synergies, please refer to page 17, 58 to 60 of the offer announcement dated 14 December 2017 available on https://
www.sibanyestillwater.com/investors/transactions/lonmin
Average processing synergies from 2021 to 2032 of approximately R550m per annum1 28
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 29
www.sibanyestillwater.comProduction profile for the next 20 years
Expected gold and PGM life of mine production (Next 20 Years)
Gold Operations, Gold oz
5.000.000
SA PGM operations, 4E PMG oz
4.500.000 US PGM operations (US), 2E PGM oz
Recycling (US), 2E PGM oz
4.000.000
Lonmin Operations, 4E PGM oz
3.500.000
Gold Fields Plan, Gold oz
3.000.000
Ounces
2.500.000
2.000.000
1.500.000
1.000.000
500.000
0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037
Source: Company information
Note: Profile is based on reserves declared as at 31 December 2017 and excludes the Burnstone project and the West Rand Tailings Retreatment Project
Ample mine life to sustain the Group in the long-term 30
www.sibanyestillwater.comLiquidity position robust – US$ RCF refinanced
• US$350 million RCF maturing in August 2018 refinanced and increased to US
$600 million on improved terms
• 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
R6
651
R5
451
R
0
(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
FaciliMes
ZAR
RCF
(R6bn)
New
USD
RCF
($600m)
2022
Bonds
($500m)
2023
ConverMble
($450m)
2025
Bonds
($550m)
*Balances as at 31 December 2017 adjusted for the New USD RCF
31
www.sibanyestillwater.comOUTLOOK
322018 Guidance
Production All-in sustaining costs Total capital
38,500 - 40,000 kg R475,000 - 495,000/kg R3,500 million
SA Gold operations¹
(1.24 - 1.29 Moz) (US$ 1,130 - 1,180/oz) (US$268 million)
R10,750 - 11,250/4Eoz (US R1,500 million
SA PGM operations¹ 1,100 - 1,150 koz (4E PGMs) $825 - 860/4Eoz) (US$115 million)
580 – 610 koz (2E PGMs
US PGM operations US$650 - 690/oz ~US$220 million
mine production)
Source: Company forecasts
¹ Estimates are converted at an exchange rate of R13.05/US$
Positive operational outlook 33
www.sibanyestillwater.comSouth 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 34 www.sibanyestillwater.com
A 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 PGM mine life competing on is to IMPROVE
growth to create
strategy sustainability > 30 years a global stage LIVES
Source: Company information 35
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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