Sibanye Stillwater reports on South African gold operations

Gold production from the SA gold operations (excluding DRDGOLD) of 4,263kg (137,059oz) for Q3 2024 was 12% lower than for Q3 2023, primarily due to a 43% decrease in production from the Kloof operation partially driven by the closure of Kloof 4 Shaft. AISC for the SA gold operations (excluding DRDGOLD) of R1,414,450/kg (US$2,450/oz) was 9% higher than for Q3 2023, due to lower gold production and a 17% reduction in gold sold.

The financial leverage of the SA gold operations to higher gold prices is evident in the nearly three fold increase in adjusted EBITDA from R344 million (US$19 million) for Q3 2023 to R1,347 million (US$75 million) for Q3 2024, driven by a 24% increase in the average gold price to R1,426,290/kg (US$2,470/oz).

The gold price has continued to increase during Q4 2024 and at current spot of around R1,565,000/kg (US$2,745/oz) both the Driefontein and Beatrix operations are expected to generate substantial cashflow, with the benefits compounding as unit costs decline with increasing production from these operations.

Capital expenditure for Q3 2024 (excluding DRDGOLD) of R962 million (US$54 million), decreased by 27% compared to Q3 2023. This decline is mainly due to a 91% reduction in project capital resulting from terminating the Kloof 4 deepening project, the closure of Kloof 4, and suspension of the Burnstone project.

Sustaining capital also decreased by 29% to R182 million (US$10 million), primarily due to the closure of Kloof 4 shaft. ORD however rose by 10% to R747 million (US$42 million), reflecting increased ORD at Driefontein 5 shaft, where additional production is forecast for 2025. Capital expenditure from the managed SA gold operations for Q4 2024 is expected to be in line with Q4 2023.

At the recent H1 2024 results we highlighted the improving production trends from the Driefontein operation during Q2 2024, and that a significantly improved operational performance was expected during H2 2024. For Q3 2024 throughput increased by 23% (resulting in unit cost (R/t) decreasing by 13%) and, together with a 5% improvement in the underground yield, underground production increased by 29% to 1,869kg (60,090oz) with production from Driefontein 5 shaft (affected by an underground fire during 2023), 251% higher. Consequently AISC decreased by 11% to R1,298,327/kg (US$2,248/oz). well below the average gold price for the period of R1,408,540/kg (US$2,439/oz) due to the increase in production.

Production from the Beatrix operation improved steadily during Q3 2024 as crews affected by the back break incidents which impacted H1 2024, resumed production with planned production rates exceeded during October 2024. Production for Q3 2024 of 890kg (28,614oz) was 5% lower than for the comparable period in 2023, with AISC of R1,384,437/kg (US$2,398/oz), 3% higher.

Production rates were significantly improved by the end of Q3 2024 and, if maintained, should result in significantly lower AISC from the Beatrix operations for Q4 2024 and 2025.

Underground production of 1,079kg (34,691oz) from the Kloof operation for Q3 2024 was 43% or 803kg (25,817oz) lower than Q3 2023 with AISC R1,614,094/oz (US$2,795/oz) remaining elevated.

The Kloof operation continues to experience significant operational challenges which have constrained production, including seismicity that affected high grade mining panels mainly at the Kloof main shaft.

Production at 7 shaft was impacted by an incident in the shaft which stopped production for two months, resulting in an estimated 80kg less gold production during Q3 2024. The focus at Kloof during Q4 2024 will be on finalising plans to create additional flexibility by developing access to secondary reefs.

DRDGOLD delivered a 3% increase in gold production, to 1,319kg (42,407oz) for Q3 2024, primarily driven by a 16% increase in throughput, despite a decrease in yield. Gold sales increased by 2% to 1,289kg (41,442oz).

Unit cost per tonne also decreased by 7% to R184/t (US$10/t), attributed to higher throughput and a reduction in more expensive mechanically reclaimed sites (clean-up sites), despite the higher winter electricity tariffs.

AISC dropped to R931,730/kg (US$1,614/oz), reflecting lower cash operating cost and sustaining capital expenditures. The completion and upcoming commissioning of the solar power plant and battery energy storage system (BESS) are expected to reduce costs further in Q4 2024.