Sibanye Stillwater gold: Ore pass blockages impacted production
Gold production from the SA gold operations (excluding DRDGOLD) of 3,297kg (106,001oz) for Q1 2025 was 15% lower than for Q1 2024.
Ore pass blockages at the Kloof main shaft severely impacted logistics and ventilation, constraining production, with production from Driefontein 5 impacted by a pump station fire and lower grades at Driefontein 1 shaft. Production from the SA gold operations (including DRDGOLD) for Q1 2025 of 4,389kg (141,110oz) was 14% lower than for Q1 2024.
AISC (excluding DRDGOLD) of R1,541,202/kg (US$2,594/oz) was 16% higher than for Q1 2024, primarily due to 22% lower gold sold year-on- year with gold sold 69kg (2,218 oz) lower than gold produced for Q1 2025 due to normal timing differences. AISC (including DRDGOLD) for Q1 2025 of R1,421,028/kg (US$2,392/oz) was 15% higher year-on-year.
Adjusted EBITDA from the SA gold operations (including DRDGOLD) of R1.8 billion (US$98 million) for Q1 2025, was 178% higher than adjusted EBITDA of R652 million (US$35 million) for Q1 2024. The substantial financial leverage of the managed SA gold operations (excluding DRDGOLD) to the gold price, is evident from the 6x increase in adjusted EBITDA to R1.1 billion (US$57 million) for Q1 2025 from R163 million (US$9 million) for Q1 2024, compared with the 34% increase in the average gold price for Q1 2025 to R1,680,607/kg (US$2,829/oz), and the adjusted EBITDA margin increasing to 19% for Q1 2025 from 3% for Q1 2024.
For Q2 2025 to date, the average spot gold price of R1,948,803/kg is 16% higher than the average price received for Q1 2025, which if sustained, implies increased profitability from the SA gold operations.
Capital expenditure for Q1 2025 (excluding DRDGOLD) of R769 million (US$42 million) was 22% lower than for Q1 2024 with project capital decreasing from R213 million (US$11 million) for Q1 2024 to zero for Q1 2025 as a result of the Burnstone project being placed on care and maintenance in H2 2024. ORD expenditure and sustaining capital of R664 million (US$36 million) and R105 million (US$6 million) respectively were in line with the prior period reflecting ongoing expenditure to maintain flexibility and optimise the remaining mine lives.
Production from the Driefontein operation declined by 12% to 1,378 kg (44,304 oz) due to a fire at the Driefontein 5 shaft pump chamber, which disrupted production in January 2025 with normal working conditions re-established in the second week of February. During March 2025 stoping crews were negatively impacted at 5 shaft, further delaying the post fire ramp-up, by a section 54 order that was issued following a fatal incident on 12 March 2025. Driefontein 5 shaft is expected to increase production gradually over the remainder of the year. Production at Driefontein 1 shaft was impacted by lower grades associated with mining through lower grade slope facies compared with proportionally higher grade terrace facies for Q1 2024. Production from the Driefontein operation is expected to stabilise over the course of 2025.
AISC of R1,482,301/kg (US$2,495/oz) was 15% higher year-on-year, primarily as a result of lower production and 19% less gold sold due to aforementioned operational challenges. Total operating costs from the Driefontein operation increased by only 1% to R1.6 billion (US$89 million) well below annual inflationary cost increases. ORD increased by 2% to R405 million (US$22 million) with sustaining capital expenditure decreasing by 23% to R50 million (US$3 million).
The Kloof operation is undergoing a planned transition to extend its LOM, by accessing secondary reef horizons, which were historically ignored due to Kloof’s extremely high grade primary Ventersdorp contact reef (VCR) and Carbon leader (CL) reefs. During this transition,
AISC is forecast to be higher than LOM averages due to elevated ORD required to access and develop necessary flexibility for sustainable production from the secondary reefs.
Underground production from the Kloof operation for Q1 2025 of 721kg (23,181oz) was 25% or 240kg (7,716oz) lower year-on-year. This was primarily due to material blocking the primary ore pass system at the Kloof 1 shaft as a result of ore pass scaling, which impacted ventilation and resulted in logistical constraints, resulting in accumulations of mined material underground . As a result, production from Kloof 1 shaft was 38% or 226kg (7,266oz) lower than for Q1 2024. This was compounded by section 54 order following the fatal incident in January 2025 restricting operations with Kloof 1 shaft initially only being able to deploy 17 of 54 crews. By the end of Q1 2025, 49/54 crews were deployed with production ramping up during Q1 2025. Production from surface sources of 101kg (3,247oz), which is now being processed at the Ezulwini plant, was 42% lower year-on-year due to depletion of surface rock dumps, in line with plan.
AISC of R2,012,712/kg (US$3,388/oz) for Q1 2025 was 27% higher than for Q1 2024 due to 38% less gold sold and 114kg (3,665oz) less gold sold than produced due to timing differences. Total operating cost decreased by R100 million (US$4 million) year-on-year, following the full closure of Kloof 4 shaft and the K2 plant in mid 2024 and the current ramp down of production from Kloof 7 shaft which will be closed at the end of 2025. For Q1 2025, Underground production from the Beatrix operation for Q1 2025 of 885kg (28,453oz) was 2% lower than for Q1 2024 with tons milled 7% lower partially offset by the yield which was 5% higher. Improved mining quality by maintaining stoping widths and stricter control of dilution has resulted in the yield improving. AISC for Q1 2025 increased by 12% year-on-year to R1,241,150/kg (US$2,089/oz) primarily due to 10% lower gold sold compared to the prior period with ORD declining by 18% to R51 million (US$3 million) in line with the life-of-mine plan. Sustaining capital increased from R3 million (US$0.2 million) to R8 million (US$0.4 million).
Gold production from the Cooke operation for Q1 2025 decreased by 26% to 212kg (6,816oz) due to mining of a lower grade zone and lower purchases of higher grade third party material. AISC increased by 18% to R1,600,000/kg (US$2,693/oz) compared to Q1 2024. This was primarily as a result of lower production and higher aggregate purchase costs of third party gold bearing material linked to the 33% higher gold price achieved.
DRDGOLD’s production for Q1 2025 of 1,092kg (35,109oz), was 11% lower than for Q1 2024 as a result of a 22% decrease in yield, partially offset by a 13% increase in tonnes milled. This was consistent with the planned transition at ERGO to mainly higher volume, lower grade sites, following the depletion of remnant higher-grade sites during the previous year. AISC for Q1 2025 increased by 18% to R1,071,235/kg (US$1,803/oz), primarily due to the 9% decrease in gold sold. Sustaining capital of R62 million (US$3 million) was in line with Q1 2024, mostly for the construction of water pipeline infrastructure from Ergo’s central water facility to the 4A8 pump station at the legacy City Deep site.
Project capital was 20% higher in Q1 2025 at R387 million (US$21 million) mainly on the construction of FWGR’s new regional tailings storage facility (RTSF) and the pump station and pipeline infrastructure forming part of it, and Phase II of FWGR’s Driefontein 2 Plant, designed to double its throughput capacity to 1.2Mtpm by 2028.
