Sibanye Stillwater: Mixed results at gold and nickel operations
Gold production from the SA gold operations of 10,703kg (344,109oz) for H1 2024 was 17% lower than for H1 2023 with AISC of R1,251k/kg (US$2,078/oz), 18% higher, primarily due to cessation of production from Kloof 4 shaft during 2023 but with some costs still being incurred during Q1 2024 due to the phased closure process. Adjusted EBITDA from the SA gold operations of R2.2 billion (US$117 million) was 7% lower than for H1 2023, but 92% higher than for H2 2023, with comparisons strongly influenced by the closure of Kloof 4 shaft. Free cash flow improved by R1.2 billion compared with H2 2023.
The operating performance of the Sandouville refinery was significantly improved as a result of improved circuit availability and production stability following repairs to the cathode units in the electro winning circuit in mid-2023 and other improvements to the plant.
Nickel production of 4,270tNi was 22% higher than for H1 2023, with nickel equivalent sustaining cost declining by 37% to US$23,684/tNi (R443,366/tNi), primarily due to reduced feedstock purchase costs (lower nickel price), and lower reagent and overhead costs. Due to these cost and volume improvements and inventory movement benefits during Q1 2024, the adjusted EBITDA loss for H1 2024 of US$15 million (R280 million) was 57% lower than for H1 2023.
The Century zinc tailings retreatment operation in Queensland Australia was disrupted by adverse weather in Q1 2024, and cash flows were impacted by scheduled maintenance on trans-shipment vessels during H1 2024. With production normalising from Q2 2024 and sales of stockpiled concentrate in July and August, cashflow should be strong for the remainder of the year. Although zinc metal produced (payable) of 42ktZn and AISC of US$2,228/tZn were towards the lower end of the H1 contribution to 2024 guidance, with continued strong operations annual guidance should be achieved.
This, coupled with the increase in the zinc price and significantly lower annual benchmark treatment charges (US$165/tonne in 2024 vs US$274/tonne in 2023), has improved the outlook and the Century operations are expected to contribute positively to Group adjusted EBITDA.
