Sibanye-Stillwater: SA Q1 PGM operations perform strongly

The SA PGM operations continued to perform strongly, producing 421,540 4Eoz in Q1 2022 (including third party purchase of concentrate (PoC)), 5% lower than for Q1 2021. Underground production of 370,272 4Eoz was 5% lower year-on-year but partly offset by 15% higher

surface production of 40,576 4Eoz.

4E PGM production from the SA PGM operations (excluding PoC) of 410,848 4Eoz, was 3% lower year-on-year, primarily due to a slower than planned return to work at the Marikana and Rustenburg operations after the Christmas break.

Cost management excellence, despite inflationary pressures was again evident from the 6% reduction in AISC compared to Q1 2021 (including third party PoC purchases) to R18,600/4Eoz (US$1,222/4Eoz), primarily due to reduced third party PoC material purchases.

AISC (excluding PoC) for Q1 2022 was only 1% higher year-on-year at R17,886/4Eoz (US$1,175/4Eoz), despite marginally lower production. This consistently good cost management from the SA PGM operations was maintained despite the impact of inflationary pressures affecting the mining industry globally, partially offset by higher credits received from the by- products sold as result of increased metal prices and is in stark contrast to the double-digit cost increases reported by PGM industry peers during the past 12 months.

The Marikana operation continued to deliver consistently good operating results. Production of 169,102 4Eoz (excluding PoC) was 3% lower year-on-year with production from surface sources down 2% to 6,562 4Eoz and underground production 3% lower at 162,540 4Eoz, due to a slower than expected ramp-up in January 2022.

Costs for Q1 2022 were again well managed with AISC (excluding PoC) R17,806/4Eoz (US$1,170/4Eoz) 5% lower year-on-year. PGM production of 179,794 4Eoz in Q1 2022 (including PoC) was 7% lower than Q1 2021 primarily due to 44% lower third party PoC production of 10,692 4Eoz due to the wind down of two third party PoC contracts during Q4 2021. AISC (including PoC) of R19,372/4Eoz (US$1,273/4Eoz) was 17% lower year-on-year due to a significant reduction in PoC purchase costs due to the lower levels of PoC material purchased.

4E PGM production from the Rustenburg operation for Q1 2022 of 149,041 4Eoz was 5% lower year-on-year. Underground production of 130,171 4Eoz declined by 6% also due to the slower than expected start-up in January 2022, temporary operational challenges at Siphumelele and Khuseleka conventional shafts and at the Bathopele mechanised mine which is currently mining through the Hex River fault. This was partly offset by 6% higher surface production of 18,870 4Eoz. AISC for the Rustenburg operation increased by only 5% year-on-year to R20,041/4Eoz (US$1,317/4Eoz) driven by lower underground production and inflationary cost pressures, partly offset by lower royalties and the impact on inventory movement caused by the 4E basket mix included in the period end inventory valuation.

PGM production of 49,518 4Eoz from the Kroondal operation, was 7% lower than for Q1 2021 due to adverse ground conditions at both Kroondal East and West which led to lower yields, particularly in March 2022 and is expected, as planned to continue for the remainder of the year.

AISC of R14,863/4Eoz (US$977/4Eoz), was 22% higher than for Q1 2021 as a result of lower production and additional underground support required for the adverse ground conditions. The open pit Klipfontein project is now fully ramped up and produced around 3,000 4Eoz (metal in concentrate) in March 2022 on a 100% basis. The final project capital expenditure of R10 million (<US$1 million) was incurred during Q1 2022 for fencing and establishment of the boxcut. This high-return rapid-payback project achieved throughput of approximately 54,000 tonnes milled (on a 100% basis) in March 2022.

Attributable PGM production from Mimosa for Q1 2022 of 28,043 4Eoz was 6% lower than for Q1 2021. The focus on optimising the reagent suite and cell settings across the flotation circuit continues. Mimosa has maintained steady costs, with AISC increasing by only 2% to US$918/4Eoz (R13,979/4Eoz).

PGM production from Platinum Mile in Q1 2022 of 15,144 4Eoz was 41% higher compared to Q1 2021 due to additional surface tonnes added to the flotation output from the Rustenburg concentrator – resulting in a temporary boost to the yield. The increase in output, resulted in 28% lower AISC to R7,462/4Eoz (US$490/4Eoz), by far the lowest in the Group.

Q1 2022 Chrome sales of 640k tonnes were 73% higher compared to 370k tonnes sold for Q1 2021. Chrome revenue of R662 million for Q1 2022 was 91% higher than Q1 2021, mainly due to increased production and higher chrome prices received. The chrome price received increased by 21% for Q1 2022 relative to Q1 2021 to US$196/tonne.

Capital expenditure for Q1 2022 of R974 million (US$64 million) was 62% higher compared with R600 million (US$40 million) for Q1 2021. This is primarily due to R204 million (US$13 million) project investment at the Marikana K4 project. Sustaining capital was 55% higher year on year at R386 million (US$25 million) and ORD was 9% higher at R384 million (US$25 million) but both were lower than planned as a result of the slower than expected start to the year.