Sibanye reports operating results ahead of guidance
Westonaria, 24 April 2014: Sibanye Gold Limited’s (“Sibanye” or the “Group”) (JSE: SGL & NYSE: SBGL) reported an improved year-on-year operating result for the first quarter of 2014. Production of 10,338kg (332,400oz) was 11% higher than that of the March 2013 quarter with the Driefontein, Kloof and Beatrix operations generating operating profit of R1,744 million (US$161 million), 15% higher than the R1,539 million (US$173 million) operating profit generated in the same period last year. These results were achieved at an average Rand gold price of R453,608/kg (US$1,304/oz), which was 4% lower than that achieved in the March 2013 quarter.
Cash and cash equivalents at the end of the period amounted to approximately R1,244 million (US$115 million) after paying dividends, royalties and half yearly taxes. The Group’s net debt position at the end of March 2014 was R748 million (US$70 million).
All-in cost of R365,187/kg (US$1,050/oz) was 9% lower than the R399,495/kg (US$1,398/oz) reported in the March 2013 quarter, mainly due to the increase in production year-on-year and the benefits realised from the continued implementation of the new Sibanye operating model. Neal Froneman, CEO of Sibanye, commenting on the quarter said: “It is pleasing that the operating performance evident in the second half of 2013 has been maintained into 2014. The operating results for the March 2014 quarter are ahead of our forecast and continue to reflect the success of our new operating model.”
On 14 April 2014 Sibanye concluded the acquisition of Witwatersrand Consolidated Gold Resources Limited (“Wits Gold”) and exercised the option held by Wits Gold, to acquire the Burnstone gold mine, subject to certain conditions precedent. This follows the successful conclusion of a detailed due diligence and was based on the already significant investment by the previous owners, Great Basin Gold Limited, in mine Salient features for the March 2014 quarter:
? Gold production 11% higher than in the March 2013 quarter, at 10,338kg (332,400oz); ? Operating profit generated from Driefontein, Kloof and Beatrix of R1.74 billion (US$161 million); ? All-in cost of R365,187/kg (US$1,050/oz) – All-in cost margin maintained at 20%; ? Net debt of R748 million (US$70 million) after paying dividends, royalties and half yearly taxes; ? Wits Gold transaction completed after quarter end on 14 April 2014; ? Option exercised to acquire the Burnstone assets; ? Assumed interim management of the Cooke underground and surface operations from 1 March 2014. development and infrastructure, and the favorable repayment terms agreed with debt holders. The acquisition is consistent with Sibanye’s strategy to create value through extending the operating life of the Group in support of its dividend yield strategy.
Sibanye also assumed interim management control of the Cooke Operations (“Cooke”) from 1 March 2014. Finalisation of the Cooke acquisition however, remains subject to the approval by the Minister of Mineral Resources in terms of Section 11 of the Minerals and Petroleum Resources Development Act.
Sibanye Gold Limited
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