Operating update for the quarter ended 30 September 2022

Johannesburg, 3 November 2022: Sibanye Stillwater Limited (Sibanye-Stillwater or the Group - https://www.commodity-tv.com/ondemand/companies/profil/sibanye-stillwater-ltd/) (JSE: SSW and NYSE: SBSW) is pleased to provide an operating update for the quarter ended 30 September 2022, Group financial results are only provided on a six-monthly basis.

SALIENT FEATURES - QUARTER ENDED 30 SEPTEMBER 2022 (Q3 2022) COMPARED TO QUARTER ENDED 30 SEPTEMBER 2021 (Q3 2021)

• Production build-up to planned levels at the SA gold and Stillwater operation achieved during October 2022
• SA PGM operations impacted by Eskom load curtailment
• Five-year wage agreements concluded at the SA PGM Marikana and Rustenburg operations
• The K4 project is slightly ahead of budget and schedule and delivered initial 4E PGM production of 914 4Eoz during Q3 2022
• Increase stake in Keliber to 84.96%, securing majority control of the advanced Finnish lithium hydroxide project

• The Group reports adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) based on the formula included in the facility agreements for compliance with the debt covenant formula. Adjusted EBITDA may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is not a measure of performance under IFRS and should be considered in addition to and not as a substitute for other measures of financial performance and liquidity. For a reconciliation of profit/(loss) before royalties and tax to adjusted EBITDA, see "Adjusted EBITDA reconciliation - Quarters"
• The US PGM operations’ underground production is converted to metric tonnes and kilograms, and performance is translated to SA rand (rand). In addition to the US PGM operations’ underground production, the operation treats recycling material which is excluded from the 2E PGM production, average basket price and All-in sustaining cost statistics shown. PGM recycling represents palladium, platinum, and rhodium ounces fed to the furnace
• The Platinum Group Metals (PGM) production in the SA operations is principally platinum, palladium, rhodium and gold, referred to as 4E (3PGM+Au), and in the US operations is principally platinum and palladium, referred to as 2E (2PGM) and US PGM recycling is principally platinum, palladium and rhodium referred to as 3E (3PGM)
• See “Salient features and cost benchmarks - Quarters” for the definition of All-in sustaining cost (AISC)
• The SA PGM production excludes the production associated with the purchase of concentrate (PoC) from third parties. For a reconciliation of the production including third party PoC, refer to the "Reconciliation of operating cost excluding third party PoC for Total US and SA PGM, Total SA PGM and Marikana - Quarters"
• The nickel production at the Sandouville refinery operations is principally nickel metal and nickel salts (liquid form), together referred to as nickel equivalent products
• The nickel equivalent average basket price per ton is the total nickel revenue adjusted for other income - non-product sales divided by the total nickel equivalent tons sold
• See "Salient features and cost benchmarks - Quarters Sibanye-Stillwater Sandouville Refinery" for a reconciliation of cost of sales before amortisation and depreciation to nickel equivalent sustaining cost

OVERVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2022 COMPARED TO QUARTER ENDED 30 SEPTEMBER 2021

The Group has successfully navigated a challenging period, with production from the SA gold and the Stillwater operation building up during Q3 2022 from the operational disruptions which occurred in the first half of the year and returning to normalised levels of production during October 2022 at both of these operations. The SA PGM operations continued to deliver consistent operational results despite challenges associated with Eskom load curtailment and the increased incidence of copper cable theft, which disrupted operations during Q3 2022.

Significantly, a five-year wage agreement has been reached with the representative unions at the Rustenburg and Marikana operations. This historic agreement, which was achieved peacefully, timeously and without the disruption experienced during the SA gold operations' wage negotiations earlier this year, is expected to set the scene for five years of relative stability.

Despite deterioration in the global political and economic environment during the course of 2022, precious metals prices have remained well supported and within historically high price ranges. Greater operational stability across the Group, should enable improved cost management for 2023, ensuring more stable earnings and cash flow and consolidating the already robust Group financial position.

SAFE PRODUCTION

The improvement in Group safety indicators following reprioritisation of safety initiatives from mid-2021 and subsequent roll out of the "Fatal Elimination Strategy" in January 2022, has been maintained during Q3 2022. The Group fatal injury frequency rate (FIFR) (per million hours worked), excluding Sandouville (which was incorporated from Q1 2022) improved from 0.07 for Q3 2021 to 0.05 for Q3 2022, with the serious injury frequency rate (SIFR) improving by 10%  to 2.83 from 3.13 for Q3 2021. The Group lost day injury frequency rate (LDIFR) also improved, by 9%, from 5.08 to 4.65, with the Group total recordable injury frequency rate (TRIFR) improving 13% year-on-year, from 6.20 to 5.40.

Not only has the sustained focus on and implementation of the "Fatal Elimination Strategy" led to reduced fatalities, but also to improved injury metrics. Group fatalities have reduced by 64%, from eleven for the first nine months of 2021, to four for the same period in 2022. The SA gold and US PGM operations also recorded another fatality free quarter despite the risks associated with resuming operations. This follows Q2 2022, which was fatality free Group wide. Sadly, two fatalities were suffered at the SA PGM operations, which reaffirm the need to maintain a relentless safety focus across the Group. 

On 29 August 2022 at the Saffy shaft, Marikana operation, Mr. S. Tyobeka, a general worker, was involved in a winch and rigging related incident. On 30 August 2022 a second fatality occurred at the Rowland shaft, Marikana operation, when Mr. M. Msiya, a fitter, was involved in a mud rush incident. The board and management of Sibanye-Stillwater extend heartfelt condolences to the families, friends and colleagues of Mr Tyobeka and Mr Msiya. Both incidents are being investigated with all relevant stakeholders and appropriate support is being provided to the families of the deceased.

US PGM operations

Mined 2E PGM production from the US PGM operations of 85,889 2Eoz for Q3 2022 was 40% lower than for Q3 2021, primarily as a result of the suspension of production at the Stillwater operation (Stillwater East and Stillwater West mine) for seven weeks following regional flooding in Montana in mid-June 2022. The East Boulder operation was issued a Mine Health and Safety Administration (MSHA) stop order which was in full effect from 18 to 29 September 2022, due to reporting of elevated nitrous oxide exposures. Subsequent investigations highlighted gas testing equipment calibration issues and contaminated fuel as the primary concerns. This order remains in force, with most restrictions eased following comprehensive feedback to MSHA on the investigation findings. Following thorough investigation, the Group is assessing the introduction of battery powered equipment and the establishment of an additional intake airway.

As per the revised plan presented to the market during August 2022, lower planned production across the US PGM operations year-on-year complicates comparisons (see www.sibanyestillwater.com/features/us-pgm-operations-review/) for detail.

Tonnes milled for Q3 2022 totalled 241kt, 37% lower than for Q3 2021 with plant head grade of 12.2g/t for Q3 2022 , 5% lower than for Q3 2021. The Stillwater operations grade was affected by feeding and milling low grade reef sand to ensure adequate volumes of backfill  for stope support purposes post the flood event. Ongoing attrition amongst more experienced miners and geological and geotechnical complexity affecting productivity at East Boulder is receiving increased management and supervisory input. Following the successful ramp-up the grade normalised at the Stillwater operation in September with the East Boulder operation's grade expected to normalise in November 2022.

The Stillwater operation resumed production in a phased manner from the end of July 2022, with production rates normalising during October 2022. Production of 47,423 2Eoz, was 47% lower than for Q3 2021, with production approximately 34,000 2Eoz lower due to the ramp up after the flooding event.

Production from East Boulder of 38,467 2Eoz, was 29% lower than for Q3 2021, primarily due to the MSHA stop order, compounded by the issues detailed in the US PGM operations' repositioning presented in August 2022.

2E PGM sold for Q3 2022 of 69,534 2Eoz, was 48% lower year-on-year and 19% lower than 2E PGM mined production for the quarter, due to the timing of deliveries in September 2022 which will reflect in sold ounces for Q4 2022.

AISC of US$1,815/2Eoz (R30,947/2Eoz) for Q3 2022 was 88% higher than for Q3 2021 (US$968, R14,156/2Eoz) due to lower production and inflationary cost pressures, with ORD capital increasing by 110% year-on-year to US$42 million (R723 million) and sustaining capital increasing by 76% to US$17 million (R293 million), primarily as a result of the repositioning of the US underground operations, with Stillwater East expenditure which had previously been classified as project capital now reclassified as ORD and sustaining capital. Costs at the Stillwater operation have been impacted by additional once-off flood recovery costs including road, piping and infrastructure repairs. At East Boulder the availability of skills continues to be a challenge and therefore costs relating to contractors have risen. Continued inflationary pressure on stores and premiums on contractor costs also contributed to the higher costs.

Implementation of the repositioned operational plan and accelerated development to restore operational flexibility, will result in elevated costs in the medium term. As production begins to build up again and stope face availability improves, costs are expected to reduce significantly with AISC planned to reduce to below US$1,000 (real 2022 terms) from 2026.

Source: Company information available at  www.sibanyestillwater.com/features/us-pgm-operations-review/

Notes: Forward costs are represented in 2022 real terms; AISC: all-in sustaining cost; AIC: all-in cost

Total capital expenditure increased by 22% year-on-year for Q3 2022 to US$85 million (R1,450 million), with the increase in ORD and sustaining capital comprising 70% or US$60 million (R1,016 million) of this and project capital 36%  lower at US$25 million(R434 million) in line with the reduced spending on the Stillwater East project and change in the classification of development from growth capital to ORD. A major milestone for the quarter was the completion of the 56 East Footwall level which now ties into the Benbow decline, completed on 16 September 2022.

PGM recycling operations

Logistical issues affecting delivery of autocatalyst material highlighted during H1 2022 have continued into Q3 2022 and it is estimated that there has been a significant reduction in receipts year-on year due to logistics issues and lower scrappage of cars, with higher 3E PGM prices in Q3 2021 also incentivising used auto catalyst collection and strong scrap flows. The recycling operations fed an average of 17.7 tonnes per day (tpd) for Q3 2022, 22% lower than for the comparable period in 2021. During Q3 2022, 1,548 tonnes of recycle material was received while 1,630 tonnes was treated. At the end of Q3 2022, approximately 42 tonnes of recycle inventory was on hand, an 82 tonne decrease versus the Q2 2022 ending inventory of 124 tonnes at the end of June 2022.

SA PGM operations

4E PGM production from the SA PGM operations was impacted by unprecedented power curtailment imposed by Eskom during Q3 and a significant rise in copper cable theft. In addition, reduced output has been planned at the Siphumelele shaft owing to increased levels of seismicity. Pleasingly, mining has safely progressed through the challenging ground conditions associated with the Hex River Fault at the Bathopele mine, which has negatively impacted production during Q2 2022 and Q3 2022 and is expected to normalise by the end of Q4 2022.

Production of 432,143 4Eoz (excluding third party purchase of concentrate (PoC) for Q3 2022 was 14% lower than for the comparable period in 2021, although production was 5% higher than for Q2 2022 despite the increased load curtailment. Severe load shedding imposed by Eskom during September 2022 necessitated the curtailment of concentrator capacity across the SA PGM operations, impacting processed output and sales for the quarter. Underground mining was less impacted by the load curtailment, resulting in underground ore  containing approximately 33,000 4Eoz being stockpiled on surface by the end of the quarter.

Third party PoC processed at the Marikana smelting and refining operations of 16,720 4Eoz was 22% higher year-on-year although the toll concentrate processed during Q3 2021  fell away due to the tolling contract concluding. Total 4E PGM production (including PoC) was 13% lower year-on-year at 448,863 4Eoz. Had the 33,000 4Eoz stockpile of mined material been processed, we estimate PGM production from SA PGM operations (including PoC) would have been around 482,000 4Eoz, compared to 513,778 4Eoz for Q3 2021.

AISC (excluding PoC) for Q3 2022 of R19,211/4Eoz (US$1,127/4Eoz), was 20% higher than for Q3 2021 at R15,992/4Eoz (US$1,093/4Eoz) primarily due to lower production, lower by-product credits and inflationary cost pressures. AISC (including PoC) of R20,143/4Eoz (US$1,181/4Eoz) was also 21% higher year-on-year, with ORD 33% higher, largely as a result of the inclusion of K4 development and 6% lower by-product credits due to lower production and specific third party processing agreements concluding.

4E PGM production from the Rustenburg operation for Q3 2022 of 179,438 4Eoz, was 2% lower year-on-year despite operational challenges including severe Eskom load curtailment. Surface production increased by 43% due to processing of smelter slag from a third party with underground production decreasing by 7% primarily due to power disruptions from Eskom load curtailment and cable theft. Production from the Bathopele mine continued to be impacted by mining through the Hexriver fault and loss of available face at Siphumelele due to seismicity. The Hexriver fault has largely been traversed and production is expected to improve from Q4 2022. A stockpile of ore containing approximately 6,000 4Eoz built up as a result of Eskom load curtailment, impacted Q3 2022 production and unit costs, contributing to a 4% year-on-year increase in AISC to R18,435/4Eoz (US$1,081/4Eoz). In addition to this, a 31% increase in by-product credits (driven mainly by higher chrome revenue) more than offset a 15% increase in ORD and a 22% increase in sustaining capital year-on-year.  

4E PGM production from the Kroondal operation of 48,120 4Eoz for Q3 2022 was 21% lower than for the comparable period in 2021.  This declining production output is expected due to the gradual ramp-down of the Simunye shaft, compounded by the load curtailment with Kroondal building an ore stockpile containing approximately 7,000 4Eoz at the end of the quarter. AISC of R15,399/4Eoz (US$903/4Eoz) was 25% higher than for Q3 2021 primarily due to lower production and  stockpile being built up at the end of the quarter.

4E PGM production for Q3 2022 from the Marikana operation (excluding third party PoC) of 163,596 4Eoz, was 23% lower than for Q3 2021, with underground production 24% lower and surface production 11% lower. Underground production was impacted by safety stoppages, cable theft and Eskom load curtailment. 4E PGM production (including PoC) of 180,316 4Eoz for Q3 2022 was 20% lower than for Q3 2021. Third party concentrate processed at Marikana increased by 22% year-on-year to 16,720 4Eoz. The Marikana operation ended the quarter with an ore stockpile containing approximately 20,000 4Eoz. Had this material been processed, PGM production from Marikana (incl PoC) would have been around 200,000 4Eoz, compared to 226,591/4Eoz for Q3 2021. AISC (excluding third party PoC) for Q3 2022 of R21,785/4Eoz (US$1,278/4Eoz), was 37% higher than for Q3 2021, primarily due to lower production,  inflationary costs, ORD (+44%) and lower by-product credits (-27%).  Key inflationary costs were due to the high cost of steel, ammonia, chemicals, fuel and related products, with AISC (including PoC) also increasing by 37% to R23,719/4Eoz (US$1,391/4Eoz) due to higher purchase of concentrate costs (+33%). ORD costs increased with the ramp-up of K4 shaft as well as an increase in off-reef development at other shafts.

Attributable 4E PGM production from Mimosa of 28,670 4Eoz was in line with production for Q3 2021. AISC increased by 18% year-on-year to US$1,234/4Eoz (R21,032/4Eoz) primarily due to a 119% increase in sustaining capital expenditure associated with the approved life of mine extension project, which includes optimisation of the plant, construction of a new tailings storage facility and life of mine extension development, which is expected to be completed in Q1 2024.

Attributable 4E PGM production from Platinum Mile of 12,319 4Eoz was 10% lower year-on-year due to 6% less tons processed, a decrease in the built-up head grade and lower recoveries. AISC at Platinum Mile increased by 9% year-on-year to R11,283/4Eoz (US$662/4Eoz).

Chrome sales from the SA PGM operations for Q3 2022 of approximately 560kt were in line with Q3 2021. The chrome price received increased by 33% to US$227/tonne (Q3 2021: US$171/tonne), underpinning a 37% increase in chrome revenue.

Capital expenditure of R1,263 million (US$74 million) for Q3 2022 was 33% higher than for the corresponding period in 2021 with ORD 33% higher at R590 million (US$35 million), sustaining capital 4% higher at R465 million (US$27 million) and project capital 271% higher at R208 million (US$12 million). The increase in project capital is linked to the K4 project at the Marikana operation during Q3 2022.

The K4 Project

The K4 project remains on schedule.  First ore was hoisted during H1 2022 with first production of 914 4Eoz achieved during Q3 2022. Development and reef tonnes hoisted was significantly higher for Q3 2022 than for Q2 2022. Project capital expenditure was R207 million (US$12 million) in Q3 2022 (R56 million (US$4 million) in Q3 2021)  project capital expenditure of R612 (US$48 million) million for the first three months.

Five-year wage agreement secures operational stability

On 28 October 2022 a five-year wage agreement was reached with the representative unions at the Marikana and Rustenburg operations, marking the conclusion of annual wage negotiations for 2022 to 2027.

The wage agreement is consistent with the recent inflation linked wage increases concluded in June 2022 at the SA gold operations.  The wage agreement comprises annual wage increases of 6% and above for bargaining unit employees (year one: R1,050 per month or 6%, year two: R1,100 per month or 6%, year three: R1,250 per month or 6%, year four: R1,300 per month or 6% and year five: R1,400 per month or 6%). Miners and artisans will receive average annual wage increases of 6% per annum for each of the five years.

The annual wage and benefit increases that have been agreed are in line with inflation and represents a total estimated average increase in the wage bill, including all benefits, over the five-year period of approximately 6.3% per annum, which is in line with inflation and the wage agreement reached at the SA gold operations in June 2022. Importantly the agreement secures a five-year period of greater stability at the Rustenburg and Marikana operations and reduced risk of labour related disruptions, which will be beneficial for all stakeholders. 

SA gold operations

The build up to normalised levels of production at the SA gold operations following the  industrial action from 9 March to 13 June 2022, proceeded according to plan. Underground production commenced on 1 July after medical screening, training and acclimatisation of returning employees was concluded, and comprehensive underground safety audits were completed, with work crews resuming operating activities in a phased manner. Normalised production rates were achieved during October 2022. As a result, we believe that comparison of operational statistics has limited value for this period.

Production from the SA gold operations (including DRDGOLD) for Q3 2022 of 6,366kg (204,672oz) was 30% lower compared with Q3 2021. Gold production in Q3 2022 (excluding DRDGOLD) decreased by 36% to 4,913kg (157,957oz) due to the phased resumption of safe production over the quarter.

AISC (including DRDGOLD) of R1,210,049/kg (US$2,207/oz) was 52% higher than for Q3 2021 with AISC (excluding DRDGOLD) 64% higher at R1,348,531/kg (US$2,460/oz). The increase was a direct function of the 39% decrease in gold sold year-on-year with a working cost and SIB capital increasing by 4% and 11% respectively, offset by a 35% decrease in ORD due to the reduced mining activity.

Normalisation of production over an extended period is expected to result in a significant reduction in unit cost during 2023. For Q3 2021, AISC (excluding DRDGOLD) averaged R822,144/kg (US$1,748/oz).

Capital expenditure  for Q3 2022 (excluding DRDGOLD) increased by 10% to R1,188 million (US$70 million) compared to the same period in 2021 due to a four-fold increase in project capital which offset a 35% decrease in ORD to R472 million (US$28 million). ORD declined due to lower development metres in 2022 compared to 2021 as a result of the slow start-up process after the industrial action. SIB capital increased 11% to R296 million (US$17 million) mainly due to expenditure on regulatory lamp room upgrades at all operations and electrical and winder upgrades which commenced during the industrial action when the facilities and equipment were not in use. Project capital increased to R420 million (US$25 million) with R315 million (US$18 million) spent on the Burnstone project and R105 million (US$6 million) on the Kloof shaft deepening  project.

Underground production from the Driefontein operation decreased by 34% to 1,640kg (52,727oz) compared to the same period in 2021  as a result of the phased return to work post industrial action, while surface production of 50kg (1,608oz) was 25% lower due to depletion of surface reserves. AISC of R1,215,013/kg (US$2,216/oz) was 54% higher than for Q3 2021 primarily as a result of the 35% decrease in gold sold.

Underground production from the Kloof operation decreased by 50% to 1,393kg (44,786oz) with the underground yield  27% lower due to a slower start at the higher grade 4 and 8 shafts. Production from surface sources of 190kg (6,109oz), was 25% lower year-on-year due to a slow onboarding of a surface transport contractor after the strike as well as depletion of the surface rock dump reserves. AISC of R1,527,554/kg (US$2,787/oz) was 80% higher than for Q3 2021, primarily due to 50% lower gold sold as a result of the phased  build-up  after the industrial action.

Underground  production of 1,321kg (42,471oz) in Q3 2022 from the Beatrix operation was 26% lower than Q3 2021 with tonnes milled only 11% lower year-on-year despite the industrial action and the gradual return to work. This was due to the processing of underground ore which was stockpiled from late January 2022 while precautionary reinforcement and buttressing work was being done on the Beatrix tailings storage facility. The underground yield declined by 17% due to less production from the higher grade 4 Shaft which was affected by a loss of face length and safety stoppages. Gold production from surface sources was suspended for the period as the focus was placed on milling underground stockpile tonnages first. AISC of R1,424,025/kg (US$2,598/oz) was 72% higher than Q3 2021, primarily due to 35% less gold sold during the production build-up after the industrial action and higher working cost due to above inflationary increases, and the  additional cost associated with ramping up the operations to normalised production levels.

Surface gold production from Cooke operations increased by 10% to 319kg (10,256oz) due to slightly increased tonnes milled and yield with AISC increasing by 9% year-on-year to R861,736/kg (US$1,572/oz).

DRDGOLD surface tonnes milled decreased by 4% year-on-year, however with a 4% increase in grade, gold production of 1,453kg (46,715oz) remained in line with Q3 2021. AISC of R765,603/kg (US$1,397/oz) increased by 18% year-on-year primarily due to industry wide inflationary effects and a 51% increase in sustaining capital, reflecting investment in new pump stations and piping at the ERGO operations. DRDGOLD project capital also increased from R14 million (US$1 million) in Q3 2021 to R53 million (US$3 million) in Q3 2022 with spending on the solar power plant and the Far West Gold Recoveries project at the Driefontein 2 reclamation plant.

Consultations regarding possible restructuring of Beatrix 4 shaft and Kloof 1 plant

On 1 November 2022, organised labour and other potentially affected stakeholders were notified that the company would be entering into consultation in terms of S189A of the Labour Relations Act (S189) regarding the possible restructuring of its SA gold operations pursuant to ongoing losses experienced at the Beatrix 4 shaft and the impact of depleting mineral reserves to the Kloof 1 plant.

The life of the Beatrix 4 shaft was previously prolonged, following S189 consultations in 2017, which, through the successful adoption of productivity enhancement and cost containment measures implemented following consultation with stakeholders, enabled it to remain in operation as long as it made a profit, on average, over any continuous period of three months (after accounting for AISC).

It is anticipated that the consultation process will reduce the number of employees that may potentially be retrenched through the implementation of possible retrenchment avoidance measures, including natural attrition, retirements, voluntary retrenchment and the transfer of suitably skilled employees to vacant positions.

We are committed to minimising the impact of the proposed restructuring and will engage with all relevant stakeholders in an effort to avoid job losses, while attempting to limit the impact on the remainder of the operations and employees at the SA gold operations and the sustainability of the Group.

The Burnstone project

Progress on the project was adversely affected by the industrial action during H1 2022, resulting delays in underground development. In addition due to logistics issues, there have been delays  in the delivery of critical spares from Europe. Labour procurement has been slower than expected due to the unavailability of skilled operators from surrounding areas. Project capital guidance remains unchanged at R1.1 billion (US$73 million) with R644 million (US$40 million) spent to date (R329 million (US$21 million) in H1 2022 and R315 million (US$18 million) in Q3 2022).

Sandouville nickel refinery

The integration of the Sandouville nickel refinery into the Group continued during Q3 2022. Sandouville faced various operational and logistics issues during Q3 2022, including solvent supply constraints, and engineering failures in July 2022 which temporarily took 40% of capacity offline. In addition, a four week technical shutdown commenced in September 2022 with operations recommencing in mid October 2022. The Sandouville nickel refinery produced 1,003 tonnes of nickel metal in Q3 2022 (2,251 tonnes in Q2 2022), 650 tonnes of nickel salts (668 tonnes in Q2 2022) and 37 tonnes of cobalt chloride (78 tonnes in Q2 2022) at a nickel equivalent sustaining cost of  US$30,185/tNi (R514,654/tNi), 12% higher than Q2 2022.

Integration is focused on: recruitment, implementing rigorous maintenance programs and increasing critical spares. The focus is on continuity and stability of production by de-bottlenecking the plant to increase throughput to nameplate capacity of c.12kt of Ni metal, c.4kt of Ni salts and c.600t of CoCl2 by 2026.

Recent increases in electricity and gas prices have reduced the gross operating margin and pose an ongoing  risk to costs especially the future supply and availability of European energy and gas during the upcoming winter season.

In parallel with the current plant production, Sibanye-Stillwater continues to advance pre-feasibility studies on the following three processes, expected to be completed during 2023:

• Producing battery grade nickel sulphate with the intention of producing 44,000 tonnes per year in two stages
• PGM autocatalyst recycling using European feedstocks
• Battery metals recycling

Further announcements will be made on these developments when the studies have been concluded.

STRATEGIC DEVELOPMENTS

Increased shareholding in Keliber Oy (Keliber)

On 30 June 2022, the Group announced its intention to exercise its pre-emptive right to increase its shareholding in Keliber to 50% plus one share for a cash consideration of approximately €146 million. A simultaneous voluntary cash offer was made to minority shareholders of Keliber, other than the Finnish Minerals Group, which increased Sibanye-Stillwater's shareholding in Keliber to an effective 84.96% for a further cash consideration of approximately €189.8 million excluding Finnish transfer tax of €2.3 million.

The Finnish Minerals Group, a Finnish State-owned holding and development company which manages the state’s mining industry

shareholdings and is the second largest shareholder in Keliber behind Sibanye-Stillwater has a current effective holding of 13.90% in Keliber with the other remaining minority shareholders holding an effective 1.14%.

With the voluntary offer now concluded, a capital raise by Keliber will be executed to achieve Keliber’s desired debt to equity ratio. The maximum total investment by Sibanye-Stillwater in the proposed capital raise is around €104 million depending on the extent to which minorities and the Finnish Minerals Group participate. Conventional debt facilities are currently under discussion with third party lenders to at least match the €250 million equity contribution to fully fund construction of the project.

Keliber is aiming to be the first fully integrated lithium producer in Europe supplying approximately 15,000 tonnes of lithium hydroxide

monohydrate per annum into the developing European battery industry. A recent definitive feasibility study and a 31% increase in ore

reserves has confirmed the quality and inherent value of the Keliber project with the fundamental outlook for the lithium market improving significantly since Sibanye-Stillwater acquired its initial stake in Q1 2021.

The transactions secure a significant and controlling exposure for the Group in Keliber, which offers significant growth potential and a valuable footprint in a supportive and attractive jurisdiction to supply critical battery metals into the burgeoning European battery industry.

OPERATING GUIDANCE FOR THE 2022 YEAR¹

As previously announced on 11 August 2022, forecast mined 2E PGM production from the US PGM operations for 2022 was revised to between 445,000 2Eoz and 460,000 2Eoz, with AISC of between US$1,380/2Eoz and US$1,425/2Eoz due to the impact of the regional flood and the repositioning of the operations following the optimisation planning carried out during H1 2022. Due to disruptions experienced during Q3 2022 and ongoing issues with employee attrition and skills availability, production for 2022 is likely to be at the lower end of the range provided with costs at the upper end of the range. Capital expenditure is forecast to be between US$275 million and US$285 million (including US$70 million of project capital).

As a result of the challenges highlighted with collection and receipt of used autocatalysts, recycling feed rates have declined significantly and are likely to remain constrained until year end. The US Recycling operations are therefore forecast to feed between 610,000 and 625,000 3Eoz for 2022, with minimal capital expenditure.

Forecast 4E PGM production from the SA PGM operations² for 2022 remains at between 1,750,000 4Eoz and 1,850,000 4Eoz with AISC between R18,500/4Eoz and R19,200/4Eoz (US$1,233/4Eoz and US$1,280/4Eoz). Capital expenditure is forecast at R4.8 billion (US$320 million) including R950 million (US$63 million) for the K4 project during 2022.

Guidance for gold production from the managed SA gold operations (excluding DRDGOLD) is maintained at between 14,000kg (450,000oz) and 14,500kg (466,000oz) with AISC between R1,390,000/kg (US$2,880/oz) and R1,470,000/kg (US$3,060/oz). Capital expenditure is forecast at R3.9 billion (US$260 million), including R1.1 billion (US$73 million) on the Burnstone project and R270 million (US$18 million) on the Kloof 4 deepening project.

¹  The dollar cost conversions for 2022 are based on an average exchange rate of R15.00/US$

²  SA PGM guidance includes third party PoC

NEAL FRONEMAN

CHIEF EXECUTIVE OFFICER

SALIENT FEATURES AND COST BENCHMARKS - QUARTERS

US and SA PGM operations

Average exchange rate for the quarters ended 30 September 2022, 30 June 2022 and 30 September 2021 was R17.05/US$, R15.59/US$ and R14.63/US$, respectively

Figures may not add as they are rounded independently

• The Total US and SA PGM, Total SA PGM and Marikana excludes the production and costs associated with the purchase of concentrate (PoC) from third parties. For a reconciliation of the Operating cost, AISC and AIC excluding third party PoC, refer to “Reconciliation of operating cost excluding third party PoC for Total US and SA PGM, Total SA PGM and Marikana - Quarters” and “Reconciliation of AISC and AIC excluding third party PoC for Total US and SA PGM, Total SA PGM and Marikana – Quarters”
• The US PGM operations’ underground production is converted to metric tonnes and kilograms, and performance is translated into rand. In addition to the US PGM operations’ underground production, the operation treats recycling material which is excluded from the statistics shown above and is detailed in the PGM recycling table below
• Production per product – see prill split in the table below
• PGM sold includes the third party PoC ounces sold
• The Total US and SA PGM and Total SA PGM operations’ unit cost benchmarks and capital expenditure exclude the financial results of Mimosa, which is equity accounted and excluded from revenue and cost of sales
• The average PGM basket price is the PGM revenue per 4E/2E ounce, prior to a purchase of concentrate adjustment
• Operating cost is the average cost of production and operating cost per tonne is calculated by dividing the cost of sales, before amortisation and depreciation and change in inventory in a period by the tonnes milled/treated in the same period, and operating cost per ounce (and kilogram) is calculated by dividing the cost of sales, before amortisation and depreciation and change in inventory in a period, by the PGM produced in the same period
• All-in cost is calculated in accordance with the World Gold Council guidance. All-in cost excludes income tax, costs associated with merger and acquisition activities, working capital, impairments, financing costs, one-time severance charges and items needed to normalise earnings. All-in cost is made up of All-in sustaining cost, being the cost to sustain current operations, given as a sub-total in the All-in cost calculation, together with corporate and major capital expenditure associated with growth. All-in sustaining cost per ounce (and kilogram) and All-in cost per ounce (and kilogram) are calculated by dividing the All-in sustaining cost and All-in cost, respectively, in a period by the total 4E/2E PGM produced in the same period. For a reconciliation of cost of sales, before amortisation and depreciation to All-in cost, see “All-in costs - Quarters”

Mining - PGM Prill split including third party PoC, excluding recycling operations

Recycling at US operations

SA gold operations

Average exchange rates for the quarters ended 30 September 2022, 30 June 2022 and 30 September 2021 was R17.05/US$, R15.59/US$ and R14.63/US$, respectively

Figures may not add as they are rounded independently

• Operating cost is the average cost of production and operating cost per tonne is calculated by dividing the cost of sales, before amortisation and depreciation and change in inventory in a period by the tonnes milled/treated in the same period, and operating cost per kilogram (and ounce) is calculated by dividing the cost of sales, before amortisation and depreciation and change in inventory in a period by the gold produced in the same period
• All-in cost is calculated in accordance with the World Gold Council guidance. All-in cost excludes income tax, costs associated with merger and acquisition activities, working capital, impairments, financing costs, one time severance charges and items needed to normalise earnings. All-in cost is made up of All-in sustaining cost, being the cost to sustain current operations, given as a sub-total in the All-in cost calculation, together with corporate and major capital expenditure associated with growth. All-in sustaining cost per kilogram (and ounce) and All-in cost per kilogram (and ounce) are calculated by dividing the All-in sustaining cost and All-in cost, respectively, in a period by the total gold sold over the same period. For a reconciliation of cost of sales before amortisation and depreciation to All-in cost, see “All-in costs – Quarters”
• Corporate project expenditure for the quarters ended 30 September 2022, 30 June 2022 and 30 September 2021 was R330 million (US$19 million), R217 million (US$14 million) and R38 million (US$3 million), respectively, the majority of which related to the Burnstone project

European operations

Average exchange rates for the quarters ended 30 September 2022, 30 June 2022 and 30 September 2021 was R17.05/US$, R15.59/US$ and R14.63/US$, respectively

¹ Nickel salts consist of anhydrous nickel, nickel chloride low sodium, nickel chloride standard, nickel carbonate and nickel chloride solution

² Nickel cakes occur during the processing of nickel matte and are recycled back into the nickel refining process

³ Cobalt chloride and ferric chloride are obtained from nickel matte through a different refining process on an order basis

⁴ Nickel recovery yield is the percentage of total nickel recovered from the matte relative to the nickel contained in the matte received

ALL-IN COSTS - QUARTERS

SA and US PGM operations     

Figures are in millions unless otherwise stated