Company Quick10K Filing
Sibanye Gold
20-F 2018-12-31 Filed 2019-04-09
20-F 2017-12-31 Filed 2018-04-02
20-F 2016-12-31 Filed 2017-04-07
20-F 2015-12-31 Filed 2016-03-21
20-F 2014-12-31 Filed 2015-03-24
20-F 2013-12-31 Filed 2014-04-29
20-F 2012-12-31 Filed 2013-04-26

SBGL 20F Annual Report

Part 1: Remuneration Committee Chairman’S Statement
Part 2: Remuneration Policy
Part 3 of This Remuneration Report Sets Out Some Analysis of How We Have Addressed This To Good Effect Over The Past Five Years.
Part 3: Implementation of The Remuneration Policy – 2018
EX-1.2 sbgl-20181231ex12032242e.htm
EX-4.36 sbgl-20181231ex43663445a.htm
EX-4.40 sbgl-20181231ex4400f6d50.htm
EX-4.44 sbgl-20181231ex444aafb3b.htm
EX-4.45 sbgl-20181231ex445d7c38b.htm
EX-4.46 sbgl-20181231ex4468f5d35.htm
EX-4.47 sbgl-20181231ex4471202c5.htm
EX-8.1 sbgl-20181231ex81c2b21e1.htm
EX-12.1 sbgl-20181231ex121d52433.htm
EX-12.2 sbgl-20181231ex122dcb13b.htm
EX-13.1 sbgl-20181231ex131a5f7c9.htm
EX-13.2 sbgl-20181231ex13233d2be.htm
EX-15.1 sbgl-20181231ex1510ca751.htm
EX-16 sbgl-20181231ex168e4a27e.htm

Sibanye Gold Earnings 2018-12-31

Balance SheetIncome StatementCash Flow

20-F 1 sbgl-20181231x20f.htm 20-F sbgl_Current_Folio 20F

As filed with the Securities and Exchange Commission on 8 April 2019

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 20-F


(Mark One)

           REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

or

            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended 31 December 2018

or

           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or

           SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from                             to

Commission file number: 001-35785

Sibanye Gold Limited

(Exact name of registrant as specified in its charter)


Republic of South Africa
(Jurisdiction of incorporation or organization)
Constantia Office Park
Bridgeview House, Building 11, Ground Floor
Cnr 14th Avenue & Hendrik Potgieter Road
Weltevreden Park, 1709
South Africa
011-27-11-278-9600
(Address of principal executive offices)
With copies to:
Charl Keyter
Chief Financial Officer
Sibanye Gold Limited
Tel: 011-27-11-278-9700
Fax: 011-27-11-278-9863
Constantia Office Park
Bridgeview House, Building 11, Ground Floor
Cnr 14th Avenue & Hendrik Potgieter Road
Weltevreden Park, 1709
South Africa
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
and
Thomas B. Shropshire, Jr.
Linklaters LLP
Tel: 011-44-20-7456-3223
Fax: 011-44-20-7456-2222
One Silk Street
London EC2Y 8HQ
United Kingdom

Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of Each Class

Ordinary shares of no par value each
American Depositary Shares, each representing four ordinary shares

Name of Each Exchange on Which Registered

New York Stock Exchange*
New York Stock Exchange

*Not for trading, but only in connection with the registration of the American Depositary Shares pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock
as of the close of the period covered by the a
nnual report 

2,266,260,491 ordinary shares of no par value each

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes   No 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes   No 

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company”  in Rule 12b-2 of the Exchange Act.

Large accelerated filer   Accelerated filer   Non-accelerated filer     Emerging growth company        

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. 

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP 

International Financial Reporting Standards as issued by the International Accounting Standards Board 

Other 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17   Item 18 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   No 

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes   No 

 

 

 

 

 

 

 

 

 

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE

[Note: To be revised as wrapper and annual report page numbers are finalised.]Picture 67Picture 66

 

 

 

 

 

 

 

Item

 

Form 20-F Caption

 

Location in this document

 

Page

1

 

Identity of directors, senior management and advisers

 

NA

 

NA

2

 

Offer statistics and expected timetable

 

NA

 

NA

3

 

Key information

 

 

 

 

 

 

(a)    Selected financial data

 

Annual Financial Report—Overview—Five-year financial performance

 

168-170

 

 

(b)    Capitalisation and indebtedness

 

NA

 

NA

 

 

(c)    Reasons for the offer

 

NA

 

NA

 

 

(d)    Risk factors

 

Further Information—Risk factors

 

270-294

4

 

Information on the Company

 

 

 

 

 

 

(a)    History and development of the Company

 

Integrated Annual Report—Introduction—Corporate profile

 

13-15

 

 

 

 

Further Information—Additional information—Memorandum of incorporation

 

352-355

 

 

 

 

Annual Financial Report—Ancillary information—Administration and corporate information

 

269

 

 

 

 

Integrated Annual Report—View from the top—Perspective from the Chair

 

19-21

 

 

 

 

Integrated Annual Report—View from the top—Chief Executive Officer’s review

 

22-28

 

 

 

 

Integrated Annual Report—View from the top—Chief Financial Officer’s report

 

29-31

 

 

 

 

Integrated Annual Report—Performance review—Delivering value from operations, projects and technology

 

50-59

 

 

 

 

Annual Financial Report—Overview—Five-year financial performance

 

168-170

 

 

 

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Factors affecting Sibanye-Stillwater’s performance—Recent acquisitions

 

175-176

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 13: Acquisitions

 

233-236

 

 

(b)    Business overview

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Introduction

 

171

 

 

 

 

Integrated Annual Report—Introduction—Corporate profile

 

13-15

 

 

 

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Factors affecting Sibanye-Stillwater’s performance

 

171-176

 

 

 

 

Annual Financial Report—Overview—Five-year financial performance

 

168-170

 

 

 

 

Integrated Annual Report—View from the top—Perspective from the Chair

 

19-21

 

 

 

 

Further Information—Environmental and regulatory matters

 

342-349

 

 

(c)    Organisational structure

 

Integrated Annual Report—Introduction—Corporate profile

 

13-15

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 1.3: Consolidation

 

210

 

 

(d)    Property, plant and equipment

 

Integrated Annual Report—Introduction—Corporate profile

 

13-15

 

 

 

 

Integrated Annual Report—Performance review—Minimising the environmental impact

 

98-115

 

 

 

 

Further Information—Information on the company—Sibanye-Stillwater’s mining operations

 

295-327

 

 

 

 

Further Information—Reserves of Sibanye-Stillwater as of 31 December 2018

 

328-337

 

 

Sibanye-Stillwater Form 20-F 2018

 1

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE continued

[Note: To be revised as wrapper and annual report page numbers are finalised.]

 

 

 

 

 

 

 

Item

 

Form 20-F Caption

 

Location in this document

 

Page

 

 

 

 

Further Information—Environmental and regulatory matters

 

342-349

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 12: Property, plant and equipment

 

229-233

4A

 

Unresolved staff comments

 

NA

 

NA

5

 

Operating and financial review and prospects

 

 

 

 

 

 

(a)    Operating results

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements

 

171-189

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated income statement

 

202

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated statement of financial position

 

203

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated statement of cash flows

 

205

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 24: Borrowings and derivative financial instrument

 

246-255

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 31: Financial instruments and risk management

 

259-263

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 32: Commitments

 

263

 

 

(b)    Liquidity and capital resources

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Liquidity and capital resources

 

185-188

 

 

(c)    Research and development, patents and licences, etc.

 

NA

 

NA

 

 

(d)    Trend information

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Factors affecting Sibanye-Stillwater’s performance

 

171-176

 

 

(e)    Off-balance sheet arrangements

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Off balance sheet arrangements and contractual commitments

 

189

 

 

(f)     Tabular disclosure of contractual obligations

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Off balance sheet arrangements and contractual commitments

 

189

 

 

(g)   Safe harbour

 

Forward-looking statements

 

9

6

 

Directors, senior management and employees

 

 

 

 

 

 

(a)    Directors and senior management

 

Integrated Annual Report—Governance—Corporate governance and leadership—Our board, governance structures and processes

 

119-121

 

 

 

 

Integrated Annual Report—Governance—Corporate governance and leadership—Executive management

 

136

 

 

 

 

Further Information—Directors and executive management

 

338-341

 

 

(b)    Compensation

 

Integrated Annual Report—Governance—Remuneration report

 

138-166

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 34: Related-party transactions

 

264-265

 

 

(c)    Board practices

 

Integrated Annual ReportGovernance—Corporate governance and leadership—Our board, governance structures and processes

 

119-131

 

 

 

 

Integrated Annual Report—Governance—Remuneration report—Executive directors’ contracts of employment

 

151-152

 

 

(d)    Employees

 

Integrated Annual Report—Performance overview—Superior value for the workforce

 

60-75

 

 

Sibanye-Stillwater Form 20-F 2018

2

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE continued

[Note: To be revised as wrapper and annual report page numbers are finalised.]

 

 

 

 

 

 

 

Item

 

Form 20-F Caption

 

Location in this document

 

Page

 

 

(e)    Share ownership

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 34: Related-party transactions

 

264-265

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 6: Share-based payments

 

217-222

7

 

Major Shareholders and Related Party Transactions

 

 

 

 

 

 

(a)    Major shareholders

 

Annual Financial Report—Ancillary information—Shareholder information

 

267-268

 

 

(b)    Related party transactions

 

Annual Financial Report—Accountability—Directors’ report—Directors’ and officers’ disclosure of interests in contracts

 

197-198

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 34: Related-party transactions

 

264-265

 

 

(c)    Interests of experts and counsel

 

NA

 

NA

8

 

Financial information

 

 

 

 

 

 

(a)    Consolidated statements and other financial information

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements

 

171-189

 

 

 

 

Annual Financial Report—Consolidated financial statements

 

202-266

 

 

 

 

Annual Financial Report—Director’s Report—Litigation

 

198-199

 

 

 

 

Annual Financial Report—Accountability—Directors’ report—Financial affairs—Dividends

 

195

 

 

 

 

Further Information—Financial information—Dividend policy and dividend distributions

 

350

 

 

(b)    Significant changes

 

Further Information—Additional Information—Recent developments

 

355

9

 

The Offer and listing

 

 

 

 

 

 

(a)    Listing details

 

Further Information—The listing

 

351

 

 

(b)    Plan of distribution

 

NA

 

NA

 

 

(c)    Markets

 

Further Information—The listing

 

351

 

 

(d)    Selling shareholders

 

NA

 

NA

 

 

(e)    Dilution

 

NA

 

NA

 

 

(f)     Expenses of the issue

 

NA

 

NA

10

 

Additional information

 

 

 

 

 

 

(a)    Share capital

 

NA

 

NA

 

 

(b)    Memorandum and articles of association

 

Further Information—Additional information—Memorandum of Incorporation

 

352-355

 

 

(c)    Material contracts

 

Further Information—Additional information—Material contracts

 

355-358

 

 

(d)    Exchange controls

 

Further Information—Additional information—South African Exchange Control limitations affecting Security holders

 

363

 

 

 

 

Further Information—Environmental and regulatory matters—Exchange Controls

 

349

 

 

(e)    Taxation

 

Further Information—Additional information—Taxation

 

363-366

 

 

(f)     Dividends and paying agents

 

NA

 

NA

 

 

(g)    Statement by experts

 

NA

 

NA

 

 

(h)    Documents on display

 

Further Information—Additional information—Documents on display

 

366

 

 

(i)    Subsidiary information

 

NA

 

NA

11

 

Quantitative and qualitative disclosures about market risk

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 31.2: Risk management activities

 

260-263

12

 

Description of securities other than equity securities

 

 

 

 

 

 

Sibanye-Stillwater Form 20-F 2018

3

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE continued

[Note: To be revised as wrapper and annual report page numbers are finalised.]

 

 

 

 

 

 

 

Item

 

Form 20-F Caption

 

Location in this document

 

Page

 

 

(a)    Debt securities

 

NA

 

NA

 

 

(b)    Warrants and rights

 

NA

 

NA

 

 

(c)    Other securities

 

NA

 

NA

 

 

(d)    American depositary shares

 

Further Information—Additional information—American depositary shares

 

358-362

13

 

Defaults, dividend arrearages and delinquencies

 

NA

 

NA

14

 

Material modifications to the rights of security holders and use of proceeds

 

NA

 

NA

15

 

Controls and procedures

 

Further Information—Controls and procedures

 

368-369

16A

 

Audit Committee financial expert

 

Integrated Annual Report—Governance—Corporate governance and leadership—Our Board and its committees—Audit Committee

 

126

16B

 

Code of ethics

 

Integrated Annual Report—Governance—Corporate governance and leadership—Ethical and responsible leadership—Ethics in action

 

116

16C

 

Principal accountant fees and services

 

Annual Financial Report—Accountability—Report of the Audit Committee—Auditor independence and fees

 

193

16D

 

Exemptions from the listing standards for audit committees

 

NA

 

NA

16E

 

Purchase of equity securities by the issuer and affiliated purchasers

 

None

 

 

16F

 

Change in registrant’s certifying accountant

 

Further information—Change in registrant’s certifying accountant

 

370

16G

 

Corporate governance

 

Further Information—Additional information—JSE corporate governance practices compared with NYSE Listing Standards

 

367

16H

 

Mine safety disclosure

 

Further Information—Environmental and regulatory matters—Mine safety disclosure

 

344

17

 

Financial statements

 

NA

 

NA

18

 

Financial statements

 

Annual Financial Report—Accountability—Report of independent registered public accounting firm

 

200-201

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated income statement

 

202

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated statement of other comprehensive income

 

202

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated statement of financial position

 

203

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated statement of changes in equity

 

204

 

 

 

 

Annual Financial Report—Consolidated financial statements—Consolidated statement of cash flows

 

205

 

 

 

 

Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements

 

206-266

19

 

Exhibits

 

Exhibits

 

371-373

 

 

 

 

 

 

Sibanye-Stillwater Form 20-F 2018

4

 


 

Table of Contents

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Historical consolidated financial statements

Sibanye Gold Limited (trading as Sibanye-Stillwater (Sibanye-Stillwater)) is a South African domiciled global, precious metals mining company, which produces a mix of metals that includes gold and the platinum group metals (PGMs). Sibanye-Stillwater owns and operates a portfolio of high-quality operations and projects, which are grouped into two regions: the southern Africa region and the United States region. See Annual Financial Report—Overview—Management’s discussion and analysis of financial statements—Introduction.

Accordingly, the books of account of the Group (as defined below) are maintained in South African Rand and the Group’s annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board, as prescribed by law. These financial statements are distributed to shareholders and are submitted to the Johannesburg Stock Exchange (JSE) and the New York Stock Exchange (NYSE).

The consolidated financial statements of Sibanye-Stillwater as at and for the fiscal years ended 31 December 2018, 2017 and 2016 (the Consolidated Financial Statements) have been prepared using the historical results of operations, assets and liabilities attributable to Sibanye-Stillwater and all of its subsidiaries (the Sibanye-Stillwater Group, or the Group). The Consolidated Financial Statements have been prepared under the historical cost convention, except for financial assets and financial liabilities (including derivative financial instruments), which are measured at fair value through profit or loss or through the mark to market reserve in equity.

Non-IFRS measures

The financial information in this annual report includes certain measures that are not defined by IFRS, including “adjusted earnings before interest, tax, depreciation and amortisation” (adjusted EBITDA), “normalised earnings”, “operating costs”, “All-in sustaining costs”, “All-in sustaining cost margin”, “All-in costs”, “All-in cost margin”, “headline earnings per share”, “adjusted free cash flow” and “net debt” (each as defined below or in Annual Financial Report—Overview—Five-year financial performance). These measures are not measures of financial performance or cash flows under IFRS and may not be comparable to similarly titled measures of other companies. These measures have been included for the reasons described below or in Annual Financial Report—Overview—Five-year financial performance and should not be considered by investors as alternatives to costs of sales, net operating profit, profit before taxation, cash from operating activities or any other measure of financial performance presented in accordance with IFRS.

Operating costs is defined as the average cost of production and calculated by dividing the cost of sales, before amortisation and depreciation 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 in a period by the gold produced in the same period. See Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 1.

The Group reports adjusted EBITDA based on the formula included in the facility agreements for compliance with the debt covenant formula. See Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 2 for more information and Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 24.11: Capital management for a reconciliation of (loss)/profit before royalties and tax to adjusted EBITDA. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue. See Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 3.

All-in costs is made up of All-in sustaining costs, being the cost to sustain current operations, given as a sub-total in the All-in costs calculation, together with corporate and major capital expenditure growth. See Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 4 for more information and Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—2018 financial performance compared with 2017 and 2016—Cost of sales—All-in costs for a reconciliation of cost of sales, before amortisation and depreciation to All-in costs. All-in sustaining cost margin is defined as revenue minus All-in sustaining costs divided by revenue. All-in cost margin is defined as revenue minus All-in costs divided by revenue. See Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 5.

Net debt represents borrowings, that have recourse to Sibanye-Stillwater, and bank overdraft less cash and cash equivalents. See Annual Financial Report—Overview—Five-year financial performance—Group financial statistics—Footnote 4 and Annual Financial Report—Consolidated financial statements—Notes to the consolidated financial statements—Note 24.11: Capital management.

Free cash flow is defined as cash flows from operating activities before dividends paid, less additions to property, plant and equipment. Management considers free cash flow to be an indicator of cash available for repaying debt, funding exploration and paying dividends. See Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—Liquidity and capital resources—Cash flow analysis for a reconciliation of net cash from operating activities to adjusted free cash flow.

Conversion rates

Certain information in this annual report presented in Rand has been translated into US dollars. Unless otherwise stated, the conversion rate for these translations is R14.35/US$1.00, which was the closing rate on 31 December 2018. By including the US dollar equivalents, Sibanye-Stillwater is not representing that the Rand amounts actually represent the US dollar amounts shown or that these amounts could be converted into US dollars at the rates indicated.

 

 

Sibanye-Stillwater Form 20-F 2018

 5

 


 

Table of Contents

PRESENTATION OF FINANCIAL AND OTHER INFORMATION continued

The Acquisitions of Lonmin, Stillwater, the Rustenburg operation and Aquarius

Lonmin acquisition

On 14 December 2017, the boards of Sibanye-Stillwater and Lonmin plc (Lonmin) announced that they had reached agreement on the terms of a recommended all-share offer pursuant to which Sibanye-Stillwater, and/or a wholly-owned subsidiary of Sibanye-Stillwater, would acquire the entire issued and to be issued ordinary share capital of Lonmin, which is a major mine-to-market producer of PGMs with core operations in South Africa (the Lonmin Acquisition). Under the terms of the Lonmin Acquisition, each Lonmin shareholder will be entitled to receive 0.967 new Sibanye-Stillwater shares for each Lonmin ordinary share that they hold. The Lonmin Acquisition is proposed to be effected by means of a scheme of arrangement between Lonmin and Lonmin’s shareholders under Part 26 of the UK Companies Act. The Lonmin Acquisition is subject to the satisfaction or waiver of a number of conditions, as set out in the announcement published pursuant to Rule 2.7 of the UK City Code on Takeovers and Mergers. Since the announcement of the Lonmin Acquisition, certain of these conditions have been satisfied, namely the receipt of approval from the Financial Surveillance Department of the South African Reserve Bank (SARB), as announced by Sibanye-Stillwater and Lonmin on 15 May 2018, and competition authority clearance in the United Kingdom, as announced by Sibanye-Stillwater and Lonmin on 28 June 2018. On 21 November 2018, it was announced that the South African Competition Tribunal had approved the Lonmin Acquisition, subject to certain specific conditions imposed on Sibanye-Stillwater, however an appeal against the South African Competition Tribunal’s decision was subsequently filed with the Competition Appeal Court of South Africa by the Association of Mineworkers and Construction Union (AMCU) on 19 December 2018. On 15 January 2019, it was announced that, in light of such appeal, Sibanye-Stillwater and Lonmin had agreed (with the consent of the UK Takeover Panel) to extend the longstop date for the scheme of arrangement relating to the Lonmin Acquisition to become effective, from 28 February 2019 to 30 June 2019. On 25 January 2019, Sibanye-Stillwater and Lonmin announced that the Competition Appeal Court of South Africa had set 2 April 2019 as the date for hearing the appeal. The appeal was heard on 2 April 2019 and the Competition Appeal Court of South Africa’s decision is awaited. The references to the Competition Appeal Court of South Africa’s hearing of the appeal in the Integrated Annual Report and Annual Financial Report herein should be read in conjunction with this statement.

The Lonmin Acquisition remains subject to the satisfaction or waiver of a number of other conditions, including (but not limited to) the approval of Lonmin shareholders and Sibanye-Stillwater shareholders and the approval of the scheme of arrangement by the High Court of Justice in England & Wales. It is expected that the Lonmin scheme document and Sibanye-Stillwater shareholder circular in connection with such shareholder approvals will be published in due course.

On 14 December 2017, a co-operation agreement was entered into between Sibanye-Stillwater and Lonmin in connection with the Lonmin Acquisition. Amongst other things, the co-operation agreement records the process by which Sibanye-Stillwater and Lonmin have agreed to co-operate in relation to certain clearances and regulatory conditions in connection with the Lonmin Acquisition, confirms certain matters in relation to the scheme and the Lonmin shareholder meetings and Sibanye-Stillwater shareholder meetings as well as certain matters relating to Lonmin’s share schemes.

Stillwater acquisition

On 9 December 2016, Sibanye-Stillwater announced it had reached a definitive agreement to acquire Stillwater Mining Company (Stillwater) for US$18 per share in cash, or US$2,200 million in aggregate (the Stillwater Transaction). On 25 April 2017, at the shareholders meeting of Sibanye-Stillwater, the Sibanye-Stillwater shareholders approved the proposed Stillwater Transaction by voting in favour of the various resolutions to give effect to the Stillwater Transaction and at the shareholders meeting of Stillwater, the requisite majority of Stillwater shareholders resolved to approve the Stillwater Transaction. Sibanye-Stillwater obtained control of Stillwater on this date. The effective date of the implementation of the Stillwater Transaction was 4 May 2017, when Sibanye-Stillwater took over legal ownership of Stillwater.

The Rustenburg operation acquisition

On 9 September 2015, Sibanye-Stillwater announced that it entered into an agreement with Rustenburg Platinum Mines Limited (RPM), a wholly owned subsidiary of Anglo American Platinum Limited (Anglo American Platinum) to acquire the Bathopele, Siphumelele (including Khomanani), and Thembelani (including Khuseleka) mining operations, two concentrating plants, an on-site chrome recovery plant, the Western Limb Tailings Retreatment Plant, associated surface infrastructure and related assets and liabilities on a going concern basis (the Rustenburg operation) (the Rustenburg operation Transaction). On 19 October 2016, Sibanye-Stillwater obtained consent in terms of section 11 of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA) for the transfer of the mining right and prospecting right pursuant to the Rustenburg operation Transaction. The effective date of the implementation of the Rustenburg operation Transaction was 1 November 2016, when Sibanye-Stillwater took over legal ownership and management of the Rustenburg operation.

Aquarius acquisition

On 6 October 2015, Sibanye-Stillwater announced a cash offer of US$0.195 per share for the entire issued share capital of Aquarius Platinum Limited (Aquarius) (the Aquarius Transaction and, together with the Rustenburg operation Transaction, the Stillwater Transaction and the proposed Lonmin Acquisition, the Acquisitions). Aquarius owns stakes in the Kroondal mine and Platinum Mile retreatment facilities near Rustenburg in South Africa and the Mimosa joint venture with Impala Platinum Holdings Limited (Implats) in Zimbabwe. The Aquarius Transaction completed on 12 April 2016, when Sibanye-Stillwater paid R4,301.5 million to the Aquarius shareholders and obtained control of Aquarius.

 

 

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION continued

Market information

This annual report includes industry data about Sibanye-Stillwater’s markets obtained from industry surveys, industry publications, market research and other publicly available third-party information. Industry surveys and industry publications generally state that the information they contain has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed. Sibanye-Stillwater and its advisers have not independently verified this data.

In addition, in many cases statements in this annual report regarding the gold and PGM mining industry, and Sibanye-Stillwater’s position in these industries have been made based on internal surveys, industry forecasts, market research, as well as Sibanye-Stillwater’s own experiences. While these statements are believed by Sibanye-Stillwater to be reliable, they have not been independently verified.

 

 

 

 

 

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DEFINED TERMS AND CONVENTIONS

In this annual report, all references to “we”, “us” and “our” refer to the Sibanye-Stillwater and the Sibanye-Stillwater Group, as applicable.

In this annual report, all references to “fiscal 2019” and “2019” are to the fiscal year ending 31 December 2019, all references to “fiscal 2018” and “2018” are to the audited fiscal year ended 31 December 2018, all references to “fiscal 2017” and “2017” are to the audited fiscal year ended 31 December 2017, and all references to “fiscal 2016” and “2016” are to the audited fiscal year ended 31 December 2016.

In this annual report, all references to “South Africa” are to the Republic of South Africa, all references to the “United States” and “US” are to the United States of America, its territories and possessions and any state of the United States and the District of Columbia, all references to the “United Kingdom” and “UK” are to the United Kingdom of Great Britain and Northern Ireland, all references to “Zimbabwe” are to the Republic of Zimbabwe, all references to “Canada” are to the Dominion of Canada and all references to “Argentina” are to the Republic of Argentina.

In this annual report, all references to the “DMR” are references to the South African Department of Mineral Resources, the government body responsible for regulating the mining industry in South Africa.

In this annual report, gold and PGM production figures are provided in kilograms, which are referred to as “kg”, or in troy ounces, which are referred as “ounces” or “oz”. Ore grades are provided in grams per metric ton, which are referred to as “grams per ton” or “g/t”. All references to “tons”, “tonnes” or “t” in this annual report are to metric tons.

In this annual report, “R”, “Rand” and “rand” refer to the South African Rand and “Rand cents” and “SA cents” refers to subunits of the South African Rand, “$”, “US$”, “US dollars” and “dollars” refer to United States dollars and “US cents” refers to subunits of the US dollar, “£”, “GBP” and “pounds sterling” refer to British pounds and “pence” refers to the subunits of the British pound.

This annual report contains references to the “total recordable injury frequency rate” (TRIFR). TRIFR includes the total number of fatalities, lost time injuries, medically treated injuries and restricted work injuries per million man hours.

 

 

 

 

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FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the US Securities Exchange Act of 1934 (the Exchange Act) with respect to our financial condition, results of operations, business strategies, operating efficiencies, competitive position, growth opportunities for existing services, plans and objectives of management, markets for stock and other matters.

These forward-looking statements, including, among others, those relating to our future business prospects, revenues and income, the potential benefit of the Acquisitions (including statements regarding growth, cost savings, benefits from and access to international financing and financial re-ratings), PGM pricing expectations, levels of output, supply and demand, information relating to Sibanye-Stillwater’s underground Blitz PGM project adjacent to the east of the existing Stillwater Mine designed to explore, define and extract the PGM resource along the far eastern extent of the J-M Reef (the Blitz Project), and estimations or expectations of enterprise value, adjusted EBITDA and net asset values wherever they may occur in this annual report and the exhibits to this annual report, are necessarily estimates reflecting the best judgement of our senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. As a consequence, these forward-looking statements should be considered in light of various important factors, including those set forth in this annual report. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation:

·

changes in the imposition of regulatory costs and relevant government regulations, particularly environmental, tax, health and safety regulations and new legislation affecting water, mining, mineral rights and business ownership, including any interpretation thereof which may be subject to dispute;

·

economic, business, political and social conditions in South Africa, Zimbabwe, the United States, the United Kingdom and elsewhere;

·

the further downgrade of South Africa’s credit rating;

·

the ability of Sibanye-Stillwater to comply with requirements that it operates in a sustainable manner and provide benefits to affected communities;

·

the occurrence of hazards associated with underground and surface gold, PGMs and uranium mining;

·

the occurrence of temporary stoppages of mines for safety incidents and unplanned maintenance;

·

uncertainty regarding the title to any of Sibanye-Stillwater’s properties;

·

Sibanye-Stillwater’s ability to implement its strategy and any changes thereto;

·

plans and objectives of management for future operations;

·

the success of Sibanye-Stillwater’s business strategy, exploration and development activities;

·

Sibanye-Stillwater’s future financial position, plans, strategies, objectives, capital expenditures, projected costs and anticipated cost savings, financing plans, debt position and its ability to reduce debt leverage;

·

changes in the market price of gold, PGMs and/or uranium;

·

fluctuations in exchange rates, currency devaluations, inflation and other macro-economic monetary policies;

·

the ability of Sibanye-Stillwater to comply with loan and other covenants and restrictions and difficulties in obtaining additional financing or refinancing;

·

Sibanye-Stillwater’s ability to service its bond instruments (including high yield bonds and convertible bonds);

·

the occurrence of labour disruptions and industrial actions;

·

changes in assumptions underlying Sibanye-Stillwater’s estimation of its current mineral reserves;

·

power disruption, constraints and cost increases;

·

Sibanye-Stillwater’s ability to hire and retain senior management or sufficient technically skilled employees, as well as its ability to achieve sufficient representation of historically disadvantaged South Africans (HDSAs) in its management positions;

·

the ability to achieve anticipated efficiencies and other cost savings in connection with, and the ability to successfully integrate, past, ongoing and future acquisitions, as well as at existing operations;

·

the ability of Sibanye-Stillwater to complete any ongoing or future acquisitions;

·

supply chain shortages and increases in the price of production inputs;

·

the adequacy of Sibanye-Stillwater’s insurance coverage;

·

failure of Sibanye-Stillwater’s information technology and communications systems;

·

the outcome and consequence of any potential or pending litigation or regulatory proceedings or environmental, health or safety issues;

·

operating in new geographies and regulatory environments where Sibanye-Stillwater has no previous experience;

·

Sibanye-Stillwater’s ability to achieve steady state production at the Blitz Project;

·

Sibanye-Stillwater’s ability to obtain the benefits of any streaming arrangements or pipeline financing;

·

the availability, terms and deployment of capital or credit; and

·

the impact of HIV, tuberculosis and other contagious diseases.

The foregoing factors and others described under “Risk Factors” should not be construed as exhaustive. There are other factors that may cause our actual results to differ materially from the forward-looking statements. Moreover, new risk factors emerge from time to time and it is not possible for us to predict all such risk factors. We cannot assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, you should not place undue reliance on forward-looking statements as a prediction of actual results.

We undertake no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events.

 

 

 

 

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INTEGRATED ANNUAL REPORT

 

Picture 12

 

Contents

 

 

INTRODUCTION

 

 

12

About this report

 

 

13

Corporate profile

 

 

17

Our strategy

 

 

VIEW FROM THE TOP

 

 

19

Perspective from the Chair

 

 

22

Chief Executive Officer’s review

 

 

29

Chief Financial Officer’s report

 

 

32

Managing our risks and opportunities

 

 

46

Stakeholder engagement

 

 

PERFORMANCE REVIEW

 

 

50

Delivering value from operations, projects and technology

 

 

60

Superior value for the workforce

 

 

76

Ensuring safe production

 

 

83

Occupational health and well-being

 

 

95

Social upliftment and community development

 

 

98

Minimising the environmental impact

 

 

GOVERNANCE

 

 

116

Corporate governance and leadership

 

 

138

Remuneration report

 

Our full set of 2018 reports, produced for the financial year from 1 January 2018 to 31 December 2018, covers Sibanye-Stillwater’s progress and achievements in delivering on our strategic objectives and commitment to creating stakeholder value.

 

 

 

 

 

 

 

 

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ABOUT THIS REPORT

APPROACH AND PHILOSOPHY

This integrated report, our primary report to stakeholders, adopts an integrated approach to describing the operational, financial and sustainability performance (see Annual Financial Report—Overview—Five-year financial performance) and activities of Sibanye Gold Limited (trading as Sibanye-Stillwater) for the period from 1 January 2018 to 31 December 2018.

This report is intended to assist stakeholders to make informed decisions on Sibanye-Stillwater’s ability to create sustained value in the long term. It provides insight into our strategy, our business and performance, and the progress made in delivering on our strategic objectives and our commitment to creating stakeholder value over the past year. We report on those matters we consider to be most material to Sibanye-Stillwater’s sustainability, operational, financial and strategic performance. Underlying this is our commitment to ensuring that our decisions are made according to, and underpinned by, our CARES values.

This integrated report complies with the International Integrated Reporting Council’s framework on integrated reporting, the King IV Report on Corporate Governance for South Africa, 2016 (King IV), and the South African Companies Act 71 of 2008 (as amended).

In compiling this report, we have aligned with the Global Reporting Initiative (GRI) Standards and have taken into account the International Council on Mining and Metals (ICMM) guiding principles as well as the 10 Principles of the United Nations Global Compact.

In this report, we attempt to provide stakeholders with relevant information that would enable an assessment of the way our mining activities in 2018 created value, improved lives and achieved other strategic objectives. In so doing, we give an account of challenges encountered and successes achieved, the impact of our activities, and of those factors and risks, both in the external environment and internally, that have had an impact on our ability to achieve our strategic objectives and to create superior value in the past year. The process to determine the most material of these risks, together with identifying our opportunities, is described in Managing our risks and opportunities.

SCOPE AND BOUNDARY

The scope and boundary of this report take into account the Group’s organisational structure (see —Corporate profile) implemented to enhance and ensure delivery on our strategic operating objectives. Annual comparative data is provided where applicable. For the 2018 financial year, annual data is provided where possible by region, type of operation and at group level. Note that the annual data provided at group-level for 2014 and 2015 in this report is comparable to that for the South Africa (SA) gold operations for 2016 – 2018. Where data for previous years has been restated, this is indicated.

Any material events occurring post year-end and before the date of approval by the Board are reported in this report.

AUDIENCE

While the principal audience for this report is investors and shareholders, we recognise that there are other stakeholders who have varied and specific information requirements, many of which we address, despite not producing a separate sustainable development report. Instead all non-financial reporting is either included in this integrated report or is available on the website, where referenced.

This report is intended to enable stakeholders to determine whether the material issues identified will affect the sustainability of Sibanye-Stillwater’s business and its ability to create and sustain value in the short, medium and long term.

ASSURANCE

Sibanye-Stillwater’s internal audit function provides an objective evaluation of the Group’s internal control processes and systems devised to mitigate business risks and has ensured the accuracy of the information presented.

Internal audit is a management function.

 

 

 

 

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CORPORATE PROFILE

Sibanye-Stillwater is an independent, global, precious metals mining company producing a unique mix of metals that includes platinum group metals (PGMs) and gold.

Domiciled and with its head office in South Africa, Sibanye-Stillwater owns and operates a portfolio of high-quality global operations, processing facilities and projects made up as follows:

 

 

United States (US) PGM operations

The East Boulder and the Stillwater (including Blitz) mines are located in Montana, in the United States. The Columbus Metallurgical Complex, which smelts the material mined to produce PGM-rich filter cake, also recycles PGMs from autocatalysts.

Southern Africa (SA) PGM operations

The Kroondal, Rustenburg and Platinum Mile operations are located on the western limb of the Bushveld Complex in South Africa, while the Mimosa joint venture is situated on the southern portion of the Great Dyke in Zimbabwe. Platinum Mile is a retreatment facility, which reprocesses arisings from Rustenburg.

South Africa (SA) gold operations

The Driefontein, Kloof and Cooke surface operations and associated processing facilities are located on the West Rand of the Witwatersrand Basin, while Beatrix is in the southern Free State goldfields. Sibanye-Stillwater also has an interest in surface tailings retreatment facilities located from the East Rand to the West Rand through our 38.05% stake in DRDGOLD Limited (DRDGOLD).

Picture 2

Projects

Our projects include:

·

The Marathon PGM project in Ontario, Canada

·

The Altar and Rio Grande copper-gold projects in the Andes in north-west Argentina, close to the Chilean border

·

The Hoedspruit, Zondernaam and Vygenhoek, PGM projects in South Africa

·

The Burnstone and the southern Free State gold projects in South Africa

OPERATING FRAMEWORK

Our operating framework is underpinned by strong, ethical corporate governance that is based on the principles of accountability, transparency, competence, responsibility, fairness and integrity, which are fundamental to the long-term sustainability of our business and to sustained value creation for all stakeholders. These principles, which are implicit in and integral to our CARES values, are applied in the management of our business and in engaging with and reporting to shareholders and other stakeholders. Our governance structures, processes and policies, together with our code of ethics, underpin execution of our strategy and support our business model.

OUR HISTORY

Following the unbundling by Gold Fields of its South African gold assets (other than South Deep) in 2013 to form Sibanye Gold Limited, the Company has transformed geographically and by metal produced – from being a South African gold mining company to an internationally competitive, diversified precious metals miner producing gold and the full suite of PGMs.

With the acquisition of the Stillwater Mining Company in May 2017, Sibanye Gold was rebranded as Sibanye-Stillwater.

 

 

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COrporate PROFILE continued

In line with our strategy, we have continued to advance the proposed acquisition of Lonmin plc (Lonmin), which was initially announced towards the end of 2017.

Sibanye-Stillwater also has a 38.05% stake in DRDGOLD, following the vending of certain of Sibanye-Stillwater’s surface gold tailings facilities and processing assets into that company. DRDGOLD is a world leader in the retreatment of gold tailings.

OPERATIONAL PROFILE 
A SNAPSHOT

 

 

 

 

US PGM operations

 

 

 

 

Units

2018
2017