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: Report From The Chairman of The Remuneration Committee
Part 2: Remuneration Philosophy, Policy and Framework
Part 3: Implementation of Sibanye-Stillwater’S Remuneration Policy – 2017
EX-4.38 sbgl-20171231ex438aa40d0.htm
EX-4.39 sbgl-20171231ex439d33e4c.htm
EX-4.40 sbgl-20171231ex440042051.htm
EX-4.41 sbgl-20171231ex4414bcb80.htm
EX-8.1 sbgl-20171231ex81315d963.htm
EX-12.1 sbgl-20171231ex1215446e6.htm
EX-12.2 sbgl-20171231ex1222b85be.htm
EX-13.1 sbgl-20171231ex1319ef4ef.htm
EX-13.2 sbgl-20171231ex132bcbb29.htm
EX-16 sbgl-20171231ex163925e81.htm

Sibanye Gold Earnings 2017-12-31

Balance SheetIncome StatementCash Flow

20-F 1 sbgl-20171231x20f.htm 20-F sbgl_Current_Folio 20F

As filed with the Securities and Exchange Commission on 30 March 2018


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 2017

or

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

For the transition period from                             to

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)
Libanon Business Park
1 Hospital Street (off Cedar Avenue)
Libanon, Westonaria, 1780
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
Libanon Business Park
1 Hospital Street (off Cedar Avenue)
Libanon, Westonaria, 1780
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 Annual Report
2,168,721,220 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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. (Check one):

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 

 

*   This requirement does not apply to the registrant

 

 

 

 

 

 

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE

 

 

 

 

 

 

 

 

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

 

124-127

 

 

(b)    Capitalisation and indebtedness

 

NA

 

NA

 

 

(c)    Reasons for the offer

 

NA

 

NA

 

 

(d)    Risk factors

 

Further Information—Risk factors

 

220-237

4

 

Information on the Company

 

 

 

 

 

 

(a)    History and development of the Company

 

Integrated Annual Report—Introduction—Corporate profile

 

12-14

 

 

 

 

Further Information—Additional information—Memorandum of incorporation

 

276

 

 

 

 

Annual Financial Report—Administrative details—Administrative and corporate information

 

219

 

 

 

 

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

 

20-21

 

 

 

 

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

 

22-25

 

 

 

 

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

 

26-27

 

 

 

 

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

 

35-46

 

 

 

 

Annual Financial Report—Overview—Five-year financial performance

 

124-127

 

 

 

 

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

 

131-132

 

 

 

 

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

 

188-191

 

 

(b)    Business overview

 

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

 

128

 

 

 

 

Integrated Annual Report—Introduction—Corporate profile

 

12-14

 

 

 

 

Annual Financial Report—Overview—Management’s discussion and analysis of the financial statements—2017 financial performance compared with 2016 and 2015

 

132-141

 

 

 

 

Annual Financial Report—Overview—Five-year financial performance

 

124-127

 

 

 

 

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

 

130

 

 

 

 

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

 

20-21

 

 

 

 

Further Information—Environmental and regulatory matters

 

268-272

 

 

(c)    Organisational structure

 

Integrated Annual Report—Introduction—Corporate profile

 

12-14

 

 

 

 

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

 

165

 

 

(d)    Property, plant and equipment

 

Integrated Annual Report—Introduction—Corporate profile

 

12-14

 

 

 

 

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

 

35-46

 

 

 

 

Further Information—Additional information—Sibanye-Stillwater’s mining operations

 

238-254

 

 

 

 

Further Information—Reserves of Sibanye-Stillwater as of 31 December 2017

 

255-263

 

 

Sibanye-Stillwater | Form 20-F 2017

 1

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE continued

 

 

 

 

 

 

 

Item

 

Form 20-F Caption

 

Location in this document

 

Page

 

 

 

 

Further Information—Environmental and regulatory matters

 

268-272

 

 

 

 

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

 

184-187

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

 

128-144

 

 

 

 

Annual Financial Report—Annual financial statements—Consolidated income statement

 

157

 

 

 

 

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

 

158

 

 

 

 

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

 

160

 

 

 

 

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

 

199-205

 

 

 

 

Annual Financial Report—Annual financial statements—Notes to the consolidated financial statements—Note 30: Fair value of financial assets and financial liabilities, and risk management

 

208-213

 

 

 

 

Annual Financial Report—Annual financial statements—Notes to the consolidated financial statements—Note 31: Commitments

 

214

 

 

(b)    Liquidity and capital resources

 

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

 

141-142

 

 

(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

 

128-144

 

 

(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

 

143

 

 

(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

 

143

 

 

(g)   Safe harbour

 

Forward-looking statements

 

8

6

 

Directors, senior management and employees

 

 

 

 

 

 

(a)    Directors and senior management

 

Integrated Annual Report—Leadership and governance—Board and Executive Committee

 

107-108

 

 

 

 

Further Information—Directors and Senior Management

 

264-267

 

 

(b)    Compensation

 

Integrated Annual Report—Leadership and governance—Remuneration report

 

109-122

 

 

 

 

Annual Financial Report—Annual financial statements—Notes to the consolidated financial statements—Note 33: Related-party transactions

 

214-216

 

 

(c)    Board practices

 

Integrated Annual Report—Accountability—Corporate governance report—Our Board, Governance Structures and Processes

 

95-103

 

 

 

 

Integrated Annual Report—Leadership and governance—Remuneration report—Executive directors’ contracts of employment

 

115

 

 

(d)    Employees

 

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

 

47-58

 

 

Sibanye-Stillwater | Form 20-F 2017

2

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE continued

 

 

 

 

 

 

 

Item

 

Form 20-F Caption

 

Location in this document

 

Page

 

 

(e)    Share ownership

 

Annual Financial Report—Annual financial statements—Notes to the consolidated financial statements—Note 33: Related-party transactions

 

214-216

 

 

 

 

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

 

172-177

7

 

Major Shareholders and Related Party Transactions

 

 

 

 

 

 

(a)    Major shareholders

 

Annual Financial Report—Administrative details—Shareholder information

 

217-218

 

 

 

 

Further Information—The listing

 

274-275

 

 

(b)    Related party transactions

 

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

 

150-151

 

 

 

 

Annual Financial Report—Annual financial statements—Notes to the consolidated financial statements—Note 33: Related-party transactions

 

214-216

 

 

(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

 

128-144

 

 

 

 

Annual Financial Report—Annual financial statements

 

157-216

 

 

 

 

Annual Financial Report—Director’s Report—Litigation

 

154-155

 

 

 

 

Annual Financial Report—Accountability—Directors’ report—Financial affairs—Dividend policy

 

151

 

 

 

 

Further Information—Additional information—Dividend policy and dividend distributions

 

273

 

 

(b)    Significant changes

 

NA

 

NA

9

 

The Offer and listing

 

 

 

 

 

 

(a)    Listing details

 

Further Information—The listing

 

274-275

 

 

(b)    Plan of distribution

 

NA

 

NA

 

 

(c)    Markets

 

Further Information—The listing

 

274-275

 

 

(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

 

276

 

 

(c)    Material contracts

 

Further Information—Additional information—Material contracts

 

276-277

 

 

(d)    Exchange controls

 

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

 

282

 

 

 

 

Further Information—Environmental and regulatory matters—Exchange Controls

 

272

 

 

(e)    Taxation

 

Further Information—Additional information—Taxation

 

282-285

 

 

(f)     Dividends and paying agents

 

NA

 

NA

 

 

(g)    Statement by experts

 

NA

 

NA

 

 

(h)    Documents on display

 

Further Information—Additional information—Documents on display

 

285

 

 

(i)    Subsidiary information

 

NA

 

NA

11

 

Quantitative and qualitative disclosures about market risk

 

Annual Financial Report—Annual financial statements—Notes to the consolidated financial statements—Note 30.2: Risk management activities

 

209-213

12

 

Description of securities other than equity securities

 

 

 

 

 

 

Sibanye-Stillwater | Form 20-F 2017

3

 


 

Table of Contents

FORM 20-F CROSS REFERENCE GUIDE continued

 

 

 

 

 

 

 

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

 

277-282

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

 

287

16A

 

Audit Committee financial expert

 

Annual Financial Report—Accountability—Corporate governance report—Board committees—Audit Committee

 

98

16B

 

Code of ethics

 

Annual Financial Report—Accountability—Corporate governance report—Code of ethics

 

92

 

 

 

 

Statement of responsibility by the Board of Directors

 

145

16C

 

Principal accountant fees and services

 

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

 

148

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

 

NA

 

NA

16G

 

Corporate governance

 

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

 

286

16H

 

Mine safety disclosure

 

NA

 

NA

17

 

Financial statements

 

NA

 

NA

18

 

Financial statements

 

Financial Information—Report of independent registered public accounting firm

 

156

 

 

 

 

Annual Financial Report—Annual financial statements—Consolidated income statement

 

157

 

 

 

 

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

 

157

 

 

 

 

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

 

158

 

 

 

 

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

 

159

 

 

 

 

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

 

160

 

 

 

 

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

 

161-216

19

 

Exhibits

 

Exhibits

 

288-289

 

 

 

 

 

Sibanye-Stillwater | Form 20-F 2017

4

 


 

Table of Contents

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Historical Consolidated Financial Statements

Sibanye Gold Limited (trading as Sibanye-Stillwater (Sibanye-Stillwater)), 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 2017, 2016 and 2015 (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 amortization” (adjusted EBITDA), “normalised earnings”, “operating cost”, “All-in sustaining cost”, “All-in sustaining cost margin”, “All-in cost”, “All-in cost margin”, “headline earnings per share”, “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. 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—Five-year financial performance—Group operating statistics—Footnote 1,  Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 2,  Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 3,  Annual Financial Report—Overview—Five-year financial performance—Group operating statistics—Footnote 4,  Annual Financial Report—Overview—Five-year financial performance—Group financial statistics—Footnote 4 and Annual Financial Report—Overview—Five-year financial performance— Group financial statistics—Footnote 5 for more information.

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 R12.36/US$1.00 which was the closing rate on 31 December 2017. 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.

The Acquisitions of STILLWATER, the Rustenburg Operations and Aquarius

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.

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 operations) (the Rustenburg operations Transaction). On 19 October 2016, Sibanye-Stillwater obtained consent in terms of section 11 of the Mineral and Petroleum Resources Development Act for the transfer of the mining right and prospecting right pursuant to the Rustenburg operations Transaction, and control of the Rustenburg operations on this date. The effective date of the implementation of the transaction was 1 November 2016, when Sibanye-Stillwater took over legal ownership and management of the Rustenburg operations.

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 operations Transaction and the Stillwater Transaction, 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 in Zimbabwe. The Aquarius Transaction was subject to the fulfilment of various conditions precedent which were completed on 12 April 2016, when Sibanye-Stillwater paid R4,301.5 million to the Aquarius shareholders and obtained control of Aquarius.

 

 

Sibanye-Stillwater | Form 20-F 2017

 5

 


 

Table of Contents

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.

 

 

 

 

 

Sibanye-Stillwater | Form 20-F 2017

6

 


 

Table of Contents

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 2018” and “2018” are to the fiscal year ending 31 December 2018, all references to “fiscal 2017” and “2017” are to the audited fiscal year ended 31 December 2017, all references to “fiscal 2016” and “2016” are to the audited fiscal year ended 31 December 2016, and all references to “fiscal 2015” and “2015” are to the audited fiscal year ended 31 December 2015.

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, as amended (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 the 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 (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 market price of the minerals that it mines and sells;

·

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

·

the occurrence of labour disruptions and industrial actions;

·

changes in 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;

·

power disruption, constraints and cost increases;

·

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

·

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

·

the occurrence of hazards associated with underground and surface mining;

·

failure of Sibanye-Stillwater to comply with various lender covenants and restrictions and difficulties in obtaining additional financing or refinancing;

·

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

·

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

·

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

·

Sibanye-Stillwater’s future financial position, plans, strategies, objectives, capital expenditures, projected costs and anticipated cost savings and financing plans;

·

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

·

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

·

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

·

the ability of Sibanye-Stillwater to comply with requirements that it operates in a sustainable manner;

·

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

·

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

·

the availability, terms and deployment of capital or credit;

·

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 HDSAs in its management positions;

·

the adequacy of Sibanye-Stillwater’s insurance coverage;

·

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

·

social unrest, sickness or natural or man-made disaster at informal settlements in the vicinity of Sibanye-Stillwater’s African operations;

·

the impact of HIV, tuberculosis and other contagious diseases; and

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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10

INTEGRATED ANNUAL REPORT 

 

 

123

ANNUAL FINANCIAL REPORT

 

 

 

FURTHER INFORMATION

 

 

220

Risk factors 

 

 

238

Information on the company

 

 

255

Reserves of Sibanye-Stillwater as of 31 December 2017

 

 

264

Board and senior management

 

 

268

Environmental and regulatory matters

 

 

273

Financial information

 

 

274

The listing

 

 

276

Additional information

 

 

287

Controls and procedures

 

 

 

288

EXHIBITS

 

 

 

290

SIGNATURES

 

 

 

 

 

 

 

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INTEGRATED ANNUAL REPORT

 

Picture 1

 

contents

 

 

INTRODUCTION

 

 

11

About this report

 

 

12

Corporate profile

 

 

15

Our vision and strategy explained

 

 

17

How we create value

 

 

VIEW FROM THE TOP

 

 

20

Perspective from the Chair

 

 

22

Chief Executive Officer’s review

 

 

26

Chief Financial Officer’s report

 

 

28

Managing our material risks

 

 

PERFORMANCE REVIEW

 

 

35

Delivering value from operations, projects and technology

 

 

47

Superior value for the workforce

 

 

59

Safety and health focus

 

 

71

Social upliftment and community development

 

 

77

Minimising the environmental impact

 

 

LEADERSHIP AND GOVERNANCE

 

 

92

Corporate governance

 

 

107

Board and Executive Committee

 

 

109

Remuneration report

 

This integrated annual report, together with the other reports produced for the financial year from 1 January 2017 to 31 December 2017, covers Sibanye-Stillwater’s progress and achievements in delivering on our strategic objectives and commitment to creating stakeholder value.

 

REPORTING COMPLIANCE

The following frameworks, guidelines and requirements have been applied, where relevant in compiling this integrated report and the entire suite of 2017 reports:

  International Integrated Reporting Framework

  Global Reporting Initiative (GRI) G4

  King Report on Governance for South Africa 2016 (King IV)

  South African Companies Act, 71 of 2008 (the Companies Act)

  JSE Listings Requirements

  South African Code for Reporting of Exploration Results, Mineral Resources and Mineral Reserves (SAMREC Code)

  Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (Mining Charter) (2002) and related scorecard (2004)

  Amendments to the Mining Charter (2010) and related scorecard (2010)

International Council on Mining and Metals (ICMM)

  Social and Labour Plans (SLPs) – in terms of the requirements of the Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA)

  United Nations Global Compact (UNGC)

  Greenhouse Gas (GHG) Protocol

  Sustainability Accounting Standards Board’s (SASB) standards

  FTSE/JSE Responsible Investment Index

  International Financial Reporting Standards (IFRS)

  South African Institute of Chartered Accountants (SAICA) Financial Reporting Guides

  SEC regulations, including the Industry Guide 7 for the Reporting of Mineral Reserves

 

 

 

 

 

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ABOUT THIS REPORT

This integrated report covers the operational, financial and non-financial performance of the operations and activities of Sibanye Gold Limited, trading as Sibanye-Stillwater. It provides stakeholders with transparent 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 during the year to 31 December 2017. This report, which includes sustainable development- related information, is the primary report in our 2017 suite of reports and takes note of any material events since year-end and the date of approval by the Board.

SCOPE AND BOUNDARY

The scope and boundary of this report have been amended to take into account the regional organisational restructuring undertaken following the significant transformation the Group has undergone in the past two years (see Corporate profile) in order to ensure continued delivery on its strategic operating objectives.

Sibanye-Stillwater’s operating assets are grouped regionally as follows:

Southern Africa (SA) region – gold and platinum group metal (PGM) mining operations and projects

United States (US) region – PGM mining operations and projects. Annual comparative data is provided where applicable. For the 2017 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 2013 to 2015 is now comparable to that for the SA region’s gold operations for 2016 and 2017. Where data for previous years has been restated, this is indicated.

The 2016 data reported for the Platinum Division is now comparable to that reported for the SA region’s PGM operations, with Kroondal, Mimosa and Platinum Mile included for nine months of 2016 and the Rustenburg operation for two months. These operations were included for the full 12 months in 2017.

The US region’s PGM assets are those of the Stillwater Mining Company (Stillwater) which were acquired effective May 2017 and are included for eight months of the year (unless otherwise specified).

REPORTING PHILOSOPHY

In this integrated report, our primary report, the information provided is intended to inform stakeholders about Sibanye-Stillwater’s operating and financial performance and progress made in delivering on our strategy. 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 aim to fulfil, particularly as we do not produce 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.

We have endeavoured to build on the information provided in the 2016 integrated report. This report describes what we accomplished in 2017 to create value, to improve lives and to achieve our strategic objectives. In so doing, we give an account of the impact of our activities and, more importantly, 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 is described in –View from the top–Managing our material risks.

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.

APPROVAL AND ASSURANCE

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

See Further Information—Controls and procedures for managements attestation on the effectiveness of Sibanye-Stillwater’s internal control over financial reporting as of 31 December 2017.

 

 

 

 

 

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CORPORATE PROFILE

Sibanye-Stillwater, an independent, global, precious metals mining company, produces a unique mix of metals that includes gold and PGMs.

Globally, Sibanye-Stillwater, is the third largest producer of platinum and palladium, and features among the world’s top gold producing companies.

Domiciled in South Africa, Sibanye-Stillwater owns and operates a portfolio of high-quality operations and projects, which are located and managed in two regions: the Southern Africa (SA) region and the United States (US) region.

TRANSFORMING OUR COMPANY

Since its establishment in 2013, the company has transformed itself, geographically and by metal produced. From being a South African gold mining company, Sibanye-Stillwater is now an internationally competitive, diversified precious metals miner producing gold and PGMs. With the formal acquisition of Stillwater in May 2017, Sibanye Gold Limited was rebranded as Sibanye-Stillwater.

Our planned growth momentum continued in 2017 with the announcements towards year-end of the proposed acquisition of Lonmin plc (Lonmin), one of the largest PGM producers in South Africa, and the vending of certain of Sibanye-Stillwater’s surface gold tailings facilities and processing assets into DRDGOLD Limited (DRDGOLD), a world leader in the field, for a 38% shareholding.

OUR VALUE-CREATION JOURNEY

2013

2016

2017

2018

South African gold mining company with mature, short-life operations

Entry into the Southern African PGM sector

Becoming a global, precious metals miner

Our value-creation journey continues

  Implemented our operating model and reduced costs to:

–  improve flexibility and quality of mining

–  increase reserves

–  extend operating life

–  reduce debt/gearing

–  deliver consistent industry-leading returns

  Value-accretive acquisitions at a low point in the PGM price cycle

  Innovative financing of strategic growth enhances value

  Implemented our operating model at the newly acquired PGM assets

  Consolidation synergies yielding superior value

  Stillwater acquisition leads to creation of a globally competitive, South African- based mining company

  Successful refinancing of the bridge loan and US$1 billion rights offer, the US$1.05 billion bond issue and the US$450 million convertible bond

•  Awaiting formal approval of:

–  Proposed acquisition of Lonmin

–  Planned partnership with DRDGOLD on retreatment of surface gold tailings

ENTERPRISE VALUE1

R10 billion

ENTERPRISE VALUE1

R32 billion

ENTERPRISE VALUE1

R58 billion

 

1 Enterprise value, or EV, is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalisation. Enterprise value is calculated as the market capitalisation plus debt and minority interests and preferred shares, minus total cash and cash equivalents. It is calculated as at 31 December of each year.

 

 

 

 

 

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COrporate PROFILE continued

location of our operations and projects

 

Picture 3

LISTINGS

Sibanye-Stillwater has its primary listing on the JSE, South Africa, where it is included in the FTSE/JSE Responsible Investment Index. The company is also listed on the NYSE, with its shares quoted as American Depositary Receipts (ADRs). For further details, see Shareholder information as well as our corporate website, www.sibanyestillwater.com.

At 31 December 2017, Sibanye-Stillwater’s market capitalisation was R34.3 billion (US$2.7 billion) and 2016: R23.6 billion (US$1.7 billion).

 

 

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corporate PROFILE continued

OUR PRODUCTS

GOLD

PLATINUM GROUP METALS

BY-PRODUCTS

In our SA region, Sibanye-Stillwater mines, extracts and processes gold-bearing ore

to produce a beneficiated product, doré, which is then refined further at Rand Refinery Proprietary Limited (Rand Refinery) into gold bars with a purity of at least 99.5% in accordance with the London Bullion Market Association’s standards of Good Delivery. Sibanye-Stillwater holds a 33% interest in Rand Refinery, one of the largest global refiners of gold, and the largest in Africa, which then markets and sells the refined gold on international markets to customers around the world.

The main sources of demand for gold are as a store of value (such as central bank holdings), as an investment (exchange traded funds, bars and coins), for jewellery and for various industrial purposes

At our PGM operations in South Africa and Zimbabwe, the primary PGMs produced are platinum, palladium and rhodium, which together with the gold occurring as a co- product, are referred to as 4E (3PGM+Au), by ratio approximately 58% platinum (Pt), 32% palladium (Pd), 8% rhodium (Rh) and 2% gold (Au). The PGM-bearing ore mined here is processed to produce PGMs-in- concentrate, which is currently processed further by third parties.

The US operations primarily produce palladium and platinum (78% Pd and 22% Pt), which are referred to as 2E (or 2PGM). The PGM-bearing ore mined is processed, smelted and refined to produce a PGM-rich filter cake. A third party refines the filter cake further.

The major sources of demand for PGMs are for autocatalytic convertors and jewellery. Together, these two areas account for around 72% of platinum demand while, for palladium, autocatalytic convertors account for 80% of demand for that metal.*

At our PGM operations, the minor PGMs – iridium and ruthenium – are produced as co-products. They, together with the three primary PGMs, are referred to as 6E (5PGM+Au).

In addition, at the SA PGM operations, nickel, copper and chrome, among other minerals, are produced as by-products.

 

* Source: Johnson Matthey

 

 

 

 

 

 

 

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OUR VISION AND STRATEGY EXPLAINED

OUR CORE PURPOSE

Sibanye-Stillwater’s mining improves lives

OUR VALUE PROPOSITION

 

 

 

Employees

By providing employment, Sibanye-Stillwater enables those employed to earn an income, acquire skills and, with training and development, to advance in a work environment where their safety, health and wellbeing are priorities.

Shareholders

Sibanye-Stillwater delivers value to shareholders by delivering superior returns through capital appreciation, spurred by operational efficiency, cost- efficient capital management and acquisitive growth.

In living our values, we show that we care about safe production, our stakeholders, our environment, our company and our future. Our approach is holistic. We are focused on delivery on all strategic imperatives critical to Sibanye-Stillwater’s long-term success

Communities

Sibanye-Stillwater  contributes to communities, broader society (including suppliers), and the economy by investing in socio-economic development initiatives, employing those who reside in  the vicinity of our operations and through preferential local procurement.

Government

Sibanye-Stillwater  contributes directly to the national fiscus by way of taxes and royalties paid, enabling government to provide social infrastructure and services. We also contribute indirectly through the payment by employees of personal income tax and of municipal rates and taxes.

Picture 33

OUR VISION

Superior value creation for all our stakeholders through the responsible mining and beneficiation of our mineral resources.

OUR STRATEGY

In order to deliver on our vision to create superior value and improve lives, Sibanye-Stillwater aims to deliver sustained, positive cash flows to ensure robust profitability throughout the commodity cycle.

 

 

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OUR VISION AND STRATEGY EXPLAINED continued

OUR THREE-YEAR STRATEGIC GOAL

Picture 49

OUR FOUR-STEP VALUE-ACCRETIVE PGM STRATEGY

APRIL 2016

NOVEMBER 2016

MAY 2017

2018

AQUARIUS

RUSTENBURG
OPERATIONS

STILLWATER

PROPOSED ACQUISITION

OF LONMIN1

• Our first entry into the PGM sector was the acquisition of Aquarius Platinum Limited (Aquarius) and its Kroondal, Platinum Mile and Mimosa assets in Southern Africa

• Aquarius managed efficient and productive assets

• Since acquisition, these assets have increased their levels of operational performance

• Acquired the Rustenburg operation, located adjacent to Aquarius’ Kroondal mine, from Anglo American Platinum

• A smart transaction structured to reduce risk and aligned with our outlook for the platinum price

• Enabled realisation of significant synergies with Aquarius assets and Sibanye-Stillwater

• Costs and operational synergies of more than R1 billion were achieved within 14 months, exceeding plan both in extent and time (R800m over three-four years)

• Acquired high-grade, low-cost assets and  a world-class growth project

• A palladium producer primarily, providing upside to a robust market

• Facilitated geographic, commodity and currency diversification

• Significant  growth potential from the lower East Boulder and lower Blitz projects as well as from the 12.2km mineralised section between the Stillwater and East Boulder mines

• Proposed acquisition announced on 14 December 2017

• Located adjacent to our current PGM operations in South Africa

• Potential to realise significant synergies

• Given its smelting and refining facilities, this acquisition is aligned with our mine-to-market strategy for the SA region

• Replacement value of smelting and refining facilities significantly exceeds acquisition cost

• Sizeable resource provides long-term optionality  from advanced brownfield and greenfield project pipeline

• Subject to Competition Commission and shareholder approval

At the end of 2016, Sibanye-Stillwater’s PGM (4E) Mineral Reserves totalled 23.2Moz

 

At the end of 2017, PGM assets totalled:

2E: Mineral Reserves of 21.9Moz

4E: Mineral Reserves of 22.4Moz

Lonmin has a PGM Mineral Reserve of 31.8Moz (as  at 30 September 2017)

1  The full announcement is available at www.sibanyestillwater.com/investors/transactions/lonmin

 

 

 

 

 

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how we create value

Sibanye-Stillwater has a portfolio of gold and PGM assets that will enable it to sustainably conduct its business as a precious metals miner for many years. We conduct our business in a world in which various external factors have an impact, whether positive or negative, on the viability of our business.

Managing these factors and their related risks is vital to our business continuity. In addition, our mining activities have an impact on:

the environment, people, employees and local communities, and broader society. We build and maintain relationships with stakeholders to minimise and manage our risk. Our CARES values, governance framework and code of ethics, which speak to our role as a responsible corporate citizen, underpin all that we do.

 

 

 

OUR ASSETS

OUR PRIMARY BUSINESS ACTIVITIES

WE CREATE VALUE

To ensure sustainable value creation, Sibanye-Stillwater has established a unique, global, diversified and long-life portfolio of precious metal assets.

Sibanye-Stillwater  is:

• a top three global producer of platinum and palladium

• the largest primary producer of palladium globally

• a leading recycler of PGMs globally

• the largest gold producer in South Africa

• Mining underground and surface resources

• Processing and refining ore mined

• PGM recycling

• Sale of end products

• Acquiring new, value-accretive assets

• Supported by:

– Community and social development initiatives

– Environmental management and land rehabilitation

• Identifying value-accretive acquisition opportunities that are innovatively financed to optimise value for stakeholders

• Focusing on safety, productivity, cost discipline and optimising operating capital so as to contribute to positive cash flows and, ultimately, to value creation

• Investing in value-accretive organic growth projects to extend operating lives and optimise return on capital

ATTRIBUTABLE OUTPUT 2017 VERSUS 2016

Gold (000oz)

2017: 1,403

2016: 1,512

PGM (4E) (000oz)

2017: 1,194

2016: 412

PGM (2E) (000oz)

2017: 376

 

 

OPERATING CONTEXT AND RISK

ENGAGING WITH STAKEHOLDERS

GOVERNANCE

• Robust processes and systems are in place to identify and manage those factors likely to have a significant impact on our ability to create value

• These systems and processes are supported by internal controls that ensure our response to mitigate any impact is effective and timely

• Our top material risks have been identified, together with corresponding opportunities, see Material risks and opportunities

• Stakeholder engagement is critical both to the stability and sustainability of our business

• Developing and maintaining constructive, positive relationships with stakeholders helps to ensure we maintain our social licence to operate

• Our strong, principled governance framework, underpinned by our values, is aimed at ensuring:

• the long-term viability of our business to sustain value creation

• that we conduct our business ethically for the benefit of all stakeholders (see Corporate governance)

ATTRIBUTABLE OUTPUT 2017 VERSUS 2016

Platinum (000oz)

2017: 780

2016: 239

Palladium (000oz)

2017: 663

2016: 136

Chrome (000t)

2017: 736

2016: 274

 

 

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HOW WE CREATE VALUE continued

CAPITAL RESOURCES USED, OUTCOMES AND IMPACTS – 2017

Various capital resources are used and affected during the conduct of our mining activities and in producing gold and PGMs. These capital resources, which are interdependent, are critical sustaining business and creating value

In 2017, Sibanye-Stillwater…

... used:

… did the following:

… achieved these milestones

… created value:

HUMAN AND INTELLECTUAL CAPITAL

A skilled, motivated workforce, supported by training and development and relevant technologies, enhances our operational efficiency; we have a framework of policies, systems and processes in place to ensure employee safety, health and wellbeing

•  Employed 66,472 (2016: 74,531) people (including contractors) – decline in total employee numbers from 2016 was due to cost optimisation undertaken that included retrenchment and downscaling of selected gold and PGM operations in the SA region

•  Prioritised employee engagement at newly-acquired assets

  Initiated safety awareness campaigns and enhanced monitoring of safety compliance

•  Improved safety performance: Fatalities: 11 (2016: 14)

  LTIFR: 5.78 per million hours worked (2016: 6.26)

•  79.6 hours of training and skills development on average per employee in the SA region

•  Improved gender diversity: 13% of employees are female (2016: 12%)

•  Successfully implemented our organisational model and rolled out our values at newly acquired operations

•  Wage agreements finalised at Kroondal, Stillwater and East Boulder

  Continued to progress the executive leadership development programme to ensure solid effective leadership

•  Paid salaries and wages paid to employees totaling R18.5bn (2016: R9.3bn) equivalent to 42% of cost of sales before amortisation and depreciation

•  Spent R549m on training and development across the Group (2016: R403m), including R17.3m (US$1.3m) in the US region. The increase is mainly due to inclusion of SA PGM operations for 12 months in 2017 versus partial inclusion in 2016

•  Began second phase of the Care for iMali indebtedness programme at the SA gold operations and by year-end, had reduced illegal garnishee deductions by R1.34m since 2015

  Improved health and wellbeing of employees – 12% decline in TB incidence (new and relapse) in the SA region

FINANCIAL  CAPITAL

 

 

 

Funds operating expenses, training and development, acquisition of natural resources and mining infrastructure, land rehabilitation, socio- economic initiatives and enhances the performance of manufactured capital.

Availability of financial capital – is achieved through ensuring the right combination of equity, debt and operating cash flows –its efficient management is critical

•  Had cash and cash equivalents of R968m at the beginning of the year

•  Acquired Stillwater for US$2.2bn (R29.3bn at R13.31/US$)

•  Raised US$2.65 billion bridge loan to conclude acquisition.

•  Net debt: adjusted EBITDA of 2.6 times following refinancing

  Began the year with an enterprise value of R32bn

•  Generated revenue of R46bn from sales of metals produced (2016: R31bn)

•  Incurred cost of sales of R36bn (2016: R25bn)

•  Capital expenditure of R6.1bn (2016: 4.1bn) for the Group

•  Bridge loan successfully refinance through a US$1 billion equity rights issue, US$1.05 billion corporate bonds and US$450 million convertible instruments, thereby ensuring a more appropriate capital structure

  Debt of R26.0bn (2016: R6.3bn)

•  Had cash and cash equivalents of R2,062m at year end

•  Acquisitions and capital restructuring has better positioned the company to unlock and create future value

•  Ended the year with an enterprise value of R58bn

 

 

 

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HOW WE CREATE VALUE continued

... used:

… did the following:

… achieved these milestones

… created value:

NATURAL CAPITAL

 

 

 

Sustainable operations profitably accessing/ exploiting natural resources – economically viable ore-bodies – is fundamental to the sustainability  of our business. In addition, natural resources – land, water, air – are impacted by our mining and processing activities

•  Acquired PGM reserves (2E) of 21.903Moz with the Stillwater acquisition

•  Deposited 39.36Mt of waste (2016: 32.61Mt)

•  Replaced a substantial portion of depleted Mineral Reserves in the SA region, a result of mining and the removal of Cooke, under a tighter set of economic parameters, thus maintaining a sustainable production profile

•  Completed almost 20km of ore reserve development across the Group

  Energy consumption was higher at 6.01TWh (2016: 4.72TWh), largely due to inclusion of SA PGM operations for full year, and acquisition of US PGM operations

•  Mined/milled 36.08Mt of ore in total

•  Reported a 37% reduction in environmental incidents

•  Reduced energy intensity and GHG emissions by 43% and 41% respectively – the reduction was due to Cooke being placed on care and maintenance, the inclusion of SA PGM operations for a full year and acquisition of US PGM operations

  Potable water consumption of 20,838Ml in the SA region (2016: 19,663Ml)

•  With the acquisition of Stillwater have increased 2E PGM Mineral Reserves by 21.903Moz

•  DRDGOLD transaction establishes a commercial vehicle suited to securing long-term environmentally friendly tailings deposition on the West Rand

 

SOCIAL AND RELATIONSHIP CAPITAL

Given mining’s impact, stakeholder alignment is essential for operational sustainability and

our ability to continue to deliver value to all our stakeholders. Honest, transparent stakeholder engagement ensures that we earn and maintain our social and legal licences to operate

•  Engaged with key stakeholders on:

–  Mining Charter

–  Proposed acquisitions

–  Occupational lung disease

–  Community development

–  Safety

  Continued with remaining SLP projects

•  The Good Neighbour Agreement in force in the US region is a good example of how co-operation with stakeholders can be beneficial to maintaining a social licence to operate – aspects of which will be applied in the SA region

  Enterprise development centres being established in the SA region

•  Paid R903m to governments in taxes and royalties (2016: R1,733m)

•  Invested R1,161m in socio-economic development, of which R1,159m was in the SA region (2016: R656m)

•  Procurement spend of R24.7bn

  BEE procurement spend in the SA region of R10.6bn or 79% of discretionary spend (2016: R7.6bn or 77% respectively)

MANUFACTURED  CAPITAL

 

 

 

Acquiring, maintaining and developing the infrastructure (plant, property and equipment) required by a mining company and optimised processes are essential to cost-efficient operations

•  Spent R1.3bn at group level on sustaining capital, including maintenance, of which R1.1bn was in the SA region

•  Spent R593m on growth projects in the SA region

•  Acquisition of the Stillwater and East Boulder mines, the Blitz project and the Columbus Metallurgical Complex

  Announced proposed acquisition of additional PGM assets (Lonmin) and of potential gold tailings retreatment partnership with DRDGOLD

•  Blitz project commissioned three months ahead of schedule

  Repositioned and diversified the Group geographically, operationally and with regard to product mix

  Invested R13m in research and development

  Invested R395m on further development of Burnstone

•  Created a unique, leading, global precious metals producer

•  Became a top three global PGM producer

  Plans in place to establish a full mine-to-market pipeline for PGM operations in the SA region

 

 

 

 

 

Sibanye-Stillwater | Integrated Annual Report 2017

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Table of Contents

PERSPECTIVE FROM THE CHAIR

It is a privilege to once again present this integrated report on behalf of the Sibanye-Stillwater Board to all of our stakeholders.

In recent years, the Company has undergone a significant strategic evolution from a single commodity, gold mining company with its asset base entirely located in South Africa, into a geographically diversified, uniquely positioned, international precious metals company.

Change of this magnitude is never easy and is often accompanied by periods of discomfort and uncertainty, and this has indeed been the case for Sibanye-Stillwater. The rapid execution of our strategy and growth to become a leading global PGM producer has resulted in the Group having to temporarily take on levels of debt that are well above those which have historically been maintained.

This rapid acquisition growth strategy and the resultant impact on the capital structure of the Group were carefully considered by management and the Board. While uncontrollable exogenous factors, such as the recent strength in the rand, present challenges, the Board is confident that, given the inherent flexibility of the broader Sibanye-Stillwater Group, there are no immediate material risks that cannot be dealt with. We are confident that management has sufficient operational and financial levers at its disposal to weather an extended period of rand strength, and that the Group is uniquely positioned to benefit substantially under more constructive market conditions and to deliver superior and sustainable value for shareholders and all other stakeholders.