Gold and platinum group metals (PGM) miner Sibanye-Stillwater reported a surge in earnings for the three months to end-March.
Adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) rose 89% from the previous first quarter to R4.1bn, despite gold and PGM output being lower year on year.
The stronger financial performance reflected record gold prices, rising PGM prices and initiatives to cut back on costs, including the restructuring of Sibanye’s PGM operations.
As the group reduces its operating footprint in SA, the realignment of its regional services in the country “notably improved profitability”, as did the restructuring of high cost, ageing PGM mines in the US.
The cost benefits of these restructurings resulted in a 74% increase in adjusted ebitda from the SA PGM operations to R2.5bn. The US PGM operations also benefited from restructuring initiatives, with absolute operating costs reducing by 37% with absolute all-in sustaining cost (AISC) costs declining by 44% year on year.
The US PGM operation expects to receive $6m at the end of the year under the US Inflation Reduction Act, a regulatory framework aimed at boosting the country's domestic supply of critical minerals and metals.
In Sibanye’s SA gold operations, adjusted ebitda soared by 178% to R1.8bn thanks to the record gold price, but operational challenges saw the group lowering its full-year gold production guidance.
The miner now expects to produce between 514,000oz and 546,000oz of gold from its SA mines, which it plans to spend R3.5bn on this year.
The downward revision came after the SA gold mines recorded a 15% slip in output for the first quarter, attributed to ore pass blockages at the Kloof main shaft, a pump station fire and lower grades at the Driefontein 1 shaft.
The SA gold operations were expected to continue benefiting from rising gold prices, with the price of bullion already gaining 16% since end-March, Sibanye said.
CEO Neal Froneman said further operational improvements this year would include the winding down of the Sandouville refinery, which will be placed on maintenance after bleeding cash in recent years.
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