Sibanye-Stillwater mulls K4 development

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Sibanye-Stillwater mulls K4 development

Published Date: 2021-02-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sibanye-Stillwater mulls K4 development

The mining company has reported a big increase in platinum group metal reserves, partly due to the inclusion of K4.

Sibanye-Stillwater has reported a 40% increase in 4E platinum group metals (PGMs) mineral reserves at its SA mines. It says reserves were boosted by the inclusion of the K4 project it acquired when it bought Lonmin's Marikana operations in June 2019, as well as its Klipfontein opencast project.

In an update, the PGM and gold mining group said both the K4 project and Klipfontein open-cast project disclosures were underpinned by feasibility studies and would be considered for development by the end of March. The K4 project formed part of historic mineral reserve declarations by Lonmin, previously excluded from the company's reporting due to economic considerations. If approved, it said these projects would commence this year. Sibanye-Stillwater estimated that its project capital requirements would reach R3.9 billion over eight years, with pay-back in six years at the mineral reserve price assumptions.

Last week, the company said it would report a surge in full-year earnings due to higher metal prices and a weaker rand combined with a strong operational performance. Net profit for the year to end-December would range between R28.7 billion and R29.9 billion, up from R62 million a year earlier. Earnings per share (EPS) would come in at between R10.53 and R10.95 from 2c previously, while headline EPS would be between R10.47 and R10.89 from a 40c loss a year earlier.

Sibanye-Stillwater attributed its operational performance to the full-year inclusion of Marikana and the realisation of significantly higher than forecast synergies, along with a notable return to profitability from its local gold operations following a strike in the first half of 2019.

For the year, the average 4E PGM basket price, which includes platinum, palladium, rhodium and gold, was 83% higher. The average 2E PGM basket price for the platinum and palladium it mines at its Stillwater operations in the US was up 36%. The rand's average 14% depreciation against the dollar also boosted revenue.

Its results are scheduled for release on 18 February. Its shares rose 7.9% to R69.99 yesterday.





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