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  • Sibanye-Stillwater: SA gold production declines in Q1,24

    Mon May 13 2024

    Sibanye-Stillwater has reported a significant improvement in safety performance, with a decline in Serious Injury Frequency Rate (SIFR) by 15% year-on-year for the first quarter, which ended on March 31. Gold production from the South African gold operations saw a decline of 18% compared to the previous year, due to the cessation of production from Kloof gold mine.

    Sibanye Stillwater CEO Neal Froneman said the continued improvement in the group’s safety performance year-on-year is pleasing, confirming that their safety strategy continues to gain traction and that we remain on track for further reduction of risk for all safety incidents. The Group SIFR saw a 15% decrease year-on-year, the third consecutive improvement since Q1 2021, and the lowest since Q1 2024.

    “The Group Lost Day Injury Frequency Rate and Total Recordable Injury Frequency Rate were also much improved, declining by 7.6% and 11.3%, respectively, year-on-year,” said Froneman.

    He also highlighted that the operational restructuring and capital preservation steps taken during H2 2023 and Q1 2024 have resulted in notable improvements at the US PGM operations. with the benefits at the SA operations expected to manifest in a phased manner over an extended period.

    “We are confident that the restructuring that has taken place to date at the SA operations, as well as the current regional restructuring, will secure a lower cost structure for the SA region, despite the phased closure cost and initial disruption that have impacted Q1 2024.”

    Platinum Group Metals (PGM) operations

    The SA PGM operating results for Q1 2024 were complicated by various factors, including the acquisition of a 50% share of the Kroondal PSA from AAP, which added 30,575 4Eoz to total production during the quarter, and the impact of operational restructuring.

    Mandatory regulatory Section 189 consultations commenced on 24 October, 2023 and concluded on 24 February, 2024, impacting productivity due to moratoriums on hiring, movement of crews, and a general decline in productivity associated with disruptions. After a slow start to the year, production improved over the quarter and into April 2024.

    SA PGM operations are forecast to be between 1.8 million 4Eoz and 1.9 million 4Eoz for 2024, including 80,000 third-party PoC, with AISC between R21,800-4Eoz and R22,500-4Eoz and capital expenditure of R6.0 billion.

    Froneman said at the SA PGM operations, lower production was from the four loss-making shafts, which were the subject of S189 consultations, as well as lost production from the Siphumelele shaft as a result of the head gear incident. This was offset by the consolidation of an additional 50% of Kroondal production following the early closing of the acquisition of Anglo-American Platinum’s (AAP) 50% shareholding in November 2023.

    The K4 project is focusing on completing shaft infrastructure and increasing production, with Q1 2024 production of 10,589 4Eoz and a capital expenditure of R154 million.

    Gold Production

    Gold production from SA gold operations decreased by 21% in Q1 2024, with gold production averaging 3,890 kilograms. Factors contributing to this decline included the closure of Kloof 4 shaft, slower production build-up post-December 2023 shutdown, seismicity challenges at Driefontein 4 shaft, and transitioning from Carbon Leader to VCR reef at Driefontein 1 shaft. Total gold production for Q1 2024 was 5,117 kilograms, an 18% decrease from Q1 2023. All-in sustaining costs (AISC) rose to R1,333,818 per kilogram, a 20% increase year-on-year.

    However, these costs are expected to decrease in subsequent quarters as shaft rehabilitation and closure activities conclude. Capital expenditure for Q1 2024 decreased by 20% compared to Q1 2023, with project capital declining by 48% due to terminating the Kloof 4 deepening project and reduced expenditure at the Burnstone project.

    Driefontein’s production is declining by 18% due to delayed commencement after the Christmas break and elevated seismicity. Surface gold production from the Cooke operation increased by 11%, albeit with higher AISC, primarily driven by increased aggregate purchase costs of third-party gold-bearing material. DRDGOLD’s gold production for Q1 2024 was 8% lower than Q1 2023, with AISC increasing by 17% due to decreased gold sales and above-inflation costs.