Sibanye Stillwater Limited Operating Update Quarter ended 30 September 2022

SALIENT FEATURES – QUARTER ENDED 30 SEPTEMBER 2022 (Q3 2022) COMPARED TO QUARTER ENDED 30 SEPTEMBER 2021 (Q3 2021)

• Production build-up to planned levels at the SA gold and Stillwater operation achieved during October 2022
• SA PGM operations impacted by Eskom load curtailment
• Five-year wage agreements concluded at the SA PGM Marikana and Rustenburg operations
• The K4 project is slightly ahead of budget and schedule and delivered initial 4E PGM production of 914 4Eoz during Q3 2022
• Increase stake in Keliber to 84.96%, securing majority control of the advanced Finnish lithium hydroxide project

OVERVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2022 COMPARED TO QUARTER ENDED 30 SEPTEMBER 2021

The Group has successfully navigated a challenging period, with production from the SA gold and the Stillwater operation building up during Q3 2022 from the operational disruptions which occurred in the first half of the year and returning to normalised levels of production during October 2022 at both of these operations. The SA PGM operations continued to deliver consistent operational results despite challenges associated with Eskom load curtailment and the increased incidence of copper cable theft, which disrupted operations during Q3 2022.

Significantly, a five-year wage agreement has been reached with the representative unions at the Rustenburg and Marikana operations. This historic agreement, which was achieved peacefully, timeously and without the disruption experienced during the SA gold operations‘ wage negotiations earlier this year, is expected to set the scene for five years of relative stability.

Despite deterioration in the global political and economic environment during the course of 2022, precious metals prices have remained well supported and within historically high price ranges. Greater operational stability across the Group, should enable improved cost management for 2023, ensuring more stable earnings and cash flow and consolidating the already robust Group financial position.

SAFE PRODUCTION

The improvement in Group safety indicators following reprioritisation of safety initiatives from mid-2021 and subsequent roll out of the "Fatal Elimination Strategy" in January 2022, has been maintained during Q3 2022. The Group fatal injury frequency rate (FIFR) (per million hours worked), excluding Sandouville (which was incorporated from Q1 2022) improved from 0.07 for Q3 2021 to 0.05 for Q3 2022, with the serious injury frequency rate (SIFR) improving by 10%  to 2.83 from 3.13 for Q3 2021. The Group lost day injury frequency rate (LDIFR) also improved, by 9%, from 5.08 to 4.65, with the Group total recordable injury frequency rate (TRIFR) improving 13% year-on-year, from 6.20 to 5.40.

Not only has the sustained focus on and implementation of the "Fatal Elimination Strategy" led to reduced fatalities, but also to improved injury metrics. Group fatalities have reduced by 64%, from eleven for the first nine months of 2021, to four for the same period in 2022. The SA gold and US PGM operations also recorded another fatality free quarter despite the risks associated with resuming operations. This follows Q2 2022, which was fatality free Group wide. Sadly, two fatalities were suffered at the SA PGM operations, which reaffirm the need to maintain a relentless safety focus across the Group. 

On 29 August 2022 at the Saffy shaft, Marikana operation, Mr. S. Tyobeka, a general worker, was involved in a winch and rigging related incident. On 30 August 2022 a second fatality occurred at the Rowland shaft, Marikana operation, when Mr. M. Msiya, a fitter, was involved in a mud rush incident. The board and management of Sibanye-Stillwater extend heartfelt condolences to the families, friends and colleagues of Mr Tyobeka and Mr Msiya. Both incidents are being investigated with all relevant stakeholders and appropriate support is being provided to the families of the deceased.

US PGM operations

Mined 2E PGM production from the US PGM operations of 85,889 2Eoz for Q3 2022 was 40% lower than for Q3 2021, primarily as a result of the suspension of production at the Stillwater operation (Stillwater East and Stillwater West mine) for seven weeks following regional flooding in Montana in mid-June 2022. The East Boulder operation was issued a Mine Health and Safety Administration (MSHA) stop order which was in full effect from 18 to 29 September 2022, due to reporting of elevated nitrous oxide exposures. Subsequent investigations highlighted gas testing equipment calibration issues and contaminated fuel as the primary concerns. This order remains in force, with most restrictions eased following comprehensive feedback to MSHA on the investigation findings. Following thorough investigation, the Group is assessing the introduction of battery powered equipment and the establishment of an additional intake airway.

As per the revised plan presented to the market during August 2022, lower planned production across the US PGM operations year-on-year complicates comparisons (see https://www.sibanyestillwater.com/…) for detail.

Tonnes milled for Q3 2022 totalled 241kt, 37% lower than for Q3 2021 with plant head grade of 12.2g/t for Q3 2022 , 5% lower than for Q3 2021. The Stillwater operations grade was affected by feeding and milling low grade reef sand to ensure adequate volumes of backfill  for stope support purposes post the flood event. Ongoing attrition amongst more experienced miners and geological and geotechnical complexity affecting productivity at East Boulder is receiving increased management and supervisory input. Following the successful ramp-up the grade normalised at the Stillwater operation in September with the East Boulder operation’s grade expected to normalise in November 2022.

The Stillwater operation resumed production in a phased manner from the end of July 2022, with production rates normalising during October 2022. Production of 47,423 2Eoz, was 47% lower than for Q3 2021, with production approximately 34,000 2Eoz lower due to the ramp up after the flooding event.

Production from East Boulder of 38,467 2Eoz, was 29% lower than for Q3 2021, primarily due to the MSHA stop order, compounded by the issues detailed in the US PGM operations‘ repositioning presented in August 2022.

2E PGM sold for Q3 2022 of 69,534 2Eoz, was 48% lower year-on-year and 19% lower than 2E PGM mined production for the quarter, due to the timing of deliveries in September 2022 which will reflect in sold ounces for Q4 2022.

AISC of US$1,815/2Eoz (R30,947/2Eoz) for Q3 2022 was 88% higher than for Q3 2021 (US$968, R14,156/2Eoz) due to lower production and inflationary cost pressures, with ORD capital increasing by 110% year-on-year to US$42 million (R723 million) and sustaining capital increasing by 76% to US$17 million (R293 million), primarily as a result of the repositioning of the US underground operations, with Stillwater East expenditure which had previously been classified as project capital now reclassified as ORD and sustaining capital. Costs at the Stillwater operation have been impacted by additional once-off flood recovery costs including road, piping and infrastructure repairs. At East Boulder the availability of skills continues to be a challenge and therefore costs relating to contractors have risen. Continued inflationary pressure on stores and premiums on contractor costs also contributed to the higher costs.

Implementation of the repositioned operational plan and accelerated development to restore operational flexibility, will result in elevated costs in the medium term. As production begins to build up again and stope face availability improves, costs are expected to reduce significantly with AISC planned to reduce to below US$1,000 (real 2022 terms) from 2026.

Total capital expenditure increased by 22% year-on-year for Q3 2022 to US$85 million (R1,450 million), with the increase in ORD and sustaining capital comprising 70% or US$60 million (R1,016 million) of this and project capital 36%  lower at US$25 million(R434 million) in line with the reduced spending on the Stillwater East project and change in the classification of development from growth capital to ORD. A major milestone for the quarter was the completion of the 56 East Footwall level which now ties into the Benbow decline, completed on 16 September 2022.

For further information please see the attached PDF.