Sibanye-Stillwater said on Thursday that they were pleased to present an operating update for the quarter ended 30 September 2018. File Image: IOL

CAPE TOWN - Sibanye Gold Limited trading as Sibanye-Stillwater said on Thursday that they were pleased to present an operating update for the quarter ended 30 September 2018.

Financial results are only provided on a six-monthly basis.

The company said that solid operational performance from SA and US PGM operations maintained collectively contributing 85% of Group adjusted EBITDA during the quarter.

Sibanye went on to add that their financial position improved by the $500 million streaming transaction, allowing for a 28% reduction in outstanding bonds.

The mining company added that the majority of debt will only be repayable after 2021/22 when Blitz is fully ramped up.

The Group safety performance improved significantly during the third quarter ended September 2018 (Q3 2018), due to ongoing interventions and safety improvement plans, gaining traction at all our operations. 

These initiatives were supported by continuing tripartite cooperation and input from key stakeholders, arising from the successful, multi-stakeholder Safety Summits that began in May 2018.

The focus on safe production remains the highest priority across the Group, 

"We are pleased to report that the South African (SA) operations achieved over 2.7 million fatality free shifts as at end October 2018."

The SA and United States (US) Platinum Group Metal (PGM) operations maintained solid production results during the quarter, with adjusted EBITDA from the SA PGM operations (excluding Mimosa), 30% higher than for the comparable period in 2017. 

Adjusted EBITDA and All-in Sustaining Cost (AISC) from the US PGM operations for the quarter, were negatively affected by a deferral of sales for the entire September month until early October. 

According to the company, this followed a request from a third party precious metals refiner, to defer deliveries of September production, whilst it undertook a stock take at its US refinery operations.

The significant operational challenges experienced at the SA gold operations during H1 2018 and the additional safety improvement interventions undertaken, continued to affect productivity across the gold operations in Q3 2018, with Driefontein in particular, delivering at substantially reduced production rates. 

As a result, adjusted EBITDA from the SA gold operations for Q3 2018, was substantially lower than for the comparable period in 2017, with AISC significantly elevated. In light of the underperformance at the SA Gold operations, guidance for the year ended 31 December 2018, has been revised, as detailed in the outlook section below, Sibanye said. 

Whilst there was a significant improvement in spot precious metal prices towards the end of the Q3 2018, the average price environment for the quarter was lackluster. 

Precious metal commodity prices in July and August 2018 remained below the quarter averages, which in turn, were only marginally higher than for the comparable period in 2017, according to the company.

As a result of the reduced contribution from the SA gold operations during the period and the deferral of September sales into October 2018 at the US PGM operations, Group adjusted EBITDA declined by 40% to R1,629 million relative to Q3 2017. 

The Group PGM operations contribution to Group adjusted EBITDA increased to 85% from 49% in Q3 2017. 

BUSINESS REPORT ONLINE