Manufactured capital

Key features

  • Focus on reducing costs to increase economically extractable reserves and improve mining flexibility
  • Commitment to serving long-term future of the business by pursuing growth and life-extension opportunities
  • Acquisitions: Cooke operations and Wits Gold

Targets and objectives for 2013/2014

In 2014, greater emphasis will be placed on improving operational productivity and efficiencies, and increasing volumes.

Sibanye creates value by turning to account its reserves and resources, and creating products that are valued by society.

Since listing in 2013, Sibanye has focused on reducing costs in order to increase its economically extractable reserves and improve mining flexibility, thereby extending the lives of the operations. In 2014, greater emphasis will be placed on improving operational productivity and efficiencies, and increasing volumes, by:

  • further improving the quality of mining;
  • investigating the potential to mine sizeable secondary reef resources economically;
  • reassessing opportunities in high-grade areas previously not mined, including pillars that can be safely mined; and
  • removing gold-bearing accumulations in previously mined areas.

Sibanye will also pursue acquisitions in the South African mining sector where it believes that acquisitions are value-accretive as well as justified strategically.

GROWTH

Sibanye management is committed to securing the long-term future of its business. In addition to pursuing growth and life-extension opportunities at its current operations, the Group has, and will continue to pursue, value-accretive and/or strategic growth through acquisitions.

In 2013, Sibanye offered to acquire Gold One’s 74% interest in the Cooke surface and underground operations, located in the West Wits goldfield adjacent to its Kloof Operation.

The Group also announced its intention to acquire 100% of Wits Gold, a gold-exploration Group with significant resources in South Africa. Both transactions are expected to be concluded in the first quarter of 2014.

Acquiring Gold One and the Cooke shafts – West Wits

The acquisition of the Cooke operations consolidates Sibanye’s dominant position in the West Wits region and is forecast to contribute on average (over five years) approximately 260,000oz of gold and up to 570,000lb of uranium per year to its existing production.

The transaction will also potentially bring to account 4Moz of gold and 43Mlb of uranium currently locked up in surface-tailings deposits by consolidating the West Rand Tailings Retreatment Project under Sibanye.

Acquiring Wits Gold – Free State

Wits Gold’s assets comprise various gold and uranium mineral rights, the majority of which are contiguous to the Beatrix Operation.

The acquisition of Wits Gold further reinforces Sibanye’s dominant position in the southern Free State goldfield and will secure the future of the Beatrix Operation. Wits Gold’s Bloemhoek project is contiguous to the Beatrix North mine, allowing the orebody to be partly accessed from existing underground infrastructure.

Utilising existing surface and plant infrastructure at the Beatrix Operation, should Wits Gold’s Bloemhoek and De Bron Merriespruit projects be developed, will significantly reduce the required capital from these projects, thereby enhancing their economics, and this is likely to realise significant capital.

BEATRIX

16,821ha
Lease area
Until 2019
New order mining right
8,528
Employees
R209m
SED expenditure
Reserves [icon] 3.6Moz
Reserves
Reserves [icon] 9Moz
Resources

Beatrix comprises three shaft systems where gold-bearing reef is mined at depths varying from 700m to 2,200m below surface. Underground ore and low-grade surface rock dumps are processed through two metallurgical plants with a combined mill throughput capacity of approximately 4.4Mtpa.

Capex [icon] R537m
Capex 2013
All-in cost [icon] R377,206/kg
US$1,222/oz
All-in cost 2013
Operating profit [icon] R1,223m
Operating profit
Total energy [icon] 659,758MWh
Total energy consumption in 2013
Total water [icon] 11,500Ml
Total water withdrawal in 2013

DRIEFONTEIN

8,561ha
Lease area
Until 2037
New order mining right
12,635
Employees
R545m
SED expenditure
Reserves [icon] 7.8Moz
Reserves
Reserves [icon] 23Moz
Resources

Driefontein comprises seven shaft systems mining shallow to ultra-deep-level gold bearing reef at depths of between 700m and 3,420m below surface. The shaft systems include five sub-vertical shafts and two tertiary shafts. Underground ore and low-grade surface rock dumps are processed through three metallurgical plants with a combined mill throughput capacity of approximately 5.9Mtpa.

Capex [icon] R1,023m
Capex 2013
All-in cost [icon] R332,660/kg
US$1,078/oz
All-in cost 2013
Operating profit [icon] R3,282m
Operating profit
Total energy [icon] 1,563,628MWh
Total energy consumption in 2013
Total water [icon] 37,137Ml
Total water withdrawal in 2013

KLOOF

20,087ha
Lease area
Until 2027
New order mining right
11,235
Employees

R296m
SED expenditure
Reserves [icon] 8.3Moz
Reserves
Reserves [icon] 33Moz
Resources

Kloof comprises five shaft systems mining intermediate to ultra-deep-level gold bearing reef at depths of between 1,300m and 3,500m below surface. The shaft systems include five operational sub-vertical shafts and one tertiary shaft. Underground ore and low-grade surface rock dumps are processed through three metallurgical plants with a combined mill throughput capacity of approximately 5.6Mtpa.

Capex [icon] R1,304m
Capex 2013
All-in cost [icon] R353,884/kg
US$1,147/oz
All-in cost 2013
Operating profit [icon] R2,854m
Operating profit
Total energy [icon] 1,550,616MWh
Total energy consumption in 2013
Total water [icon] 27,999Ml
Total water withdrawal in 2013
Sibanye operations map