Sibanye Gold CEO Neal Froneman. He expressed doubts about the viability of listing two Amplats mines. Picture: MARTIN RHODES
Sibanye Gold CEO Neal Froneman. Picture: MARTIN RHODES

SIBANYE Gold reported a 90c per share final dividend, despite profit for its 2015 financial year dropping by about two-thirds, and outlined plans to extend the lives of key mines.

Sibanye, which wants to wean itself off increasingly expensive electricity supplied by Eskom, has terminated talks with Waterberg Coal and said it was considering alternative coal options.

Sibanye reported full-year profit of R538m to end-December compared with R1.5bn profit the year before.

It declared a 90c per share dividend for the year, bringing its total return to shareholders to 100c, equating to R916m in all.

It was a year of two distinct halves for Sibanye, with a host of operational difficulties besetting the first six months and an improved performance in the second half, said CEO Neal Froneman.

Gold production fell 3% for the year to 1.54-million ounces because of the difficult first half.

Sibanye’s current liabilities by the end of December were R2.6bn higher than its current assets, nearly R1bn more than June last year. During the year, the company generated R3.5bn in cash and had unutilised debt facilities of R6.2bn.

"The directors believe that the cash-generated by its operations and the remaining balance of the group’s revolving credit facility will enable the group to continue to meet its obligations as they fall due," it said.

Sibanye is progressing the purchase of Aquarius Platinum for $294m and buying the Rustenburg mines of Anglo American Platinum for at least R4.5bn.

Looking ahead, Sibanye forecast gold output this year of 1.61-million ounces at an all-in sustaining cost of R425,000/kg.

The weakness of the rand and a firmer dollar gold price has meant the rand gold price is currently about R100,000/kg higher than the average received price of R475,000/kg last year.

If this price continued during the course of this year, the all-in sustaining cost margin would be 25% compared with 11% last year.

The all-in cost, which includes spending on growth, was forecast to be R440,000/kg because of the start of projects at Kloof and Driefontein mines to deepen workings as well as development work at the Burnstone mine.

Capital expenditure this year was estimated to be R3.9bn.

At Driefontein 5 shaft, Sibanye has started a R1.1bn project to add 10 years of life to the mine, extending it to 2042 to produce an extra 2.1-million ounces of gold. Sibanye will spend R124m on the project this year.