presentation: operating and financial results for the six ... 5. financial review 6. outlook 7....

Operating and financial results

for the six months ended 30

June 2014

31 July 2014

Disclaimer

Certain statements included in this presentation, as well as oral statements that may be made by Sibanye Gold,

or by officers, directors or employees acting on their behalf related to the subject matter hereof, constitute or are

based on forward-looking statements. Forward-looking statements are preceded by, followed by or include the

words “may”, “will”, “should”, “expect”, “envisage”, “intend”, “plan”, “project”, “estimate”, “anticipate”,

“believe”, “hope”, “can”, “is designed to” or similar phrases. These forward looking statements involve a number

of known and unknown risks, uncertainties and other factors, many of which are difficult to predict and generally

beyond the control of Sibanye Gold, that could cause Sibanye Gold‘s actual results and outcomes to be

materially different from historical results or from any future results expressed or implied by such forward-looking

statements. Such risks, uncertainties and other factors include, among others, Sibanye Gold’s operations, Sibanye

Gold’s ability to implement its strategy and any changes thereto, Sibanye Gold’s future financial position and

plans, strategies, objectives, capital expenditures, projected costs and anticipated cost savings and financing

plans, as well as projected level of gold price and other risks. Sibanye Gold undertakes no obligation to update

publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the

date of this presentation or to reflect any change in Sibanye Gold’s expectations with regard thereto.

In accordance with the requirements imposed by the JSE, Sibanye Gold reports its reserves using the terms and

definitions of the SAMREC Code (2007 edition). There are differences between the SAMREC Code and the

Security and Exchange Commission’s Industry Guide 7. Mineral or ore reserves, as defined under the SAMREC

Code, are divided into categories of proved and probable reserves and are expressed in terms of tonnes to be

processed at mill feed head grades, allowing for estimated mining dilution, recovery and other factors.

2

Agenda

1. Defining Sibanye

2. Highlights for the six months ended 30 June 2014

3. Sustaining the dividend

4. Operating review

5. Financial review

6. Outlook

7. Questions

3

Defining Sibanye

Sibanye vision statement

SUPERIOR VALUE CREATION

FOR ALL OUR STAKEHOLDERS

5

through a culture of caring

What differentiates Sibanye

• Significant free cash generation

• Committed to a superior long term dividend strategy

• South African focused and committed to South Africa

• We recognise the importance of all stakeholders to our success and sustainability

6 Uniquely positioned in the industry

Sibanye values: we CARE about

• Safe production

• Our stakeholders

• Our environment

• Our company

• Our future

7 CARE underpins the way we do business and interact with each other

A holistic integrated approach to business

• Delivery on all strategic imperatives is critical to long term success

• Safety, volume, grade and costs – our operational deliverables that underpin

our business

• Strong cashflow supports the dividend to reward shareholders and underpins our

ability to create sustainability

• Growth (organic and acquisitive) ensures

long term delivery of sustainable rewards to all stakeholders

8 Recognising and delivering on the needs of all stakeholders

Implementing the CARE culture

• We are actively trying to address the underlying issues impacting our employees:

• migrant labour and unemployment – partly addressed by alternative shift arrangements and the companies growth

• indebtedness – “Care for Imali” programme started

• housing/home ownership – hostel conversions, house builds, home ownership programme

• wage gap and standards of living – gain share initiatives, aligning and rewarding employees in line with investors and management

• transformation, education and training programmes (Sibanye Academy)

• sustainability of the regions we operate in post mining (local economic development, education, Small/Medium Enterprise facilitation)

9 Benefits for Sibanye and all stakeholders

SIBANYE GOLD

Reduce

costs and

paylimits

Increase flexibility

Increase margins

Optimise all capital including

balance sheet

Strong cash flows

Robust

dividends

Premium rating

Operating strategy

10 Restoring and sustaining operating credibility and delivering what investors want

Highlights for the six months

ended 30 June 2014

37

50

0

10

20

30

40

50

60

H1 2013 H1 2014

cp

s

Dividend

Dividend

35%

Financial highlights*

12

• Interim dividend of 50 cents per share declared

• Annualised dividend yield - 3.5%

• Operating profit increased by 4% to R3.5 billion,

despite 2% lower gold price

• Normalised earnings stable at R1.1 billion

• Cash generated by operating activities up 5%

to R3,886 million (US$383 million)

• Net debt reduced to R617 million (US$58 million)

from R1,909 million (US$188 million)

Increase in dividend supported by strong cash generation

3,703

3,886

3,000

3,200

3,400

3,600

3,800

4,000

H1 2013 H1 2014

Rm

Operating cash flow

Operating cash flow

5%

* For the six months ended 30 June 2014 compared with the six months ended 30 June 2013

Operating highlights*

13

• An 8% increase in gold produced to 22,143kg

(711,900oz)

• Operating cost declined by 10% to R815/ton

• Total cash cost of R291,212/kg (US$848/oz), in

line with forecast

• All-in cost of R367,601/kg (US$1,071/oz), 2%

lower

• All-in cost margin maintained at 17%

• The Cooke Operations contribute positively to

profits and operating cash flow after capex

• First uranium shipment from the Cooke

Operations

16,000

18,000

20,000

22,000

24,000

H1 2013 H1 2014

kg

Production

KDB UG Cooke UG Surface

22,143

20,413

250,000

300,000

350,000

400,000

H1 2013 H1 2014

R/k

g

All-in cost

All in cost

375,036 367,601

Solid operating performance – integration of acquisitions underway

8%

-2%

* For the six months ended 30 June 2014 compared with the six months ended 30 June 2013

Significantly outperforming our peers and the gold price

Sibanye relative share price performance

14

-20

0

20

40

60

80

100

120

140

160

January February March April May June July August

%

Sibanye Gold JSE All Share FTSE JSE Gold Mining Gold - $/oz Gold - R/kg

Source: Bloomberg: 20 July 2014

Sustaining the dividend

Dividends underpin the strategy

• Regular, consistent dividends are a key strategic imperative and differentiator

• Sibanye will strive to maintain a benchmark dividend in the mining sector

• The ability to deliver on the dividend underpins and informs our corporate

strategy and thinking

• Dividend policy: 25%-35% of normalised earnings

• Organic and acquisitive growth will be directed by the ability to sustain or

enhance the dividend strategy

• Growth will be funded from cash flow after dividends or alternative

funding options will be considered where appropriate

16 Ability to maintain superior dividends defines who we are

Sizeable resources capable of sustaining production beyond 2030

Strengthened Mineral Resources

• Enhanced Mineral Resources and Reserves at 31 December 2013

• Gold Mineral Reserves increased by 46% to 19.7Moz

• Maiden 43.2Mlb uranium Mineral Reserve declared

• Life of Mine (Kloof, Driefontein and Beatrix) extended to 2030

• Post Cooke and Wits Gold acquisitions

• Gold Mineral Reserves increased by 66% to 32.7Moz

• Uranium Mineral Reserves increased by 139% to 102.8Mlb

• Preliminary assessment of organic projects suggests gold production over 1.4Moz

per annum until 2028 – funded from cash flow after dividends

17

Post-acquisition gold production profile

18

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2 000 000

Pro

du

ctio

n o

z

Randfontein surface

Beatrix surface

Kloof surface

Driefontein surface

Cooke 4

Cooke 1-3

Beatrix u/g

Kloof u/g

Driefontein u/g

*Refer to appendix for further details

Underground

reserves in

LOM

Surface

reserves

in LOM

Gold Fields 2013

LOM profile based on Reserves from current operations only

Free cash flow (after royalties and tax)*

19

* Assumptions: Gold price: 430,000 R/kg and 10.50 ZAR:1US$ (real 2014 terms)

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

5 000

R m

illio

n

Reserves only

2013 Dividend escalated by 17%

Cash flow from current gold Reserves included in 2014 LoM

2013 dividend

escalated to account for extra shares in issue

Based on Reserves in current LOM profile

Pro

du

ctio

n o

z

Conceptual project gold production profile

20

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2 000 000

oz

SV4

Bloemhoek

Beisa

De Bron

Kloof drop down

Burnstone

WRTRP

Randfontein surface

Beatrix surface

Kloof surface

Driefontein surface

Cooke 4

Cooke 1-3

Beatrix u/g

Kloof u/g

Driefontein u/g


Project conversion should enhance the LOM production profile

Underground

reserves in

LOM

Surface

reserves

in LOM

Feasibility

study being

undertaken

or reviewed

Pre-feasibility

study being

undertaken

or reviewed

(Phase 2)

Gold Fields 2013

Conceptual project capital expenditure profile

21 Stable capital cost per ounce produced

-

50

100

150

200

250

300

350

400

450

500

-

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000

3 500 000

4 000 000

4 500 000

5 000 000

US$/oz

R0

00

SV4

Bloemhoek

Beisa

De Bron

Kloof drop down

Burnstone

WRTRP

Randfontein surface

Beatrix surface

Kloof surface

Driefontein surface

Cooke 4

Cooke 1-3

Beatrix u/g

Kloof u/g

Driefontein u/g

US$/oz


US$/oz

Underground

reserves

in LOM

Surface

reserves

in LOM

Capital cost

US$/oz

(Phase 2)

Pre-feasibility

study being

undertaken

or reviewed

Feasibility

study being

undertaken

or reviewed

Conceptual free cash flow (after capital and tax)

22

*For illustrative purposes assuming all projects are implemented

Includes direct operational/project costs, excludes corporate, financing and other costs

Gold price: 430,000 R/kg and 10.50 ZAR:1US$ (real: 2014 terms)

-

1 000 000

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

R000 Reserves only

Total including all projects

2013 Dividend escalated

by 17%

Cash flow from current gold Reserves included in 2014 LoM

Cashflow Including projects

2013 dividend escalated to account for extra shares in issue

Able to fund value accretive pipeline without risking dividend

23 Executive management focussed for delivery

NEAL FRONEMAN CEO

CHARL KEYTER CFO

MARIUS SAAIMAN SVP Business

Development

RICHARD STEWART SVP Tech Services

and Projects

PETER TURNER

SVP Safe Technology

SHADWICK BESSIT SVP Underground Ops:

Kloof and Driefontein

WAYNE ROBINSON SVP Underground Ops:

Beatrix and Cooke

DICK PLAISTOWE SVP Surface Operations

DAWIE MOSTERT SVP Organisational

Effectiveness

ROBERT V NIEKERK SVP Organisational

Effectiveness

HARTLEY DIKGALE SVP General Counsel and Sustainable

Development

JAMES WELLSTED SVP Investor

Relations

CAIN FARREL Company

Secretary

ADAM MUTSHINYA SVP Human

Capital

NASH LUTCHMAN

SVP Protection

Services

Operating Review

0.24

0.15 0.18

0.12 0.14

0.17

0.11 0.12

0.00

0.05

0.10

0.15

0.20

0.25

0.30

2007 2008 2009 2010 2011 2012 2013 20146 MthProg

11.56

6.76

4.73 5.26

5.79 6.90

6.27 6.16

0.00

2.00

4.00

6.00

8.00

10.00

12.00

2007 2008 2009 2010 2011 2012 2013 20146 MthProg

Australian Mining Industry

Benchmark

6.20

3.76

2.82 2.77 3.32

3.67 3.49 4.04

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2007 2008 2009 2010 2011 2012 2013 20146 MthProg

23.84

15.08

10.38 8.20

6.76 5.80 4.50 3.76

0.0

5.0

10.0

15.0

20.0

25.0

30.0

2007 2008 2009 2010 2011 2012 2013 20146 MthProg

Safety statistics*

25

2012 US FIFR

Fatal Injury Frequency Rate

Lost Day Injury Frequency Rate

Serious Injury Frequency Rate

Treat & Return Injury Frequency Rate

*Per million man hours worked

The safety regression is being addressed

Kloof Operations

26

6.0

6.5

7.0

7.5

8.0

8.5

0

200

400

600

800

1 000

1 200

1 400

Mar-13 June-13 Sep-13 Dec-13 Mar-14 June-14

g/t

'000 to

ns

Kloof tons milled and grade (quarterly)

UG tons Surface tons UG yield

• UG gold production up 15% to

7,458kg (239,800oz)

• ore milled 1% higher to 949,000

tons

• UG yield 5% higher to 7.9g/t

• UG operating profit R1.4 billion

(US$130 million)

• Improving on both H1 and H2

2013

• UG operating cost 3% higher to

R2,023/ton

• cost management reduces

inflationary impacts

• All-in cost of R345,035/kg

(US$1,005/oz)

250

300

350

400

2 500

3 000

3 500

4 000

4 500


R0

00

/kg

kg

Kloof production and costs (quarterly)

UG Production Surface Production All-in cost

A pleasing operational performance

Driefontein Operations

27

250

300

350

400

2 500

3 000

3 500

4 000

4 500

5 000

5 500


R0

00

/kg

kg

Driefontein production and costs (quarterly)


• UG gold production 3% higher -

7,695kg (247,400oz)

• ore milled 3% lower to 949,000

tons

• UG yield 6% higher to 6.7g/t

• production at lower grade

sections affected by fire

• UG operating profit up 8% to R1.3

billion (US$120 million)

• UG operating cost 1% higher to

R1,873/ton

• employee numbers reduced

• contractors replaced with own

employees


(US$1,048/oz)

4.0

5.0

6.0

7.0

8.0

0

500

1 000

1 500


g/t

'000 to

ns

Driefontein tons milled and grade (quarterly)

UG tons Surface tons 'UG yield

After effects of the Q1 fire still impacting on delivery

Beatrix Operations

28

• UG gold production 15% higher –

4,518kg (145,300oz)

• ore milled up 21% to 1,196,000

tons

• underground yield of 3.8g/t 4%

lower

• West Section contributing

strongly

• UG operating profit up 22% to R503

million (US$47 million)

• UG operating cost 9% lower to

R1,258/ton


(US$1,119/oz)

A pleasing operational performance

,150

,250

,350

,450

,550

1 000

1 500

2 000

2 500

3 000


R0

00

/kg

Kg

Beatrix production and costs (quarterly)


2.5

3.0

3.5

4.0

4.5

0

500

1 000

1 500


g/t

'000 to

ns

Beatrix tons milled and grade (quarterly)

UG tons Surface tons UG yield

Turnaround in progress – driven by volume and mining quality

Cooke Operations – June 2014 only

29

• UG gold produced - 559kg (18,000oz)

• ore milled - 123,000 tons

• UG yield - 4.57g/t

• UG operating profit of R39 million

(US$4 million) – 15% operating margin

• UG operating cost R1,683/ton


(US$1,251/oz)

• First uranium produced

• Development of by-product areas on

plan

-

100

200

300

400

500

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

R m

illio

n

Cooke Operations forecast capital expenditure

Capital expenditure

0

2 000

4 000

6 000

8 000

10 000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

kg

Cooke Operations forecast gold production

Underground production

Surface Operations

30

• Gold production declined 2% to

1,913kg (61,500oz)

• ore milled 31% higher to

4,371,000 tons

• 25% drop in yield to 0.44g/t

• Operating profit R291 million (US$53

million)

• Operating cost 6% lower to R129/ton

• WRTRP on schedule with DFS

outcome expected Q1 2015

A challenging business with substantial upside

150

200

250

300

350

500

600

700

800

900

1 000

1 100


R0

00

/kg

kg

Surface production and costs (quarterly)

Surface production Operating cost

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0

500

1 000

1 500

2 000

2 500

3 000


g/t

'000 to

ns

Surface Operations tons milled and grade (quarterly)

Surface tons Surface yield

Financial review Charl Keyter CFO

Income Statement

Six months to 30 June 2014 Six months to 30 June 2013

Gold price – R/kg and US$/oz R443 865/kg US$1 293/oz R451 448/kg US$1 535/oz

Rand million US$ million Rand million US$ million

Revenue 9 828.5 920.3 9 215.4 1 007.1

Operating costs (6 340.4) (593.7) (5 849.5) (639.3)

Operating profit 3 488.1 326.6 3 365.9 367.8

Operating profit margin - % 35% 37%

Amortisation (1 488.2) (139.3) (1 388.8) (151.8)

Net operating profit 1 999.9 187.3 1 977.1 216.0

Finance expenses (159.9) (15.0) (233.1) (25.4)

Share based payments (208.2) (19.5) (114.9) (12.6)

Sundry other (262.8) (24.5) 65.8 7.2

Profit before non-recurring items 1 369.0 128.3 1 694.9 185.2

32

Income Statement (cont.)



Profit before non-recurring items 1 369.0 128.3 1 694.9 185.2

Non-recurring items (306.9) (28.8) (1 163.6) (127.2)

• Impairment Beatrix West - - (821.0) (89.7)

• Impairment Investment in associate (119.6) (11.3) - -

• Restructuring costs (106.0) (9.9) (343.0) (37.5)

• Other (81.3) (7.6) 0.4 -

Royalties (195.2) (18.3) (167.1) (18.3)

Current taxation (434.0) (40.6) (270.8) (29.6)

Deferred taxation 99.8 9.3 196.2 21.4

Net profit for the period 532.7 49.9 289.6 31.5

Headline earnings 652.2 61.2 880.8 96.1

33

Earnings



Net profit (less non-controlling interests) 532.7 49.9 290.0 31.5

Impairment 119.6 11.3 821.0 89.7

Profit on sale of assets (0.2) - (0.4) -

Tax effect of remeasurement items 0.1 - (229.8) (25.1)

Headline earnings 652.2 61.2 880.8 96.1

Basic earnings per share (cents) # 69 6 51 6

Headline earnings per share (cents) # 84 8 156 17

# Based on the weighted average number of shares in issue during the period (30 June 2014 - 772 679 370 and 30 June 2013 - 566 412 788)

Diluted basic earnings per share

(cents) * 67 6 51 6

Diluted headline earnings per share

(cents)* 82 8 154 17

* Based on the diluted weighted average number of shares in issue during the period (30 June 2014 - 792 208 938 and 30 June 2013 - 572 013

748)

34

Cash flow and debt Six months to 30 June 2014 Six months to 30 June 2013

Cash flows Rand million US$ million Rand million US$ million

Cash from operations 3 057.1 286.2 3 409.7 372.6

Dividend paid (555.2) (52.0) - -

Capital expenditure (1 345.7) (126.0) (1 438.6) (157.2)

Net loan repayments (906.0) (84.8) (220.0) (24.0)

Investment in subsidiary (415.3) (39.7) - -

Loans granted to subs. pre-acq. (161.2) (15.6) - -

Other movements 37.6 3.6 47.8 5.8

Net cash generated/(utilised) (288.7) (28.3) 1 798.9 197.2

Debt:

Long and short term 1 820.6 172.1 4 000.0 394.1

Less cash balance 1 203.7 113.8 2 090.7 206.0

Net debt 616.9 58.3 1 909.3 188.1

Net debt to EBITDA (in Rand terms) 0.08 0.35

35

Dividend Declaration for 2014

Rand million

Earnings attributable to the owners of Sibanye Gold 533

Add back amounts required to normalise earnings: (including the loss on financial instruments [R178m], transaction costs [R82] and retrenchments

[R106m] partly offset by Tax on these items, the Rand Refinery impairment [R120m], share of

associates after tax [R149m] and other [R4m])

532

Normalised earnings for dividend purposes 1 065

Dividend earnings payout based on 35% 373

Normalising the dividend for the 17% additional shares issued on acquisition of Cooke operations during May 2014 effectively diluting the dividend

76

Earnings available for dividend 449

Interim dividend based on 898 301 633 shares – c.p.s (ZAR) 50

Annualised dividend yield based on 30 June 2014 share price (cents 2854) 3.5%

36

Outlook

2014 operating forecast

• Gold production: 50,000 kg (1.6 million oz)

• Total cash costs of ~ R285,000 – 290,000/kg (US$836 – 880/oz)

• All in costs of ~ R365,000 – 370,000/kg (US$1,070 – 1,085/oz)

• Total annual capital expenditure ~ R3.5 billion

38

Questions

presentation: operating and financial results for the six ... 5. financial review 6. outlook 7....

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