JOHANNESBURG (miningweekly.com) – JSE- and NYSE-listed Sibanye expects to report an attributable loss of at least R4.8-billion for the six months to June 30, mainly as a result of R4.4-billion in nonrecurring items, including a R1.1-billion provision for potential silicosis claims.
       
Also part of the nonrecurring items is a R2.8-billion impairment charge relating to the cessation of its lossmaking Cooke and Beatrix West operations and R402-million in costs associated with the acquisition of US firm Stillwater Mining Company.

Earnings were also negatively impacted on by the 14% appreciation of the rand against the dollar during the period under review.

Meanwhile, Sibanye pointed out that its earnings per share (EPS) and headline earnings per share (HEPS) for the interim period were further affected by the issue of nearly 1.20-billion shares pursuant to the $1-billion equity raise that closed in June.

The precious metals miner, therefore, expects to report a loss a share of at least 320c and a headline loss a share of at least 145c, compared with EPS and HEPS of 24c and 79c respectively in the first half of 2016.

Further, it expects to report a normalised loss a share, which is adjusted for gains and losses on foreign exchange and financial instruments, nonrecurring items and share of result of associates after tax, of at least 65c, compared with normalised EPS of 152c in the first half of 2016.

Meanwhile, Sibanye on Thursday said its South African gold production for the six months to June 30 was expected to have decreased by 8% year-on-year to 688 600 oz, as a result of the impact of illegal mining at the Cooke operations and lower volumes and grades from Beatrix West.

Attributable four-element platinum group metal (PGM) production in South Africa reached 590 000 oz, while the newly acquired US assets delivered 93 800 oz two-element PGM output for the two months under Sibanye’s control.

SILICOSIS CLAIMS
Sibanye anticipates that its share of a possible settlement of class action claims for occupational lung diseases and related costs will be R1.1-billion before tax.

A consolidated application was brought against several South African mining companies, including Sibanye, for certification of a class action on behalf of current or former mineworkers (and their dependants), who have allegedly contracted silicosis and/or tubuculosis (TB) while working for one or more of the mining companies listed in the application.

In May 2016, the South African South Gauteng High Court ordered the certification of two classes – a silicosis class and a TB class – and that the common law be developed to provide that, where a claimant commences suing for general damages and subsequently dies before close of pleadings, the claim for general damages will transmit to the estate of the deceased claimant. 

The High Court ruling did not represent a ruling on the merits of the cases brought against the mining companies.

The Supreme Court of Appeal granted the mining companies leave to appeal against all aspects of the May 2016 judgment. The appeal hearing before the Supreme Court of Appeal is scheduled to be heard between March 19 and 23, 2018.