NYSE- and JSE-listed Sibanye-Stillwater on Thursday said it hopes to resume dividend payments in the second half of 2020, if high precious metals prices prevail.

The gold and platinum group metals (PGMs) miner reported “a pleasing recovery” in its operating and financial performance in the quarter ended September 30, following a difficult 18-month period.

All of its operations had benefited from higher prices in the quarter and Sibanye noted that pricing continued to strengthen.

Sibanye, which is led by CEO Neal Froneman, reported a 240% year-on-year increase in its adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) to R5.54-billion, or $377-million.

Its South African PGM operations contributed 53% of the adjusted Ebitda, its US PGM operations 32% and its South African gold operations 15%.

The South African PGM operations recorded a 70% year-on-year increase in production to 518 623 oz of platinum, palladium, rhodium and gold (4E). The increase was primarily the result of the consolidation of the Marikana operations for the full quarter, as well as higher output from the Kroondal operation.

The average 4E basket price had increased to $1 385/oz in the quarter under review, compared with the average price of $1 000/oz achieved in the third quarter of 2018.

The US PGMs operation achieved a 6% year-on-year increase in output to 147 353 oz of platinum and palladium (2E).

The challenging geotechnical conditions experienced during the first half of the year had continued to restrict stope access during the third quarter, negatively impacting on production at the Blitz project.

Sibanye expects the impact of these operational challenges to be temporary and said the long-term trajectory of the Blitz production ramp-up remained unchanged.

The average 2E basket price had increased by 55% year-on-year to $1 388/oz in the third quarter.

Meanwhile, the production build-up at Sibanye’s South African gold operations continued following a five-month strike earlier in the year, with output down nearly 7% year-on-year at  287 330 oz.

“Production has largely normalised, although an underground fire at Kloof 4 shaft, most likely related to illegal mining activities, and elevated levels of seismic activity following the resumption of safe production, has resulted in the temporary unavailability of some high-grade panels and continued to constrain the Kloof operation.

“The Beatrix operation has recovered well, with production only 8% below that achieved for the third quarter of 2018,” Sibanye pointed out.

It added that the ongoing stabilisation of the gold operations, along with a 26% year-on-year increase in the average realised rand gold price, had resulted in a “significant turnaround” in the financial performance of the group’s gold operations.

The average gold price had increased to $1 451/oz, compared with the average price of $1 205/oz in the third quarter of 2018. In rand terms, the price increased to R683 500/kg.

An operational review of the company’s South African gold and US PGM operations had been completed and a revised operational plan is set for implementation in 2020.

PRODUCTION GUIDANCE
As a result of the challenged ground conditions at the Blitz project and fall-of-ground safety stoppages in recent months, Sibanye has revised its full-year production guidance for the US PGM operations downward to between 590 000 oz and 610 000 oz of 2E.

This compares with the 625 000 oz to 640 000 oz of 2E output it previously guided.

Sibanye has maintained its output guidance for the South African PGM operations, excluding the Marikana operation, at between one-million and 1.10-million ounces of 4E.

Output from the group’s South African gold operations is expected to be at the lower end, at about 771 617 oz, of guidance.