Sibanye Stillwater Ltd Q2 FY2024 Earnings Call

Ladies and gentlemen, good afternoon and good morning. On behalf of the C-suite, welcome and thank you for taking time out of your busy schedules. At our 2023 year-end results in February, we made a commitment to focus on our balance sheet. Today, I hope you will recognize the tremendous effort from the Sibanye Stillwater team in doing just that. And hence the theme of the H1 2024 presentation is reflected in the presentation title, and let me read it. It says, delivering on our commitment to strengthen the balance sheet while also increasing liquidity. Please take note of our safe harbor statement. The agenda for today includes a brief strategic context. That will be led by myself and essentially it all starts and ends in the market. And you will see what I'm referring to when we get into that. I will also cover the salient features for the first half of 2024. Charl Keyter, our CFO, will then complete the financial review, after which he will hand over to our chief regional officers who will each cover their regions. We have Richard Stewart doing the South African region, we have Mika Seitovirta doing the European region, Charles Carter will do the US region, and Robert Van Niekerk, who’s also our Chief Technical and Innovation Officer, is also the Chief Regional Officer for Australia and he will cover the Australian region. So our 3D strategy is well known to the market. There's just a few points that I want to make, and I'm not going to go through all the detail on the slide. Our Board, together with the executive, have recently been through an extensive strategic review. And we remain confident that our strategy is relevant and delivering on shared value remains a keen focus for us. Our focus however remains on the strategic essentials especially through the current commodity price cycle. There are two other things that I want to mention that I think are relevant to the discussion today. Despite the noise that is creeping into the debate regarding the relevance of ESG, we as a company remain steadfast in our view regarding the importance and the relevance of ESG. We believe it's a good business practice and it will remain embedded as the way we do business. I also read much around the issues of diversity with suggestions that if you go work, you go broke. And again, I think that's such nonsense. We will continue to drive inclusivity, diversity, and belonging as we believe it creates a competitive advantage for a company like ourselves. Just moving on to the strategic context, I want to say that in terms of the metals that we have exposure to, understanding mobility or probably more particularly the evolution of mobility is important to understanding how the green metals could well be used in the future. I think it's important to note that electric powertrains are technologically smart and will certainly be the powertrains of the future. Within a short period of time, the issues around constraints and negative views of battery electric vehicles will be addressed and there is no doubt in my mind that battery electric vehicles will remain a very significant part of the future global car pool. I think it's also important to note that legislation on its own cannot drive what policy is being implemented in many countries. Consumer preferences and societal patterns will also influence the market and the way cars and power trains are utilized. I think as such, and it's well noted on this slide, power trains will be an evolving mix of technologies, and it will include internal combustion engines for a long period of time still, hybrids, fuel cells, and pure battery electric vehicles. Hydrogen will certainly play a role in power trains both in fuel cells as well as in direct combustion engines. Synthetic fuels have the potential to extend the era of vehicles with pure internal combustion engines. Our views in this regard have been very consistent and it's amazing to me how the pendulum swings from extreme positivity of battery electric vehicles to negative views and the same regarding internal combustion engines and PGMs. I think the bottom line is that you need to be on the right side of technology and we have, I believe, good exposure to all the evolving technologies from our metals point of view. We will now move on to just talk a little bit about the markets, specifically PGMs and lithium. Within our C-suite we have dedicated commodity champions whose responsibility it is to stay abreast of market trends and developments that relate to their metals and to develop our house views. Richard Stewart is our commodity champion for PGMs and Mika Seitovirta is our commodity champion for battery metals. So at this point, I'm going to hand over to Richard to take us through our house view on PGMs, more specifically platinum and palladium, and after that I'll ask Richard to hand over directly to Mika to cover the lithium market. Thank you, Richard, over to you.

Thank you very much, Neal, and good afternoon ladies and gentlemen. When discussing commodity markets, many people are curious about the direction these markets are heading, and PGMs are no exception. We analyze the markets based on three timeframes: the short term, typically less than two years, where we determine how to respond to current conditions; the medium term, approximately ten years, where our forecasts are more reliable; and the long-term, which is more speculative and extends beyond ten years. In the short term, we have observed a clear disconnection between market fundamentals and the price trends, which have fallen more sharply and significantly than anticipated. We believe that the 3E metals, including PGMs, are currently in deficit. The reasons for the price trends are complex, involving multiple factors rather than a single cause. We've previously mentioned issues like de-stocking, as several OEMs built up inventory after COVID, and that trend has been decreasing. Additionally, significant supply chain disruptions have occurred, notably with more Russian metal entering China. Most of the PGM market, about 80%, operates under long-term supply agreements, with only a small portion trading in the spot market, which ultimately influences pricing. When supply chains experience disruptions and spot buyers exit the market, it significantly affects supply and demand dynamics. Combined with negative global economic sentiments and the growth rates of battery electric vehicles (BEVs), this creates a disconnect between paper trading and physical trading. Historically, such dislocations tend to correct themselves, and the longer the dislocation persists, the more severe the correction tends to be. In the short term, we still expect volatility, but we believe that the fundamentals will eventually assert themselves, leading to potential rapid price increases as market conditions tighten. However, we are preparing for a period of short-term volatility. In the medium term, we have become more resilient based on the developments of the past 18 months. Our outlook for the markets remains largely unchanged, though due to lower price levels, primary supply from South Africa and North America has declined more than we previously forecast, and we don’t anticipate significant growth from Russian supply. Secondary supply is also expected to remain limited due to margin pressure and ongoing supply chain issues. Although we anticipate continued growth in BEV demand, we see that growth rate being moderated, and we believe the gap will be filled by internal combustion engine (ICE) hybrid vehicles. Considering the combination of supply pressures and moderated demand, we maintain that the PGM market is quite robust, a viewpoint we have consistently held. Looking at the long term, we see more speculative elements and structural changes taking shape. Currently, about two-thirds of PGM demand is driven by auto catalysts, which we predict will decrease to around 50% by 2040. The lost demand will likely be compensated by industrial applications, particularly linked to the hydrogen economy. However, many variables will influence this outlook, and understanding the development and adoption of these technologies is crucial for a confident forecast. This understanding informs our long-term strategy to secure sustainable industrial applications to replace auto catalyst demand in the coming decades. When analyzing the PGM market, we model it as a 2E basket of platinum and palladium due to their substitutability. Research from various market analysts suggests that we will experience deficits until around 2027, after which surpluses may occur. Given the supply constraints and the anticipated moderation in BEV penetration, we foresee deficits for the remainder of this decade, transitioning to slight surpluses in the early part of the following decade. Overall, we maintain a positive medium-term outlook for PGMs. I will now pass it over to Mika, who will cover the lithium markets. Thank you.

Thank you, Richard. A few words about leading supply and demand balance and the outlook, how we see that. First of all, behind there is obviously the growth of the electric vehicles. Many of us have revised downwards the forecasts and the volumes of the EVs and so have we. Even in the downwards scenario though we believe that during the next five years, by 2030, the volumes are going to be double against today's volumes. This is obviously something that is going to impact the lithium demand a lot. So, despite of the short-term surplus in the market, we see a very strong outlook long-term for lithium demand. Meaning that actually during the next five years, consequently we believe that lithium demand is going to double as well. It is also to be noted that the deficit starts ‘26/’27, which is a perfect timing for our Keliber project when we start to commissioning with our own ore. Over to you, Neal.

Thank you, Mika and Richard. Let's now move ahead with the salient features for the first half of 2024. So, the picture on the right hand side of the slide is actually the first slide in the year-end presentation which was delivered in February of this year. As I mentioned in my introduction today, we committed at that point in time to focusing on our balance sheet. And the piggy bank was also used to reflect the cost savings we intended to achieve from the large amounts of operational restructuring that we intended undertaking and had undertaken to preserve our margins through this lower price commodity downturn. I am particularly pleased with what we have achieved to date on both of these. Richard will cover the cost benefits of our operational restructuring in his section. But let me start with the impact that we've made on the balance sheet. So I'm very pleased to advise that we've increased our balance sheet strength and liquidity by more than ZAR25 billion or $1.4 billion. And we will in the following slide show you how that amount has been calculated. But first of all, what did we do? And the H1 balance sheet initiatives are listed there, and I intend to go through them in some detail. We announced the uplifted agreements we had on our covenants. The debt covenants have been uplifted to 3.5 times until June 2025 and 3 times until December 2025. We have a currency geared collar that we've implemented at our South African PGM operations to protect the margin in a strengthening ZAR environment. That was done on the basis that we could see the potential of an improving climate in South Africa. And I dare say the appointment of a government of national unity is a first very important step in that and we believe the rand will continue to strengthen and that is a protection on the downside. Our convertible bond derivative was reclassified as equity following the Sibanye Stillwater shareholder approval. The ZAR6 billion RCF refinancing and upsizing was completed. We entered into post June 30, in fact in August, a ZAR1.8 billion gold prepay that is currently being implemented. The Keliber Lithium project was separately financed to the tune of EUR500 million through a green financing. And then of course, operationally, we benefited from improved adjusted free cash flow compared to the second half of 2023, following some of the operational restructuring starting to impact. Very pleasingly, and I've highlighted it in dark black, is that our net debt to adjust the EBITDA is currently at 1.43 times and I want to point out that does not include the gold prepay and I will give you a pro forma indication of what that looks like with the gold prepay. As I say, a very pleasing result and certainly the expectations I think of the sell side analysts that we would be resorting to some form of deeply discounted rights offer must now be moot. So I did indicate that in the following slide, which you can now see, we would indicate what we have completed and the value ascribed to each one of those initiatives. The covenant uplift gives us a turn of 1 times and assuming our adjusted EBITDA for a year is about ZAR13 billion at this point in time, that's a ZAR13 billion benefit. The currency hedging and geared collar is on the slide, the prepay, the refinancing, the green loan, and all of that totals up to just over ZAR25 billion or as I said $1.4 billion. What we still have in the pipeline is another $600 million to $700 million of streams and other prepays that we are working on. So we are looking forward to an estimated pro forma total of increasing the balance sheet strength and liquidity in excess of ZAR36 billion or about $2 billion. And as I've said, any suggestions that we're going to have to revert to equity to strengthen our balance sheet must be somewhat moot now. There is one area where we still have some work to do. The polygons on the left indicate a number of techs, areas where we've completed restructuring or in Sandouville’s case, we've terminated what we believe was an onerous contract, the covenant uplifts, the convertible bond and the gold prepay are all done. The one area where we still plagued with losses in our business is in the US and with the announcement today, we have initiated what I believe will hopefully be the last phase of restructuring and I think it's quite material and quite significant. So let me talk you through it. And when Charles covers the US region, he will provide more detail. But we are now entering a final phase where we will be restructuring the US business for a 2E PGM basket price below $1,000 per 2E ounce. How are we going to do that? We are terminating high cost production of about 200,000 2E ounces from the US PGM operations. Stillwater mine will be put on care and maintenance. We will increase productions slightly from our higher grade Stillwater East operations, which has lower cost infrastructure and more efficient infrastructure. We will also reduce production from East Boulder and that will essentially improve the cost performance but also defer expansion capital. Unfortunately, it does result in a further headcount reduction of approximately 800 employees and contractors. The net result is that we will still ensure a sufficient scale of operation to maintain our very important recycling operations and to leverage off the recent Reldan acquisition. Probably more importantly with a high quality ore body of this nature, we retain mining optionality for a higher 2E basket price environment. We certainly did look at putting the entire business on care and maintenance. That is a much higher cost option than what we have set out here, but I will leave it to Charles to talk us through that detail. As we always do, we are sharing with you our gearing and this is a graph of adjusted EBITDA and of course net debt to adjusted EBITDA multiples reflected in the red dotted line. Pleasingly, and as I've said, without the gold prepay, our net debt to adjust at EBITDA as of 30th June comes out at 1.43 times. If we include the gold prepay, that number is actually 1.29. You would remember that we have said around 1 times is a net debt to adjust at EBITDA multiple that we are comfortable with. So again, I think very pleasing from our point of view under these circumstances to be operating at those sort of levels. So we've covered protecting the balance sheet. Let's now move on to some of the other salient features in terms of embedding ESG in our business. Very pleasingly, we are achieving record group safety performance and I will leave it to Richard to talk in more detail about that. We are advancing our green metal strategy and growing our secondary and urban mining platform that is inherently environmentally friendly and responsible. Our journey to net zero continues with 407 megawatts of renewable energy PPAs projects under construction. And in addressing the Marikana massacre, which was not during our ownership of those assets, we have implemented the Marikana renewal process, and that is resulting in significant collaboration from those impacted and affected communities, and it's resulting in positive change. And I'm sure you may have seen some of the media commentary on that at the anniversary. In terms of delivering on operational improvements and operational sustainability, very pleasingly, the South African PGM business had a solid operational performance, benefiting from the proactive restructuring done earlier this year. Our gold business had a disappointing operational performance mainly due to seismicity and of course any restructuring is disruptive, but we certainly look forward to improve performance for the second half of 2024. Our US PGM business had a solid operational first half and continued to build on the good results of the restructuring later last year, but because of low palladium prices it remains loss making and hence the restructuring that I referred to in the previous slide. Our US recycling business generates positive earnings and cashflow. Sandouville also generated an improved performance, but of course, because of the structural change in the low, in the nickel market and the low nickel prices, that we brought forward the conclusion or the termination of the nickel supply contract that we had with Boliden. The Keliber Lithium project continues well and in line with our expectations and pleasingly the Century zinc retreatment operation is on track for a profitable 2024. I'm not going to go through all the financial numbers. Charl will cover that in the financial review. But just to say, clearly earnings and cash flow impacted by a significant decline in the PGM basket price. We made a basic loss of ZAR7.5 billion. We did have headline earnings of ZAR137 million. There was a ZAR7.5 billion impairment of the US PGM operations and you can see that basic loss is basically the impairment. Our gross debt of ZAR34.2 billion is actually 9% lower than at 31 December, 2023. And we ended up with cash and cash equivalents of just over ZAR15.5 billion. I would like to just talk a little bit about unlocking the latent value potential as the last slide in this section. There are a number of areas where the significant value that we are in the process of unlocking. Our South African uranium assets and strategy has good direction, especially with the appointment of Greg Cochran to lead this part of our business. In terms of the Cook tailings resource, we've completed a review. We will complete a further feasibility study in 2025. I think important to note that it's near to midterm potential from a uranium production point of view, plus it has the benefit of gold byproduct credits. It's an opportunity to use this asset to build a uranium business leveraging of Cook's low technical risk development. The Beisa uranium mine also has significant U308 resources and there's significant potential to unlock value through a partnership or sale to third parties where we are in discussion. In terms of the Century operations, very pleasingly, we are now starting to assess opportunities to leverage the existing infrastructure, which is the port, the concentrator, the pipeline. By looking at phosphate deposits within that region, we have a number of our own phosphate deposits, but the region is well endowed with some very good phosphate deposits. So that will be receiving some attention and we look forward to providing you with more information in due course. We completed the Class 3 feasibility study on Mount Lyell during the first half of this year and we have decided that it warrants taking the feasibility study to a Class 2 estimate and we expect that being completed in 2025. Rhyolite Ridge, there's a decision pending once we have the environmental permit record of decision and the Class 2 feasibility results. So we look forward to receiving those and applying our minds. Reldan has very significant future recycling growth potential in Mexico and India. And it's not just through electronic waste. This business is being very complementary to our autocat recycling business in Columbus. So I would like to at this point hand over to Charl Keyter to take us through the financial reviews. Thanks, Charl. Over to you.

Thank you, Neal. Good morning and good afternoon to all participants. Starting with the financial performance for half one 2024, revenue was down 9% due to significantly lower PGM prices. Although production volumes were up at the SA and US PGM operations, the 4E and 2E basket price were down 28% respectively, and the 3E basket price was down 53% for our US PGM recycling operation. Pleasingly, the gold price was up 18%, but this was almost fully offset by lower volumes. Cost of sales increased period over period, but this half year includes six months for the new Century operations compared to four months in the previous period and it includes the newly acquired Reldan operation from 15 March, 2024. Normalizing for the Reldan acquisition, costs in absolute terms only went up by 2%. Adjusted EBITDA came in at just over ZAR6.6 million, almost half the number for the same period in the previous year, and this was predominantly driven by lower revenues. During this period, we also re-performed our impairment assessment and based on consensus low of future Palladium prices, an impairment of $400 million was recognized at our US PGM operations. The loss for the period was ZAR7.2 billion, but after backing out the US impairment and the associated taxes, the profit would have been approximately ZAR550 million rand. In line with our dividend policy, no dividend was declared. This slide shows our debt maturities and liquidity. Net debt at the end of the period was ZAR18.7 billion, and the repayment profile following the refinancing of our rand revolving credit facility remains very manageable with the 2026 bonds being our first significant maturity. Liquidity headroom is just under ZAR40 billion, which is roughly 2.5 times our requirement. And that is having two months of operational and capital expenditure in available headroom. Liquidity headroom was extended through the refinancing and upsizing of the rand revolving credit facility, the conclusion of the Keliber EUR500 million green financing and the execution of a ZAR1.8 billion gold prepay. Just a few words on the cyber-attack that we experienced post half one 2024 and also the reason for the delay in results. In July, we experienced a cyber-attack that impacted our global ICT systems. On discovery, the group ICT team acted swiftly to isolate our networks and systems across all regions and business units. The operational impact was limited but I think very importantly, safety of our employees were prioritized in all instances. The biggest impact was at our US metallurgical complex impacting smelting and recycling processes that resulted in increased stockpiles that will be processed over the rest of 2024. All credit has to go to our ICT team that restored the majority of our ICT environment in just over three weeks. I will now hand over to Richard Stewart to take you through the results of the SA region. Thank you.

Thank you very much, Charl. Good afternoon, everyone. We will go through the regional operating updates. To start, our foremost concern is safety. It has been encouraging to see the positive impact of the Fatal elimination strategy we implemented in 2022, which has helped reduce risk in our operations over the past few years. During this period, we recorded our best serious injury frequency rate and a decrease in high potential incidents. These indicators suggest that we are successfully mitigating high energy incidents that could lead to fatal accidents. Unfortunately, despite significant improvement year-on-year, we tragically lost three colleagues in this reporting period, one at Beatrix Operations, one at Kloof operations, and one at Bathopele. On behalf of the management team and Board, we extend our heartfelt condolences to the families of our lost colleagues. In the last 18 months, especially in South Africa, we have undertaken significant restructuring to ensure sustainability in the current price environment. This included the closure of unprofitable operations, specifically four shafts and two processing plants. We also restructured marginal operations, like the Marikana Rowland shaft and the Rustenburg Siphumelele shaft. To adapt to the reduced production, we restructured our regional overheads and services to fit the new operating model. We have merged service teams to create a centralized team that supports all operations in the region, which is expected to enhance efficiency and effectiveness, ultimately benefiting revenue. Since the beginning of last year, our total employee count, including contractors, decreased from around 82,000 to just under 70,000, reflecting a 15% reduction aligned with the smaller operating footprint from the restructuring. While this restructuring has been disruptive and costly, most expenses have already been incurred, with final costs expected in the third quarter. We anticipate that the annual savings from the restructuring in South Africa will reach about ZAR3.5 billion, based on the 2022 cost base. We expect to realize the full benefits from the final restructuring completed in June by the end of the year. We have also conducted significant capital reviews and decided to delay the Burnstone project, putting it on care and maintenance in the current environment. Our gross savings from operational restructuring currently sit at just under ZAR5 billion per year, and when including deferred capital costs, we are looking at total savings of nearly ZAR7.5 billion annually. Despite the disruptions from restructuring, the South African PGM operations performed steadily. Total production for the half-year was just under 880,000 ounces, a 4% increase from the same period last year. The acquisition of 50% of Kroondal from Anglo last year contributed almost 70,000 ounces, offsetting losses from restructuring and shaft closures. Production was impacted by a shaft bin failure at Siphumelele, which halted operations for nearly two months, and by legal industrial action at Kroondal. Adjusted EBITDA was just under ZAR5 billion, reflecting a substantial decline year-on-year mainly due to a 28% drop in the total basket price. However, we maintained our capital investments year-on-year with ZAR2.55 billion spent during this reporting period, demonstrating our commitment to investing in our future assets. The all-in sustaining cost increased by 9%, primarily due to one-off costs associated with the restructuring and closing the Klipfontein open cast at Kroondal. Excluding one-off adjustments, we observed a 6% to 7% rise in fundamental underlying costs, consistent with inflation. It's notable that Kroondal completed its last ounces for the purchase of concentrate agreement with Anglo in August, and from September 1, it will operate under a toll processing agreement, similar to Rustenburg. This change will lead to increased costs but also higher revenue as we will benefit from 100% of basket prices, positively impacting margins. Gold production was disappointing, with a year-on-year decline of about 17% to just over 10.7 tons. The closure of Kloof 4 shaft, which accounted for about 7% of the decline, significantly influenced this reduction. We also faced increased seismic activity at Kloof and Driefontein, and we suspended some operations at Beatrix after a fall of ground. However, Driefontein resumed normal production by June and should maintain that level moving forward. At Beatrix, we have implemented a new mining method for wide reef areas and expect full operations to return by the end of Q3. The closure of Kloof 4 led to less operational flexibility, exacerbating the impact of seismic activity. To address this, we are increasing flexibility and exploring secondary and higher-grade reefs throughout the year. We anticipate Kloof will operate below optimal output for the remainder of the year. Due to decreased production, all-in sustaining unit costs rose by 18%. However, the absolute cost base in gold decreased by 3% due to restructuring initiatives, resulting in a 10% real discount when adjusted for inflation. Adjusted EBITDA reached ZAR2.2 billion, which represents nearly a third of the group's EBITDA, highlighting the importance of having gold in our portfolio during these challenging macroeconomic conditions. DRD contributed just under 2.5 tons of gold at an all-in sustaining cost of roughly ZAR930 per kilogram. Lastly, our gold wage agreements expired at the end of June, and we are currently in final negotiations with organized labor across our gold operations. Thank you, and I will now pass it over to Mika.

Thank you, Richard. In Sandouville, we have had focus on two things mainly. First of all, reducing the losses. Secondly, building up the future through our GalliCam project. We have been rather successful in reducing the losses in Sandouville. H1 is clearly less losses than it was last year. There is a 57% improvement. However, we are still loss making. And therefore, we have also decided that with the current feed and with the current products, we are going to stop the production. It means that there will be no more feed after the year-end and we are ramping down consequently Q1 ‘25. GalliCam is moving forward and it is a project which is now in the pre-feasibility study phase. And we believe that we are going to finalize that by the year-end. And then we are going to do the decisions about the definitive feasibility study and a possible demo plant in Sandouville, provided that the results are as encouraging as they have been so far. The good news are that we have actually produced pCAM in our lab, and our innovation is working through the chlorine route. Secondly, we have also patented this one to protect ourselves. So we see a good future for GalliCam process and the next time we can tell you more about it is definitely when we have the results out of the pre-feasibility study. Coming to Keliber, Keliber is moving forward and there are no changes when it comes to commissioning the refinery H2, 2025. You can see from our CapEx number the latest forecast for this year. It has been changed from EUR360 million to EUR300 million and we are in some of the installations a bit late which means that the CapEx is going to be spent on the next year's site instead of this year's site, but the commissioning of the unit H2 ‘25 is still valid. Some milestones. Our project is now fully funded. So we have EUR500 million green loans secured in August. And we got very good support from the European Investment Bank, Finnvera and a consortium of leading banks and it confirms to all of us the strategic importance of this project not only for Sibanye Stillwater but also for the European Union and European customers as such. For the future, we have also done exploration. So we have some really good results on that one. And obviously long term, we all want to see growth. And we know that there is a strong demand of lithium. So we continue that work in parallel with the construction of the sites. Now, I want to show you some very beautiful pictures from Finland. You can see on the left hand side, you can see two pictures of the refinery in Kokkola. That construction is the most advanced of the three places where we are doing the construction. You can also see that actually in Paivaneva the concentrator is moving forward as well. And even the Syvajarvi open pit mine site has started well and really ready for first of all with the external spodumene feed starting the commissioning for the refinery H2 ‘25, but with our own ore during towards the very end of 26. And over to you, Robert.

Thank you, Mika, and hello everybody. The Century operations again had a very tough start to the year. They received about 1,100 millimeters of rain in the first three months of the year, as compared to a historic average of about 550 millimeters of rain. That said, I'm pleased to say that the lessons learnt from last year and the rain protection precautions that team put in place will enable them to produce 16,000 tons of payable zinc in quarter one. The operations recovered very nicely in the second quarter of the year. They produced 26, 000 tons of zinc. So, all in, we have produced 42,000 tons of zinc for H1 2024. It's very difficult to compare the first half of this year to the first half of last year as we didn't own these operations for the whole of the first half of last year but I can tell you that quarter two this year, the production was substantially better than quarter two last year. Our all-in sustaining costs improved by 8% to $2,228 per ton of zinc compared to the same period last year. This is largely due to improved production, but also in part due to very tight cost control measures the team on the operations have introduced. Our EBITDA loss has reduced from $28 million in H1 last year to $19 million in H1 this year. A substantial portion of that $19 million is directly due to the maintenance of our transshipment vessel. I can confidently report though that all of our deliveries will be filled before the end of this year. In conclusion, I am looking forward to a good finish to the end of this year. I'm looking forward to a good H2 2024. And in fact, I'm looking forward to a good 2025 as well. In part assisted by two tailwinds at the moment, the first being metal prices are substantially more than we anticipated and better than what we budgeted for. And spot treatment costs are also lower than the current benchmark spot treatment costs. You can see on the slide that we have hedged approximately 20% of our production for the next 18 months. So that is about 2,000 tons per month of payable zinc from July of this year through to December next year. So, I think I will leave it there and hand over to Charles. Thank you very much.

Thank you, Robert. As we turn to the Americas region, what you'll see in these results are the benefits of the restructuring we did late last year. We had a 16% increase in mine PGM production to 238,139 2E ounces, which is the highest production rate since H2 2021. We also had a 23% decline in all-in sustaining costs to $1,343 an ounce. Operating unit costs remain stable at $1,067 an ounce despite inflation year-on-year, which was due to improved production. Both production and costs were ahead of plan and I want to recognize our operating teams for that strong performance. All-reserve development was 42% lower at $65 million and sustaining capital 51% lower at $21 million, a combined saving of $68 million. Project capital declined by 63% to $8 million. However, during this period, the average 2E PGM basket price declined 30% to $977 an ounce, which has now led us to take more significant restructuring steps that I'll talk to in a moment. Adjusted EBITDA of $27 million, as you are aware, includes €43 million insurance payout from the ‘22 flood. As Neal has outlined with a PGM basket price below $1,000 an ounce, we are now needing to do further restructuring in our Montana business. This will see us reducing next year's production by approximately 200,000 ounces or some 44% of current run rates. We are doing this by placing the Stillwater West mine on care and maintenance while keeping Stillwater East going where we intend to increase production to approximately 130,000 ounces next year. At East Boulder, mine production will be reduced to 135,000 ounces. We will be mining four ramps instead of the current six, which in turn allows us to defer expansion capital in the tailings and rock dump facilities. We are also reducing fleet at both operations, which will have a number of costs and resourcing benefits. This reduction in mine ounces should see us reducing absolute dollar all-in sustaining costs by some 41% or approximately $385 million on current projections. Our total capital for next year will more than halve to some $29 million. Neal has highlighted the significant reduction in headcount, which will see our employees' numbers reduced by almost 40% as we align hourly and salaried employees with the revised production profile. As part of this restructuring, we are collapsing our current dual management structure across two mines into one new structure, reducing some layers and moving select management functions to the center to service all business units. We will also further reduce our contractors and backfill these roles with our own employees where possible. We will also make a number of changes on our met complex, but retain sufficient scale to support our PGM recycling operations. Importantly, at all business units, we will retain the optionality to return to higher production as prices permit. This restructuring is not just about reducing volumes and people, but critically, it's also about improving operating efficiencies, ongoing cost reduction, and throughout preserving the optionality of these high quality long life ore bodies at both mines. With this restructuring, we are also initiating a new vision to drive towards a sustainable business through the price cycle for the long term. Let me characterize key aspects of this vision for our Montana business. First, a key foundation for all the changes required to create this vision are engaged employees committed to delivering world-class outcomes. Obviously, with the restriction of the scale, we run the risk of losing significant talent and undermining team morale. But I do believe that as we deliver the necessary changes to make this profitable, we can make these operations a rewarding place to work for the long term. Second, we want to continue our best-in-class ESG performance. An example of this is that we have just received the record of decision for a dual federal and state environmental impact statement for our East Boulder tailings and rock storage expansion. This follows a three-year, nine-month process with no legal challenges and with the final decision issued with no objections, both of which are unprecedented in mining permitting processes in the US today. This speaks to the integrity of our stakeholder engagement and our collaborative relationships with environmental and community NGOs. It's also a testament to robust regulatory structure in Montana where an independent review panel must sign off on all new tailings facilities. Last but not least, it talks to an exceptional environmental planning and permitting team in our Montana business. Obviously with the significant restructuring announced today, many of these relationships with our diverse local and regional stakeholders will likely be stressed, but I believe that the integrity with which we conduct these engagements will ultimately prevail. And the test of any partnership is to be able to have open and honest conversations, especially in challenging times. Another key aspect of our vision for this business is to drive our all-in sustaining costs to $1,000 an ounce, which we believe we can achieve over the next three years, primarily with a focus on ongoing cost optimization. We will focus on optimizing and resource loading the current mining front while introducing task mining as appropriate. On mining methods, we want to fully mechanize cut and fill and convert to sub-level extraction where possible at both operations. As mentioned, we will fully optimize feature requirements. And we also intend to improve shift, execution, and blast cycles, which will be a key parameter to get better efficiencies and cost outcomes. Throughout this process we are introducing a digital trend for enhanced planning and more strategic look at how to optimize these operations. While scaling back production in the short term, we believe that we can also use this time to properly reposition these operations for improved future performance. This is especially true at Stillwater West, which as noted, we are placing on care and maintenance. But we have work to do here to ensure that when that operation restarts, it does so with improved underground infrastructure and efficiencies. On all of this transformative repositioning work, we will need to work collaboratively with the United Steelworkers to find new pathways to improve deficiencies in operating flexibility. This is an important partner for us who we firmly believe can help us create a long-term sustainable mining business that is world competitive. In concluding, let me note that we are uniquely positioned as a leading US critical minerals, PGM miner and recycler. The steps we are taking today will position this business for a sustainable long-term future that is important to the US critical mineral self-sufficiency agenda. As I hand over the Grant to take you through recycling, let me just note how proud I am of the work that he and the Reldan team have done to integrate this e- and industrial scrap business into our Americas platform in a very short period of time. You will see the first glimpses of this impact in these results as we now introduce gold, silver and copper to America's business. But I also know that the embedded growth potential of this enlarged metals recycling platform is significant and it is only a matter of time before US owners and analysts will start to recognize this in Sibanye Stillwater’s valuation. Thank you and let me hand over to Grant.

Thanks very much, Charles, and good day to you all. Yes, important to note that the Columbus recycle business remains largely unimpacted by the restructure. We will continue to receive material and differentiate ourselves in the market through our positioned approach to responsible sourcing, our strong assay turnaround, time capability, and our long-term relationships built on experience, knowledge, and trust. Despite the sustained macroeconomic pressures on spent autocat volumes, the US PGM recycling business remains solid with volumes stabilizing around 155,000 3E ounces. Gross margins have remained stable at between 4% to 5%, despite the 54% decline in 3E prices from the first half of 2023 to the $1,252 that we have received this year. The PGM recycling segment contributed a solid $8 million, that's ZAR147 million in adjusted EBITDA for the first half of 2024, again, underscoring the strength and stability of our operations. In mid-March of this year, we also concluded the Reldan transaction, marking a strategic milestone in our recycling strategy beyond our traditional focus on PGMs from autocats. We have expanded beyond solely relying on PGMs from spent autocats and tapped into high margin industrial waste streams, which open up new avenues for growth. Reldan specializes in processing industrial and electronic waste, offering a significantly less capital intensive alternative to traditional mining operations for producing a suite of green metals. From March to June 2024, Reldan processed 6 million pounds of mixed scrap and sold 42,000 ounces of gold, 850,000 ounces of silver, just under 15,000 ounces of platinum palladium and 1.1 million pounds of copper. The resulting combination of Columbus and Reldan industrial and precious metal suites presents a natural hedge reinforcing the sustainability of our business model. The acquisition further enables us to leverage Reldan's network sales team and metal logistics routes to capitalize on existing territories and relationships within the US, Mexico, and India for the benefit of the Columbus Met Complex. Reldan's strong early performance contributed $300,000 in the adjusted EBITDA and adjusted free cash flow of $9 million for the initial four months under our ownership. Having recently visited both operations within Mexico and India, I'm deeply excited about the growth prospects in both of these regions, so please watch this space. Neal, over to you for the conclusion. Thanks.

Thanks, Grant. And two slides in the conclusion. The first slide is really about guidance. And let me say, other than our South African gold operations which have been severely disrupted through the restructuring and seismicity, we are having to adjust gardens unfortunately on that. The Keliber lithium project, we won't quite spend all the capital we intended this year, so the revision is really a revision in spending. There's no other revisions to that project to date. We are not changing the US guidance, but I do want to say we should expect significant, well there's the potential for disruptions due to the restructuring that we hope to have completed by the end of the year, but I think that is just a bit of a warning or a heads up. So the anti-fragility journey continues. And in my mind, the key aspects of becoming anti-fragile are the bullet points set out below. So first of all, let's recognize the record safety performance that has been achieved with a continuous focus on eliminating fatalities and reducing high potential incidents. As I mentioned right at the beginning of the presentation, ESG will remain embedded in the way we do business. We think it's appropriate and it leads to sustainability. As I also mentioned right at the beginning, diversity, equity, inclusion, and belonging will remain an integral part of our strategic differentiation. The fundamentals as elaborated on by Richard and Mika indicates that from the metals we produce, we have exposure, we remain positive regarding that exposure. We've also shared with you significant strengthening of the balance sheet with more non-debt initiatives well advanced and we look forward to including those when we deliver our year-end results. We have sufficient liquidity to ride out an extended depressed commodity price environment and progress our key projects should that depressed commodity price environment occur. We've taken decisive steps to optimize our operations for the short and medium term and Richard shared with you the very impressive amount of savings that we are looking forward to from that. There was a strong performance from our South African PGM operations. There are operational improvements expected from South African gold in the second half of this year and clearly we hope that's sustainable into 2025. Unfortunately, the US PGM operations enter a new phase of restructuring for the current lower price environment to reduce the cash outflows and preserve optionality. Again, I want to say it means we are taking 200,000 ounces out of the market over 2025 and that will probably be ongoing. We are working towards a cost structure of $1,000 an ounce over a two to three year period. And our integrated global recycling footprint, which spans autocat’s industrial and electronic waste is very well positioned for growth in key regions being the US, Mexico, and India. So bottom line, we exposed to the right metals and ecosystems, very importantly, at the right time. And we look forward to a much better future in terms of improving commodity prices and profitability. With that, I will hand over to James to pick up any questions. Thank you, James. Over to you.

Thank you, Neal. The first question comes from Andre Luis Alves Catenani asking about the company's outlook on increasing allocation of gold assets, specifically in terms of expanding gold share of the total asset portfolio through investment in additional mines.

Let me pick that up, James. I think, as we've said previously, we like gold. We still think gold has got quite a bit of upside, but we are not focused on external growth at the moment. I thought I made it clear right at the beginning that our focus is on the strategic essentials, focusing on the balance sheet and of course delivering good operational results. So perhaps sometime in the future but certainly not right now.

Thanks, Neal. Then a series of questions from Arnold Van Graan from Nedbank. You've proactively and prudently shored up the balance sheet to ride out the storm, which should be commended. How much time has this given you? And in other words, how long can you run at current metal prices before further action is needed?

Well, certainly I'd like to ask Charl to give his view as well, but in my view, as long as the commodity prices stay the same and Arnold you made it clear at current metal prices together with the restructuring that we've done and the additional strengthening that we're going to still follow through with, I think we can run a very long time, whether that's three years, five years or 10 years, we certainly will not consume our balance sheet and all our debt. We will get to a breakeven position and then have sufficient reserves in our balance sheet. Charl, I don't know if you want to add to that.

Thank you, Neal. Arnold, to answer your question, we have always anticipated a challenging three years ahead of us, relating to our debt and financing, followed by the project build-up. As this ramp-up begins, our forecasts indicate that we will reach a stable financial position, operating well within our covenants. We took proactive steps to navigate through this three-year challenge. It may seem like we've gained three years, but it's really just a hurdle that will resolve itself starting in 2027.

Thanks, Charl. Again on the debt, you referred to the possibility of adding a further $600 million to $700 million in non-debt financing to the balance sheet. Is there not a risk that you're paying way too much of the future upside and value with these alternative funding structures, the tenure and impact of which invariably outlast the down cycle? Equity dilution is never great, but isn't it cheaper than some of these alternative deals? Neal?

I think yeah. So did Arnold ask that question?

Yeah.

So, Arnold, listen, we're very aware of, let's call it the long-term impact of a stream arrangement as an example. But I can assure you that, first of all, we don't stream primary products. There might be very small streams on primary products. Secondary products actually have very little value or they attract very little in terms of valuations by analysts. So as long as you're streaming a secondary product and as long as you're streaming a byproduct at a significant high in the price cycle, I think it's smart. We are very well aware of the cost of capital related to equity and the cost of a stream. So we don't go blindly into streams, but the work we're doing on it at the moment, we are quite comfortable that it's the right decision.

Thanks, Neal. I think these two will be for Charl. Does the Keliber green funding loan have recourse to the Sibanye balance sheet or is it ring-fenced to the project first of all and then what concessions did we have to make to the lenders for the covenant uplift?

Thanks, James. So in terms of the Keliber green financing, yes it has recourse to the balance sheet to the extent that it's drawn. So, obviously Keliber being a very important part of the company going forward, they signed up as a borrower and a guarantor under our facilities and hence the reason why they will be included. But I'd just like to make the point that to the extent that it's drawn, that amount will be included. So, fast concessions to the lenders. It was a voluntary concession that we as a company offered, but it's effectively 20 basis points or 0.2% at the top end. So should we go over three times leverage, there's a 20% basis point additional on the margin. So no major concessions or any restrictions from our lender side.

Thank you, Charl. There's a couple of questions on the US PGM restructuring. I think we've answered most of them. Looking at 2024, we haven't changed guidance. So obviously what we look at is the 200,000 ounce reduction in production coming through in 2025. In terms of all-in sustaining costs, I think that was covered as well. It won't be immediately down to 1,000 but certainly we will be working to get costs down to 1,000 per ounce is the target. I think the specific questions which may be of interest is, and Neal or Charl, how quickly would we be able to reopen Stillwater West should prices recover? And what kind of prices would drive that decision?

So, I think reopening any mine is probably a six to nine month sort of process. But, Charles, would you like to come in on that?

Yeah. Thanks, Neal. Look, we're not in a rush to do that because we've got work to do, as I alluded to, on the underground infrastructure at Stillwater West mine that particularly relates to the haulage systems. We have multiple handling at the moment. It's not cost effective. So we've got to look carefully at that and we've got to look at the infrastructure around our shaft just on some upgrades, et cetera. So, you certainly need higher prices, but we just need a bit more time to work on improved efficiencies because it's a very spread out mine. It's old infrastructure. It's long travel times. And that doesn't change, but within that we have work to do. And we're not rushing to do that spend through ‘25, but we are going to be doing the planning and the thinking and the optimization trade-offs. So, I've got no doubt we will get higher pricing through 2025, but this is not an on-off switch that you trigger very quickly, but so it's more about the work to do. And then, once we have the efficiencies identified and the mining cost efficiencies daylighted, then we would make that decision. I think the other parameter that's not an on-off switch is simply getting labor back. So this takes time. And we'll have to work that in. So I don't see this as a 2025 option realistically but I do think it's incumbent on us to keep the option developing, work on the underlying issues, that means that when it comes back, it does so with improved underground infrastructure and efficiencies. On all of this transformative repositioning work, we will need to work collaboratively with the United Steelworkers to find new pathways to improve deficiencies in operating flexibility. This is an important partner for us who we firmly believe can help us create a long-term sustainable mining business that is world competitive. In concluding, let me note that we are uniquely positioned as a leading US critical minerals, PGM miner and recycler. The steps we are taking today will position this business for a sustainable long-term future that is important to the US critical mineral self-sufficiency agenda. As I hand over the Grant to take you through recycling, let me just note how proud I am of the work that he and the Reldan team have done to integrate this e- and industrial scrap business into our Americas platform in a very short period of time. You will see the first glimpses of this impact in these results as we now introduce gold, silver and copper to America's business. But I also know that the embedded growth potential of this enlarged metals recycling platform is significant and it is only a matter of time before US owners and analysts will start to recognize this in Sibanye Stillwater’s valuation. Thank you and let me hand over to Grant.

Thanks very much, Charles, and good day to you all. Yes, important to note that the Columbus recycle business remains largely unimpacted by the restructure. We will continue to receive material and differentiate ourselves in the market through our positioned approach to responsible sourcing, our strong assay turnaround, time capability, and our long-term relationships built on experience, knowledge, and trust. Despite the sustained macroeconomic pressures on spent autocat volumes, the US PGM recycling business remains solid with volumes stabilizing around 155,000 3E ounces. Gross margins have remained stable at between 4% to 5%, despite the 54% decline in 3E prices from the first half of 2023 to the $1,252 that we have received this year. The PGM recycling segment contributed a solid $8 million, that's ZAR147 million in adjusted EBITDA for the first half of 2024, again, underscoring the strength and stability of our operations. In mid-March of this year, we also concluded the Reldan transaction, marking a strategic milestone in our recycling strategy beyond our traditional focus on PGMs from autocats. We have expanded beyond solely relying on PGMs from spent autocats and tapped into high margin industrial waste streams, which open up new avenues for growth. Reldan specializes in processing industrial and electronic waste, offering a significantly less capital intensive alternative to traditional mining operations for producing a suite of green metals. From March to June 2024, Reldan processed 6 million pounds of mixed scrap and sold 42,000 ounces of gold, 850,000 ounces of silver, just under 15,000 ounces of platinum palladium and 1.1 million pounds of copper. The resulting combination of Columbus and Reldan industrial and precious metal suites presents a natural hedge reinforcing the sustainability of our business model. The acquisition further enables us to leverage Reldan's network sales team and metal logistics routes to capitalize on existing territories and relationships within the US, Mexico, and India for the benefit of the Columbus Met Complex. Reldan's strong early performance contributed $300,000 in the adjusted EBITDA and adjusted free cash flow of $9 million for the initial four months under our ownership. Having recently visited both operations within Mexico and India, I'm deeply excited about the growth prospects in both of these regions, so please watch this space. Neal, over to you for the conclusion. Thanks.

Thanks, Grant. And two slides in the conclusion. The first slide is really about guidance. And let me say, other than our South African gold operations which have been severely disrupted through the restructuring and seismicity, we are having to adjust gardens unfortunately on that. The Keliber lithium project, we won't quite spend all the capital we intended this year, so the revision is really a revision in spending. There's no other revisions to that project to date. We are not changing the US guidance, but I do want to say we should expect significant, well there's the potential for disruptions due to the restructuring that we hope to have completed by the end of the year, but I think that is just a bit of a warning or a heads up. So the anti-fragility journey continues. And in my mind, the key aspects of becoming anti-fragile are the bullet points set out below. So first of all, let's recognize the record safety performance that has been achieved with a continuous focus on eliminating fatalities and reducing high potential incidents. As I mentioned right at the beginning of the presentation, ESG will remain embedded in the way we do business. We think it's appropriate and it leads to sustainability. As I also mentioned right at the beginning, diversity, equity, inclusion, and belonging will remain an integral part of our strategic differentiation. The fundamentals as elaborated on by Richard and Mika indicates that from the metals we produce, we have exposure, we remain positive regarding that exposure. We've also shared with you significant strengthening of the balance sheet with more non-debt initiatives well advanced and we look forward to including those when we deliver our year-end results. We have sufficient liquidity to ride out an extended depressed commodity price environment and progress our key projects should that depressed commodity price environment occur. We've taken decisive steps to optimize our operations for the short and medium term and Richard shared with you the very impressive amount of savings that we are looking forward to from that. There was a strong performance from our South African PGM operations. There are operational improvements expected from South African gold in the second half of this year and clearly we hope that's sustainable into 2025. Unfortunately, the US PGM operations enter a new phase of restructuring for the current lower price environment to reduce the cash outflows and preserve optionality. Again, I want to say it means we are taking 200,000 ounces out of the market over 2025 and that will probably be ongoing. We are working towards a cost structure of $1,000 an ounce over a two to three year period. And our integrated global recycling footprint, which spans autocat’s industrial and electronic waste is very well positioned for growth in key regions being the US, Mexico, and India. So bottom line, we exposed to the right metals and ecosystems, very importantly, at the right time. And we look forward to a much better future in terms of improving commodity prices and profitability. With that, I will hand over to James to pick up any questions. Thank you, James. Over to you.