SIYANDA BAKGATLA PLATINUM EXCEEDS ALL EXPECTATIONS SINCE ACQUISITION

Siyanda Bakgatla Platinum Mine (SBPM) is exceeding all expectations according to CFO Imraan Osman. He says, “since acquiring Union Mine from Anglo American Platinum in early 2018, our financial performance has improved significantly, we have stabilised the operations, and have done so with zero fatalities.” He adds, “during the 2020 financial year we achieved 3 million fatality free shifts coupled with a 7% improvement in the lost-time-injury-frequency-rate.”

Osman notes that the company has signed a 3-year comprehensive wage agreement with AMCU until 2022 which has ensured a stable labour environment for the workforce of c.7000, including contractors.

He says, “our excellent operating performance is based on the higher quality and quantity of fresh ore from underground operations, the optimised metallurgical circuit which has improved PGM recoveries and the enhanced supply chain management system which has reduced costs and improved working capital management”. “Entering the PGM industry at the opportune time has further enabled us to leverage off the buoyant commodity prices currently being experience in the sector”.

Siyanda has spent in excess of R 430 million in development expenditure to open new working areas and create further operational flexibility underground. This created the ability for the mine to improve throughput whilst extracting higher quality tonnes from its underground operations. The higher production coupled with recovery improvements on the metallurgical circuit resulted in a 20% increase in production of 308 536 4E ounces against the 2017 performance under the previous management.

Through the various initiatives coupled with a favourable PGM pricing environment, the business successfully generated positive revenues of R7.2bn and EBITDA of R3.3bn in FY2020, a 108% and 107% respective improvement compared to the prior year. This resulted in R705m profit after tax and a R200m dividend payment to the shareholders, which include local communities (27%), and employees (7.3%) who participate in the employee share scheme. The mine remains focussed on Socio Economic upliftment, investing c.R16.2m in socio-economic development projects within the local community and labour sending areas which is 4% more than the previous financial year.

2020 was a challenging year, with the mine being temporarily closed under lockdown regulations from the 26th March to 20th April 2020. SBPM however swiftly resumed operations, returning to production from the 20th April 2020 albeit at reduced operating capacities per the national lockdown regulations.

OUTLOOK

Despite a challenging and strained operating environment due to Covid19 restrictions and having lost a month and a half production capacity, SBPM is expecting to achieve some 270 325 4E ounces resulting in revenue of c.R8.7bn and EBITDA of c.R4.2bn for the financial year ending 28 February 2021.