Sibanye Stillwater Limited

Good morning and welcome to our 2020 year end results presentation. It is a long presentation as we have much to share with you, a lot of good news. I trust you will find the content enlightening. Let me say please sit back and enjoy. I'm just going to share my screen with you. As I said, this is our 2020 year end results, obviously incorporating some focus on the second half of the year. There's also a substantial strategic update that will be included. As always, please take note of our safe harbour statements. In terms of the contents of the presentation that really followed through the following key strategic highlights, I think you will find in the ESG section a good demonstration of ESG excellence and some exposure to what we see coming from the hydrogen economy and certainly We believe that the products we produce are making a difference one pgm ounce at a time and we will also demonstrate very significant social and economic and environmental impact and of course a good exposure to the future hydrogen economy. It's important to share with you our journey on improving and developing a value-based culture I'm going to share in some detail the the organizational structure transition which includes concepts such as Holacracy, Stratified Systems Theory and we talk of Global Competence. In terms of operational delivery You will see probably from the announcements already this morning that we've had stellar operational delivery despite the challenges around COVID-19 disruptions. Certainly I think we've proven our ability to rapidly respond to these challenges. The good Themba George Nkosi, Melanie Naidoo-Vermaak, Richard Andrew Stewart and then of course you would have also seen we recently reserved apologies we released a reserve and resource update and the board has approved an investment in some South African projects and I'm going to be very pleased to share that with you as well. We've been talking about our technical strategy for the last few years and I'm very pleased to say that's well advanced and we will be giving you some indication of our future strategy around external growth as well. Very importantly, and again Charles will cover this in some detail, we've had a lot of questions around capital allocation. I have promised Shareholders that once we've had board approval we will share with you a detailed structure on how we intend to allocate the very substantial amounts of cash that we are generating. So that's essentially also the structure of the present. We like to operate strategically and the The first one and core to our business Themba George Nkosi COVID-19 we've developed a strategy that really is about living and working with COVID-19. We believe COVID-19 is something that is here for the long term and in fact there's been some unique opportunities to improve our operational efficiency as a result of COVID-19 and I think the first point is that the protocols that we developed have been implemented and implemented very successfully at all our operations and you will see from one of the following bullet points that The South African mining industry COVID-19 death rate is one third of the national rate. That really underpins how successful these protocols were. In addition, we identified employees that were most vulnerable, those that have very significant COVID comorbidities, I should say, and we actually developed ways to reduce that risk and ensure that their lives were protected. Montana was hit by what we call the first wave in the fourth quarter of 2020. You can see it in the graph below. A very substantial first wave late in the year, which obviously impacted on the operations in the fourth quarter. Just moving on and some of these numbers we've quoted previously so I'm not really going to focus on the left hand side of this slide but we believe we're making a real difference for stakeholders in our business. There's been significant COVID-19 support to our stakeholders and that continues. We have publicly expressed that we are willing to contribute Themba George Nkosi where we can administer vaccine that translates into about 18,000 people per day that can be vaccinated. We would like to extend the vaccination to the dependents of our employees and of course our doorstep communities and we're willing to fund that and we've made that quite public and hopefully the government will support us in that. We've made significant impact through social investments. This morning we announced $6.8 billion of capital investment in new growth projects. That was approved. Our social and labour plans and corporate social initiatives and other ESG initiatives are being funded at the moment. And of course we're providing substantial supplier and SME support. In terms of tax, we all know that SARS tax receipts for 2020 were $300 billion versus $200 billion budgeted for and that additional $100 billion essentially came from the mining industry. In terms of ourselves, royalties and taxes of R7.1 billion were paid in 2020 versus R2.3 billion in 2019. That's a 213% increase. So these are very, very substantial contributions to the national interest and to our stakeholders. As I say, we are making a difference. Another area of focus and an area where we get lots of questions from our shareholders is around Marikana, the renewal and the restitution following the disaster there. We believe we are creating a new and much better future. First of all, that starts with the operations, the Marikana operations themselves. We've restored economic viability and essentially the long-term future is also being secured through the approval of the K4 project. We believe this is an opportunity to build a new legacy together with stakeholders. We started that process last year with the Marikana disaster memorial. and essentially we are fostering healing and closure by doing the following things. We're providing ongoing counselling to those that were affected initially, emotional support for the affected employees, the widows and their families. We have delivered seven houses to widows. The balance of nine houses will be completed and handled early in 2021. which means all the widows of those deceased mine workers and security guards would have received houses. Pursuing justice and restitution for those affected, we believe there will not be closure until there is proper justice and restitution and we have stepped up and are trying to resolve these issues on behalf of those people that There's ongoing educational support for the 141 beneficiaries from the 1608 Trust that was established by Lonman. And we're honouring Lonman's outstanding legacy SLP obligations while we are delivering on our new SLP3 commitment. So we really have stepped up to address these legacy issues and to change the direction and trajectory of what's happening. The structure below is really the strategy and you can see how the renewal program is focused on the widows. Justice for the Local Tribe, the Vapa Vakhali, Social Restoration and of course the Coffee Project which is really about a memorial that we would like to establish here. That should address the legacy issues of course. Future and ongoing sustainability is being addressed through economic restoration as I said We've now stabilised these operations. The economic viability has been restored. We're looking at other projects within the area such as agriculture, industrialisation and enterprise development. Of course, we can't do this on our own and we do need to collaborate with all the stakeholders in the area, but this is progressing and moving forward quite In terms of the products we produce, we are a leading producer and recycler of green nickels. I'll focus first on the production of PGMs and you can see the key ones listed at the top of the slide. Platinum, Palladium, Rhodium, Iridium and Lithenium. As I alluded to right at the beginning, We do see the hydrogen economy developing very quickly. We have substantial exposure to that as I'm going to outline below. But for now, the PGM play a very important part in removing noxious exhaust gases and hydrocarbons from automobile exhausts. The future technologies that we hope to be involved with is in green hydrogen, PGM based proton exchange membrane technology which we believe is well suited to using intermittent renewable energy feed and then of course hydrogen fuel cells which we know are efficient and environmentally friendly and will become the alternative source of power for many things but primarily automobiles. The metals that are involved in these future technologies are clearly platinum, iridium and ruthenium and we the largest producer independently. Benefit from the Future Hydrogen Economy and I'll say a bit more later on in the presentation about that. Our Columbus recycling business in the US is also a very proud business segment. It's one of the largest global recyclers of spank water catalysts in the world. We recycled 840,000 3E ounces of that palladium, platinum and rhodium and that was in 2020. Very important to note that not only is recycling smarter in its own way, but from an environmental point of view, our recycling facility emits six times less Tons of carbon per PGM. It uses 63 times less water and it generates 90 times less rock waste than the mining operation. So these are very very smart and environmentally friendly processes. In addition from a commercial point of view the PGM recycling business has green credentials. which provides access to lower yield funding and tax exempt bonds and certainly we see that as part of the capital structure for our recycling business. So very important part of our business when you consider the ESG credentials related to that. I'm also very pleased to announce that we've done the necessary work to determine When we can achieve carbon neutrality as a group and we will be targeting, committing to targeting carbon neutrality by 2040. Internally we hope to meet that target substantially but that requires further work and in support, this is all in support of the Paris Agreement and the United Nations Sustainable Development Goals. In terms of our specific goals at a high level, our goal is underpinned by the following. Advocating for future decarbonisation of electric power in South Africa through our role in the Energy Intensive User Group, through Business Unity South Africa, the Electricity Policy Forum and of course other sectoral forums. Decarbonisation targets have been built into the long-term incentive framework for senior management, so we are dead serious about making sure that we incentivise to achieve these targets. We are also looking at continuous energy efficiency improvements. We're targeting a 2-3% year-on-year improvement as a minimum. and just for reference through these initiatives 165,000 tons of CO2 emissions were avoided in 2020. We are increasing renewables in our energy mix. 50 megawatts solar PV plant is in development. We're looking at a 200 megawatt plant of additional solar PV renewable energy We're looking at storage and wind projects as well. And we're hoping and targeting 20% renewable penetration by 2030. As you can see from the bottom of the slide, a full update on our decarbonisation strategy. will be provided in the latter part of 2021. But we are happy to make the commitment of targeting carbon neutrality by 2040. I'm not going to go through these. These are really recognitions from credible Organisations and institutions that have recognised our ESG credentials and we look forward to adding to this list and even enhancing the ratings that we receive from these organisations. I'd like to now move on to the value-based culture that we are building and enhancing within Our company and the initiatives around that. I think first of all let's talk about gender equality. I am specifically championing the women in mining initiative at the Minerals Council and I volunteered for that role because I believe in this initiative. At Sabania Stillwater specifically, We're targeting 30% of females in the workforce by 2025 and of course increased representation and development of women at all levels. We are progressing with intent. These are not just motherhood and apple pie statements. For instance, 30% of our South African female versus were females, sorry I should say, were female in 2020. 30% of our promotions approved in 2020 were women. 31% of new recruits in 2020 in South Africa were female and 31% of directors are currently female. So, as I say, these are not just motherhood and apple pie statements. We are progressing with intent. In the US, we've worked with the women in mining in the US to create the first corporate membership and establish the women in mining chapter for the US PDM operation. So that's also well advanced in the United States. In terms of COVID and our ability As I mentioned earlier, to use some of the opportunities that COVID created, we've been able to accelerate our cultural growth and implement some unique working practices within the company. We've introduced what we call the SOHO concept, that's the Small Office Home Office. What we have really used is remote working where possible to reduce the risk of exposure to COVID. But in addition, there are health and safety and productivity benefits. We've seen it in our results. We've seen it in the activity of our employees. There are lifestyle benefits. It's a privilege and I'm pleased to say that no one's abused that privilege. We've also been able to access the global labour pool and becoming a global organisation that's a very important part of ensuring that we have the right competence and the right capacity within the company and in fact that we are able to grow globally. Internally, we've been able to expand inclusivity through virtual connect sessions. We're able to reach wider audiences. We're able to get more involvement from those people attending these sessions. And this was very effectively used in the lockdown period. A, to maintain connection. with our employees, but we actually accelerated some very smart working practices through some of these initiatives. Virtual training and development are accessible and efficient. We use that. We use the Henley School of Management and we've even had graduates coming out of these virtual sessions. Probably more importantly though is we've been able to enhance engagement with our employees and the organisation and achieve alignment across the group, in other words across the oceans. We have far more engagement across continents using virtual methods of work. So I do believe this is yet to stay. I do believe this has created a lot of engagement and will become organisations' competitive edges. As I mentioned in the beginning, For probably the last year we've been implementing a new leadership architecture which has been designed to obviously enhance the current performance of the company but also to ensure that we are future ready for the strategy and growth that we see unfolding in the not too distant future. The strategic leadership has really been configured in line with stratified systems theories. We've embraced electricity. That's provided autonomy, agility, and purpose alignment. We've become an evolving learning and leading organization. I think you will see many aspects of that in the results. We are geared to respond to volatility and uncertainties. I believe the way we could respond so quickly as a large organization to the COVID pandemic and the lockdowns and so on is testament that this management system really works. We've been able to ensure role clarity for the business and ensure that it's aligned to our business requirements We've made a number of appointments which we've communicated. I'm not going to go through all of them but we've appointed a Chief Operating Officer, a Chief Technical Officer, of course the CEO and CFO were existing positions. Probably within the next quarter we will complete the structure and you can see the areas that we still have to make appointments in the diagram. But essentially This is an evolution from a management structure to a leadership system and it's working extremely well for ourselves. I'd like to now move on to the focusing on safe production and operational excellence. First of all, we always start with safety and safe production. It's been a difficulty adapting to COVID-19. and there's no doubt that our safety performance has been impacted by COVID-19 and that's essentially because of lockdowns having to stop operations and then to build them up and essentially because of this being quite complex and disruptive we've had to reform teams and of course that in its own right leads to complex behavioural issues. But we're on top of it and certainly I think with stability we will re-establish and the very good safety record that we had prior to the COVID issues. We did achieve safe production milestones. Some of them, despite COVID, they listed there. I'm not going to go through them in detail, but regrettably we lost nine colleagues in 2020 due to safety related issues. Our safety strategy we believe is solid. and again I've presented it previously so I'm not going to go through it in detail other than say it involves an enabling environment, empowered people and then of course world-class systems. What I do want to share with you though is that we have enough confidence in our safety strategy to actually Start targeting international safety standards. The graph on the left hand side is courtesy of the ICMM and it's the blue bars are companies and their safety performance. This is public information. That's 2019 data. The green bars are our 2020 current safety performance. You will notice, contrary to what many people would expect, the Savania Stillwater Gold operations are not the biggest problem. Our single biggest problem is our US PGM operations. Needless to say, All three operating segments are targeting let's call it international or world-class safety standards. You can see the agencies below that graph and again it will be surprising to many of you that fall of ground accidents are not the main issues. You can see issues such as slip and fall and foreign body and trucks and trams are much bigger agencies to safety related incidents. What I do want to say, and this is important, that we need to recognize that the Bunya Stillwater employs more than 80,000 people. That means we have responsibility for the wellbeing of at least 80,000 people. We do not accept that our operating environment being deep underground and labour intensive is an inhibitor to world-class safety performance. Reducing risk by closing operations in my mind is copping out and it will have significant unintended consequences for the many people that we employ. If you think by divesting these assets for safety reasons is the way to go, we also don't believe that will solve any safety related risk as we just pass them on to the buyer of these assets. To realise our purpose of improving lives to Bunyan Stillwater will ensure that our operations are comparable. to international peers and I've already alluded to the trajectory that we intend to be on and achieve these results within five years. Our safe production strategy which was just highlighted on the previous slide specifically addresses behaviour related issues and real risk reduction. So we remain confident in although we will be deep underground miners that we can get to international safety benchmarks and standards. Part of operational excellence is certainly growing the reserve base and As you can see, we've also put out recent announcements regarding this. There's been a 40% increase in the South African PGM Mineral Reserve base, a 7% increase in the US PGM Mineral Reserve base, and then of course our South African Gold Mineral Reserves have stayed pretty stable. I think the perception that we pick up from analysts that we may have short lives is completely unfounded. And I want to just focus on the different operations. The South African gold operations, British still has five years of life, Drift and Tame 10 years of life, Cluos 13 years of life. Burnstone, which we've just announced that we've re-initiated the project, has 20 years of life and our surface sources 2 to 3 years of life. DRD, where we have a 50 plus 1 interest in, has in excess of 20 years of life. So there are not many gold operations in the world that have that type of profile. Our South African Gold operations still have long life. Even more spectacular are our PGM business. The South African PGM operations, you can see Crindle and the Mozank 12 years, Morricona excluding pay 4, 16 years, Rustenburg 32 years and the newly announced pay 4 project, 51 years. are surface sources in Rustenburg and Morricone are seven and five years respectively. Those are not short lasts. In the US, we know that the ore body is extensive. The Stillwater West operation is 25 years of life. Stillwater East also 25 years, East Boulder 39 years. And as I will show you in some of the upcoming slides, there is still an extensive resource which can add to So we certainly, the perception that we have short life assets is actually incorrect. Just now moving on to production and financial numbers. The larger diversified production base has underpinned record earnings and cash flows. and you can see it from the graph on the left. You can see in that graph how the net threats and how the profitability which is adjusted EBITDA has really gone up from the second half of 2019. You can see that in H2 Gold was responsible for 19% of adjusted EBITDA. Our South African PGM business 60% of adjusted EBITDA and our US PGM business 21% of adjusted EBITDA. You can also see the red dotted line is our net debt to EBITDA in other words Our leverage has come right down and in fact is actually negative 0.06 so in other words we net cash and we'll talk a bit more about that just now. But this record financial performance has come from the benefits of an enlarged South African PDM production base. Important to note that our gold business has Return to Normalized Levels and when I discuss the gold segment in particular you'll see we are achieving similar levels to 2016 from a profitability point of view. The US has been consistent despite the very significant hardships they've had this year due to the COVID-19 impact and I will go through that in some detail. Of course we've had the benefit of higher precious metals prices but I would also suggest that our entry into the sector was well informed and our analysis of supply and demand has really put us in good stead. So, for the record, we made a record 19.9 billion free cash flow, that's 1.2 billion dollars. We achieved earnings of 49 billion Rand, which is about 3 billion dollars. and as I said, from a deleveraging point of view, we're now in the next cash position. So, very pleasing to see the transition of the company. Just going through some of the details. As you can see, the South African PGM business contributed 60% of the adjusted earnings, as I mentioned in the previous slide. You can see from this the amount of production from underground and surface. You can see the average basket price as it's ramped up. You can also see that we've been able to bring down the oil in sustaining costs, especially in the second half of the year, primarily based on synergies and volumes. So if we look at H2 production, it was 40% higher than H1. We achieved normalised production rates after the lockdown and subsequent lockdowns. and Bill Buff in November 2020. We have successfully integrated Morricona and as we've mentioned previously we've achieved annual synergies of just under 2 billion Rand per annum. That's two and a half times the initial 730 million Rand estimate that we provided when we acquired those assets. The adjusted free cash flow is 11,7 billion, just over 700 million US dollars and that compares to 2019 where it was only 2.7 billion or 186 million US dollars. Just to note, these are high margin assets, 60% EBITDA margin for the second half of 2020. I know that this will be a question, so hopefully we've pre-entered it. This essentially looks at the pull split of the South African business. This is not group, this is the SAPGM business. And you will notice that the very significant role that Rhodium has started to play. It's 8% of the pull split. That's 46% of the revenue. So very, very substantial contributions from Rogan. Iridium is starting to feature as a valuable metal. We are the biggest producers of Iridium and Ruthenium. As you can see, Iridium makes up 1% of production and Ruthenium 5% of production. And collectively they contribute about 1.1% of revenue, so still quite small. Very important if you are going to be successful in terms of achieving operational excellence is to look at where you are positioned on the cost curve but probably more importantly to see the changes that you've made or the impact you've been able to have and I'm very pleased to say that our operating teams and our operating strategy has seen the assets that we have acquired move very substantially down the industry cost curves. We're very pleased with this. It's a very important factor in terms of operational excellence and I hope that we can continue on the same trajectory. We are very pleased to be able to provide The market with four year outlooks for most of our operating segments. Up until now we've been so busy acquiring and integrating on a regular basis that it's not been possible to provide longer term outlooks. So this is a break from the past. You can see for the South African PGM business that is relatively stable over the next four years. We've provided both volume and cost information. In terms of capital cost, there is a small increase in 2021 and as we've said throughout 2020, Post the lockdown, that is a carryover of capital from 2020 and you can see it clearly in the bottom graph. In terms of our US operations, they contributed 21% of earnings. The graph gives you an indication of underground You can also see how we've benefited from the basket price increasing and our oil and sustaining costs have been relatively flat. I will talk a little bit more about that when we get to Blitz. The second half of 2020 production was 3% higher. There was a 2% increase in orange sustaining costs primarily due to a 7% increase in taxes and royalty, which of course is driven by the increasing basket price. These are very high margin operations, even higher than the South African PGM business. They have 63% EBITDA margins. on the underground operations. Recycling has really delivered and in fact delivered just over $50 million of EBITDA in 2020 compared to $38 million in 2019. Very pleasing Fuller Mall project has delivered on time and at budget. We now are at and the annual run rate of 40,000 2e ounces and of course you'll get the benefit of that through 2021. Interestingly the project NPV exceeds 400 million dollars at current spot prices so that was a great investment. Just looking at The four-year forecast. Again, we've provided you with production and oil in sustaining cost information. We've also provided you with the capital information and we split it into all reserve development and project capital. As I said earlier on in the presentation, I would allude to the organic growth opportunities at Stillwater. There's over 12 kilometres of resource that can still be mined. We've got the Lower East Boulder and the Lower Blitz projects that are clearly opportunities. We will look at those in due course. Underground production, as you can see from the forecast, is building up to approximately 850,002 ounces by 2024. Recycling, also about 850,003 ounces. All-in sustaining costs will stabilise at $750 an ounce in 2021 terms. at the time of acquisition we projected those to be 550 if you normalize 550 to about 2021 it's about 650 so there's an additional hundred dollars an ounce that We are going to incur and that's going predominantly into infrastructure investment. We feel that's necessary. We've been able to review this project and the delays have also caused an increase in capital costs which I will also get to shortly. Moving on to Blitz. Blitz is definitely a project that is not replacing production. That's an additional 300,000 ounces of production by 2024. As I said, unfortunately, the project capital has increased. Due to various reasons, but we are comfortable that it makes sense to spend that money. And as I said, the oil and sustaining costs will not quite be as low as we thought. But again, we understand the reasons for that. Just looking at the South African gold operations, they are contributing 19% of earnings. You can see the production graph on the left-hand side of the slide, underground production and surface production. You can also see how we've benefited from increasing rand gold price, rand per kilogram gold price. But we've also been able to, with higher volumes, So the second half was 43% higher from a production point of view than 2020. That was a successful ramp up post the COVID-19 lockdown. You would remember there were some concerns with the COVID protocols. of whether we would get back to normalize the production rates. I'm very pleased to say we got there in November and it does look sustainable. There was a 12% reduction in all-in sustaining costs due to the higher volumes. DRD, which we hold a controlling stake in, had also 25% higher production at an all-in sustaining cost of just over R600,000 per kilogram. These assets will have good margins, 36% EBITDA margins for the second half of 2020 and of course we expect a slightly better performance in 2021 because we should be at steady state. In terms of earnings, they've reduced EBITDA of 7.8 billion Rand, which is not too shabby. just under $500 million for 2020 and that was a reversal from a loss of $969 million or $67 million in 2019. Free cash flow was of the order of $6.4 billion or $386 million for the 2020 year whereas the previous year were losses. Very pleased with the Gold's operation performance. Again, we are providing a longer term outlook that we now have more stability and you can see a fairly stable production and a slightly reducing audience sustaining cost profile. The oiling sustaining cost, as you can see from the top bullet on the right hand side, is due to the CLURC infrastructure project, which is designed to reduce the infrastructure footprint. Just like the South African PGM operations, There's a slightly elevated capital profile in 2021 due to the carryover from 2020 and you can see that clearly in the bottom graph. I'd like to just briefly cover the precious metals market and I'm only really going to highlight I think areas that are significantly different or necessary to reinforce. There's no doubt that Platinum's fortunes are set to turn. I have been publicly quoted as seeing Platinum at $2,000 an ounce in the not too distant future. We worked very hard to to introduce what we consider sustainability between Platinum and Palladium. Palladium, you will see from the graphs going forward, has been in a substantial deficit for some time and we had real concerns that that deficit would result in real shortages and hence our financing of research through BASF to look at substitution. Very pleased to say that's had a very positive effect and substitution is taking place as we speak and you are now starting to see more forecasts as to the contribution that substitution is going to make and you can see it's quite significant. AutoCat catalyst demand will increase from 2.7 million ounces for platinum in 2019 to 4.5 million ounces, almost 2 million ounces more, largely due to substitution in gasoline order caps. That far outweighs any investment in investment demand or jewellery demand and we're really pleased with that outcome. And certainly when it comes to rhodium, we are now applying our minds as to use what may be surplus palladium to substitute rhodium. But there is no doubt that platinum has a really good long-term future. In terms of palladium, the near term is solid. It moves from a small deficit to a larger deficit in 2021, and that is really as demand recovers. I've spoken about the substitution of palladium with platinum, but I also alluded to the opportunity to partially substitute rhodium And if we don't do that, we do face the potential consequence of a lack of sustainability in the basket. Just coming to rhodium, the fundamental deficit continues and this is going to be exacerbated by a decline in primary supply in South Africa mainly due to a long-term undercapitalization of assets due to depressed prices. As I said, substitution is important and in this case we see rhodium being substituted in the glass industry by platinum. That will remove 20,000 ounces of industrial demand which will still not be enough to offset the deficit you see here but it will make rhodium an automaker because of its 90% exposure to the automobile sector. There's been a lot of questions about despite the very slow Autodemand Growth, why the demand for the metals has been as strong as it is. And I think it's simply due to the loadings, the additional loadings required by the increasing environmental standards that have come in over the last while. So this graph shows you the metals. and their profile in terms of demand which as I've said is driven by the vehicle demand which is the black dotted line but also the metals are impacted by loadings, increased loadings and that's why you don't see the same profile. Just in terms of the gold market, as you've seen, about 20% of our earnings still come from gold. We like gold. We wish we had a larger gold base and that is something that we continue to work on. But in terms of gold, I think low interest rates are going to certainly drive gold investment. and we see low interest rates as something that is not going to change in the short term. In terms of consumer demand, largely from emerging markets, as we go through the COVID recoveries, we see consumer demand recovering as well. There will be, in our view, moderate net purchases from central banks and our view is informed I suppose production is something we need to consider. It has been impacted in 2020 by COVID related issues. So it will return and it has returned to historical levels. I think the real question mark remains about the lack of investment in new projects, the lack of new projects per se, the lack of new discoveries and how sustainable current production levels are. So this is the market that we think is going to be robust and possibly even be squeezed in the not too foreseeable future. At this stage, I'd like to hand over to Charles to discuss the financial results and share with you the capital allocation model that was approved by the board. Thank you, Charles.

Thank you, Neil, and good morning to everyone on this call. 2020 was written against the backdrop of the global coronavirus pandemic. The events of 2020 brought new challenges that I believe very few people were prepared for. It changed the way we live and how we connect with each other. 2020 was as sobering as it was defining for Sabania Stillwater and all credit must go to our operational, medical and support staff for the exceptional results I'm about to share with you. Starting with our income statement, revenue increased 75% year-on-year to R127 billion. Production was maintained in line with 2019 Despite the challenges imposed by COVID-19, and that afforded us the opportunity to take advantage of elevated commodity prices. On a per unit basis, revenue for our South African PGM operations was up 83% to R36,700 per 4 e-ounce. For the US PGM operations, up 53% to $1,900 per 2 e-ounce, and for our South African gold operations, up 43% to 925,000 rand per kilogram. Cost of sales was up 35%. However, the inclusion of Marikana for 12 months compared to seven months in 2019 accounted for 5 billion rand. Secondly, as the prices for platinum, palladium and rhodium increased, it has a direct impact on the US recycling costs. This price and exchange rate movement accounted for 10.5 billion of the additional costs. Adjusted EBITDA for 2020 was up 230% to 49.4 billion Rand or $3 billion. Interestingly, the adjusted EBITDA for Q3 of 15.6 billion and for Q4 of 17.3 billion on its own exceeded the adjusted EBITDA for the entire 2019. I'm also happy to report that we closed out the 2023 convertible bond well ahead of time and this has assisted us in the downward path of our debt reduction. The net result is that earnings per share for 2020 was up 536 times or for the statistically minded 53,600% and this translates into a final dividend of 321 cents per share bringing the full year dividend to 371 cents per share or a yield of just under 9% using the average share price for 2020. Moving on to the next page, I'm extremely pleased to report that our deleveraging efforts have been achieved and we are now well within reach of our internal comfort level of gross debt of about 15 billion Rand or $1 billion. Cash at the end of 2020 was 20 billion rand and that was up 3.5 times from 2019. At the end of 2020 our gross debt was 17 billion or 1.2 billion dollars compared to 26.6 billion rand or 1.9 billion dollars in 2019. The result is that we are now in a net cash position of 3 billion rand at the end of 2020. compared to a net debt position of R21 billion at the end of 2019. That was a R24 billion swing. We further estimate that our interest expense will reduce by R350 million in 2021 and we are contemplating a reduction and refinance of our 2022 and 2025 bonds towards the middle of 2021 to take advantage of record low interest rates. Moving on. Looking at how we allocate available capital, if we start with the cash generated by our operations, a total just over 45 billion rand. After accounting for staying business capex, net interest and royalties and taxes, available cash was 31 billion rand. The 31 billion rand was further allocated as follows, 11 billion to our shareholders in the form of dividends, and 2.6 billion Rand towards growth projects. The balance was retained for working capital, debt repayment and increased liquidity. Turning to the next slide. I'm sure this slide requires very little explanation. We are pleased to report that we have declared a final dividend of 321 cents per share, bringing the full year number to 371 cents per share. which is at the top end of our payout percentage. Normalised earnings for 2020 was just under R31 billion and that translated into a dividend distribution of R10.7 billion for 2020 to our ordinary shareholders. And I think the graph on the right just highlights how significant this is compared to previous periods. My last slide is on capital allocation. It is important to note that over the next five years, after accounting for all operational expenditures, interests, taxes, royalties and capital, that we estimate that we will generate between R150 billion and R200 billion in cash, using a range of prices ranging from consensus to spot. I appreciate that commodity prices are both dynamic and volatile, but we deem it prudent to show what the allocation priorities will be. I would like to stress that the priorities will be tackled in parallel and not necessarily sequential. Our first priority is investment into our ore bodies in the form of project capital and Neil will speak to the significant pipeline of internal opportunities that we have. Based on the projects that we have proposed to our board, which are K4, Cliff Fontaine and Burnstone, the project capital required is estimated at R6.2 billion over the life of these projects, with R1.5 billion of project capital expenditure estimated for 2021. Our second priority would be to galvanise our balance sheet, and this will include a cash liquidity buffer of R5 billion, with the balance of R10 billion in available undrawn facilities. This equates to two months of operational expenditures. We also anticipate to build up a debt buffer over the next three to five years of roughly $1 billion. This will be kept on balance sheet and will keep us in a neutral debt to cash position and will shield us from any bumps in the road going forward. This should also significantly improve our credit metrics as we can no longer rely on the SA sovereign rating to anchor or support us. The next priority is dividends. We would like to retain our position as a leading dividend payer. In order for us to do that, dividends have to be repeatable and predictable. We estimate that based on an equity rewriting of between 20 and 40%, that we will pay a dividend of between 9 billion rand and 10 billion rand per annum, which should translate into a yield of between 2 and 4%. And we have already started that journey in 2020. with a payout of 10.7 billion rand. Priority number four will be on debt management. And as highlighted previously, we anticipate reducing and refinancing our 2022 and 2025 bonds towards the middle of 2021 to take advantage of lower interest rates. We receive a lot of inquiries about share buybacks. We have taken a first step, and that is to change our long-term incentive plan to a cash settled scheme, which under normal circumstances would have resulted in a dilution of about 3-5% over a 5-year period. In addition, we also recently completed the buyback of odd lot shares of roughly 0.5% of our issued shares. And then lastly, should there be further cash left on the table, this will flow back to you in the form of increased dividends. I hope this gives you some idea and clarifies the capital allocation priorities going forward. Thank you ladies and gentlemen. I will now hand back to Neil to take us through the final part of the presentation.

Okay, thank you Charles and for those of you listening to us, we are on the last part of the presentation and I'm just going to share my screen again. Just to recap, we started with our primary focus area of embedding ESG excellence as the way we do business. We then moved on through our strategic focus areas of building a values-based culture. We looked at focusing on safe production and operational excellence. Charles has just completed the financial results. and has shared with you the optimising of capital allocation. If we continue to look at our last two strategic focus areas, the one that I will start with is prospering in South Africa's investment climate. So we've said a lot in recent presentations about our concerns. I think we're now able to show some very specific examples of where the country maybe, not maybe, will be missing out. So I think it starts from, first of all, we need to recognize, and I don't think anybody disputes it, that the state of the South African economy is very fragile and the ongoing COVID-19 pandemic continues to wreak havoc. So economic recovery in our view is absolutely necessary to alleviate poverty and inequality and our concern has been that current policies and ideologies inhibit investments There are critical needs to address these investment barriers to drive economic recovery. Right now we hear talk of a commodity super cycle. So with that positive outlook, there's an opportunity for the mining industry to significantly contribute to the economic growth. of South Africa and in fact the Minerals Council has recently estimated that 20 billion rand of potential investment opportunities are available in a supportive environment, but the environment is not supportive. And why is it not supportive? There's uncertain regulatory policy, there are risks related to power reliability, and rapidly escalating rising power costs and these are increasing investment hurdle rates and it's only the best projects such as K4 and Burnstone and perhaps a few others in the industry that may come to fruition under these type of conditions. They meet the current hurdle rates which are also are high We've just shown our South African project pipeline and there are many, many other projects that will not pass these hurdle rates and that's a lost opportunity and I'm sure you will find the same thing in many other South African mining companies and South African companies. So in our view it's really very urgent for economic reforms and stakeholder alignment if we are, as a collective, going to address poverty and inequality. It is a crisis and we do need government to make the necessary changes to create an investor-friendly environment. Having said that, you will see these projects that we've announced and we're happy to make these investments exceed the hurdle rates that are required under these conditions. If we look at K4, it's certainly a Tier 1 PGM project that's unravelled. If you look at some of the key statistics, it requires only 3.9 billion Rand of capital which will be spent over eight years, obviously the majority up front. It is at steady state, going to produce 250,000 4E ounces per year. The average operating cost is just over 16,000 Rand per 4E ounce. That means at current spot prices it's extremely profitable. At our assumed Project prices, it's got a six year payback at spot at four years. That's incredible for a project of this nature and it will produce 11.5 million 40 ounces over a 50 year life, 50 years. The net present value and this is at a 15% real discount rate and You have to apply in these sort of conditions at 3 billion at assumed project prices and 21 billion at current spot basket prices. It has an internal rate of return of 33% at assumed prices but 80% at spot. So an incredible project. and we're really fortuitous to have acquired this with the Longman assets. We will be mining both the Murenski and the new G2 reefs down to a depth of 1,200 odd meters, so it's not ultra deep. We benefit from some capital of $4.4 billion that was invested by Longman. We also acquire or we did acquire with the assets 130,000 tonne per month concentrator. We've got equipped and functional shafts, both ventilation and a main shaft. We've got existing surface infrastructure. and the project is partially developed. So that's not a lot of money to invest in a project with a 50 year life and it's because of the substantial investment that's taken place in the past. So that's all the commercial and the technical mining issues. We specifically with acquisitions or projects have to quantify for our board what the regional social and economic benefits are as well. So first of all, this ensures the sustainability of the Marikana operations over 50 years. It's a significant investment in the local economy. It provides 4,380 steady-state jobs. It's meaningful from an opportunities point of view for local procurement SMME Development and Skills Transfer. So this should really have a very positive impact on social and economic benefits in the region. I'm also really pleased to announce that the Burnstone project has been approved. You would remember that when we acquired the Stillwater assets we had to curtail all capital expenditure. During that break we have maintained the assets, done a little bit of project development but essentially we've curbed all unnecessary expenditure and of course that's also given us the opportunity to review the project and although it was never stopped because there was a fault with the project, we can certainly with new confidence restart this project. This project in 2021 terms, and just to be clear, all the figures I've quoted for K4 were also 2021, but this project we will spend 2.3 billion over 14 years to complete the project. It'll have average steady state production of 138,000, just under 140,000 ounces per annum, so it's a significant producer of gold. Importantly, it'll have an average operating cost of around 400,000 rand per kilogram again. That's going to mean it's a high margin project. It'll produce 2 million ounces over a 21 year period. The net present value using a 15% real discount rate is approximately 1.4 billion at assumed prices and remember we for budgeting and project work. We are much more conservative than spot. At spot, the net present value is just under 4 billion Rand. Internal rate of return, 24% at assumed prices, but at spot, just under 40%. So seven-year payback, I think great value creation opportunity for our shareholders. Again, we are always asked to focus on the regional and economic benefits. The Balfour area where this project is located has got severe socio-economic challenges. Unemployment is more than 30%. Youth unemployment is approximately 44%. This project will create 2,500 long-term jobs and contribute very meaningful to that region as well. This is a project we acquired with the Wits Gold acquisition in 2015. We will be mining Kimberley Reef, which my team has substantial experience with. It's a very channelized reef. Not everybody can mine it. and the average depth of this mine will be 550 meters. So it is actually very shallow. Again, there is lots of existing infrastructure that was invested in by the previous owners. We have a functioning metallurgical facility, established tailed storage facilities, equipped and functional vertical shafts and reclines, surface infrastructure and so on. Being a very channelised orebody, the way to mine a channelised orebody is to know exactly what's in front of you and you would see that we have done extensive underground development and infrastructure work to give us the confidence that we know exactly where these channels are and how to mine them. So with that I'd like to move on to pursuing value accretive growth based on a strengthened equity rating and I think let's pick up those in two separate focused slides. First of all, value accretive growth. Well, I don't think anyone can argue about the fact that our entry into PGMs was impeccably timed. For a total investment of 43 billion Rand or about 3 billion dollars, we have acquired assets, high quality assets, established ourselves as the number one PGM producer and in fact that investment is actually only equivalent to the 2020 adjusted EBITDA. So this was really low cost acquisitions and were exceptionally well timed and of course we would like to duplicate this type of value of creative growth in some of our other focus areas. So let's just talk about our thinking and we have shared our sigmoid purge with you. The base of this company was built off our gold business which we transformed. We positioned it into an industry leading dividend payer that allowed us to generate the cash and obtain the credibility and support from our shareholders to acquire South African PGM assets. We made our move after substantial analysis and then the transforming acquisition of Stillwater was conducted in 2017, which provided us with an international precious metals base. and probably the best geographical diversity in the PGM sector. That is the same type of recipe that we would like to apply in two more key areas. But before I go to those, I just want to say and I said it earlier in the presentation that our goals-based has become relatively small to the rest of the company and as we've said in previous presentations we remain interested in increasing our goal base but we battle to find value within the sector but we continue to look. In terms of The next sigmoid curve that is ready to participate in the battery metals growth and the electric drive train and as you would all know we acquired SFA Oxford to help us develop a battery metals or a high-tech metals strategy and we did that because we believe it's complementary to our PGM investment case and certainly as we've done this work we've seen that our approach to fabricators and the supply chain are all very very meaningful in the sector as well. So both PGMs and battery metals are components of the global auto market and are part of the green future. So it's exactly the right type of business we would like to be exposed to. The analysis over the last two years has identified the key metals. It's identified that the fundamentals are robust and it's identified value accretive opportunity and those are being pursued as we speak. It is certainly positioning Savanya Stillwater as a provider of strategic metals for tomorrow's green technologies and on that note We are already starting to plan our fifth sigmoid curve which involves making sure that we are part of the hydrogen economy. We've got good exposure as I said in the ESG section to parts of the hydrogen economy and I highlighted the metals that give us that exposure. So let me then conclude and we have certainly seen our share price re-rate and if you look at from our initial beginnings in 2013 we've outperformed everyone on this list by a lot of way and of course we're very proud of that and certainly the re-rating that I've been complaining about and the undervaluation that I've been describing is being reduced. We have certainly seen some significant growth and I'm very pleased. What I do want to share with you is that although we've seen very significant It's all offering very significant value on just about any metric you can apply. If you look at enterprise value for either DARPA for 2021 and 2022, I think we are still cheap. It may look like we have not moved, but I think what is becoming very clear is that our earnings are very, very significant. So our EBITDA is growing and we need to see the enterprise value grow in line with the earnings. And it will happen. We know exactly that it's further delivery, it's further disciplined capital allocation, further disciplined value accretive external growth and so on. So we look forward to that rating, but for those of you who might think we're expensive, you can see on an enterprise value per EBITDA basis, we're not expensive. There's still substantial upside. If you look at price on a cash flow per share basis, again, you can see we are relatively cheap compared to senior PGM companies, intermediate gold and senior gold companies. And again, I think the cash flow per share is increasing at a rapid rate and even though our price is going up, it's not going up as quickly as the cash flow per share basis. So again, it just represents a cheap entry point into our stock. If you look at our net debt to either dollar, remember this was seen as a significant risk and a significant reason why we were undervalued. Well of course that's turned into a net cash position and you can see from a net cash position we really had negative net debt to EBITDA, one of the highest net debt to EBITDA positions in the list. If you look at an enterprise value and market cap, as I said we've seen significant growth and I'm very pleased about that. Thank you very much. and the earnings potential of this company and of course we declared a very significant dividend which we believe is sustainable and repeatable and going to be predictable. So let me then conclude and I think you can clearly see that we've had solid Themba George Nkosi and not too recently people outside of the industry have described the PGM sector as entering a super cycle and I think they are not wrong. We want to be more exposed to a green future. We are already very well positioned for it but you can see our focus on battery rentals and the hydrogen economy is going to ensure that we are well positioned for a green future. Our investment in DRD, our investment in recycling are also green credentials. We've committed to ESG excellence and I spent a significant part of this presentation showing you what we've done. I've also made significant commitments to achieve as a deep level underground minor international safety standards We have a strategy that is shown to work and we believe that is the base on which to make these safety commitments and achievements. We have a very strong balance sheet. We have very substantial financial flexibility and as Charles shared with you, we are going to be very disciplined in the way we allocate capital and just to summarise, We will fund our projects to create sustainability. We will ensure that we've got significant reserves to cover our debt. We will pay predictable and consistent dividends. We will pay down our debt when appropriate. We will look at value accretive opportunities in terms of M&A and of course at the right time we will continue with our share buyback program. was really converting our long-term incentive scheme to a cash circle scheme. So those are our capital allocation priorities and that is the discipline that we will continue to impart. We have unrivaled projects to unlock which will create value to all stakeholders. Our technical strategy to diversify and deliver future value is well advanced and as I said previously I'd be surprised not to make one or two acquisitions in this area during this year. Finally you would have seen that we are offering substantial relative value despite the very significant improvement in our rating and share price. So with that I'd like to close what has been a very long delivery, but a delivery I hope that you enjoyed and that you found interesting. We had a lot of interesting news and new developments to share with you. I hope you found it interesting and enjoyable. We've come to the end and certainly together with my team I'd be happy to take any questions that you may have.