Sibanye Stillwater Limited

Good morning and good morning to all and a very warm welcome to our results and strategic update for the year ended 31 December 2021. There are forward-looking statements in this presentation, so please take note of the safe harbour statement. The agenda for today is safety and ESG first. Those are our single and most important priorities. I will be assisted in presenting that section by Jeven Martin and Grant Stewart. I'll then do a strategic update, which is titled Positioning for Positive Impact. And I think you will find that very interesting. We do use our year end results to provide strategic guidance to the market and our shareholders. I will then hand over to Dr. Richard Stewart, our Chief Operating Officer, who will present the results of the operations in detail. As you can see, we've called it operational excellence. We've had an outstanding year considering all the challenges of COVID and safety and so on. Richard will then hand over to our CFO, Charles Carter, who will then conduct the financial review, which I think you will also enjoy an outstanding year from a financial perspective as well. And then I'll wrap up with a brief outlook and conclusion. So as I said let's start with safety and it gives me absolutely no pleasure to talk about fatalities. We've had a very very tough year where we've lost 20 of our colleagues throughout the group tragically in 15 incidents. A majority of those happened in the second half of the year and We really stepped in and took very decisive actions, including in October, a five day suspension of all operations across the group to audit workplaces, refresh safety focus. And then in December, we actually shut down portions of our operations in the gold sector at CLUF 1 shaft, Beatrix 1 and 3 shaft, and then a partial closure at Driefffontein to arrest these unacceptable incidents. We had to do the same within our South African PGM business and one of those shafts, Tembalani, was a result of a lack of supervision due to COVID-19 and we just deemed it Thank you very much. Thank you very much. that it is aligned and consistent with global industry standards and practices. So that gave us the confidence that we don't have a flawed safety approach. We did, through that independent assessment, identify opportunities to further operationalize and institutionalize The commitment and responsibility for safety among the line management of the organization and at the same time we have developed a very comprehensive fatal elimination plan which is being rolled out and I have no doubt will have a very positive impact on reducing fatality. We are totally focused on our efforts to get to zero harm. I think it's always important when you have these type of dramatic and very serious incidents to look at the underlying data. and I do get confidence from the fact that we are clearly doing many of the right things. It doesn't change the fact that we lost 20 of our employees. But if you look at the rate of increase in the left-hand graph of our workforce, you can see the rate of increase in terms of the number of employees in the group and many more. Thank you. to Zero Harm. I think it's also important to note that we do lump all our fatalities together, but we need to remember we have a very substantial PGM division, both in South Africa and in the US. And of course, we have a large gold business as well. And what's very clear to us is that the gold business is challenging, being ultra deep, But we also notice something else and I've seen references in other CEO presentations to the industry in general, whether it's in South Africa or in the US is also regressing or regressed in 2021. If you look at South Africa, it regressed by about 22% and in the US it regressed by 25%. There is something behind the current regression that seems to be an international issue regarding safety. Nevertheless, we remain very focused on making a difference. And as I say, we do look for confidence and comfort in the things that we are doing along this journey. If you look at some of the highlights, all our operations received ISO 45001 and 14001 accreditization. We have seen an improving trend in all injury frequency measures since H1. We also had a number of safety milestones such as at Marikana, we achieved 4 million fatality free shifts. At Kluwer Floor, one of our deepest operations, we went scratch free. for six weeks. And of course, the more you can duplicate this, the more you're going to impact on reducing injuries and hence reducing fatalities. And then at our surface processing business, we achieved 13 million fatality free shifts on the 16th of September 2021. So those give us the confidence to continue down this very challenging and tough road to zero harm. Last year I presented our sustainability strategy as a basis for our ongoing commitment to ESG excellence and in fact The basis of our green metal strategy is based on the sustainability strategy. And last year I presented building a green metals business and I will just recap on that briefly shortly. But today what we wanted to share with you in more detail was our road to carbon neutrality. We've made good progress since we made the commitments earlier last year to get to carbon neutrality by 2040. We certainly do believe we can do that much earlier. And then we've really made some outstanding progress on water demand and intensity. And Grant Stewart will present that to you. Just as I said, I wanted to just remind you of building a green metals portfolio, and that's based on building a climate change resilient business. And we've made, again, significant progress and nothing has changed in terms of our focus area. As we said last time, we spent two years doing due diligence before we entered the battery metals market. We did four transactions in 2021, Kelleber, Sandoval, the Raya Light Ridge project, and the acquisition of a stake in New Century. Just to remind you again, the battery metals together with the PGMs will provide a very significant green metals portfolio. We do intend to complement that with other metals such as copper, maybe manganese. uranium is a byproduct of gold and we are working on our uranium strategy but nuclear energy is now considered green and therefore the underlying metal must be considered green as well and to complement that we have advanced our thinking in recycling and of course tailings retreatment is another area that is similar to recycling but We do and we are increasing our exposure in the circular economy. So that's the basis on which we make acquisitions and it's the basis on which we will enhance our green credentials. At this stage, I'm going to hand over to Jevon Martin to talk to you regarding our path to carbon neutrality by 2040. Thanks, Jevon.

Thanks, Neil. The Bund for Water believes climate change to be the most pressing threat to our planet and global challenge of our time, as recognised by the Paris Agreement and the UN Sustainable Development Goals. As a force for good, Savannah Steelworks has a role to play in the urgent global response to the threat of climate change. And as such, we have aligned our governance strategy, risk management and targets across the group to align with the recommendations of the TCFD. First and foremost, we produce green metals, as Niels indicated, that support in the reduction of greenhouse gases and the reversal of climate change. In 2021, we committed to achieving carbon neutrality by 2040 in advance of the requirements of climate science. Over the last year, we have refined our pathway in supporting interventions and have grown in confidence in our ability to deliver on this commitment. In the graph depicted here, we have forecasted our greenhouse gas emissions profile over the life of our mines based on a bottom-up analysis of their production profiles and energy requirements. In terms of business as usual, we expect a short-term increase in emissions through production growth, followed by a decline from 2025 through life of mine closures and carbonization. If we overlay a science-based pathway, we're able to understand the operational decarbonisation required to contribute to limiting global warming to 1.5 degrees Celsius and adhere to science-based targets, which we plan to update in 2022, including Marikana and Scope 3. Through the introduction of demand-side energy management, renewable energy, electrification and fuel switching opportunities, including hydrogen, we are able to demonstrate an active decarbonisation pathway This pathway will be converted to internal annual carbon budgets prescribed at a group and segment level to inform our long-term incentive planning. Recognizing that there will be remnants hard to abate emissions towards the end of our carbon neutral journey, we have compiled a carbon offset strategy that will generate the required offsets to neutralize the remaining emissions. Combined, these elements present a definitive pathway through to carbon neutrality supported by internal carbon budgets to drive group decarbonisation and deliver on our commitments. Due to the infrastructure and extensive energy requirements of our South African operations, combined with the carbon intensive electricity supply from ESCOM, 93% of our group greenhouse gas emissions emanate from grid supplied electricity. ESCOM also continues to pose risk to our business through above inflation tariff increases and unreliable electricity supply. The extensive electrification of our operations, however, presents an opportunity to mitigate these risks and accelerate decarbonization through the deployment of renewable energy. Relaxing of regulatory requirements and anticipated ability to trade electricity in South Africa has allowed us to grow our portfolio of renewable projects to 557 megawatts, including solar and wind projects. We have appointed a local project developer for our SA Gold 50 MW Solar PV project and two local project developers for three shovel wind projects across South Africa. Steady progress is also being made in the permits and consents required for our SAPGM Solar project. These projects have been structured to limit capital outlay whilst enabling significant decarbonisation and savings benefits. The total anticipated capital cost of the project is anticipated to be around 11 billion rand and will be funded by third parties through power purchase agreements. The projects will enable 25% reduction in scope to emissions by 2025 and deliver substantial operational benefits. We plan to also leverage these projects to promote local socio-economic development through our infrastructure for inflation program. The project also contributes in closing of the South African electricity supply deficit and bringing an end to load shedding to the benefit of all South Africans and the economy. I'll now hand over to Grant. Thank you.

Thanks, Jeff. Water stewardship is the use of water in ways that are socially equitable, environmentally sustainable, and economically beneficial. We are strongly committed to comprehensive and transparent water governance, effective management of our water at site level, and collaboration to achieve responsible and sustainable water use. We've been recognized for these efforts in 2021 by the CDP. In 2021, the South African Gold Operations purchased 8% less potable water. Our reliance on purchased potable water at our gold operations reduced by some 1,278 million liters or 17% year on year and 344 megaliters or 2.8% at our South African PGM operations year on year. This despite an increase in 4% and 15% in tonnes treated at the SA Gold and SA PGM operations respectively. As we move forward into 2022, we have committed to further reducing our reliance on the integrated Vail River system, the economic muscle of Gauteng, by 15% from a 2020 base year. During 2021, we remain true to our course of water independence and our Gold operations. boreholes to supply the Cook Plant completed in Q1 of 2020 and boreholes to supply Cook 2 and Cook 3 shafts in Q4 of 2021 have rendered that complex entirely independent of municipal supply. Ezoweni has also been independent of rainwater since Q1 of 2021. Although Drie Fonteyn is already 90% independent of rainwater, an extension to Drie Fonteyn's 20 million litre treatment plant per day by an additional five megalitres per day will see Drieft Fortein's independence from municipal water supply by Q3 of this year. The Kluwerf water treatment plant, which forms part of the phase one of the operations independence drive, has reduced the reliance of the Kluwerf by a third, with full independence envisaged by Q1 of 2023. Our efforts to reduce water independence have not only reduced our reliance on the integrated Vol River system, but has also had a significant savings to the gold operations of some 85 million rand per annum or last year rather with phase two of Driefontein and Klerf expected to bring an additional saving of some 50 million rand per annum going forward. Our US PGM operations are located in the water rich catchments and have similar challenges to the SA gold operations in respect of managing the risks associated with water pumping, treatment of water and the discharging into a pristine environment. The newly installed disc filters at the Stillwater Mine and East Boulder Mine have demonstrated our ability to move beyond compliance with an average of 30% removal of the total nitrogen and 45% removal of metals from those compliance levels. At the SA Gold operations, following the installation of the Cook surface treatment plant to replace the underground treatment strategy, the Cook No. 1 and 2 shaft water quality has shown a 9% improvement in water quality year on year. The threat of theft, vandalism, and sabotage shall ever remain a concern. On the 13th of December 2021, the Department of Mineral Resources and Energy granted Rand Uranium the environmental authorization for the rehabilitation, decommissioning, and closure of our cook shafts. That's cook one, two, and three, which means we are a step closer to closing those operations and removing some 300 million Rand care and maintenance costs from those operations. Neil, I think I'll leave it there and over to you. Thanks very much.

Thank you, Jeven, and thank you, Grant. As I indicated at the beginning of the presentation, we do use our annual results presentation to provide you with further strategic updates. I want to just start with our existing and other strategic focus areas or pillars as we refer to them. You see them in the diagram on the right hand side. They are well known, they have been consistently applied and being strategically managed in my mind is very important for success. And of course, if you have a good strategy, you should have exceptional success. And I'm very pleased to report that the strategy you see on the right hand side has resulted in record annual adjusted EBITDA of 68.6 billion or 4.6 billion dollars. We've achieved 80% higher adjusted free cash flow of 37.4 billion Rand or 2.3 billion dollars and that's ultimately or predominantly I should say by focusing on safe production and operational excellence and having made the moves that we did make into commodities at a point in the cycle that was very beneficial to our shareholders. I think in addition our capital allocation model has been a good guy and we redeemed our 2022 and 2025 bonds. We replaced that with 1.2 billion notes due in 2026 and 2029 and important that was done with $169 million of lower interest burden. So it was done at much better rates. You would also see from this results, and Charles will cover this in more detail, we've declared an additional dividend, but the total dividend for the year will amount to just under 14 billion Rand or $866 million for the 2021 year. Yeah, and that is a 9.8% dividend yield. So that is certainly class leading. In addition, our capital allocation model also refers to share buybacks and some of our shareholders do believe that share buybacks are important. We do as well. So in addition to the dividend, we have also purchased 5% of our shares at a share price much lower than where it is today. That amounted to 8.5 billion Rand or just under $600 million. So again, we've applied our capital allocation framework and model, which is part of our previous strategy and will remain part of the new strategy. The net result is we do have a robust balance sheet with a net cash position of 11.5 billion Rand or just over $700 million. and of course as I've just mentioned before I hand it over to Jeven, we've advanced our green metal strategy with four acquisitions. To me that is the result of being strategically managed and that is why we put effort into being at the forefront of understanding the environment and developing strategies that put us in a good spot to create value. So let me talk about the strategic refresh that we undertook late last year. And we undertook this strategic refresh with a view to raising the bar and moving our strategy to a higher level. And the environmental scan, which is always important in terms of strategy, really looked at the evolution around the industrial revolutions. And what was very clear to us, the industrial revolutions of the first, the second and the third were good for humanity, but they were tough on humans and hard on the environment. There's been an exponential increase in urbanization and with an increase in urbanization, of course, there are climate change issues, there are pandemic issues, and clearly we cannot continue in the same way. And certainly the fourth industrial revolution is now rapidly being replaced with the fifth industrial revolution, which is a conscious rewiring And prioritizes the needs of human beings, the environment and society. And as you know, from our previous visions and our business purpose, we are a company that is very focused on people and the environment and those softer issues. So this has really been the background to the way we addressed the strategic refresh. Now, we also know that we have been through incredible change in a very short period of time, plus incredible challenges related to COVID-19. and in fact we've become aware of what we call grey elephants that are going to shape the fifth industrial revolution and a grey elephant is a highly probable high impact yet neglected catalyst or force of change so not only are these grey elephants a challenge but they're also catalysts for change and we certainly used the COVID-19 grey elephant to change many things I believe for the better in our business. But important to note that COVID-19 is a grey elephant and the pandemic was a catalyst agitating and amplifying several other grey elephants. So we've identified them. I'm going to share them with you now. And the bottom line is we must be prepared for these future grey elephants to recognize and take advantage of the opportunities they present. So it's not just about challenges. It's about the opportunities that these grey elephants present. Let me just work through them and I will very briefly link them to how they have impacted on our strategy. So I've already mentioned pandemics as being a grey elephant that was predicted and no one took any notice of that. We've all experienced how difficult it's been, how it's affected our own personal lives, how it's affected our business and how it's affected many people around us. Very sadly, the World Health Organization predicts a number of pandemics in the 2020s, and it's mainly related to urbanization. And these pandemics are highly probable and can come from anywhere. The bottom line for business, If this turns out to be true, we need to develop a business that is pandemic resilient and I can certainly share with you how we do that practically and how we are positioning for that. I think the issue of ageing is another grey elephant and the world is ageing fast. For the first time in history, there are already more over the age of 60 is considered old, than younger people that's under the age of five. In fact, there's a 400% increase of people turning 100. And by 2030, older persons will outnumber children aged zero to nine, that's a classification of children. So we need as a business to recognize this, and we need to cater for an older workforce. And of course, we link that to becoming bionic and I'll talk more about bionic a bit later. And of course, that starts, bionic starts linking to also preparing yourself for being pandemic resilient. One of the better known grey elephants, although some people still dispute the issue of climate change, is what we refer to as the angry planet. And what I am going to say is just about every one of these grey elephants lead to angry people. And the climate emergency has no nationality, no race, no sexual preference, and certainly no political or religious affiliation. It's real and the transition we are in will create completely new global tensions. and again like with most of these things it's the poorer people in the world that suffer from an angry planet and as a business we have adjusted our strategy to build a climate change resilient business and in fact to provide metals that are at the forefront of reversing climate change and I will expand on that a bit later as well. Inequality is growing. Africa is expected to account for 9 out of 10 of the poorest people in 2030. and of course we need to deal with inequality. It does again affect the poorest people. We need to recognize, especially in our South African and Southern African business, that this is a huge issue and you will see from the adjustments to our capital allocation framework We are going to make a very conscious and significant effort to spend money in social upliftment. The next grey elephant is, we call it a big squeeze, and the world is being squeezed. There's absolutely no doubt from A shortage of fuel, microchips, which we all know impacted the PGM business last year and is still having an impact. Water and food shortages, skilled talent, retirement, inflation and interest rates were all being squeezed. So we have to, if we are going to address things like pandemics and address the angry planet issues, we need to position our business within like-minded ecosystems where people have similar views and therefore we can work together and we can develop pandemic resilience. We can provide metals and solutions Two end users so that we avoid the big squeezes. Another grey elephant and it's common to all of these is angry people and the acts of consuming endless processions of negative online news to social unrest globally, angers on the rise. We have to address this by creating shared value and developing a common purpose. Angry people are either going to make us or break us. So we cannot ignore things like inequality, big squeezes where again poor people are affected the most. And then multipolarity and I think this last week or so we see globalization unraveling. Russia is in the Ukraine testing the West's results. China will increase its competition directly with the US. Power and influence will shift. And again, it's about positioning our business like we have In light-minded ecosystems such as building our battery metals profile in Europe and North America. That's practically how you deal with that. Then the next grey elephant is intelligent advances and this is really about advances in robotics, artificial intelligence, machine learning and and that's actually in a new age and we can do what we did in previous industrial revolutions we can introduce this without due concern to people that will be exactly the wrong way to go we need to we need to introduce this intelligence and and technology in a way that is constructive and and recognizes people and we talk about being bionic where we focus on the people aspect. So you can see how these concepts have a lot of commonality and have informed our strategic thinking looking forward. So there is the complete picture and we have revised or refreshed our strategy to take account of these grey elephants. So we are very clear on what we need to adapt for. As I said, our previous strategy has been very successful and it does not mean we're throwing it out and have started with a new strategy. In fact, we have developed what we call a three-dimensional strategy, keeping the good from our previous strategy but also developing something that is going to differentiate us in many respects. The first thing, our strategic foundation hasn't changed. Our purpose used to be improving lives through our mining. I think the purpose has been refined to safeguard global sustainability through our metals and energy solutions. Our vision used to be creating superior value for all our stakeholders. The vision has been slightly refined to be a leader in superior shared value. We've introduced the word shared value for all stakeholders and to support climate change reversal. Those are higher level purposes. That is our higher level vision. and of course our CARES values commitment accountability respect enabling and safe production remain our values and of course ESG and shared value actually becomes even more dominant that is our strategic foundation that's why we exist and that is what we want to impact on so that is very similar but we've raised the bar now you would Probably most of you would have seen Larry Fink's letter to CEOs and I must say it was an excellent letter and Larry's one of his comments is most appropriate. It's never been more appropriate for CEOs to have a consistent and a clear purpose. and there you see it, there is our impact and our strategic foundation. Just moving on to things that currently sit in our current strategy, we believe they've become strategic essentials. You have to ensure safety and well-being. You don't have to make that a strategy. You have to prosper. in every region in which you operate. That doesn't have to be a strategy. That is a given. Achieving operational excellence, which was a very important part of our previous strategy, is a given. That has to continue. Optimizing long-term resource value has to continue. Maintaining a profitable business and optimizing capital allocation, those are Those are administrative issues. They are not strategies in their own right. They are given. So what is new? And again, it's almost a slight repositioning. Now these are the strategic differentiators. These are the The new aspects that we will focus on and have elevated some of the strategic focus areas from our previous strategy. So first of all, ESG excellence, that has been refined into being recognized as a force for good. and I know that many companies use this force for good but I think based on our purpose and our vision you can see the underlying substance behind being recognized as a force for good. Building a global portfolio of green metals and energy solutions that reverse climate change is going to differentiate us. We have a unique combination of battery metals and a very substantial PGM business that will in future underpin the hydrogen economy. Taking account of some of those grey elephants, we have to become more inclusive, we have to become more diverse, and Bionic and I explained the importance of those. So that really enhances our cultural change initiative. And then of course, building pandemic resilient ecosystems and being part of those ecosystems. are what's also going to allow us to prosper in regions such as Europe and North America, but also not be disrupted by pandemics. It's going to be important to provide metals that are necessary to reverse climate change in those ecosystems. So those are our strategic differentiators. And just in case you were wondering how we covered All the grey elephants, this matrix shows you that every grey elephant is covered in most cases by more than at least two of these strategic differentiators. So I'm comfortable that the environmental scan and the refresh strategy will certainly take account of these and will put us on the front foot So at this stage, I'm going to hand over to Richard, who will go through the really good results that were achieved at an operational level. So thank you, Richard.

Thank you very much, Neil, and good afternoon and good morning, ladies and gentlemen. It's a real pleasure today to be able to share with you operating results from the second half of last year. I think as many of you would have been aware, we recently published our updated mineral resources and reserves as at the 31st of December. I think just to highlight before we get into the details that we have had a change in the way that we report our mineral resources and reserves, and this has specifically had an impact on our South African operations, where historically we reported attributable resources and reserves based on an effective financial interest, Whereas now we are basing that attributable number on an effective legal or equity interest as of course the financial liabilities do change year on year. I think very important to highlight this has got absolutely no impact on the underlying resources of the reserve numbers for the operations. Neither does it have an impact on the financial exposure Sabania has to these assets. It is just the attributable portion that changes. I think very pleasing in the numbers is that at both our South African PGM and our US PGM operations, we saw a slight increase in reserve numbers, which effectively means our ongoing exploration more than replaced what we depleted during 2021. In our gold operations, we saw about a 700,000 ounce decrease in total reserves on 100% attributable basis, so marginally less than what we depleted during the course of last year. The 72.5 million ounce reserve base that we have underpins a very sustainable portfolio. Our South African gold operations have lives of mines that vary from four years at Beatrix to in excess of 10 years at Dufontaine and Truff. And our gold projects have lives well in excess of 20 years. Our PGM operations generally have lives well in excess of 15 years, with our US operations in Rustenburg in particular, having lives well beyond 30 years. So a very sustainable portfolio and underpinned by a significant mineral resource base for future replacement and growth. I think also very exciting is for the first time we are declaring resources as a result of our entry into the green metals last year. And in particular, our lithium resources at our Caliber project in Europe and our Rhyolite Ridge project in Nevada, made in resources for the first time there. and Zinc as well through our exposure to new century resources in Australia. Our uranium resources in South Africa remain unchanged and those are currently under economic studies. And of course, we also report our copper resources in Argentina, in South America at our ALTAR project. Moving on to our South African PGM operations. Very pleasingly, they continued with a great performance during the second half of last year. Total production from these operations amounted to just in excess of 940,000 ounces for the half year and 5% higher than the comparative period the year before. I think particularly pleasing was the strict control that we maintained over our costs resulted in a nominal 1% lower unit cost year on year. And for the year, we came in at around 17,000 rand before e-ounce. We sold just under 960,000 ounces of PGMs, and that was an average basket price of just over 40,000 Rand per 40 ounce, marginally higher year on year. This equated to a free cash flow out of these operations for the second half of the year of just over 8.2 billion, significantly higher than the comparative period last year, and a very healthy 54% adjusted EBITDA margin despite the drop-off in the PGM prices towards the back end of 2021. Our sustained and very disciplined focus on cost has meant that we have seen our operations gradually move down the cost curve and we now have a portfolio of PGM assets that sit squarely within the second and third cost quartiles and I dare say look forward to seeing that move to the left continue in the years to come. An important announcement at the beginning of this year was the agreement that we reached with Anglo American Platinum on the PSA transaction, on the PSA assets. Essentially what this transaction is about is that we will ultimately take over the infrastructure of the PSA, including the rehabilitation liabilities. And how the transaction will work is that those conditions or the transactional close Once we have delivered 1.35 million ounces into the PSA under the current PSA terms, as well as got the required regulatory approvals from the Competition Commission and the DMRE. Important to note is that the 1.35 million ounces that actually started counting from January of last year, so as at the beginning of this year, there was marginally under 900,000 ounces that still needed to be delivered. Once these conditions have been fulfilled, we will then take over the infrastructure and the POC arrangement will convert into a toll arrangement on terms similar to the current Rustenburg toll. I think this is a transaction that's created significant value for all stakeholders. In the short term and immediately, it allows the PSA to consider mine planning across mine boundaries. and that of course allows us to optimize operational flexibility and efficiency through those mine plants. I think in the medium term, it allows or creates an additional 1.8 million ounces of reserves at Rustenburg and this was effectively ground that couldn't be accessed through Rustenburg infrastructure that will now be mined through the PSA infrastructure. In addition, a lot of the Rustenburg reserves that were going to be mined through Rustenburg infrastructure at the back end of the life can now be extracted far earlier through the PSA. And of course, for local stakeholders, a key value is that we've almost doubled the life of the Crindall operations, with the longest life shaft being extended for up to 16 years. And of course, that means sustained employment and optimal return out of this infrastructure, which benefits all stakeholders. For Sabania Stillwater, we estimate that this transaction has about a 6 billion rand value uplift for our company. The US PGM operations had a tough second half to the year, and this was following a very tragic fatal accident that we suffered in June. The production out of these operations was approximately 270,000 ounces for the second half of the year, which was about 11% lower than the comparative period in the year before. The lower production output combined with inflationary pressures and rising inflation in the US environment together with the need to bring in higher contractors to supplement skill shortages that we're suffering in the area all resulted in a year-on-year 18% increase in unit costs to just over $1,000 per ounce for the year and just under $1,040 for the second half. The operations battled with several operational constraints during the fourth quarter in particular, which largely have been dealt with. But in the medium term, we will continue to suffer constraints predominantly as a result of revised operating procedures post the fatal accident. And what that has really meant is that we cannot have people in rubber-tied vehicles operating in rail ends at the same time as rail equipment. This has had a significant impact on our mining efficiencies, particularly at Stillwater West. That is likely to continue into the medium term until such time as we have fully installed proximity detection systems that will allow us to operate under a new procedure in that area. In addition, I think like much of the US, Montana currently has a very low, in fact, a negative unemployment rate. And as a result of that, there is a birth of skills in the region at the moment. And attracting skills and experiencing high attrition rates on our employee and workforce has been a challenge during the course of the year. As a result of these constraints, and we do foresee them continuing into the medium term, we will be reassessing what the optimal operational output is from the Stillwater assets over the coming months, taking these constraints into account, as well as our forecast for the medium term palladium market conditions. Pleasingly was the conclusion of a three-year wage agreement at East Boulder, which was a sustainable agreement and my compliments to the team and the unions for constructive engagement during that process. The PGM recycling continued to deliver significant value despite some real challenges during the second half of last year, particularly logistic challenges associated with COVID and moving spent water catalysts around the country. But in addition, there was also a significantly reduced amount of vehicle scrappage, that due to less new car sales as a result of the chip shortages that we saw during the course of last year. That meant in total we fed just over 350,000 ounces during the half, but we were also able to process a significant amount of iron ventry, therefore unlocking working capital of about $380 million over the period. Our recycling inventory at the end of the period was at about 25 tons, which we see normalizing around 200 tons as we built up during the course of this year. This output resulted in just over $50 million of adjusted EBITDA with an additional $9 million of interest earned from advances to our recycling customers. Moving on to our South African gold operations, Under the circumstances of some very tough safety interventions, self-imposed many of them, under those circumstances our gold operations managed to sustain a steady output and produced for the half just over 550,000 ounces, which was 4% lower than the comparative period to last year. The lower output and significant inflationary cost pressures, in particular from Escon, steel and chemicals, as well as catching up capital in the form of all reserve development and sustaining capital that was underspent during 2020 as a result of COVID resulted in a total 16% increase in unit costs to R814,000 per kilogram. ERD production was 3% lower and at 10% higher costs and that combined with an average RAN gold price of R860,000 per kilogram, some 11% lower than last year, resulted in our EBITDA being 2.8 billion, or just under half of what we achieved over the comparative period. Nevertheless, this is still an 18% adjusted EBITDA margin. As many of you would be aware, we are continuing with wage negotiations at our South African gold operations. In December of last year, modeling that was undertaken on our TSF together with ourselves and our engineers at Record identified a risk due to excessive pore pressures at our Beatrix tailings facility. And this modeling, combined with the excessive rain that we were experiencing at the time, led us to make a decision to stop deposition onto this tailings facility until rehabilitation work had been undertaken. That rehabilitation work includes the building of the buttress wall in the area recognized as as high risk on the tailings dam. We anticipate that this rehabilitation will be completed by the end of March. During this period, underground production is continuing at Beatrix and that ore is being stockpiled and we expect to be able to treat all of that stockpiled ore during the second and third quarters of this year. So in terms of annual guidance, starting off with our US PGM operations and clearly taking into account the constraints which we are currently operating under, we forecast production for this year to be between 550 and 580,000 ounces. As I mentioned, this is currently being assessed to determine what the optimal output should be in the medium term. All in sustaining costs at those levels equate to around $1,000 per 2D ounce. and capital is estimated at around $300 million, which includes $70 million of project capital. Our U.S. recycling is forecast to be largely flat at between 750 and 800,000 ounces. And similarly, at our South African PGM operations, we're forecasting flat production at between 7.5, well, 1.75 and 1.85 million ounces at a cost of between 18 and a half and 19,000 rand per four yards. Capital at our PGM operations is marginally higher at 4.7 billion, and that includes a billion rand of project capital being spent on our K4 project. At our South African gold operations, we had a self-imposed safety stoppage at Beatrix. Beatrix operations only commenced production in February of this year, and as a result, we are lowering guidance for our gold operations to between 25 and 27 tons of gold. The lower production and the stoppage at Beatrix does mean that we are anticipating higher unit costs and currently we're forecasting between 875 and 925,000 rand per kilogram. Capital is marginally lower, having caught up much of the reserve development and SIB capital last year from 2020, and that is forecast at about 5.2 billion rand and includes one and a half billion rand for the Burnstone project, and R350 million for the continuation of our Q4 decline project. Thank you very much. And I will now hand over to Charles for the financial review.

Thank you, Richard. Good afternoon and good morning to all participants on the call. It once again gives me great pleasure to share the excellent financial results with you for the year ended December 2021. Next slide. Starting with the income statement, revenue increased 35% from R127 billion in 2020 to R172 billion in 2021, following the continued strong performance of PGM prices. Interesting to note, compared to 2019, revenue increased by R100 billion or 136%. Cost of sales were up 33% from R76 billion in 2020 to R101 billion in 2021. Most of the cost increases, excluding the year-on-year above inflation increases in labour, electricity and consumables, related to an increase in recycling costs of R14.8 billion, which is directly linked to the increase in the recycling PGM basket price. The recycling PGM basket price increased from $2,200 per 3 e-ounce to about $3,500 per 3 e-ounce. The balance of the cost increases was due to the very profitable, albeit higher, cost of purchase of concentrate at our SAPGM operations amounting to R3.2 billion. The result of the aforementioned is that EBITDA increased 40% year on year to 69 billion rand. If we now turn our attention to the standard items for the year, net finance expenses were down from 2.1 billion rand to 1.3 billion rand in 2021, mainly due to lower average debt for the period and higher cash balances. For the period, we recognize the loss on financial instruments, which were mainly made up of the following. A $4.7 billion loss on the Rustenburg deferred payment was realized. The loss is primarily driven by the significant increase in the 2021 actual profitability. The balance being changes in the future consensus PGM input prices used to value these liabilities. Just as a reminder, this liability is calculated at 35% of distributable free cash flow generated by the Rustenburg asset over a six-year period ending in December 2022. The balance of the loss on financial instruments were due to the Rustenburg and Marikana share-based payment obligations that increased R1.3 billion also driven by the changes in future consensus PGM input prices. A write-down or impairment of our SA Gold assets of just over R5 billion was recognized at year end. At 31 December 2021, a number of factors, including above-inflation wages and electricity prices, were identified that negatively impacts the ability of the Driefontein, Kluwerf and Beatrix operations to recover the carrying value of mining assets over their respective remaining life of mines. Additionally, an assumed long-term gold price forecast and this is based on sell side analyst consensus of approximately 750,000 rand per kilogram or $1,500 per ounce in real terms negatively affected the forecast cash flows from these operations. This led to the recognition of impairment losses at the Driefontein, Kluwerf and Beatrix reportable segments. Royalties at 2.7 billion rand, and mining and income tax of 13.7 billion rand increased 54% and 183% respectively. The increase in mining and income tax was due to the significant increase in profitability and the recognition of the previously unrecognized deferred tax asset at Marikana. After accounting for all of the aforementioned, profit amounted to 34 billion rand. Headline earnings for 2021 were approximately 37 billion rand compared to 29 billion rand in 2020. Headline earnings per share for the period was 1,272 cents per share. Next slide. The debt and liquidity maturity profile highlights that we now have a deferred low risk maturity ladder. At period end, The US dollar 600 million and rand five and a half billion RCF facilities were fully repaid and the only outstanding debt with recourse to the balance sheet was the 1.2 billion dollar bond issued in November 2021. It is worth noting that the bonds that were issued in November was not only upsized to $1.2 billion, but will also result in an approximately $170 million of interest or coupon savings on a like-for-like basis compared to the 2022 and the 2025 bonds that were issued in 2017. The US dollar RCF matures in April 2023 and the Rand RCF matures in November 2024 and these will be extended or refinanced well ahead of these maturities. Liquidity headroom at the end of the year stood at 48 billion Rand and consisted of 30 billion Rand in cash and the balance of 18 billion in undrawn facilities. Next slide. The dividend momentum was maintained at the upper limit of our dividend policy. The final dividend for half to 2021 was 187 cents per share, bringing the full year dividend to 479 cents per share, a 30% increase year on year and a yield of over 10%. Returns to shareholders for the 2021 year amounted to R22.3 billion and was split R13.8 billion in dividends and R8.5 billion in share buybacks. Thank you. Next slide. This table illustrates the clear value proposition of Sabania Stillwater, looking through the lens of return of capital to shareholders. From a dividend yield perspective, Sabania Stillwater came in at the number one position, closely followed by our South African PGM peers. If we include buybacks and we look at total returns to shareholders on an absolute basis, we still came in at the number three spot. However, measured in market capitalization, Sabania Stillwater ranks in the number six position of the gold and PGM peers presented on the slide. Moving on to the next slide. We continue our disciplined delivery on all aspects of our capital allocation framework. Looking at the performance for 2021, we achieved or exceeded our capital allocation priorities as measured in each of the capital allocation buckets. We have further refined our capital allocation framework and I would like to highlight two additions to the capital allocation framework. The first is the renaming of the dividend bucket to the stakeholder shared value bucket. The change here is that we have looked at various funding mechanisms for social upliftment projects and to ensure that this is based on profitability and aligned to our other important stakeholder being our shareholders, we have decided that at each dividend declaration we would like to set aside an amount equivalent to one and a half percent of the dividend declared to fund these extremely important ESG initiatives. The second change or addition is the inclusion of a new innovation and market development research and development fund named the Bionic Cube. This was agreed to by the board of directors and on an annual basis, we will allocate up to 1.5% of EBITDA subject to strict investment criteria. We believe that these two important factors further strengthens our disciplined capital allocation. I would now like to hand back to Neil who will take us through the outlook and the conclusion.

Thank you, Neil. Thank you, Richard, and thank you, Charles. I'm going to just complete the presentation with a brief outlook and conclusion. There are experts in PGMs, there are experts in battery electric vehicle forecasts, and I don't intend to try and portray myself as an expert. We understand the supply and demand side of these metals. very clearly and I don't want to repeat what is obviously good work done by many other people. But I do want to provide you with our view at a high level regarding perhaps a slightly different view. We believe PGM Demand will remain well supported well into the 2030s. And it's predominantly because internal combustion engine vehicles have a substantial future, much more than what I think is being given credit to. And it's because the forecasts of the penetration rates of battery electric vehicles is in my view substantially overstated. And yes, I do know that a lot of this has been legislated, but when we are not able to provide the metals required for batteries, I do suggest that governments will revisit their legislation to take account of that. But in addition, there are tightening emissions regulations which will support PGM demand and I would also say that I do believe that technology regarding internal combustion engines will also improve. The growth in heavy duty fuel cell electric vehicles will also underpin PGM demand. and then of course in the longer term the hydrogen economy will really provide that demand underpin post 2030. So the outlooks for PGMs remain constructive and robust. As I've said on the battery metals, there's a very aggressive market forecasts and those are going to be tempered by battery metal supply constraints. I think we talk generically about lithium and nickel, but there are very specific requirements for battery grade lithium hydroxide. That's already in a deficit in 2021 and that deficit is going to deepen substantially. Nickel prices and nickel sulfate is of course the requirement or battery precursor. Nickel is at all-time highs as demand clearly outstrips supply. I do see major constraints and I do think despite nickel prices being elevated, despite lithium prices being high, these are still lows in this battery metal cycle. So let me then conclude and you will notice the heading is adapt or die. And as I said right at the beginning, Our strategies have served us very well and they've in fact delivered the results that you've seen today. So our strategic delivery, we do what we say we will do. It's not always popular, but we do what we say we will do and it's really worked to our benefit. We've delivered record annual earnings. We have a well-timed entry into the green metal sector. As I've said, I believe there's a lot of upside on battery metal prices, which is also going to constrain the penetration rates of battery electric vehicles. We're delivering on all elements of our capital allocation framework. You've seen that in terms of our dividends. You've seen that in terms of our share buyback. You've also seen refinements to our capital allocation framework. And very importantly, together with shareholders, we are making commitments to invest in social upliftment to avoid angry people and be a force for good. And you've also seen us enhance Our approach to market development, research and development through our Bionic Cube Fund. We've been very focused and disciplined on M&A. If we can't grow in the battery metal space because we can't create value, we won't do it. But we will not compromise. Our new Refresh strategy is enhanced and it's enhanced our strategic positioning. for future resilience and I believe success. It's a class leading strategy. It's a 10 to 15 year strategy. We've raised the bar in just about every area that we have a strategic focus. So I have no doubt we will be a force for good. And then just again, Larry Fink in his letter which you can read on the internet, he said I believe the decarbonizing of the global economy is going to create the greatest investment opportunity of our lifetime. It will also leave behind the companies that don't adapt regardless of what industry they are in. and I think Larry Fink is spot on and we are certainly going to be one of those companies that prosper in this environment. So at this stage, thank you for your time. I hope you found all the submissions and presentations interesting. I am going to hand over to James Wellsted to facilitate the question and answer session. Thank you, James.

Thanks, Neil. As usual, we'll start with the questions over the webcast, and then we'll go to the phones once we've been through a couple of questions that come through online. The first one, I think, for you, Neil, is Wayne Kluko. With the current lithium price at its all-time high, is Sabania likely to exercise its option to increase its current investment in Kelaba, and if so, when?

Yeah, thanks James. And Wayne, good question. As I said in my presentation, even though some of these commodities are getting to all-time highs, The future shortage or constraints in these commodity markets means that these are not the highs and there is a very significant upside, especially for the right quality of these metals. In other words, if they're produced in the right form and in the right market. We will certainly be progressing our route or process to control of Caliber and I would suggest that would happen as we complete the feasibility studies and probably within the next six to nine months that should be complete.

Thanks Neil. I've got a couple more questions. These two are really similar on the Appian transaction. I'll ask from Tyler Broder first. Can you provide some colour on what's happened with the Appian transaction and why you decided to not complete it? And then what out clauses did you have in the sale and purchase agreement? Maybe you want to answer those first and then I'll ask the rest.

yeah certainly thanks thanks James and Tyler simply put most M&A transactions have a clause that if there's a material adverse change or effect post the signing of an agreement it's your right as a buyer to to exit the the transaction and that's exactly what happened there was a A geotechnical event which we deemed as material and because Soroti and Santorita were joined in the same transaction, we exercised our right on a material adverse effect clause to exit the transaction.

Then the next part of Tyler's question, do you see this affecting your ability to transact with other companies in future? And then linked to that now with prices running, do you see more potential for M&A and if not, do you expect excess cash to come back to shareholders?

So first of all I see absolutely no reason why this should affect our ability to do further transactions. These things do happen and of course I think from our shareholders we will have full backing because the valuation considerations were very disciplined. In terms of pricing, I think I answered that in the previous question and alluded to it in the presentation. Although commodity prices are high, there are going to be severe constraints and I think we can look forward to much higher commodity prices. That does not mean We will assume much higher commodity prices in making our decisions regarding whether something is value accretive. But the perception that we had all-time highs and this is the peak of the market in battery metals is completely wrong. And sorry, there was a third part to that, James.

I've just deleted the question. I think it was about returning excess cash to shareholders.

Correct. Look, I think we have presented our capital allocation model and we've shown that we've applied a very disciplined approach to returning cash back to shareholders and stakeholders. Now, We are not going to declare exceptional or extraordinary dividends at this stage. We have a useful proceeds. But if we get to a point where we cannot find, let's say, external growth opportunities, we cannot create value through organic growth within our business, of course, we will return it to shareholders. But we believe our current dividend yield is industry leading. We believe we are providing a fair return to shareholders. And if we have excess cash, we will use it for other purposes until we hit a dead end on those processes. So no, there will be no additional returns at this stage.

Thanks Neil. This is from Ahmad Hakim. He was just asking whether in view of the recent claims and statements by Appian could we provide more detail on the geotechnical event and then I guess more importantly what is your confidence level that you are legally secure?

Ahmed, thanks for that question. Look, the one thing I want to state up front is we are not going to litigate on this issue in the public domain. That's not proper, it's not appropriate. So I think first of all we've got a high degree of confidence in the In our rights, in the fact that that was material and really that is the amount of detail that I am going to supply. So just to summarize, we have a high degree of confidence. and we believe the geotechnical event was very significantly material. Thank you.

Then the next question from Wade Napier and Anil I guess you could or perhaps Richard as well. What levers do the SA Gold assets have to reduce costs in the event that the mines turn free cash flow negative? and then the second part is relating to the share price having increased by 50% year-to-date. Does this change how management might think about funding M&A? That is, would we be willing to issue shares to fund future M&A?

Yeah, so I'll ask Richard to answer the gold question. Let me deal with the share price increase and whether we would use that as let's call it currency in any M&A. Certainly we acknowledge the increase in our share price, it's pleasing. I would also suggest, though, we're still significantly undervalued, so the use of shares at this stage is highly unlikely. I think there's substantially more upside in our share price, and at perhaps higher values it may make sense. Now, I need to qualify that and say it depends also on the target. If our relative share price is trading at a higher premium than the target, then of course it makes sense to use our currency. But in general, I would say we are still significantly undervalued. Richard, do you want to deal with the gold question?

Thanks very much Neil and Wade I guess there are a couple of triggers you can pull in these circumstances. What I would say the key ones are obviously having a stable production output is critical and I think that is a base that we started establishing again last year after many years of disruption be it strikes and COVID but that's the first critical one. Secondly, we obviously have a capital profile that is designed to support the current life of mines, which, as I highlighted earlier, Beatrix is four years and Cleo van Driefontein ten years. You know, under a very depressed environment, those life of mines would have to be looked at, and of course then capital is a lever you can pull. But that is a long-term decision. I think in the short term, you know the two key aspects we need to focus on is one we have a very aggressive overhead cost focus at the moment and we do have several programs in place to try and reduce that and then the final one is really managing our operating footprint we do have many of our footprints Cook is a good example you know where the care and maintenance and pumping costs of Cook are currently costing us around 600 million a year and that is really a regulatory process to go through to be able to close those and managing and reducing our operating footprint can have a substantial impact on costs and therefore on sustainability of jobs as well. So certainly managing our footprint and rehabbing together with other stakeholders is a key element to keeping those costs down. Thanks.

Thanks, Richard. This question from Adrian Hammond. Well, two questions really. Potential size of claim from Appian. Can we provide that? And then will we need to make a provision?

So, Charles, you can answer the provision part of the question. Adrian, I think that's a question you must direct at APN. We are not aware of a specific claim as of yet. We've swapped letters, but I would ask you to address that to APN. I just wanted to just come back to the gold question that Wade asks and just add on to what Richard said is we will not run our gold business and bleed to death should we have large negative cash flows. I just wanted to make that point. But, Charles, I believe there is a note in the financial statements, but over to you.

Thank you, Neil. And Adrian, no, at this point in time, there's no requirement to raise a provision. I mean, there's just still too much uncertainty. The only time that you do raise a provision is where you have certainty. So, you know, if this gets to a position where we have certainty on a claim or a judge makes a decision on that, at that point in time, we'll consider raising anything. But for now, nothing.

Thanks, Charles. For Richard, from Adrian, the last question. Can you expand on the new strategy from Kruendal? What is the life extension and will it remain a mechanized mine?

Thanks, Adrian. Yes, it will remain a mechanized mine. So certainly there's no intention to change the mining method. The infrastructure still remains as is and of course that is to support that mining method. Essentially what the strategy is is, you know, Kruendal sort of mined down to the extent, to the depth extent of what that mine boundary was, and in some cases also to lateral extents. And really what we have the ability to do is now to drop those boundaries, continue down with a bit of depth, as well as continue laterally into the adjacent Rustenburg ground. So really what the strategy is is to optimize the mine plan, seeing the Kruendal property or the old PSA property and the Rustenburg property as one. So that is really the strategy. In terms of extending the life, most of those shafts without having done this transaction Most of those shafts would have come to an end of their life in around about 2024, 2025, where it just wouldn't have been able to carry itself as a standalone unit. By doing that, by completing the transaction, a lot of those shafts will now continue well into the latter part of this decade, 2028, 2029. As I mentioned, with some of the shafts, Bombanani in particular, actually being able to continue for 16 years. So it is about our original strategy with putting contiguous assets together. Dropping mine boundaries allows you to optimize surface infrastructure, underground infrastructure, and therefore mine plans. Thanks.

Thanks Richard. I'll just ask one more question then we'll go to the phone lines and then we'll come back to the online questions. Just a question from Lyolo Mkemtani from Business Day. He's referring to the strike ballot report that the CCMA produced that's been distributed to the media and just asking for a response on that, Neil.

Yeah, I think it's safe to say that if you look at those numbers, and I'm not familiar with exactly what's been circulated to the media, but certainly as you've seen solidarity is not in support of a strike. When I look at the numbers, I don't see OASA in support of a strike. When I look at the split across NAM, NAM at Beatrix is not in support of a strike. NAM within the West Vits is in support of a strike. And of course, AMCU is in support of a strike. but I must also point out that if you consider a balloting process fair when people stand in a stadium and raise their hands and the sample is you know somewhere around 15 maybe 20 percent I don't think that's indicative of Thank you.

Thanks, Neil. And just to point out what Neil was referring to, there were 8,224 employees who voted in this ballot process. And we employ about 31,000 people at our gold operation. So it's a very small segment of that population. Maybe if we could go to the phone lines for a couple of questions.

Thank you very much, sir. The first question comes from Catherine Cunningham. of JP Morgan.

Thanks, guys. So just two questions from me. The first one is just could you perhaps talk in more detail around the sources of cost inflation across the group and maybe just elaborate on where that differs between the SA Gold operations and then the SA and US PGM operations. And then the second question is, in the event of tighter sanctions explicitly impacting Russian palladium exports, How do you see the supply picture panning out in that scenario, and are you aware of any disruptions to palladium exports to date? And then, I guess, linked to that, to what extent, if at all, would you anticipate that ongoing conflict in Russia-Ukraine could negatively impact global auto supply chains and therefore impact demand for metals from the OEMs?

Okay, thanks Catherine and Rich, if you can pick up the inflation point. I'll just start off on the issues regarding Russia and the Ukraine and sanctions. Catherine, it's a good question and I think, let me start by saying, I think you're going to see a lot of volatility initially with a lot of speculation. However, I think the facts are that Russian palladium, which is really, I think, the metal that we should focus on because it's significant in the Western world, Russian palladium is mostly used in Europe. So if there are tighter sanctions or sanctions specifically imposed on Norilsk Nickel, I think the impact will really be in the short term on Europe. Having said that, I also believe that there will be alternatives to someone like Norilsk Nickel in terms of supplying metal to friendly countries which means that you will probably see a change in market dynamics. and of course what is short in Europe will probably then flow from countries that take Norilsk's palladium that are being supplied by the Western world. So I think supply will sort itself out in the shorter term. I think I'm much more concerned with the second part of your question. which is about supply chain disruptions. We are aware that the Ukraine supplies a number of car companies with wiring harnesses and there's been major disruptions to companies like Porsche and Volkswagen and of course it'll increase. And those are the obvious ones. Just like COVID, I think there are a lot of hidden supply chain disruptions that are unfortunately probably going to impact on demand more so than supply being constrained. But of course, as I've said, you will get speculation and volatility in the initial phases of something like this. From our point of view, our heads are down. We have our customers. North America is pretty much independent. We produce North American palladium for North America. And of course, our other palladium goes to our other customers around the world. Thank you. Rich, over to you.

Thank you very much, Catherine. I think generally there's been inflationary pressures across the board, but to highlight some of the bigger ones, clearly in South Africa, electricity has been a big one. Steel has been quite a big one, which impacts, for example, on a lot of our stores' materials, our support, as well as our engineering infrastructure. Labor, of course, we are still operating under historic agreements. Those increases have been above inflation. Of course, that's built into our forecast, but it does still result in above inflation increases and hence the need to bring that in line with inflation. And then finally, chemicals that we use in our processing and also fuel. To distinguish between the gold and the SAP GMs, The gold operations are far more exposed to power and steel in particular, deeper level vertical shafts, big electricity exposure, and our PGM operations in particular have a higher exposure to fuel price given that a lot of them are mechanized operations. I think important just to note and I'm not quite sure if that was part of the question but part of the reason that we managed to contain costs in the SAP GMs was not so much around the fact that they were not impacted by inflationary pressures, they most certainly were, But through the realization of synergies and through the cost-cutting initiatives that we've had, we were able to work out those above inflationary cost pressures. So it wasn't that the two operations were differently exposed, but more that we had more of an opportunity to cut the costs on the PGM business. Thanks.

Awesome.

Thank you. That's clear. Thank you. The next question comes from Leroy Mguni of HSBC.

Hi, good afternoon, guys. I've got a few questions, please. The first one is, if I look at your reserve assumptions, they've gone up about 23% for the basket price. But either in the Crandall and Mimosa editions, your reserves haven't really gone up by much. If you could maybe unpack that. I'm wondering if it's linked to cost inflation. And then, For the Brazilian acquisitions that you walked away from, would you be open to settling on a lower price than what you had initially agreed if that goes down that road? And then my third question is a cheeky one, but I'll try my luck. Norosk Nickel has underperformed quite significantly and could potentially be in your reach. It certainly has the metals that you are looking for from a battery perspective. Is that something that you would consider as an acquisition?

Rich, why don't you do the reserves first? Perfect. Thanks very much, and thanks, Leroy. Listen, on the reserve side, no, it hasn't got to do with costs. We have revised our pricing assumptions, and perhaps just to unpack or explain that a little bit, historically reporting under the SEC, We were bound to report with three-year trailing averages. Under the new Guide 7 that's come out, we can now look at setting our own price base as long as, of course, that's justified and realistic. And as a result, we've really looked at through-cycle prices to guide our resources and reserves. And the key for that is we, of course, want to make long-term decisions on those price decks. So it really is about trying to optimize prices through the cycle. The reason it doesn't have a specific impact on the PGM operations is the reserve price deck that we used previously and that we're using now, there's still significant margin in those operations. As you would know the PGM assets have got a fairly constant grade. So it's not like you can, unlike gold for example, where different prices allows you to mine lower grades, you can mine it selectively. In PGMs the grades are far more consistent. So just the fact that we still have that margin really means that it doesn't have a significant impact on your reserves. Where there was a small impact is when we get right into the tail of these operations and then slightly higher prices might allow you to continue for a little bit longer. But it's not a material increase in reserves for that reason. Thanks, Leroy.

Thanks, Neil. Thanks, Rich. Leroy, your second question on APN, I just want to say again, we're not going to litigate in the public domain, but I don't want to say no comment all the time. But we walked away. We didn't take the decision lightly. There's been a material adverse event, so we've walked away. So the answer is no. Is Norilsk a target? Listen, Norilsk is a wonderful company, but it doesn't sit in a jurisdiction that is of interest to us. We have really targeted building our ecosystems or our presence in ecosystems in Europe and North America. So, no, it is not a target.

Thanks. Thanks for the responses.

Appreciate it.

Thank you. The next question comes from Nkoteko Matonzi of Investec. Nkoteko, your line is open. You can ask your question.

Oh, good afternoon. Can you hear me now?

Yes, we can. Please go ahead. Thank you.

All right. Super. I have two questions. The first one, the background is around the SAPGM operations which continue to outperform and Marikana is proving to have been a great acquisition and so is Rustenburg. But in contrast, the output out of the USPGM and cost is not anywhere close to the initial expectation. So my question is what has been your key influence as far as the And I mean, when I look at some of your peers, I think they're also still going through issues as far as international operations are concerned. And your growth and green strategy probability is it will likely be in international grounds, as you've just highlighted now. So how do you avoid this white gap in particular on operational aspects? between expectation and actual reality once on the ground. So that's the first question. The second question is around recycling. I noticed that purchase times declined by 3% year-on-year, and the Fed times declined by 10% year-on-year. So I just want to know if there are capacity limitations on your side as far as recycling is concerned, and also just to get your outlook as far as recycling, global recycling

Thank you. Yeah, thanks. Rich, will you deal with the recycling? I'll deal with the, and I couldn't quite hear your question, but the point you made was that our South African acquisitions, PGM acquisitions, appear to have done very well, and you're quite right. They were smartly structured. They were acquired at the right time. Your concern is that the U.S. operations don't look like they've worked. So let me correct your perceptions. We have not met, let's say, our plans. That is very true. There's been a couple of headwinds. But the US operations are exactly what we bought. They are no different to our, let's say, initial assessment. and I haven't recently done a calculation but I do believe they've paid for themselves and again the acquisition was done at a point in time similar to the South African PGM businesses and we've had a real benefit of profitability and obviously based on commodity prices. So the quality and the attributes of the US PGM business are exactly what we have expected. I think our changes to the plan are really taking account of, let's say, conditions that are very, very different to pre-COVID conditions. Yes, there have been some technical issues in terms of flexibility and ramp-up, but there are very different issues regarding the availability of labour which is something more recent and the costs associated with using contractors. So we will apply a very different business model and I have no doubt that it will be extremely profitable and it will continue returning value back to our shareholders. Operating in the US has been an absolute pleasure and I have no doubt that operating anywhere else in Europe, Finland and France will be an absolute pleasure. So I don't foresee, I wouldn't put all these challenges we've had in or perceived to have had at Stillwater in one basket and say working internationally is hard. I can tell you it's much harder to run our operations in South Africa and yes they've performed well and that's good. So we remain let's say bullish on our ability to operate in all areas around the world that we will obviously choose. Rich?

Thanks, Neil, and Kateko, thanks very much for your question. If I understood it correctly, the decline that we had in our recycling numbers during the second half of the year wasn't capacity-linked. It was more driven by supply chains being able to transport cats, truck driver shortages in the US, etc., and lower scrappages of cars. So it wasn't a capacity constraint. As it stands, we're not capacity constrained at our processing facilities. There is a mix that we do need to consider with recycling. In other words, we blend our recycling material with our primary material. and we do manage that to optimize recoveries and costs and throughput. So there is a link there, but it's not really a capacity constraint and that is obviously a link we can play with, but that is a blend issue that we do address. I think in terms of your question regarding our views on global recycling, I think during the pandemic, the combination of both the pandemic and supply chains being disrupted globally, combined with the lower scrappage of cars, that's been a global event with new car sales being down as a result of chip shortages. We do see that recycling recovering over the next year or two and building back up to similar levels as what it was prior to COVID. So it has been a depressed secondary market for the last two years, but we see that recovering from this year going forward.

Okay, thank you. The next question comes from Robert Sennott of Silver Yule Capital.

Yes, this question is directed to Neil. Neil, what is your position on silver? Themba Nkosi Stillwater has every card in the deck to form a royal flush but silver. And I wanted to find out from you your thoughts on pursuing and getting involved and and the other precious metal that you don't have interest in right now.

Thanks Robert and good question. We do like silver and silver is not only a precious metal, it's a metal that has, in my view, a strong technology and industrial underpin. We have looked at silver. In fact, we've looked at silver as a way of entering the North American gold business. As you know, many of the silver opportunities... have gold byproducts. It is something we'll continue to look at, and it is a metal we like. We like its fundamentals. So, Robert, perhaps I can just leave it there. But it is of interest to us, yes.

Thank you for that information. Yeah, it's very much a green metal, Neil. Very much a green metal. Yeah. And... I just appreciate all the good work you folks have been doing with your M&A and how your business is turning out, and really appreciate the dividends that you're paying to shareholders. Thank you for your good work.

No, thank you for those very kind comments, and I agree with you 100% on silver being a green metal. Thanks, Robert. We'll look further into it.

Thank you. The next question comes from Renee Hofreuter of NOAA Capital Markets.

Good afternoon, Neil and team. Thanks very much for taking my questions. Just two quick questions. What is the progress on K4 shaft? When do you think the extra production will come in? And will it be expansion or will it be replacement? Those answers. And then secondly, I hear what you said about palladium and eventually the supply sorting itself out and the price sorting itself out. But what if it doesn't and the palladium price now stays up at $27.50 or wherever it is now and then it doesn't come down. Do you think that will be a trigger for really starting to substitute platinum for palladium?

Yeah, so Renee, yeah, I think let me deal with Palladium. We're going to just try and get Robert Van Niekerk on standby, who's running K4 Project, to give you definitive answers. Rich and I can do it, but probably at a higher level. But on your question on palladium, absolutely. If palladium prices stay high, you will definitely see substitution taking place. I have no doubt. I suppose that is good news. for us on both sides. As you know, we have a 50-50 palladium platinum pool split, if I could call it that, in our company. So, yeah, I do see substitution becoming a reality if the palladium price stays high. My view is that it'll, as I said earlier, it'll wash itself out in terms of alternatives, you know, in terms of markets that are not, let's say, sanction constrained. Rob, if we could get you online just to answer Renee's question on K4, and I trust you heard that.

Neil, I did hear that. I just want to confirm that you can hear me.

and here you clearly.

Okay. Good afternoon, Rene.

Hi, Robert.

K4 project commenced around about the middle of last year after the internal authorisation process and so on we went through in our organisation. I can report that the project team is fully staffed up. The EPCM contractor is in place and performing in accordance with expectations. The work schedule or progress is as per schedule for the last six months and development will commence in quarter two of this year. We've been very fortunate with K4 because K4 is supported by a very, very large PGM base, the base being Rastamurk, the base being Kruendal, We haven't had to go out and recruit people and train them up for K4. We've been privileged in the fact that we can actually take, for want of a better word, the best of the best from the other platinum operations and deploy them at K4 and for the positions they leave at the other operations. So that has really been the approach we've taken to date. But the K4 operation is progressing as planned, Renee, in a nutshell.

and how many ounces could we expect as expansion ounces and by when?

At steady-state K4 is going to produce approximately 250,000 ounces a year. That is from both the Marensky and the UG2 refluorosin and that will be in four years from now.

Great, thanks very much. Thank you. Thank you, Neil.

Yeah, thanks, Rene. Nice talking. Nice. Thanks.

Thank you. The next question comes from Chris Nicholson of RME Morgan Stanley.

Hi, good afternoon, everyone. Thank you for the call. A couple of questions for me. The first one is just on your Americana BE structure. I understand that you've got kind of two components there, the Timbani and the other Americana shareholders. Could you confirm if the other Americana shareholders are now unincumbent and are fully participating in dividends in that operation? And then the second question, just to follow up on the Crandall profile, I understand you've given some guidance there in light of mine, which we appreciate. What does the decline rate look like? I would imagine that post-2023 it's not going to be producing at the 450,000 balances it has been. How do we anticipate those balances rolling off? Thank you very much.

Thanks, Chris, and hi. Rich and Charles, can you deal with the BEE? Yep. And Rich, probably with the Kruendal decline rate in terms of output.

No problem. Chris, thanks very much. Listen, the absolute details of that BE transaction we can get to you. It wasn't that during the restructuring they were all completely unencumbered, but the liabilities were completely restructured. So some of the other parties did still have liabilities associated with it. The exact numbers I don't have offhand or where they sit at the end of this year. But it wasn't that they were all completely unencumbered, no. There were still some, but the exact numbers I could get to you, Chris. In terms of Crindall, you're 100% correct that there is a roll-off. I think Crindall's peak production is 450,000 ounces. There are one or two shafts which will still come to an end and we will optimally... We will in the next couple of months be putting out our detailed resource and reserve statements together with our annual report and that will certainly show a full profile for those operations on the back of the new life of mine and the current life of mine has been done with this transaction in mind. So Chris will be able to share those details with you in the very near future as we publish those numbers.

And next is a follow-up question from Adrian Hammond of SVG Securities.

Thanks very much for taking my further question. Neil, just a bit on strategy. You mentioned in the past targeting battery metals and PGMs and gold equally in terms of EBITDA. Is that still the case? And as you've been aggressive with your M&A in the past year, and largely shifting more to manufacturing. Is there a scenario in the future where you think you would separate or unbundle the South African mining assets from your endeavours offshore? And then just on safety, which is obviously a sore point, one of your peers has recently closed the shaft Bambunani to due to seismicity. Is this sort of potential options that you are facing as well? Thanks.

Yeah. Thanks, Adrian, and good to talk to you live. Yeah, so listen, ideally, we would like to have an equal split in earnings across battery metals, PGMs, and gold. Obviously, we've got a long way to go in achieving that. It would be very nice to triple our earnings based on what's happening with PGMs, but that is certainly still our broad intention, which means we need to grow our battery metals business. It also means we need to grow our gold business. Unbundling certainly is something we consider Themba George Nkosi, Melanie Naidoo-Vermaak, Richard Andrew Stewart A large balance sheet, the flexibility we have with different commodities allows us to really consider building something that is unique and very sustainable. In terms of safety, absolutely if our safety incidents were due to seismicity and with the difficulty of predicting Thank you very much. We'll have no hesitation but to close shafts, and we showed that last year. But it's not due to seismicity, Adrian. But if it was, absolutely the answer is yes, we would close them. So I hope that answers your three questions.

Yes, thanks, Neil.

Thank you. There are no further questions from the lines.

Thanks. We'll go back to the webcast then. A question from Craig Martin, I think for Richard. Could we elaborate on the mineral resources report where in the group overview we show PGM answers as well as PGM at 100%? So the attributable and the 100% and the same with other minerals. Which column represents mineral resources as they apply to Sabania Stillwater shareholders?

Yeah, thank you very much, Craig. And I actually don't have the table in front of me, but what I can say, so the 100% column you see is essentially the answers of the resources or reserves that sit within the project or the operation that they refer to. So that is essentially 100%. And year on year, that makes the comparisons easy. What we previously looked at was we declared our attributable portion of that. So where we have minority shareholders, and as I say it's most applicable in South Africa where we have empowerment partners, we have an equity stake at a project or a company or a mine level. We previously declared our effective economic interest in that. So if we had financed one of our minority shareholders and half of that had been paid back, On a 26%, you know, we obviously then would have declared they would have, well, 13 less, 87%. What we're saying now is what we're declaring is the 74% in that example. So we are only declaring attributable to ourselves the actual equity interest that we have directly in those resources and reserves. And those are the balance of the columns that you see in the statement. As I highlighted up front and just to stress again, it doesn't change the resources or reserves within a project, neither does it change any economic interest we have. I think the shareholdings and the various empowerment structures, etc. that we have in place have obviously been disclosed. None of that changes, but just for simplicity's sake, we now declare our resources and reserves purely on our equity and that shouldn't change year on year. I hope that assists Craig, but would be happy to take it offline and work you through it if easier.

Thanks, Richard. And just for your information, Craig, so the column to the left of the 100% column is the attributable portion to Sabani Stillwater shareholders in that report. So just to clarify that. Question from Richard Hatch. Can we quantify what kind of production impact we can expect at the US ops versus the original plan? I think, Richard, do you want to cover that one?

Yeah, Rich, go ahead. Sure. So, Rich, I think, listen, that is clearly still work in progress. I mean, I think the guidance we put out today, and I'm sure if you looked at the maths compared to what we put out or what we achieved during the second half of last year, you will see that really that is just flat guidance. So at the moment, operating under all of the constraints that we currently have and all of the excess costs that we have incurred with extra contractors etc. You know that almost I guess to an extent paints the bottom line, the worst case scenario. Our original targets through ramping up the Stillwater East project was to attain about 850,000 ounces per annum and what we're really doing is saying what is the optimal Thank you very much. It is work that is being undertaken at the moment and as mentioned we are looking to have that completed around about middle of this year. But I guess I can share with you what those boundaries are and that's really been the guidance we've given which is as we operate today under those constraints and it's precisely about dealing with those constraints in the new plan that we're looking at. Thanks Richard.

Thanks, Richard. This is more of a statement from Dominic Illett. This was a very exciting presentation. Thank you. The clarity of strategic focus and laser-sharp implementation and delivery is truly commendable. Keep up the good work, Mr. Ferdinand and team.

Thanks Dominique and we pride ourselves on being very strategically managed and strategically focused and I think all credit to the team on the delivery of the results. I think the results are the ultimate measure in whether you've been successful in your strategy but we appreciate the comments and I'm sure the rest of the team has heard it as well. Thank you.

Thank you, Neil. A question from Abi at Deutsche Bank. Have you seen any change in the behavior of PGM customers? Are there new inquiries from the customers? Also, is there any slack you have in the system? Thanks.

Yeah, let Richard answer that.

Any change in customers, I think not on a sustainable basis. Of course, there's a lot of volatility in the market and and yeah, we do get short term Short-term inquiries based on market volatility. I think importantly, our overall marketing strategy is less about trying to be a trader in the market and more about building long-term relationships with customers in supply chains. And that inherently means that we do have slightly less exposure to the volatility. Jones, apologies, could you just, there was a second part to that question? It was about any slack in the system, Richard? Any slack in the system, I'm assuming you mean around demand and supply at the moment? No, listen, I think at the moment certainly there's still strong demand for all of our metals. Slack in terms of having excess metals, no. I think at the moment we're certainly finding that the demand remains high, if that's what you're referring to. Thank you.

Will, we're just drawing to an end of the presentation. I'll just quickly deal with a question from Sipelele Mdudu asking about the litigation process timelines. There is no litigation process at the moment. As Neil said, we've exchanged letters, but there's no formal process in place. So I hope that answers the question. Neil, this one's probably valid. Is uranium dead in South Africa or are you involved in project assessment work

Yeah, uranium is definitely not dead in South Africa. We sit on probably some of the best reserves I would say in the world when you consider that some of our uranium reserves are on surface and are part of a dump where we can extract both the gold and the uranium. Uranium is still a target for us. It's not a high priority. It is still being worked on. It's more complicated because it forms part of a broader base of assets, so that is introducing some complexity. But we remain very bullish about the long-term future of uranium and its classification of well the classification of nuclear energy as green energy and the very disruptions you've seen with renewables as base load energy just doesn't work and we've always been proponents of nuclear energy has a place so we continue to work on that it's not dead in the water it's just not a high priority

Thanks Neil. I've got a couple of technical questions, but I think let's leave it at that. It's ten past two. We'll respond to those questions by email. We've got your email addresses, so we'll respond directly to you. So I think on that note, I'll pass over to Neil just for some closing remarks.

Thanks James and again thank you to all of you that took time to join us, listen to us. I hope you found it interesting and we look forward to more delivery and of course I'd like to thank my team as well. An exceptional set of results and really I'm very proud of what has been achieved. Thank you very much and enjoy the rest of your day.