Sibanye Stillwater Limited

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

Thank you Richard, over to you. Thank you very much Neil and good afternoon ladies and gentlemen. Discussing commodity markets at the moment, I guess many are asking many questions about where these markets are going and PGMs are certainly no exception. The way we look at the markets at the moment to drive our business is really across three different time periods. So we look at a short term, generally less than two years, tactically, how do we respond to the current market? We look at a medium term, generally out to about 10 years, where I think we have some confidence in terms of the way we forecast, and then slightly more speculative beyond 10 years. So certainly our view in terms of the short term and what we're seeing is that there has been a distinct dislocation between the fundamentals that we see. Fundamentally, we believe the 3E metals, PGMs, are very much in deficit and the price trends that we've seen, which of course have been falling a lot faster and a lot further than I think many imagined. Of course, the question is, why is that the case? We don't see a silver bullet or a single reason for this. It really has been a coming together of multitudes of factors. We have mentioned in the past things like destocking. Several OEMs did build up stocks post-COVID and that has been coming out over the last few years, although we do think that that is declining. We have also seen in the market some significant disruptions to supply chains and changes to supply chains, in particular a lot more Russian metal finding its way into China. and then we have some in the PGM market probably about 80% of the metal trades as physical metal under long-term supply agreements with a very small portion trading in the spot market that ultimately sets the price and of course when you have disruptions to supply chains and take some spot buyers out of the market that does have a significant impact. Combine all of that with some negative sentiments around global macroeconomics, BEV growth rates, and essentially what you end up is a highly dislocated market between, let's call it, paper trading and ultimate fundamental or physical trading. When we've seen this in the past, it does tend to come together again, and the more extended the dislocation, the more severe the correction. So our view is that for the next for the short term we do still expect volatility but ultimately we think the fundamentals will come through and therefore there is risk upside for some very rapid reactions and price appreciation as markets continue to tighten. But certainly we are planning for a volatile short-term period. In terms of the medium term we have in fact I think become more robust given what we've seen happening over the last 18 months. Our view on the markets has not materially changed, but because of the lower price environments we've seen, the primary supply coming out of particularly South Africa and North America has in fact declined more than what we originally forecast and we don't see much growth coming out of Russian supply. Similarly, secondary supply we think is going to remain constrained because of both margin pressure as well as supply chain disruptions. And as we've seen demand for in terms of the rates of which BEVs are growing, and they will continue to grow, but just that rate has been moderated. And we think that gap will be filled by CE hybrid vehicles, which is good for both PGMs and battery metals. and taking a combination of that supply pressure and demand moderation in the medium term, we actually think the PGM market remains pretty robust, a view that we have held for an extended period of time. Over the long term, it does become a bit more speculative and we do see structural changes occurring. Today, PGM demand, about two-thirds of it is underpinned by auto catalysts and we see that declining to about 50% out to 2040. The difference in demand will be made up by industrial applications, a significant portion of which will be associated with the hydrogen economy. But of course, there are still many factors that we need to understand and understand how these technologies develop and are taken up before we can get confidence in that forecast. And that drives our long term market development strategy around securing sticky industrial applications to replace largely auto catalyst demand. for the decades to come. So just looking at our overall view of that market, we do model it as a 2E basket, being platinum and palladium, given that they are substitutable. and what you can see in the in the white bars is almost an average of various market research houses which would suggest that we still have deficits up to about 2027 and then moving into surpluses for the factors that we've mentioned above the supply constraints as well as a moderation in terms of battery electric vehicle penetration we in fact see deficits for the balance of this decade only then moving into slight surpluses early in the following decade So overall a robust view for the medium term for PGMs. I'll now hand over to Mika who will discuss lithium markets. Thank you.

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

Thank you, Mika and Richard. Let's now move ahead with the salient features for the first half of 2024. So, the Picture on the right hand side of the slide is actually the first slide in the year end presentation which was delivered in February of this year. As I mentioned in my introduction today, we committed at that point in time to focusing on our balance sheet and the piggy bank was also used to reflect the cost savings we intended to achieve from the large amounts of operational restructuring that we intended undertaking and had undertaken to preserve our margins through this lower price commodity downturn. I am particularly pleased with what we've achieved to date on both of these. Richard will cover the cost benefits of our operational restructuring in his section. But let me start with the impact that we've made on the balance sheet. So I'm very pleased to advise that we've increased our balance sheet strength and liquidity by more than 25 billion Rand or 1.4 billion US dollars. And we will in the following slides show you how That amount has been calculated. But first of all, what did we do? And the H1 balance sheet initiatives are listed there and I intend to go through them in some detail. We announced the uplifted agreements we had on our covenants. The debt covenants have been uplifted to three and a half times until June 2025. and three times until December 2025. We have a currency geared collar that we've implemented at our South African PGM operations to protect the margin in a strengthening ZOI environment. That was done on the basis that we could see the potential of an improving climate in South Africa and I dare say the appointment of a government of national unity is the first very important step in that and we believe the RAN will continue to strengthen and that is protection on the downside. Our convertible bond derivative was reclassified as equity following the Sylvania Stillwater shareholder approval. The 6 billion Rand RCF refinancing and upsizing was completed. We entered into post June 30, in fact in August, a 1.8 billion Rand gold prepay that is currently being implemented. The Calibre Lithium project was separately financed to the tune of 500 million euros through a green financing and then of course operationally we benefited from improved adjusted free cash flow compared to the second half of 2023 following some of the operational restructuring starting to Themba George Nkosi, Melanie Naidoo-Vermaak, That does not include the gold prepay and I will give you a pro forma indication of what that looks like with the gold prepay. As I say, a very pleasing result and certainly the expectations I think of the sell side analysts that we would be resorting to some form of The Covenant Uplift gives us a turn of One Times and assuming our adjusted EBITDA for a year is about 13 billion at this point in time, that's a 13 billion benefit. The currency hedging and geared collar is on the slide, the prepay. Themba George Nkosi, Melanie Naidoo-Vermaak of Streams and other prepays that we are working on. So we are looking forward to an estimated pro forma total of increasing the balance sheet strength and liquidity in excess of 36 billion Rand or about 2 billion US dollars. And as I've said, any suggestions that we're going to have to revert to equity to strengthen our balance sheet must be somewhat moot now. There is one area where we still have some work to do. The polygons on the left indicate a number of ticks, areas where we've completed restructuring or in Sandoval's case, we've terminated what we believe was an onerous contract. The covenant uplifts, the convertible bond and the gold prepay are all done. The one area where we still plagued with losses in our business is in the US and With the announcement today, we have initiated what I believe will hopefully be the last phase of restructuring. And I think it's quite material and quite significant. So let me talk you through it. And when Charles covers the US region, he will provide more detail. But we are now entering a final phase where we will be restructuring The U.S. business for a 2E PGM basket price below $1,000 per 2E ounce. How are we going to do that? We are terminating high cost production of about 200,000 2E ounces from the U.S. PGM operations. Stillwater mine will be put on care and maintenance. We will increase production slightly from our higher grade Stillwater East operations which has lower cost infrastructure and more efficient infrastructure. We will also reduce production from East Boulder and that will essentially improve their cost performance but also defer expansion capital. Unfortunately, it does result in a further headcount reduction of approximately 800 employees and contractors. The net result is that we will still ensure a sufficient scale of operation to maintain our very important recycling operations and to leverage off the recent Reldan acquisition. Probably more importantly with a high quality ore body of this nature, we retain mining optionality for a higher 2E basket price environment. We certainly did look at putting the entire business on care and maintenance. That is a much higher cost option than what we have set out here, but I will leave it to Charles to talk us through that detail. As we always do, we are sharing with you our gearing and this is a graph of adjusted EBITDA and of course net debt to adjusted EBITDA multiples reflected in the red dotted line. Pleasingly, and as I've said, without the gold prepay, Our net debt to adjusted EBITDA as of 30th June comes out at 1.43 times. If we include the gold prepay, that number is actually 1.29. You would remember that we have said around one times is a net debt to adjusted EBITDA or multiple that we are comfortable with. So again, I think very pleasing from our point of view under these circumstances to be operating at those sort of levels. So we've covered protecting the balance sheet. Let's now move on to some of the other salient features in terms of embedding ESG in our business. Very pleasingly, we are achieving record group safety performance. And I will leave it to Richard to talk in more detail about that. We're advancing our green metal strategy and growing our secondary and urban mining platform that is inherently environmentally friendly and responsible. Our journey to net zero continues with 407 megawatts of renewable energy PPAs projects under construction and In addressing the Marikana massacre, which was not during our ownership of those assets, we have implemented the Marikana renewal process, and that is resulting in significant collaboration from those impacted and affected communities, and it's resulting in positive change. And I'm sure you may have seen some of the In terms of delivering on operational improvements and operational sustainability, very pleasingly, the South African PGM business had a solid operational performance, benefiting from the proactive restructuring done earlier this year. Our gold business had a disappointing operational performance mainly due to seismicity and of course any restructuring is disruptive but we certainly look forward to improved performance for the second half of 2024. Our US PGM business had a solid operational first half. and continued to build on the good results of the restructuring last year. But because of low palladium prices, it remains loss making and hence the restructuring that I referred to in the previous slide. Our US recycling business generates positive earnings and cash flow. Sandoval also generated an improved performance. But of course, because of the structural change in the nickel market and the low nickel prices, we brought forward the conclusion or the termination of the nickel supply contract that we had with Boliden. The Calibre Lithium Project continues well and in line with our expectations and pleasingly the Century Zinc Retreatment operation is on track for a profitable 2024. I'm not going to go through all the financial numbers. Charles will cover that in the financial review. But just to say, clearly earnings and cash flow impacted by a significant decline in the PGM basket price. We made a basic loss of 7.5 billion rand. We did have headline earnings of 137 million. There was a 7.5 billion rand decline Themba George Nkosi, Melanie Naidoo-Vermaak, Richard Andrew Stewart I would like to just talk a little bit about unlocking the latent value potential as the last slide in this section. There are a number of areas where there is significant value that we are in the process of unlocking. Our South African uranium assets and strategy has good direction, especially with the appointment of Greg Cochrane to lead this part of our business. In terms of the Cook tailings resource, we've completed a review. We will complete a further feasibility study in 2025. I think important to note that it's near to midterm potential from a uranium production point of view, plus it has the benefit of gold byproduct credits. It's an opportunity to use this asset to build a uranium business, leveraging off Cook's low technical risk development. The Beiser uranium mine also has significant U308 resources and there's significant potential to unlock value through a partnership or sale to third parties where we are in discussion. In terms of the century operations, very pleasingly, we are now starting to assess opportunities to leverage the existing infrastructure, which is the port, the concentrator, the pipeline. By looking at phosphate deposits within that region, we have a number of our own phosphate The region is well endowed with some very good phosphate deposits. So that will be receiving some attention and we look forward to providing you with more information in due course. We completed the Class 3 feasibility study on Mount Lyle. Themba George Nkosi A decision pending once we have the environmental permit record of decision and the class two feasibility results. So we look forward to receiving those and applying our minds. RELDUN has very significant future recycling growth potential in Mexico and India and it's not just through electronic waste. This business is being very complementary to our AutoCAD recycling business in Columbus. So I would like to, at this point, hand over to Charles Carter to take us through the financial reviews. Thanks, Charles. Over to you.

Thank you, Neil. Good morning and good afternoon to all participants. Starting with the financial performance for half one 2024, Revenue was down 9% due to significantly lower PGM prices. Although production volumes were up at the SA and US PGM operations, the 4E and 2E basket price were down 28% respectively, and the 3E basket price was down 53% for our US PGM recycling operation. Pleasingly, the gold price was up 18%, but this was almost fully offset by lower volumes. Cost of sales increased period over period, but this half year includes six months for the new century operations compared to four months in the previous period, and it includes the newly acquired Reldon operation from 15 March 2024. Normalizing for the Reldon acquisition, costs in absolute terms only went up by 2%. Adjusted EBITDA came in at just over 6.6 billion Rand, almost half the number for the same period in the previous year, and this was predominantly driven by lower revenues. During this period, we also re-performed our impairment assessment and based on consensus low of future palladium prices, an impairment of $400 million was recognized at our US PGM operations. The loss for the period was 7.2 billion rand, but after backing out the US impairment and the associated taxes, the profit would have been approximately 550 million rand. In line with our dividend policy, no dividend was declared. This slide shows our debt maturities and liquidity. Net debt at the end of the period was 18.7 billion Rand and the repayment profile following the refinancing of our Rand revolving credit facility remains very manageable, with the 2026 bonds being our first significant maturity. Liquidity headroom is just under 40 billion Rand, which is roughly two and a half times our requirement. and that is having two months of operational and capital expenditure in available headroom. Liquidity headroom was extended through the refinancing and upsizing of the rent revolving credit facility, the conclusion of the caliber 500 million Euro green financing and the execution of a 1.8 billion Rand gold prepay. Just a few words on the cyber attack that we experienced post half one 2024 and also the reason for the delay in results. In July, we experienced the cyber attack that impacted our global ICT systems. On discovery, the group ICT team acted swiftly to isolate our networks and systems across all regions and business units. The operational impact was limited, But I think very importantly, safety of our employees were prioritized in all instances. The biggest impact was at our US metallurgical complex, impacting smelting and recycling processes that resulted in increased stockpiles that will be processed over the rest of 2024. All credit has to go to our ICT team that restored the majority of our ICT environment in just over three weeks. I will now hand over to Richard Stewart to take you through the results of the SA region. Thank you.

Thank you very much Charles and again good afternoon ladies and gentlemen. We'll work through the regional operating updates. Thank you. I guess just to kick off with our first and last priority is safety. I think it's been very pleasing over the last few years as we have shared with the market. We implemented a Fatal Elimination Strategy in 2022 and I think it's been very pleasing over the last few years to see the positive impact the strategy has had in reducing risk across our operations. Over the current period we saw our best ever serious injury frequency rate and a continued decline in the high potential incidents that we measure across our operations. These are all leading and lagging indicators that suggest that high energy incidents, which can result in fatal accidents, are being mitigated and reduced on a sustainable basis. Despite that, tragically, we did have a significant improvement year on year, but tragically still lost three colleagues during the reporting period. We lost a colleague at Beatrix Operations, Cliff Operations and Butterpeddy. and on behalf of the management team and board, our sincere condolences go to our lost colleagues. Over the past 18 months, and in particular in the South African region, we have undertaken a significant amount of restructuring of our operations specifically to position ourselves for sustainability in the current price environment we find ourselves in. Across South Africa, that's included the closure of unprofitable operations. That's included four shafts that we've closed and two processing plants. We've also restructured operations that were marginal. That included the Marikana Roland shaft and the Rustenburg-Zipumaleli shaft. And then to meet that downgrade in terms of production or restructured production, we also have restructured our regional overheads and services to align with that new operating footprint. We used the opportunity of the restructuring to introduce a new operating model for services in the region. We no longer have separate teams servicing gold and PGMs, but rather a single central services team providing services to all our operations in the region, which we certainly believe will introduce increased efficiency and effectiveness to our operations, bringing revenue benefits. This has been a significant restructuring. In total since the beginning of last year, we've seen our total employee base, which includes contractors, declining from about 82,000 employees to just under 70,000. That is a total reduction of about 15% and in line with the reduced operating footprint as a result of the restructured shafts. Of course this restructuring has been highly disruptive to operations and does come with a cost. Most of those costs have been incurred now with the final costs to be incurred during the third quarter of this year and we then look forward to seeing the full benefits coming through in the years to come. The estimated savings from the restructuring in the South African region is about three and a half billion rand per annum and that's measured against the cost base of 2022 and we expect to see the full costs from the final restructuring that was completed in June of this year coming through by the end of the year. We have also undertaken significant capital reviews and in that regard have made a decision to delay the Burnstone capital and place that project essentially on care and maintenance in the current environment. The table on the right we have presented something similar before and this reflects updated numbers based on the actual savings realized and as can be seen gross savings from operational restructuring is currently sitting at just under five billion per annum and when we consider the capital deferrals that are included in that on an annual basis we're looking at a total saving of close to seven and a half billion per annum. I think despite those significant disruptions through that restructuring, the South African PGM operations delivered a solid and steady performance. Total production for the half year came in at just under 880,000 ounces, which is 4% higher than the equivalent period last year. The market will recall that we acquired 50% of Kruendal from Anglo during the fourth quarter of last year. and that added just under 70,000 ounces for the current reporting period and more than offset the losses from restructuring and shaft closures across the rest of the PGM footprint. Our production was negatively affected by a shaft bin failure that we suffered at Sipumaleli that put that shaft out for almost two months and then the illegal industrial action that we had at Kruendal specifically at our K6 and Kwezi shafts. Adjusted EBITDA came in at just under 5 billion rand and although that is a significant decline year on year that is primarily driven due to the much less 28% drop in the total basket price but I think pleasing is that we have maintained our capital investment into our operations year on year with a total of 2.55 billion being spent during the current reporting period and I think testament to our sustained investment in our assets for the future. All-in sustaining cost increase was disappointing at 9%, much of that driven by the one-off costs associated with the restructuring, as well as the closure of the Klipfontein open cost at Kruendal. Taking off the one-off adjustments, what we tended to see is an increase of about 6-7% in the fundamental underlying costs, which is broadly in line with inflation year-on-year. I think worthy just to highlight that Kruendal did deliver its last ounces into the purchase of concentrate agreement with Anglo during August and as from the 1st of September that means Kruendal will now be on a toll processing agreement similar to Rustenburg. This will result in Kruendal's costs increasing but also the total revenue increasing in terms of getting 100% of basket prices. Net-net, that does give us a positive margin gain for Kruendal as we move from a POC to a TOL agreement. Gold operational output was a little bit disappointing. Overall, we saw a decline of about 17% year-on-year to just over 10.7 tonnes of gold produced. A significant portion of this was due to the closure of Kluwer Foreshaft, which was finally closed earlier this year. and that did account for about seven percent of the of the total decline. We did experience some increased size of seismicity specifically at Kloof and Driefontijn and in addition we did suspend some wide reef mining operations at Beatrix where we suffered a fall of ground in a back area where we stopped production to investigate the mode of that and understand the implications going forward. I think very pleasing is that Drieffontein returned to normal production during the half and by June was back at expected levels. Drieffontein has significant flexibility to deal with the seismicity and we are looking forward to that sustained production into the second half of the year. At Beatrix we have instituted a new mining method for the wide reef areas and by the end of the first half two-thirds of those had been brought back online. and we expect the last portion to be brought back online during Q3. So we look to Beatrix to return to steady state levels by the end of Q4. And our CLUF operations, with the closure of CLUF 4 shaft, we have had a reduction in terms of the total flexibility. So the seismic impact there was significantly greater. In order to address this, we are increasing flexibility and opening up mining areas on secondary reefs, lower grade reefs, the QLIRF reef, as well as investigating other high grade areas. And this will be a process that's undertaken during the course of this year. We do, however, expect QLIRF to maintain current levels and therefore below optimal output for the balance of this year. As a result of the decline in production, all in sustaining unit costs were 18% higher. That is driven by volume. Our total absolute cost base at gold had in fact decreased by 3% with the restructuring initiatives, which year on year, taking into account inflation, is about a 10% real discount in terms of those costs. Adjusted EBITDA, despite the challenges, came in at $2.2 billion. This accounts for almost a third of the group EBITDA and I think is testament to the benefit of having gold in the portfolio during these macroeconomic challenging times. ERD contributed just under two and a half tons of gold to the total output at an all-in sustaining cost of about 930 rand per kilogram. and finally our gold wage agreements that expired toward the end of June of this year and we are currently in final negotiations with organised labour across our gold operations. Thank you and now I hand over to Mika.

Thank you, Richard. In Sandoville, we have had focus on two things mainly. First of all, reducing the losses. Secondly, Building up the future through our Gallican project. We have been rather successful in reducing the losses in Sandoville. H1 is clearly less losses than it was last year. There is a 57% improvement. However, we are still loss making. And therefore, we have also decided that with the current feed and with the current products, we are going to stop the production. It means that there will be no more feed after the year end and we are ramping down consequently Q1 2025. Gallicam is moving forward and it is a project which is now in the pre-feasibility study phase and we believe that we are going to finalize that by the and then we are going to do the decisions about the definitive feasibility study and a possible demo plant in Sanduvel provided that the results are as encouraging as they have been so far. The good news are that we have actually produced PCAM in our lab and our innovation is working through the chlorine route Secondly, we have also patented this one to protect ourselves. So we see a good future for CaliCam process and the next time we can tell you more about it is definitely when we have the results out of the pre-feasibility study. Coming to Caliber. Caliber is moving forward and there are no changes when it comes to commissioning the refinery H2 2025. You can see from our capex number, the latest forecast for this year, it has been changed from 360 to 300. And we are in some of the installations a bit late, which means that the capex is going to be spent on the next year's site, instead of this year's site. But the commissioning of the unit H225 is still valid. Some milestones. Project is now fully funded. So we have 500 million green loans secured in August and we got very good support from the European Investment Bank, Finvera and a consortium of leading banks and it confirms to all of us the strategic importance of this project, not only for Sibani Stillwater, but also for the European Union and European customers as such. For the future, we have also done exploration. So we have some really good results on that one. And obviously, long term, we all want to see growth. and we know that there is a strong demand of lithium so we continue that work in parallel with the construction of the sites. Now I want to show you some very beautiful pictures from Finland. You can see on the left hand side you can see two pictures of the refinery in Kokkola. That construction is the most advanced of the three places where we are doing the construction. You can also see that actually in Päiväneva the concentrator is moving forward as well and even the Syyvajärvi open pit mine site has started well and really ready for first of all with the external spodumen feed starting the commissioning for the refinery Age 225, but with our own oar during towards the very end of 26. And over to you, Robert.

Thank you, Mika, and hello, everybody. The century operations, again, had a very tough start to the year. They received about 1,100 millimeters of rain in the first three months of the year. This compared to a historic average of about 550 millimetres of rain. That said, I'm pleased to say that the lessons learnt from last year and the rain protection precautions the team put in place will enable them to produce 16,000 tonnes of payable zinc in quarter one. The operations recovered very nicely in the second quarter. They produced 26,000 tons of zinc. So all in, we have produced 42,000 tons of zinc for H1 2024. It's very difficult to compare the first half of this year to the first half of last year as we didn't own these operations for the whole of the first half of last year. But I can tell you that quarter two this year, the production was substantially better. and Q2 last year. Our oil and sustaining costs improved by 8% to US$2,228 per tonne of zinc compared to the same period last year. This is largely due to improved production but also in part due to very tight cost control measures the team of the operations have introduced. Our EBITDA loss as reduced from $28 million in H1 last year to $19 million in H1 this year. A substantial portion of that $19 million is directly due to the five-year maintenance of our transshipment vessel. I can confidently report, though, that all of our deliveries will be full before the end of this year. In conclusion, I am looking forward to a good Themba George Nkosi, Melanie Naidoo-Vermaak, Richard Andrew Stewart You can see on the slide that we have hedged approximately 20% of our production for the next 18 months. So that is about 2,000 tons per month of playable zinc from July of this year through to December next year. So I think I will leave it there and hand over to Charles. Thank you very much.

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

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

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

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

Let me pick that up, James.

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

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

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

Honourable, I mean, to answer your question is, we always had a three year hump ahead of us, which was associated with the caliber build, so it was the incurrence of the debt and the financing, and then, you know, building the project, and once that started ramping up, you know, our forecast showed that, you know, we would be in an equally even financial position, in other words, operating well below our covenants. So effectively what we did was just to be proactive in this process and to make sure that we can get over this three year hump. So I'm saying it sounds like we bought three years, but it's really a hump that sorts itself out from 27 onwards.

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

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

Thanks, Neil. I think these two will be for Charles. Does the Kiliber Green funding loan have recourse to the Sabania balance sheet, or is it ring-fenced to the project, first of all? And then what concessions did we have to make to the lenders for the covenant uplift?

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

Thank you, Shaul. There's a couple of questions on the USPGM restructuring. I think we've answered most of them. Looking at 2024, we haven't changed guidance. So obviously what we look at is the 200,000 ounce reduction in production coming through in 2025. In terms of all in sustaining costs, I think that was covered as well. Thank you very much.

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

Yeah, thanks, Neil. Look, we're not in a rush to do that because we've got work to do, as I alluded to on the underground infrastructure at Stillwater West mine that particularly relates to the haulage systems. We have multiple Themba George Nkosi, Melanie Naidoo-Vermaak it's long travel times and that doesn't change but within that we have work to do and we're not rushing to do that spend through 2025 but we are going to be doing the planning and the thinking and the optimization trade-offs so I've got no doubt we will get higher pricing through 2025 but this is not an on-off switch that you trigger very quickly so it's more about the work to do and then, you know, once we have the efficiencies identified and the mining cost efficiencies daylighted, then we would make that decision. I think the other parameter that's not an on-off switch is simply getting labour back. So this takes time and, you know, we'll have to work that in. So I don't see this as a 2025 option realistically, but I do think It's incumbent on us to keep the option developing, work on the underlying issues that means that when it comes back, it's a much more productive operation with a better cost profile. Thank you.

Further to that one from Arnold van Graan, you mentioned that you would be increasing output at Stillwater East and East Balder and increasing grades. Is this akin to high grading and what impact would this have on the flexibility of these operations in future?

Yeah, it's not about... Sorry, Neil, go ahead. Yeah, go ahead, Charles.

No, it's not about high grading. So... As I've just mentioned, why we put in the West Mine on care and maintenance, which has good grades in patchy areas, is the underlying infrastructural cost issues, handling issues and constraints around that. On Stillwater East, we have good grades. We are selective because of ground conditions on those grades, but we've got very new infrastructure. and we've got very clean haulage systems and handling systems and very efficient systems. So the grade switch is really just a function again of infrastructure and modern infrastructure and we've opened up a very good set of options there that we can just continue to leverage going forward. So that's not about high grading, that's just about the quality of the infrastructure and the ore body and within that we've got selectivity. But again, not driven by grade, it's more driven by ground conditions at the moment. But as we solve for that, you know, that new east mine has significant leverage long term. And then at East Boulder, again, it's not about high grading. The decision to go from six ramps to four within which we are selective on those ramps on the basis of cost and efficiency is more about the fact that if we go flat out on the current six ramps, which we can do, we then accelerate the spend on the enhanced tailings facility and the extended rock dump facility. And that means a big capital spend in 25. So we have the latitude to push that out of it. And that's why we are reducing volumes. We are favoring the volumes at East Boulder on more efficient steps and better cost profiles. Again, not high grading. So those are some of the trade-offs we've been doing. And I think it solves for multiple things, but it allows us at any point to switch back to bringing that, you know, now that we've got the permitting on all of that expansion, we've got the time to decide when we trigger. And that'll be driven by decisions around capital spend timing. and, you know, I mean, that gives us choice. So I think the flexibility is in our hands there. Thank you.

Thank you. I think this one is for Richard Stewart. I think some market participants are now saying that PGM loadings in China have fallen over the last two to three years more than previously expected and thus current deficits are overestimated, hence the low prices. What's your view on that?

Thanks very much, James. I think there's no doubt that the Chinese sort of loading in terms of their vehicles has been lower and has been declining over the last couple of years relative to Western markets. So I think that's quite well known. I also think that is built into the existing deficits and current deficits that have been forecast. I don't think there's much of an impact on current The reason for those lower loadings is largely driven by less stringent controls, less stringent testing that needs to be done, specifically real-world driving testing. So the real question I think that needs to be asked, so current deficits I don't think are impacted, it's well modelled, but what does that mean going forward? One of the concerns that's been raised is if Chinese OEMs I'll start getting an increasing market share relative to Western OEM companies in the rest of the world. Would that result in an overall lower PGM loading globally? I think that's more the concern that's been raised I think it's important to recognize those that if you are going to be selling markets into sorry if OEMs are going to be selling cars into global markets they would have to meet with the with the requirements in those markets so so we have looked at the at the lower loadings particularly in China we've built that into our models and our forecast and quite comfortable that the deficits we're forecasting have got that in account. So a well-known number. I think it's in a lot of the numbers already. I don't think it's a huge surprise.

Thanks, Richard. We'll ask one more question, then go to the phone lines. Neil, I think this is definitely for you, from Arnold van Graan. Is your business not spread too wide? Lots of moving parts, businesses at different life cycles, markets, commodities, and capital cycles. Sounds like he's quite confused by it all. Can you really manage this effectively?

Yes, Arnold, it sounds like you and I are having one discussion today. Absolutely, we can manage it effectively. I think what you see today through the presentation is chief regional officers totally Themba George Nkosi and we probably haven't made this as clear in this presentation other than saying we're in the right metals in the right ecosystems. We are very well produced to work through this commodity cycle in PGMs which is affecting probably 90% of our revenue at the moment but as Kelleber come on stream as we move from zinc into phosphates in Australia, as we develop Mount Lyle, as we increase our exposure into other metals, we become a very different company. The environmental credentials and the business opportunities from secondary mining and recycling are just fantastic. We are unique in that combination and very well positioned to create value in the long term. The one thing that is very certain to me This company will not become a dinosaur. So you can see I'm certainly very well aware and our board continuously checks with us that we have the capacity and competency to manage a business like this and we certainly do. So I remain very positive about our exposure and the breadth of the business. Thank you.

Thank you. Operator, could we now take a couple of calls from the chorus call line, please?

Thank you, sir. First question comes from Chris Nicholson of Ironman Morgan Stanley. Please go ahead.

Hi, good afternoon, Neil, James and team. Thanks so much. I'll limit my questions to two, please. First question is on the US PGM assets. So it looks like obviously you've reduced production there from around 450 to about 250,000 ounces. So it's about a 40-45% cut to production. I got the comment there from Charles that you're cutting capex by more than 50%. So I guess my key, and I think he gave a number so I might have missed that, but My key question is, how long can you actually maintain that current production run rate at that reduced level of capital spend? Should we expect that you still have a life of mine after 2040, 2050 at 250,000 ounces, or does production start dropping off below 200, say, by the end of the decade? So that's the first question. Then the second question, just going back to a question I think Shaul answered earlier, I mean, earlier this year, You talked on your plans to having maybe a free cash outflow of somewhere between 8 to 9 billion rand this year. I see that your free cash outflow was 7.3 billion rand in the first half of this year. So obviously probably pretty disappointing maybe against your own plans there. Just from the comments, clearly you're taking action in the US, you're taking action at Sandoval. Can you get this business to free cash flow break even by 2025? It just seems that the way you talk about the capex hump, that maybe it's only 26 or 27 that we only get to free cash flow break even, under current prices. Thank you.

Alright, so Chris, I'm going to ask Charles and Charles to comment directly to your questions, but we We have to get to free cash flow break even. It's not just about a capital hump and certainly I don't think it's just about cutting capital in the US. It's about deferring capital just to make it clear. The plan to get to $1,000 an ounce is a plan that is sustainable in the US. There is no doubt that our South African business will be at least cash flow neutral. If not positive and our Australian business will be cash flow positive. Europe post the calibre construction will of course also move into cash flow The cash outflow this year is recognized. I do think it will be less than doubling what you saw in the first quarter. But let me first ask Charles to come in on your USPGM question and then Charles if you can just hand over to Charles to deal with the cash outflow.

Thanks, Neil. So what we've been talking to today is really the 2025 plan that's work in progress, which has a lot of moving pieces that I think we've touched on to give you a sense of the significant shift. With year end and early next year when the company guides to the full planning cycle, we will be talking also to the three-year plan, which we're busy working on. So it's not that we've backed ourselves into a corner and now it's cut, cut, cut, and then there's nowhere to go. We have made, I think, some very good choices around constraints facing us right now that we are taking head on and the flexibility we need to retain as we move forward. So the development pullback, the capital pullback is to match the current production run rates, which we replace with development. The capital, as Neil said and I've illustrated, is about short-term deferral. That doesn't back you into a corner. But we do have sizable capital in the three- to five-year window. So those are the choices which would have otherwise been triggered. If we were going full bore on current run rates, we'd be triggering that next year. So we've freed up next year to do a lot of work on costs, a lot of work on asset optimisation. and we expect in that three-year window, so to bring it to $1,000 an ounce is not simply about lifting the ounces, it's about lifting the efficiencies and we believe as we get that right, we then can lever up really good free cash flow and then we have the flexibility to decide on volume. So East Boulder, you can switch back to six ramps very quickly. They're there, they develop, they're active. We are doing the development to protect all of that. Stillwater East, as I've illustrated, it's new infrastructure. We can further develop, which we're doing. We can further open up. We've got significant leverage there. Both of that protects reserves and it protects life. and then Stillwater West. It's care and maintenance for now, which I see going through next year. We will do the work during that year to decide when we bring it back. That'll be as much about price as it will be about infrastructure optimization and getting it set up properly. So I don't see any impact on life. I don't see any impact on reserves. I don't see Any impact on flexibility to lift this game when we decide to. And that'll be very much free cash flow driven as a decision point. So I think we're setting out the store for next year and you should have comfort in what that looks like. Year end, we'll be setting out the store for the medium term. I'm actually quite excited about what that starts to look like. Thank you.

Thanks Chris, and to Neil's point, there's definitely, if we look at 2025, if we look at current commodity prices, because I think that's a big determinant in whether we will be free cash flow neutral, but definitely looking at our operations, South African Gold, SAPGM, Australian Zinc Retreatment, I mean clearly there we will be at a cash flow break-even position and I would even go as far as to say that we would be putting some money in the toll. There are two outliers. Clearly Stillwater needs a slightly higher 2E price. So based on current estimations, albeit a much significantly lower cash outflow, there will still be a moderate cash outflow for 2025. And then calibre is the other big outlier. We need to spend about $600 million in capex there, roughly $300 this year, $300 next year.

so so those would be the two you know that that would be consuming cash over that period but the operations themselves will fully fund themselves and as I said you know we'll put some money back into the bank thanks just maybe point out to Chris as well if you look at that cash flow statement or cash flow free cash flow table the SA Gold operations show H1 2023 Free Cash Outflow of 1.25 billion rand and then it increases to 2.4 billion rand for H1 2024 but remember that we consolidate DRD Gold as well and DRD Gold's capex has gone from 657 million rand in H1 2023 to 2.5 billion rand in H1 2024 so that's about a 1.8 billion Thank you. Next question comes from Adrian Hammond of SBG Securities. Please go ahead. Yeah, thanks, operator. Hi, Neil. So firstly, Neil,

I'd like to know a bit more about what levers you can pull should you have to continue to fund the balance sheet. Would you consider selling assets such as your interest in DRD, which is very cash-generative right now, it's quite a valuable asset, or are there any other opportunities you can offer? Or are you prepared to keep cutting costs off the business to fund your offshore strategy? That's the first one. That's for sure an indication of what we should be modeling for the restructuring costs for Stillwater this year. I do notice you sold a lot more metal than you produced out of the SAP GM business. Do you have quite a bit of stock there? Could you give us a bit more color as to how much you might draw down for 2H? Just maybe for Richard, you've obviously got quite an insight into recycling. I noticed that the flows there are quite weak still, yet the market seems quite optimistic about a recovery. Could you perhaps share some insights there? Thanks.

Thanks Adrian, and clearly Charles and Richard will pick up their relevant portions. We're not anti-selling assets, in fact our uranium strategy specifically includes considerations like that. I also want to say there's a limit to cost cutting. and I know you can always cut costs further but at a point it does cause damage. I personally am a lot more upbeat about the restructuring flowing through in the right way and 2025 will hopefully be a year where there's no negative impacts from Themba George Nkosi, Melanie Naidoo-Vermaak, Richard Andrew Stewart The balance that we refer to of the $600 to $700 million of balance sheet strengthening which is non-debt and non-equity just to be clear. Once that's in place and commodity prices remain roughly where they are, together with the savings that we've already shared with you and and that flowing through into 2025 I think we are well positioned with the current projects I'm not talking about new projects with our current projects and and we will be prudent we are really very negatively disposed towards using equity as I said earlier we know the cost of that and it's not something that we're going to resort to and I don't think we have to resort to it even over a two to three year period. Adrian, we'll keep a balanced view, but I don't know that post the additional streaming and prepay that we're intending to do that we'll actually need to do anything more. Thanks. Shal, will you go next and then Rich, you can follow Shal.

Thanks Adrian. So Adrian, the retrenchment costs to be modelled I would say is in the order of about $12 to $15 million. That's by our own calculations the number. So not a big or massive outflow from a restructuring perspective. On the stock build-up, I'll also take that question. So we had a furnace rebuilt at our PGM refineries and that has resulted in us building up additional stock at the end of 2023. you know clearly we we take a very keen eye on working capital and you know we asked the team to work that through the process and a lot of that came through in quarter one of this year and that's why you'll see a higher metal sold than a metal produced but I would say we are now back to to historical averages so you know there's there's not a lot of metal that we can accelerate through the process thanks rich thanks very much and

Yeah, hi Adrian. Just in terms of the recycling, I guess the reason why we're possibly a little bit more bearish on the recycling, I guess, is three things. So firstly, we do think that recycling is impacted by margins. We often hear recycling is a fixed margin business, so it's price inelastic. But at low prices, even fixed margins become less money. The big part of recycling is obviously how you finance it, so it's working capital. So a combination of small markets and high financing costs where we're sitting at the moment definitely impacts on those businesses. And then the final one is spare capacity. So over the last four or five years we've seen a significant amount of spare capacity, processing capacity for recycled materials being built up during the high cycle. A lot of those facilities are running well below where they should be or designed to be and that increases unit costs. So overall the recycling market is currently under a lot of pressure and we need to see that changing. I think importantly, what do we put into our models? So when we showed our house view, what our model is based on is we look at history, how much of the metal that went into automobiles ultimately finds its way back in terms of recycling. And when you look over an extended period of time, that number is actually pretty consistent. over the last sort of decade or so. So it becomes quite a good benchmark to use going forward. Yep, you might get volatility in the short term but overall that should be the metal we see coming back and that's what we've built into our models with some short-term pressure. So that's how we get to our numbers. Thanks, hope that helps.

Next caller from the lines please.

Thank you.

The next question comes from Rene Hofreiter of Sibirana Research, NOAA Capital. Please go ahead.

Hi, everybody. Thanks for taking my question. Just two quick questions from me. How much did Chrome contribute to revenue at your SAP GMOPS, just in percentage terms or in rand billions or whatever? And then in terms of the caliber project, What long-term lithium price are you using for the valuation of Caliber and is it giving you a decent IRR at current lithium prices?

Thanks Rene. I'll ask Mika to go first just to comment on the assumptions regarding the lithium prices and then Charles or Richard if you can just pick up the Chrome question. Thanks Rene.

Thank you very much. Thanks, Neil. We are actually not disclosing the prices we are using in our financial model, but I can assure you that our prices are very moderate. They are flat and they have been there since the definitive feasibility study and we have kept them the same. So we feel that we are quite safe actually against the forecast that we showed A bit earlier in this presentation, where we can clearly see that if you take whatever consensus forecast, you can see that they go right towards 30,000, reaching first 20,000 probably during the next five years. And against that picture, we are sure that we can keep our costs and break-even levels well below Those levels. So we are confident that we are on the right side of that. Thank you.

Thanks very much, Rene. So just on the Chrome side for the half year, the revenue was about three billion. So full year annualized closer to six of current prices. That's about at the moment running at about seven to eight percent of the total revenue basket for the South African PGM operations. It's in that sort of ballpark, and that's about 1.3 million tonnes that we're seeing coming through there. So that is a significant portion of the total revenue basket.

Yeah, thank you. Next caller, please, from the lines.

Thank you. Next question comes from Guteke Matonze of Investec Bank. Please come ahead.

Good afternoon. Thank you for taking my call. My first question is on Stillwater and the restructuring, oil and sustaining costs of about $1,000 to $2,000. And I mean, I think Charles did say that at current prices, Thank you very much. So my question is, and I think Neil talked about, said you consider the full closure of this operation, and my question is why is the restructuring the most optimal solution versus a full closure when you consider the long-term headwind as far as a commodity like caladium is concerned? And then my second question on On the gold side of things, Benston you put it on cairn maintenance at these record prices. Why not closure or is the cairn maintenance the first stage before you actually go for a full closure of that operation? And then also still on gold, seismicity seems to have increased quite a bit. Is it fair to say as far as the cost structure of your gold operation is concerned, you've made a step change on the cost curve as far as positioning is concerned? I'm going to leave it there.

Okay, thanks Kuteko and I'll try and just lead into the Stillwater and Palladium question and then Charles come in afterwards. In terms of, you know, these are not just commercial decisions. We employ people and there's a balance in our decision making looking after social impacts as well. So it's not simple we close and we displace in this case 1500 or 1600 employees. That's not the sort of company we are. However, Let me say we're also very commercial and putting the operations on care and maintenance is actually a higher cost option. You have a continuous negative cash flow with no possibility of recovering those costs. Your point, Kuteka, in the longer term, current indications are that palladium will face headwinds. But if you look a little bit deeper into our market development strategy, there are lots of initiatives that are focused on the market development for palladium. But also, I would suggest that The reason we produce a 2E graph that shows what it shows is because of almost the ability to substitute platinum with palladium. We have a slightly different view of the market and the long term. I just want to make a point on Burnstone as well. Burnstone is not a project that, well, let me say the reasons for what we're doing with Burnstone is to preserve capital now. And it's a good project. And when we have spare capital, we will certainly develop it. And Rich, you might want to say more when you answer the gold question. But let me just see if Charles, if you want to add anything to the decision-making around Stillwater. And then we can hand over to Richard to deal with gold as well.

Yeah, Neil, not much to add to what you've said, which I think captures it all. But just to reinforce, we made lots of trade-off analyses and looked long and hard at the best outcomes. And I think the The takeaway should be that this is a world-class ore body. The geology is exceptional, but it's not easy. It's very fickle. It's not a linear reef pattern. It requires quite an adept mining approach. And over the last couple of years, we've been working hard to improve efficiencies around that. Now I think we're in the game of getting that right. And as we get that right and we bring that cost structure down and we bring the optimization up, you have a very levered option here and you still have choice. Care and maintenance might remain for a while. It allows you to bring it back. It allows you to later on say, you know, on balance, we have a long-term bearish outlook and therefore we make a choice. We don't have that outlook, by the way, and I think Neil's made that very clear, as has Richard. So you want to protect optionality here and you want to protect a world-class long-life asset that in anyone's portfolio is a tier one asset when optimized and when mined efficiently. So I think we have all of those choices on the plate and we have a game plan for getting it right through next year and then we have a game plan that gives us optionality beyond that. Choices can be made either way as market circumstances dictate. Thank you.

Thanks very much I think just maybe just to comment on Burnstone I think you know Neil said the crux of it it's a project we like very much it's a good project a lot of the capital has been spent and it's really now about the ramp up you know yes it's a high gold price environment now but clearly that is still a project that needs to ramp up and those those sort of profiles are obviously long-term decisions we make as opposed to you know where we think the gold price is going to be six to twelve months and it is about looking at the region as a whole so so we do look at the capital we've got you know what what can we can we turn off or slow down now that doesn't have a big impact on the rest of the business and turn back on again at the right time so it's a combination of factors but certainly Bernstein is not a project we would put into full closure given where it is and certainly the value of the project that we see we still see there so so that would be that reasoning just to add to Neil Neil's comments in terms of the gold costs I think important to recognize obviously the gold operations we've got are very operationally geared and what I mean by that is it is a high fixed cost base. These are assets that originally were expected to close more than five years ago and we've still got 10 years worth of reserves on it. but that means it needs to be carefully managed and there are two ways to manage that. The one is obviously volume and output and the other way is managing fixed costs which is a lot of the restructuring we've done predominantly through infrastructure and overheads. So where do we see this business based on where we've got it right now? I think our outlook for a steady state in terms of the big three operations, Kloof, Beatrix and Driefontein, so I'm excluding DRD, is probably somewhere in the region of about 550,000 to 600,000 ounces per annum. That's where we see the current steady state. And that would be off a cost base of between 1 and 1.1 million rand per kilogram at those sort of output levels. Today, Driefontein is operating there. Beatrix, we expect to see getting there towards the end of the current half. and then of course as I mentioned CLIRF we needed a bit of opening up to get that flexibility so if you translate that into a dollar per ounce number at those output levels it's in the region of about eighteen to nineteen hundred dollars pounds which is roughly the the cost structure we would see for these operations. Thanks.

We're getting short of time now so could we just take the last two calls on the line please. First caller.

Next caller comes from Lirui Munguni of HSBC. Please go ahead.

Hi, good afternoon, Neil and team. I'd like to ask about the fixed costs in your USPGM business. So you've got a business that was by design, sort of designed to cater for 750,000 ounces to year maybe. and a much bigger recycling business as well compared to what it's delivering at the moment. You're now cutting that to about 250 in terms of the mining side. How are you ensuring that you can take out the fixed costs so that it doesn't drown your unit costs at your reduced production rate?

Thanks Leroy and a very good question which We apply all the time when we go through a restructuring especially on the basis of reduced outputs. There's a very significant cost reduction based on taking out 800 employees. Some of those you may argue are variable because They are production people, but as Charles explained, simplifying the management structure to one GM across the entire operations effectively taking out a whole level addresses your question and certainly we can give you some more detail on that, but it has been addressed. Charles, do you want to add anything to that?

Yeah, I think, you know, putting Stillwater West on care and maintenance had a significant fixed cost component because of the aged infrastructure and the travel times and the shaft setup and everything else. So that is a big swing on getting a lower operating cost structure for the rest of the business. And then the Met obviously has a higher fixed cost component. But the MET also has flexibility. So we are currently running one furnace. We have two furnaces available. You can scale up or down and you have the backup furnace as needed. But that gives you a residual fixed cost structure that really needs this kind of operating profile. And that operating profile also protects your recycling profile. And we have some upside on that recycling volume as it currently sits at the Met. So you've got to get the mix right. And I think this plan that we're putting on the table today does that. Obviously, as you get volumes up at the right times, your unit costs drop and your cash flow opens up significantly. But I think we're moving now to a place where we've made some very hard decisions on the organizational structure Talent in the US is very expensive for good reason because we pay prevailing wages, we are well regulated, we have exceptional ESG environmental and other performance which is very costly. So we're running the business now on a scaled down basis that protects all of that but gives us optionality going forward. and I think the mix of the mining and the recycling and the grain recycling platform and the grain mix within the metals and the sourcing etc that's a very interesting business long term and that's the one we're protecting right now.

Thank you very much, and I'm afraid we've run out of time. We do have details of the people who have sent other questions in, so we'll make sure that we respond to you by email most likely. So we will try and deal with all outstanding questions. Neil, if I can hand over to you for a last word, please.

Thanks James and thank you everybody for attending and those that asked questions I hope we answered them in a way that was understandable. I think I want to say we've worked very hard. This has been a tough six months for us. We did commit to address our balance sheet which I think is the issue that has caused the most concern more recently and I dare say we've done a good job of doing that and there's more in the pipeline and I'm pretty confident we will close it out before the end of the year. In addition to that, what can go very badly wrong in a phase like this is the restructuring and the wheels coming off your operational engine room and of course that just depletes the balance sheet in a much quicker way. I'm again very pleased with the regions in delivering the results they've delivered. Clearly there are some areas of disappointment. We're well aware of that but I think if you look through those there are lots of good results and if you understand and see the cost savings that are going to come through with the restructuring You see a business that even in a low price environment is going to be essentially sustainable. So very, very pleasing achievements which I do believe will lead to the creation of value. In addition to that, I think we have a wonderful strategy. We're in the right metals at the right time. and certainly in the ecosystems that we participate in we are well supported so this company is actually very well positioned and I think we can look forward to a re-rating now from the bottom so thank you again all for your time and we look forward to sharing our year-end results with you early next year thank you very much