Sibanye Gold CEO Neal Froneman
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – Gold miner Sibanye Gold on Tuesday reported record gold production of 424 700 oz (13 210 kg) for the three months ended September 30, up 10% year-on-year.
The company said the higher production, which resulted in an operating profit of R1.78-billion, was mainly owing to the solid performance of the company’s Kloof, Driefontein and Beatrix underground operations, in Gauteng and the Free State, as well as the inclusion of a full quarter’s production from the Cooke operations.
Gold production from Sibanye’s underground operations increased 9% to 391 400 oz (12 173 kg) for the three months under review, as production returned to planned levels following a series of safety-related stoppages in July.
Meanwhile, output from surface operations, at 33 300 oz (1 037 kg), was 10% higher year-on-year.
The company said the surface production was, however, significantly below what was planned.
“Since commissioning, the Python plant at Kloof has struggled to meet the required levels of throughput and was stopped in July. Metallurgical recoveries of surface rock dump material at Driefontein were lower than expected during the quarter and resulted in 93 kg less production than planned from the Driefontein surface plants,” Sibanye explained.
However, the gold miner noted that recoveries had been consistently improving in the fourth quarter, with the volume increase expected to result in further unit cost reductions at Cooke and, as gold production increased, a decline in total cash and AIC.
Meanwhile, as a result of the 2014 yearly wage increases that were implemented from July and the higher winter power tariff, the third quarter also saw significant cost increases.
These above inflation cost increases resulted in all-in sustaining costs (AISCs) increasing 6% quarter-on-quarter to $1 116/oz (R384 777/kg).
Sibanye maintained its full-year production guidance at 1.61-million ounces (50 000 kg), with total cash costs forecast at about $850/oz (R295 000/kg), while AISCs and AIC were expected to be $1 070/oz (R372 000/kg) and $1 095/oz (R380 000/kg) respectively.
“Sibanye is well on track to deliver on annual guidance. Although we had a solid quarter from the majority of our operations, we have seen our margins decrease to 11% during this quarter, as we have incurred both winter electricity price tariff and the 2014 annual wage increases.
“The management team will, as it has in the past, work out these above-inflation cost increases over time,” Sibanye CEO Neal Froneman commented, adding that the company’s operating profit for the period would continue to underpin its benchmark dividend policy.