All right. Good morning everybody and especially, I think, it should be noted good morning from Billings, Montana for some of us. And welcome to Sibanye Stillwater’s H1 2019 Operating and Financial Results. You may want to know that we have obviously just completed our Board meeting process in the U.S. and I am very pleased to say that it gives us also an opportunity to engage with all our U.S. stakeholders. So here in the U.S. you have Charl; Chris; and myself, plus some of our directors, our incoming Chairman, Dr. Vincent Maphai; and Rick Menell. In Johannesburg, we have the balance of the executive team, Robert; Shadwick; Richard; Dawid; and Themba. And we will conduct this morning’s proceedings first of all by going through the presentation and then opening up for questions, where we will involve the balance of the executive, Charl and I will do the majority of the presentation. Moving to page two, important to note, our Safe Harbor statement and there are forward-looking graphs in this presentation. So please take note of the forward -- the Safe Harbor statement. Moving to slide three, in terms of the agenda. We always start our meetings with the values and safety moment. I will cover that as part of the presentation. We will then look at Lonmin, our initial observations. If we do not have the South African PGM wage negotiations, I think, there will be lots of questions. So we have included some slides on that. And then we will get into the actual operating results for H1, going through the gold, the South African PGM operations and the U.S. PGM operations. At that point, I will hand over Charl, who will cover the financial results and then there will be some brief concluding remarks. If we can move to the next slide. And this really just sets the scene for the safety and the values moment and to me it’s an important slide. It is the way Sibanye-Stillwater conducts. It’s the way we think about things. And in terms of our tree, just a quick summary, our values are routes, the people of our organization or the trunk of the tree. They give us direction and strength. We are business. We have to be profitable. So safe, cost, volume and grade are important and then the tree flourishes and all stakeholders benefit and if we do this really well, the tree produces fruits. And our vision therefore is about [Technical Difficulty] And can I just confirm up until where did you hear me? All right.

Business trend, I think.

Yeah. So in terms of the thinking that we had in place since 2013, I think, we are well advanced and somewhat ahead of the pack. I think, clearly, we recognize that shareholders are also a very, very important stakeholder and I do believe that this approach will maximize value for shareholders more so than just being focused only on shareholders. Moving to slide number five. This is really about our safety value and that’s one of our -- the roots of our tree. The strategic framework was presented at the previous results in February. This is the framework that was developed based on the challenges we had in 2018 and it’s really, yeah, just to refresh your memories as to what we are doing regarding safety and it starts with values. It’s a commitment to our values trading engaged leadership. Then focusing on creating an enabling environment, empowering people and creating fit-for-purpose systems, and we are very focused on making sure that all the elements of this zero harm strategic framework is being implemented and it’s had very, very significant and impressive results, which I am going to get to on the next slide. So, if you can go to slide number six now and the heading is most appropriate, reestablishing and improving our leading safe production performance. We have had a very commendable recovery in group safety performance. I am very pleased to announce the South African gold operations have been fatality free now for a year, that’s 365 days, a significant industry milestone and a historical record for these operations. They have never gone this long fatality free. More impressive in fact is that 7 million fatality free shifts have been worked in the gold segment. Regrettably, we have had two fatalities during the first half of…

Thank you and good morning to everybody on the call. If we start with slide 28. The income statement for the six months end of 30 June, I’d like to start with revenue. Revenue decreased marginally from R23.9 billion in half one 2018 down to R23.5 billion in half one 2019. If we look at revenue from the U.S. PGM operations that increased by 52%. That was on the back of higher 2E basket prices. But also the significant increase that we saw in the recycling volumes that Neal discussed in the previous slides. This was offset by 28% decrease at our South African PGM operations and again this was due to the change in purchase of concentrate to the toll arrangement, which effectively means that on some of the metals we could not recognize revenue for between three months and five months. But happy to say that we are in the cycle now and that will now normalize over the remainder of the year. Revenue from our SA gold operations and if we exclude DRD decreased by 53% and that was due to the five-month strike, but the effects of the strike was about 3.5 months in this half of the year. I think all things considered. Considering the 28% decrease at the SA PGM operations and the 53% at the SA gold operations, I think, still a significant achievement in [inaudible] revenue. Moving on to cost of sales before our amort and depreciation. The U.S. PGM operations had an increase and again that was on the back of the recycling volumes. We saw a decrease at the SA PGM operations, due to the fact that we could not recognize the revenue, simply means that we dropped the cost associated with that revenue out to inventory as well. And…

Thanks, Charl. If we can go to slide 23 please, sorry, 33 please. And, I think, first off, we introduced this slide in our last reporting period and we have updated the slide for current commodity prices and slightly refined life of mine models and also the current performance of Lonmin. If you look at the slide what it shows you is, first of all, it’s a waterfall of the net asset value of our different businesses. First thing I always like to highlight is the importance of our U.S. business. You can see the -- a bit -- the importance of South African PGM, South African gold. You can see Lonmin a significant, obviously, Group debt needs to be deducted from the total net asset, well, from the net value to give you the net asset value for Sibanye-Stillwater. And if you divide the total Sibanye-Stillwater net asset value by the number of shares and issue, you get to a net asset value per share. On the very right-hand side is the current market cap at $21 per share, which you can see a significantly less than the net asset value per share of the company. And in fact if you look at the bottom bullet point, we are trading at a ratio of 0.6 times, which is a significant discount now. Now, as I have said last time, we know exactly why we are trading at this discount and we have been addressing the issues that are causing the discount and I do think you will see from this presentation that a number of them have been positively and successfully addressed. So my view is that over the next six months to probably 18 months, we can look forward to a very significant rerating and this discount will…

Thank you. Could we take some questions from the call, please?

First question is from Chris Nicholson from [inaudible]. Please go ahead.

Hi. Good afternoon. Good morning, guys, and thanks for the [inaudible]. I have three questions that relates to the South African PGM operations and potential for additional CapEx. The first one is maybe if you could just take us briefly through your philosophy around incremental reinvestment and specifically [inaudible] one maybe outside of Lonmin, prices are higher. So should we expect some incremental CapEx [inaudible] production profile there or with the priority still be de-gearing? The second question I have is just relating to the Competition Commission requirements [inaudible] I think it was Rowland MK2 and 4B at Lonmin. Are we not quite close to the price that would hit those projects that you have reinvested in and could I just understand whether that actually [inaudible] now that has to reinvest [inaudible] beyond close to those metal prices? And then the final question is, could I just ask why you haven’t yet given Anglo Platinum notice on the toll material to take that through the Lonmin operation. Does that have anything to do with the R1 billion smelter or [inaudible] required? Thank you.

Thanks, Chris. And I will ask -- I will ask Rob to comment on the incremental investment. Rich, if you could pick up on the Competition Commission commitments around Rowland and others. I will pick up on the Anglo Platinum aspects. So, perhaps, Rob you start first. Richard, if you could go second and then I will deal with the Anglo Platinum notice.

Okay. Thank you. So far as the incremental investment is concern, we are reevaluating the surface potential both at Rustenburg and at the Marikana operations. Some of those generation one shaft are actually quite close to been able to contribute positively. So as part of the review we are going through now, we are reevaluating those older shaft at Marikana as well. You asked also the question about K4 and 4Belt [ph] if I am not mistaken. The priority at the moment at the Marikana operations are to get them cash flow positive. So at this stage we are not really looking K4 project, but when we finished reviewing the existing operations, we will start focus on reviewing those projects as well. And 4B is very definitely part of the re-planning exercise we are going through at the moment.

Thanks, Chris. With regards to your question around the com com, I think, two things. Firstly, importantly, just to place in context what the principle of that condition was and the principal around that condition was really around us looking at opportunities, where we could grow the business and therefore offset any restructuring or job losses that came inherently where existing shafts were coming to an end of their useful lives due to reserves having run out. And the way the condition is specifically structured is that we will consider looking at projects and you did mention some of them 4B and MK2 Rowland are some of those projects. We committed to looking at those and it’s not just the price trigger point, it is really around the -- profitability trigger point, so margin, that needs to be created. So there’s both price and costs. In the event that the projects do make economic sense and are viable under conditions at the time and that is also quite well defined in the conditions, then we have committed to looking at going ahead with those. So, yes, you are quite right, prices have moved substantially. At the same time though costs on the other side of that equation and total margin is what this is really based on, as part of the work that we are doing right now, with assessing the operations that work will be conducted and we will look at it in light of that in terms of the conditions we have got.

Yeah. Thanks, guys.

Thank you very much.

The next question is from Adrian Hammond of Standard Bank. Please go ahead.

Hello, James, Neal. Few questions for you and members of the team. Just firstly on Lonmin and Rustenburg wage talks, what’s the status of that please and do you have any strike plans in place and how long do you think the balance sheet could withstand the strike at Lonmin? And then you obviously quite well aware that AngloGold is selling Mponeng. Is that something you would be interested in and what’s your general view on exposing yourself more to South African gold? And just for Charl, just perhaps you could give us some color on your strategy around what you intend doing with free cash flow. And do you have a sort of target gross debt in mind or are you channeling it through dividends. And then just on the -- just to understand my understanding around the mechanics of the Wheaton deal and could you tell us what Stillwater would have generated in EBITDA ex Wheaton deal. And then on the convertible bond, what’s the price at which that converts in a potential dilution and when does that option become available? And then for, Rob, the costs at Rustenburg quarter-on-quarter increased quite materially up 16% in rand per ton terms, despite, I mean, producing more tons. So, perhaps, a little color on that, please? Thanks.

Okay. Thanks, Adrian. Let me just also just finish off first with Chris’ question. I think and that’s partially an answer to some of Adrian’s questions. The -- on the incremental investments, I think, Chris, it should be noted that our primary focus is deleveraging. So as in addition to what Rob said, I think, that we will be mindful and quite focused on first getting our debt -- our gross debt down as well. But obviously, we are not going to stop the operations of capital either, but certainly before we start spending money on projects, we will make sure that we are appropriately leveraged. On the Anglo Platinum question in terms of giving notice regarding treatment. I think, right now we would like to retain flexibility. We remain very concerned about the electricity supply situation in South Africa and strategically we in no rush to provide that notice to Anglo Platinum. I think we got a lot on our plate and we will deal with that in due course. In terms of Adrian’s questions, let me just suggest the following. Rob, in terms of Rustenburg wage talks, there has been four or five meetings at both the Rustenburg and Lonmin or at Marikana. We are clearly far apart and I suppose we are now looking at ways of resolving the dispute. As always, we will have very good and comprehensive strike plans. I just want to say though that our strategy regarding a strike, especially now knowing that a secret ballot is law will be to convince our employees based on what we did in the gold strike that a strike will not result in a change in their demands or in as capitulating to those demands. And we will work very hard to convince our employees not to strike, but to continue engaging until we find each other. We can sustain a strike for a very long time, especially with half our revenue coming from the U.S. However, I think that is a very unlikely scenario. In terms of AngloGold, let’s just say, we have said we open minded to the opportunity. We are under NDA and it’s very difficult to say much more than that. We are not panting off to more deep level gold mines, but there are significant synergies and opportunities between Driefontein and Mponeng. Would we -- if Anglo was not running a process, would we be talking to them about the opportunity, the answer is, no, we have got other things that are more important. I will ask Charl to referring to -- Rob, I would suggest that that’s the difference between the PoC and the toll arrangement. But please, can you may be, first of all, just expand on that.

Okay. Good afternoon, Adrian. You will see that the costs at Rustenburg have increased in percentages similar to those that you have just spotted, yet those at our Kroondal operations are flat. And the reason why we have seen more of a increase at Rustenburg is there is two costs in particular, which are increasing the right significantly more than inflation and the one is the cost of electricity, which is substantial in Rustenburg compared to our trackless operations. And in the cost of people as well, the cost of our employees also a lot more in percentage terms at our conventional operations compared to our trackless operations at Kroondal. But having said that, in addition to those two cost drivers, the biggest influence has been the move from the purchase of concentrate agreement with Anglo Platinum to toll processing or toll treatment of the Rustenburg material.

Thanks, Rob. Charl, can you…

… pick up the other questions.

So, Adrian, yes, in terms of targeting gross debt and we are targeting a number in the order of about R15 billion and you may ask how did we get to this number. It’s simply just a back help from our covenants, which means that our EBITDA can go as low as R6 billion and we would still be comfortable within our covenants. And that is a number that we will be targeting in the short-term. But as I said, that is simply, because we are in a cyclical environment, that is a number that we will be targeting. I think this is also a two-pronged answer. We have said that if our net debt to EBITDA starts going below 1.5 times and we would then open up the discussion with our Board to start the resumption of cash dividends. So in short, we still will have a two-pronged approach. The one will be to bring the debt -- the overall debt down. But in -- once we are comfortable with the covenants, we would definitely be considering the resumption of cash dividends. In so far as the Wheaton transaction is concerned, if you go to Note 14 in our results. You will see that for this period, we recognized R213 million of deferred revenue. So that would have flown straight to the bottomline on the Stillwater to EBITDA. So the EBITDA would have been roughly about R200 million more for this half year. Your question on the convert, I don’t have the numbers, the exact numbers in front of me. But when we issued the convert, the reference price was about R16 a share. So at the end of the period if the share price is at R22, remember there was a 35% premium on it, then it will convert. But we also have a soft call option where if the share price trades at R27 we can force conversion. So that is where we all with the convert and I hope that answers your question.

Yeah. Thanks.

Thank you. The next question is from Patrick Mann of Bank of America Merrill Lynch.

Hi. Good afternoon. Thanks very much for the call. I just had one question that hasn’t been asked. The poor ground conditions at Blitz and the additional anchors and shotcreting that’s slowed down development and increased the unit costs. I mean, is this a permanent change to the plan and should we expect that steady state costs are likely to be higher than previously guided or is this specific to a patch of bad ground? Thanks.

Patrick, I will ask Chris to comment, but let me just give you my inputs. So we have just spent some time at Stillwater, with the Board meeting process. I think it’s an -- well, let me say, it’s going to be an ongoing issue in that we are going to use additional support, but the productivity issues are really related getting used to that, and therefore, we will -- it’s not going to be a constant negative on the results other than a little bit of increasing costs. The actual cost increase, were really just because of a slightly reduced ounce profile for this year and an increased royalties, that wasn’t really related to the Blitz. But Chris, you can expand on that?

Yeah. Patrick, if you look at the strike length that we are opening up with Blitz, it’s similar to the Stillwater West facilities, and we have multiple different areas at Stillwater West, all with different mining conditions. So the fact that we have got difficult ground conditions in the blocks that we are currently focused on, we can’t extrapolate that out for the rest of the mine. In fact, the latest drilling that we are doing for resource definition of the 56 level, we are encountering significantly less water, while then we have in the existing stoping blocks. To Neil’s points in terms of productivity, there is a couple of things that we are doing with equipment on order to help us further mechanize the cable boat bolting in the application at the shotcrete. Our current practices as we don’t have to do it significantly in the mine on as productive as they can be. So as we get later into the third quarter, fourth quarter, we would expect productivities to pick up. But this can’t be extrapolated to the whole of Blitz, and as you know, Blitz isn’t completely drilled out, so we will evaluate conditions as we go.

Chris, it might just be worth -- just reinforcing the cost guidance and the impact of the $100 in revenues.

Yeah. I mean, one thing to note, we have both revenue and some severance taxes and property taxes that flow through our all-in sustaining cost, the severance tax is a state tax. And for every $100 change in price, we have got about a $7 change in the all-in sustaining costs and as you can see from our realized price, it’s significantly up from Q2 last year, as well as Q1 last year. So that is part of the cost increase that we are seeing within our AISC guidance.

Okay. Thanks very much.

Thank you very much.

Thank you. The next question is from Arnold Van Graan from Nedbank CIB. Please go ahead.

Yes. Good afternoon. I have got a quick question on the Stillwater. So it basically relates to East Boulder, you mentioned that you plan to make up the lost production during the rest of the year, that’s normally very hard to achieve. So my question is how confident are you that you will be able to actually make up that lost production. And then my second question relates to Lonmin. You said, you basically found the asset exactly as you expected or it is as you expected. But isn’t there a risk. It’s actually in a worse state than you thought given the delay in the transaction. In other words and I am specifically referring to lack of stay in business capital, lack of flexibility in orders. So maybe you can just comment on that. Thank you.

You may just start.

Starting with East Boulder, East Boulder, we have been achieving our tons at East Boulder, but we have not been achieving the grade and we have two distinct mining methods there. On the sill mining, we tend to get a lower grade and we have been getting more tons out the sills than the panel. The panel we achieve a higher grade as we reported in quarter one we got into some sequencing issues on the panels, which meant that we didn’t have the panel availability in order to maximize grade. We are now back up above target panel availability and certainly the last three weeks, four weeks of productivities done make a year. We were above our targeted productivities in order to achieve our year-end guidance on the East Boulder. So, with the panel availabilities we have had in the -- and the focus that we have had on those panels with confidence that we can pull back to the guidance in the second half of the East Boulder. We will know on the Stillwater west side it is over delivering against plan given the recovery plans that we put in the second quarter. So we have had real solid performance in Q2 out of the west side of the mine. At Stillwater, we have had -- we are back in the place we want to be on the East Boulder side and it really is the performance of the Blitz with the more challenging ground conditions. And you will note from the results, we have actually had record performance on the smelter in terms of throughput of ounces. So very successful there.

Yeah. Arnold, I can reinforce what Chris says, East Boulder, I am very confident we will achieve its full year plan by the end of the year. So it’s flowing back nicely. And Rob, would you pick up the Lonmin question?

Okay. Afternoon Arnold. We are very happy with what we have found at Lonmin with regards the condition of infrastructure, both on surface and underground. Even though capital has been saved over the last couple of quarters they have maintaining the infrastructure in very good and enabling condition. Sadly, though, they haven’t developed the ore body, the way they should have developed the ore body. So there is a lack in -- a lack of stoping flexibility on the generation two shaft and this is something that we will be addressing in our operational plans over the next year or two. What I have seen so far indicates that we will very definitely be able to maintain the current production levels going forward at those generation two shafts. And the biggest impact we are going to be making over the near-term is reducing the costs and increasing the efficiency of those operations.

Okay. Thank you very much.

And Arnold, if I can just add on, I think, with good leadership, the morale will improve by being transparent and having the, let’s say, the operational muscle to make the changes that are required, morale will improve significantly. So none of this is a challenge that we haven’t dealt with before or that concerns us. There are significant challenges, but we really believe we have the ability to make the changes and the differences that are required.

Thanks.

Thank you. The next question is from Leroy Mnguni of HSBC. Please go ahead.

Good afternoon, guys. My first question is on the cancellation of your toll treatment arrangements with Anglo Plats. I understand that you are saying you considering your options and you just want to bid on the operations, is one of the things that you are considering perhaps providing your spare capacity at Lonmin to some of the projects that are being developed in the country and just keeping your mental locked up with Anglo Plats for a longer period of time? And then my second question is just on slide 12, where you show, that cash burn at Lonmin in the June quarter, it’s quite a big number. Is there any, sort of one source in there or something that stands out that would have driven that cash burn?

All right. You are right. The cash burn I would refer to either Robert or Charl, and the -- just coming back to the cancellation of the Anglo contract. Yeah, I think, in addition to the comments I made around, wanting to focus on the things that we need to do now and having less exposure to electricity disruptions. There are strategic benefits of keeping additional capacity available. That’s not a primary driver, but certainly, something that is being considered. I do think that overall for the industry, a rationalization of processing capacity could be beneficial to the entire industry in terms of getting costs down. So there are some discussions happening in that area. Rob or Charl, who’s going to pick up on the -- okay, Charl, will pick it up?

So, Leroy, if you look at the slide and you look specifically at those green blocks. Those are the special costs or the one-off costs that we refer to and those include some additional rehabilitation provision. There were some refinancing success fees that Lonmin incurred, as well as transaction costs, obviously, they had to pay their advisors on their side and there are some further restructuring costs and some retention fees that was associated with management to keep them up until the end of the closing of the transaction. So those are the significant one-off costs that we have picked up. There’s also a thin red line there, which is the Lonmin office costs and which is we can confirm that all of that cost is --has now exited the system and the Lonmin offices are effectively closed now.

That’s slide 11.

That is slide 11, yes.

Thank you.

Thank you. The next question is from Brian Nunes of Gramercy.

Hi, gentlemen. Thanks for the call. I will keep it brief. Just one question on the -- what is the hedging strategy in place at -- in the gold operations, I see there is some hedges, they are not too material. But given where prices are right now and looking at how you value your business on the NPV, looking at the spot basis, on the prices you used. Just wanted to understand what your strategy for hedging going forward is and how that dovetails with your outlook for pricing?

So in terms of hedging, you are right, we have got some hedges in place at our gold operations. And it’s roughly about 30% of 2019 production. And the strategy behind the hedges, you remember that probably in the earlier part of the year with the gold price sitting at around R550,000 a kilo and us being in a strike period, we considered entering into some zero cost collars, just to predict the downside associated with the gold business. But we are happy with where commodity prices are now. We believe that we should retain the flexibility and the upside to the commodity prices. So at this point in time, we will not enter into any further hedges. So just to reaffirm that the strategy behind putting the 30% in place initially was to secure some of the profitability of some of our higher cost operations.

Okay. Thank you very much.

Just to add on to that, Brian. We see hedging as a risk management tool rather than speculating with that. And so we -- that’s not really our functions. So we would prefer to be less hedged than more hedged, just as a overall Group perspective.

Thank you very much. The next question is from James Bell of RBC Capital Markets. Please go ahead.

Yeah. Good afternoon and thanks for the call. Most of my questions have been covered. But I guess I just go one on strategy for you, Neal. I mean you talk on the one hand about addressing your South African discount. But clearly you have just increased your South African exposure with Lonmin, your -- in the room on the AngloGold assets. So I guess, I am just wondering if you can talk a little bit more about -- if you think this is actually a realistic strategic goal given your large footprint there and potential growth even in the future.

Yeah. Certainly, James. So, I think, it was a very conscious decision to move into PGMs and 80% to the world’s PGMs occur in South Africa. So the net result is to be a large player you have to be in South Africa. We understand the South African operating environment well and I do think especially taking long term views, we are comfortable in operating smoothly in South Africa. However, there’s not a lot less left for us to do in South Africa and we have signaled our intentions to complement our PGM business by growing in the battery metal space, if I can call it that. That clearly is not going to happen in South Africa, or its unlikely to happen in South Africa. And I do think while growing a portfolio that is significantly bigger eventually than South Africa. South Africa will become a much smaller part of our overall business. And that’s going to require considerations as to where we listed, where those resource targets are. And of course, I think, fundamentally working with the government and the regulators in South Africa to improve, let’s say, the environment in which business operates will also go a long way to reducing the South African discount. So, it’s a two-pronged approach. It’s trying to make a difference in South Africa. But it’s also about becoming a true international company that competes on the global stage at the right time, as long as it’s value accretive and that will be how we eventually address our South African discount. So it’s not contradictory at all but it’s much more of a process to get there.

Okay. That makes sense. And then maybe one on the U.S. PGM recycling. Yeah, sorry, and -- yeah, no, just on the U.S. PGM recycling, in terms of the market there, can you give us some, maybe an update on how that looks and in terms of the kind of run rate you are seeing for EBITDA with the expanded furnace. Do you feel like, is that a one-off the drawdown or do you feel like you are actually going to be pulling higher profitability on a go-forward basis?

The market we are seeing is very strong. I think the industry as a whole continues to be challenged by the diesel catalysts, so there are high carbon catalysts that we -- we have talked about. Previously we have restructured all of our contracts now to ensure that we can manage that exposure. So we continue to see strong volumes through that. There is a small one-off part of the earnings in that, when we re-brick the furnaces, we reprocess the bricks, and therefore we unlock every furnace, rebuild a portion of revenues from recovering ounces in the brick and we allocate the ounces between mined ounces and recycled ounces based on the gold price and that has had an impact in the first half of this year.

Okay. That makes sense. Thank you.

Thank you. The next question is from Felix Njini of Bloomberg. Please go ahead.

Yeah. Hi, Neal and team. Thanks for the call. Could you just clarify, so why is the platinum wage talks are concerned with -- you, Sibanye has raised its offer and how do you see this dispute being resolved. Could you also give us more color on the restructuring at Lonmin that you mentioned earlier? Does this mean going back to the initial plan to close the mines and cut -- cutting more than 15,000 jobs? And finally, could you just clarify on Mponeng, did you say you are under non-disclosure agreement? Thank you.

Yeah. So, Felix, ask Robert just to talk about platinum wage negotiations and what color he can add, remembering that to some extent that’s a confidential process. And in terms of Lonmin, it was never 30,000 people that were in. Well, 30,000 people at risk, if we do not address the issues that I have highlighted in this call. But again I will allow Robert to indicate that, I don’t think that we can quote a number yet other than the needs to be restructuring. But I will leave that to Robert. In Mponeng, yes we are under confidentiality because we are part of that process. So we wouldn’t like to, well, we are not able to comment on that at this stage. So, Rob, will you pick up the other two?

Yeah. Well, I will, I didn’t hear the question clearly. What must be clarified regarding the wage negotiations, if you can repeat that for me, please?

Yeah. Rob, it is -- basically, that Neal earlier on said, he is looking towards, resolving that just disputes. So I want to find out, does that include raising the initial wage off alert that when you made, that was announced by AMCU a couple of weeks back.

Okay. Felix, again, sorry, the line the side isn’t as clear is what I would like it to be. So let me just talk briefly around that at the moment. We are running two separate processes. We are running one process at the Rustenburg operations and another process at the Kroondal operations. We have put a higher offer on the table. Sorry, in order to Kroondal operations, I apologize, at the Marikana operations. In Rustenburg, we have put more on the table compared to what we have put on the table at Marikana. Having said that, we do believe where we are at this stage and forgive me I can’t elaborate as to where we are, but we are, at this stage is fair and reasonable, especially given the financial position Lonmin finds itself in, our Marikana operations find itself in. I think we are actually getting close to where we can go. It might be a little bit left for negotiation and we are still around the table talking to all the unions in this regard. But we are two months into the process now, and I think, we all getting to what we will consider -- close to what we would consider fair and reasonable. I hope that answers your question.

Thanks, Rob.

And so far as how many people will possibly be affected with a restructuring at the Marikana operations are concerned. We are busy reviewing all of those operations at the moment. What I can highlight at the moment is that the older shaft, the generation one shaft, they are not all contributing positively to the bottom line at Marikana. So we are very definitely going to look at the viability of those operations and whether they continue or not. To the extent to which I am not certain at this stage, we will complete that exercise within the next month or so and then we can give better guidance and so forth that is concerned.

Thank you, sir. Ladies and gentlemen, we need to take some questions from the webcast.

Thank you, Operator. And a lot of the questions that are on the screen that we have got from the people listening on the webcast. I think we have dealt with. So I will selectively choose some that we haven’t heard before. If anyone does have any specific that they want to follow-up on, please feel free to call us and we will respond immediately. Just in terms of -- Hi, Neal and team, well done on safety performance in gold business. This is Lebohang from Hogan. Keep it up. Can you please guide on what we think about Lonmin in the second half until the review is done in terms of unit costs and production and then can we give more color on the ground challenges at Blitz. I think we have covered the Blitz situation quite well. Rob, I don’t know if you have got any comment on the rest of the year from Lonmin. Just to give the some sort of guidance.

Yeah. Good afternoon, Lebohang. The rest of the year Lonmin operations are still going to be challenging. Having said that, the spot price for -- or the basket price for 4E PGMs at the moment is in excess of R20,000 per 40 ounce. That is significantly more than what we have been receiving at all of our operations to-date. So, I am very confident that we will probably maintain the current production level. But in so far as EBITDA is concerned, you are going to see a very significant improvement at Lonmin for the remainder of the year.

Thanks, Rob. And then the next question is from Philippe Vez Gonzalez [ph]. He wanted to know, Neal from you with, what you thought of the South African political situation currently, any concerns or do you remain optimistic. And then second question about plans into EV metal sector especially in Nickel and Lithium?

Yeah. So I’d ask Richard just maybe to comment on the work we are doing around battery metals and the process we are going to go through. In terms of the South African political situation, it’s a very tough environment at the moment. We have a good President. We have an ethical President. He’s been attacked from all sides. As business, we remained constructive but very concerned. Some of the issues that need urgent attention are not being addressed as quickly as they should. And certainly, if we don’t increase our response as a country, we are going to be in serious trouble. Having said that, we remain constructive and we understand what our role is as business. Rich, will you picked up on the EV process that we going through?

Yeah. Thanks, Neil. I think -- in terms of the EV process, as Neal mentioned earlier, those strategy was really driven by looking at an opportunity to complement our existing PGM business, I think, where we find ourselves at the moment is fairly comfortable with understanding were certain markets are going in particular the automobile market. I think the areas that we are looking to understand a little bit better is where necessarily battery technology is going. What the metals are that are going to be provided into that new technology and ultimately what the supply and demand fundamentals are. So we certainly think it’s an exciting area to get into. But I think what we are doing through a very systematic process is making sure we understand those markets. We understand which metals we want to target and understand where value can be derived and once we have been through that, we will then make a decision as to how we may or may not enter this market. I don’t think this is about trying to get onto the recent rush that was the lithium way or the cobalt way that’s happened over the last couple of years. This is certainly a very systematic approach to ensuring that this is a market we want to enter and we can see the value for it. But certainly at the moment strategically, it does look that way. James. I have done that James.

Okay. Apologies. The next question is from Nkateko with Investec. Excluding low production at Stillwater, what is the operating cost increase year-on-year? I think the question is more related to mining inflation. I guess part of that operating cost would have also been related to the increased palladium prices. Chris, which I think you have discussed, but maybe a comment on mining inflation in the US?

Yeah. Look, labor inflation, we settled union contracts in the 2% to 3% range and that continues be where we are on labor inflation and labor is about 60 -- 55% to 60% of the costs. We do see some other areas where we are under cost pressures. I mean if you look at our grand support that’s essentially driven by steel prices and we have seen increases this year, year-on-year in the high-single digits and that’s probably to do with some of the tariffs that have been put on. That’s not a huge portion of our costs. Electricity, another big input costs, again, we are not seeing huge cost increases there. So we have a few pockets of specific cost inflation, but nothing too alarming. I’d say, the only other thing that does drive the cost profile is this transition to growth in order to bring new people in and train them up, they are not productive from day one, so you have a training period where you have brought resources in and you have got to get them to be productive. And if you think on the Stillwater side, we are almost doubling output. Well, it will be more efficient in the way we have set it up, particularly on the support side and the haulage side there still is a transition as we ramp up there.

Okay. Thank you. Again from Nkateko, relating to recycling volumes. Question is whether the current stronger palladium price is driving increased volumes in recycling?

We don’t see a strong correlation between Platinum or Palladium prices and recycling volumes. What does drive recycling volumes more so is scrap steel prices. What happens is this, the catalytic converter is taken off the vehicle as soon as it goes into the scrap yard and tons of low steel prices those old vehicles don’t even get taken to the scrap yard. If they do get to the scrap yard, whether it’s a low palladium price or a high palladium price, the cat is taken off the vehicle and tends to be monetized almost the major lane. At sometimes we see short-term holding, if people think the prices have dipped, but that tends to be over a one month, two months, maximum three months period but not over a longer term period. So I’d say that the palladium price isn’t driving the scrappage of vehicles.

Thank you. And then the last question from Nkateko is a question on the life of mine benefits for the SA PGM operations following the acquisition of Lonmin. Does it add any life to the operations?

Who wants to pick that up?

Lonmin, the life of mine operations. So, I think, generally speaking, looking at Rustenburg and Kroondal as an example. Rustenburg is long life at fairly steady rates. If there is any benefit on that side of largely be from the synergies again that get realized and therefore drop in costs making certain other resources or reserves profitable. But fundamentally, I don’t think it has a material impact -- Lonmin wouldn’t have a material impact on the Rustenburg reserves as they stand right now. I think what Lonmin does introduce to the company as a whole or a couple of very exciting growth projects, which certainly under the right economic conditions. It’s something we would look at. So good example would be K4, which arguably is one of the best-developed high grade Merensky projects that still remains within the Bushveld. So it certainly gives us a growth portfolio that is not currently in our life of mine plans but under the correct conditions could certainly a feature.

Thanks, Richard. And then from Rene Hochreiter from NOAH. And I guess this is opposite to what we have been hearing before, as Neal, do you have an inclination to split the gold division from the PGM division at this stage or in the future. And do you think this might improve the rating of either one or the other in terms of reducing that you say discount that you mentioned?

Yeah. Rene, certainly, we continuously look at strategic, let’s call it, opportunities to improve value for shareholders all the time. Splitting the gold and the platinum business is certainly something that can do that. However, I would argue that under current gold process, the gold division can add a lot of value to the portfolio. I think in terms of our assessment of why our share has underperformed. We -- I outline that in the presentation and they are much more fundamental things, such as the operational disruptions due to safety, the gold strike, the high leverage. Once we have addressed all of that, there might be opportunities, or let say, marginal increases in value that you can get from strategies like that. But there is no doubt that the combination of gold and PGM’s and the cost base that we are able to have in place due to large shared services across both gold and platinum is very beneficial for the group. So it’s got its pros and cons and we will keep an open mind going forward. We will have to see how that unfolds.

Thanks. That’s it from the webcast. Do we have any calls on the conference line?

We have one more question on the call from Ian Wilson of [inaudible]. Please go ahead.

Hi. And I think this is Yanka [ph]. I basically wanted to ask about the platinum wage negotiations. So you mentioned that 80% of the workforce represents about AMCU. I was wondering if there is any concerns that this would make negotiations possibly more difficult considering how the gold negotiations were sort of push through with the majority of being from the other unions.

Yanka, yeah, it’s Neal here. I think the more -- well, let me put it you this way, in gold, we had a 50-50 split between NUM and AMCU. That is a very difficult situation to manage, because half of your workforce wants to work and we need -- we as a company therefore incur those costs and therefore to offset those costs, we have to try under very difficult circumstances regroup people into teams, under intimidation try and be productive. In the case where you have such a large portion of your workforce aligned with one union is actually very beneficial. It’s much easier to manage that situation. In that most of your employees, should they be -- should they decide to go on strike will be in dispute with the company, will not be at work, and therefore, you can shut down operations, avoid confrontation and minimize costs. So actually the platinum situation, the South African PGM situation is actually an easier and a more beneficial situation from a strike point of view. Obviously, we will work very hard to avoid the strike. But if there is, I would suggest that it’s a better situation than what we had in gold.

Okay. Thank you.

Okay. Thank you. And I think that’s it from the calls, there’s just one more question from the webcast from Barry Davidson [ph]. Neal are you satisfied that the PGM industry is committing sufficient resource to the marketing of its products. That is enhancing the performance of existing applications and the commercial and scientific research into the development of new applications. After all it starts and ends in the marketplace?

Very good to hear from you and I check the shareholder register all the time to make sure, you haven’t sold your shares, so that’s nice and I am pleased that you are probably enjoying some profits. Richard, can also comment, but in fact, Richard, used your comment that you have just made now that it all begins and ends in the marketplace at the Board meeting here in Montana. And essentially, we think that the marketing in the industry can be done much better, the market development as a large or the largest PGM producer now. We are constructively engaging and influencing, what we believe is a much better direction for the industry. But it is, enough being done, I don’t think that enough can be done. But Rich, do you want to add on to that?

Thanks, Neal. Good afternoon, Barry. I think Neal said correct and I agree with his statement. I don’t think enough can be done. I think PGMs are clearly a demand that is often created. There is a portion that sells itself in the market but the rest needs to be created and therefore it is an investment that’s strongly required. I think the critical questions are where that investment should be going, given where the current marketplaces are, where the current demand is and what the overall basket is doing. So, I think, generally speaking, that’s a little bit dangerous to look at the market development with respect to one metal only and ignoring the rest of the -- ignoring rest of the basket. And then most critically, I think, it’s important to ensure that where that market development is spent, but spent efficiently and we ensure we get this bang for our buck for wherever invested. And I think that is -- that’s certainly the approach we are taking. Looking at both industry-wide market development, as well as certain initiatives we are undertaking ourselves. So I fully agree with your commentary and more about execution and whether it’s needed or not.

Thanks, Richard. And I think it’s been two hours since we started the presentation. So I think we will stop the questions for now. I will hand over to Neal just to conclude.

Yeah. Thanks. Thanks, James. And it really was a pleasure to present from Billings, Montana and the quality of the questions we got were really good. I am very excited about where we find ourselves as a company. We acknowledge the challenges that are in front of us. But as I have said, we are really on the cusp of a re-rating with our changing circumstances. So thank you to all of you that took time to join us on the webcast and the conference call and please have a safe day going forward. Thank you.