Good morning, ladies and gentlemen and awesome occasion to meet, especially just after listing as Sibanye-Stillwater. We have a very long and detailed presentation. I'm not going to go through the detail on every slide, but I would suggest that in your own time, you look at the information. It's good quality. But I'm also happy that we come back to any particular slide at question time if that is what you'd like to do. The structure of the presentation this morning is, there's a highlight section. I'm then getting to look at roughly where we've come from, a bit of ESG in that. And then we'll get on to some of the results. Charl will then present the financials and I will conclude post that. As with any good mining presentation, there are forward-looking statements. So please note the safe harbor statement. Highlights for 2019 and I think we should work through these quite carefully and in detail. First and foremost, safety performance increased dramatically from 2018. And that wasn't just by more effort. Of course, a lot of effort went into it, but a lot of fairly radical thinking and a new strategic framework helped us achieve the results. But since August 2018, our ultra-deep level gold mines have been fatality free. That's never ever been achieved in the South African gold mining industry. So that's 10 million fatality-free shifts. In terms of transformation, it continues. And we have restructured our gold operations. I'll talk a little bit more about that. There's been a very significant reduction in the footprint and the assets that we now run. We did complete the Lonmin transaction, and I want to say with very fair Competition Commission conditions. I think I want to actually say to them well done. I think it…

Thanks Neal and good morning ladies and gentlemen, and forgive me if I sound a bit like most ceremonies upfront, but I think two groupings that I really want to thank this morning. Obviously, last time this year, I was a lot pile, my knees were sore. I was praying for recovery in prices and pleading with our lenders to allow us some covenant relief, but happy to say today that after intensive drilling by the risk committees, they supported us and they stood by, and a big thanks, and there are some of them in the room this morning. So thank you to the lenders. I think secondly to my accounting team, and obviously our new auditors. The results we are seeing this morning is simplified, but it's up to 80 subsidiaries that needs to be consolidated, and Lonmin alone accounts for 40 of those. So you can see it's a big task. And how they managed to burn the candle on both ends, and then ultimately deliver the product today, I think a big thank you to both of them. This is my excited face. So really excited this morning about the results. So if we then move into the financial results. Let's start with revenue. Revenue for the period increased by 44%. That was on the back of a 69% increase at our US PGM operations or ZAR11 billion. That was driven by 37% higher average 2E basket price and 9% weaker exchange rate and a significant increase in recycling volumes. SA PGMs increased by 82% or just under ZAR12.5b. And I think what's even more significant, and you will remember that in the first quarter of this year, we barely recognized any revenue for our SA PGM assets following the change from a purchase of concentrate…

Thanks Charl. All right. As I indicated earlier on, we would get to talking more about strategy. And again, nothing really new. Our strategic focus areas are shown. They all go through them now. But what we are focused on as a company is to strengthen our position as a leading precious -- or international precious metals mining company by doing the following things, and probably in order of priority, let's start at the top, building a values-based culture. A lot of that you saw in the safety slide. Those of you that follow business thinking, strategy is clearly important, but culture eats strategy for breakfast. So it's critical to develop the right cultures in a company. So we will be enhancing what I think we already have, is a good culture, but to something that is outstanding. Our core business is operational excellence. So, focus on safe production is a critical focus area and that is really important in terms of delivering the earnings that you've just seen. Deleveraging our balance sheet is a fundamental priority. But I would almost say that it's done other than bringing down the gross debt, which will just take some time. Addressing our South African discount. And I was asked this question last time. There is two components to this. The one is actually trying to influence a better outcome for business in South Africa, trying to deal with these negative issues that international investors have of our business in South Africa. That's the one aspect, and of course the second aspect is at the right time considering appropriate listings for the company. But our primary focus right now is to grow our business and try and influence the outcomes in South Africa. And it's only once those things are really in order…

Hi, it's Patrick Mann from Bank of America. Well done on a good set of results. I wanted to ask why not resume or restart the dividend now? I mean as you say, prices are up another 40% year-to-date. On a pro forma basis, you're well below 1 times, and you could have paid a 25% to 35% payout ratio. So, is there any signaling there that you're cautious on these prices or what's the thinking behind not resuming dividends now?

Thanks, Patrick. And a good question, and it's something we deliberated at our Board meeting as well. Look, I think, in essence, our priority remains deleveraging and we would like to see our net debt position lower before we resume dividends. That's really the answer. If the surge in commodity prices had happened a month or two earlier, we may have made a different decision. So no, it's not, it's not a concern that this is a bit of a bubble. It was we want to get our net debt down. And we had also given guidance at a high level that it would probably only be in August. So we didn't want to surprise our shareholders as well. So we wanted to be consist. I know it would have been a positive surprise, but still it's a surprise.

Thank you, Neal. It's Suvish. My question is around the statement which was released in the past week by DRD, they are moving to the PGMs now. Now, I would be interested, if what has been the influence of the transactions and your price value, in terms of acquiring more from DRD.

Well, maybe I must DRD to answer that one. Do you mind if ask, I mean, yes, I think we've influenced a bit. But, Niel.

Thanks, Neal. I think the -- you made a point earlier that forward-looking strategy is to develop opportunities. And for us to be in the Sibanye slipstream, which is a big slipstream, is a very good place to be. Already we've been given the opportunity to develop these wasteland assets, and to not express the desire and position ourselves to also see if we can get involved in Sibanye's is very significant platinum tailings. If we don't do it, they might pick somebody else and that could be a bad day for us.

Thank you.

Arnold?

It's Arnold Van Graan from Nedbank. Question for Charl. So how much additional working capital have you tied up in the recycling business over the past six months? And then, just another question on that, just confirm that you're still not taking any price risk on that material.

So in terms of working capital tied up, obviously we've effectively doubled that. But where are you on now. Okay, sorry. Just want to make sure I -- yeah, on the recycling, apologies, on the recycling. So we've effectively doubled that, and that's because of the price that's gone up. And we are still not taking price risk on it. So that is confirmed. Obviously, we bought in at a price, and then, we obviously sell it at a price, and we take the marginal of the top.

Leroy?

Good morning. This is Leroy Mnguni form HSBC. My question is around the sustainability of your dividend, once you resume. So you've guided the market on a number of potential areas, where you're interested in acquiring assets. Some of them, it seems that could be sizable acquisitions. What are the timing of those based on your expectations? And how will that impact the dividend? My second question is, given where commodity prices are right now and some of the forecast that you've showed us, would it be cheeky to expect special dividend above your policy when you do resume dividends? And then could you just maybe give us a bit of color on the recycling industry at the moment? The market expects that there will be an increase in supply from recycling. What are some of the headwinds that you're seeing that will prevent an acceleration in supply growth from recycling?

Okay. So, can I ask Richard to address the last question. I'll just address the -- your first few, Leroy. So, I think that both our shareholders and previous shareholders have made it very clear that we can't keep on stopping and starting dividends. We did it because we had to buy Stillwater and use debt and you can't be leveraged the way we were. I would -- and in fact, our Board has expressed the same -- the same concerns that when we start, we have to start in a smaller way, but however we start, it's going to be sustainable. So, the sustainability of our dividend going forward, irrespective of any further, let's say, use of capital for M&A or projects or whatever it may be has to be sustainable and will be sustainable. We come off a very different base. So, I think you can accept that with confidence that we will have to cut our cloth to suit on any further M&A. And yes, it is something we are considering. But I want to make, again just very clear the priority is deleveraging, reinstating the dividend and if there is anything to do, it's got to be value accretive. We're not deal junkies. We need to replicate what we've done in the PGM sector. So, it's not just because we now have money, we can embark on M&A. We are looking for those value accretive opportunities, but it's only post doing what we're doing now. The second part of your question is related to extraordinary dividends. And yes, I think we would like to do that if it's appropriate, the one thing we've discussed at Board level, but we've made no decision. So, please let's be clear on that. We've made no decision on this, but there is a chance that we'll consider extraordinary dividends from our gold business once we've paid an ordinary dividend from our PGM business. But that's still a final discussion that's got to take place at Board level. But I think it's appropriate, if you want to be an industry-leading dividend payer, you better be -- do more than just pay ordinary dividends. Rich?

Thanks very much, Leroy. So I think when it comes to recycling there are three major factors you've got to consider. So, the first one is the age of the costs. So, generally speaking costs get recycled off about 12 years, it's a good average. So what can come on to the market now, I think -- produced 12 years ago, that's going to be a different implication for platinum and palladium in terms of obviously more recently, we've seen a lot of palladium cuts relative to platinum and hence the reason our outlook is for recycling on platinum to be a lot flatter, while palladium will continue to grow. The second major factor is how much actually gets recycled. Historically, we've seen about 50% of cuts actually make it back. We view that assumption going forward in our model, but given that the market is getting bigger, one may argue that actually might be quite difficult. In absolute terms, it's getting bigger. That might be a difficult number to maintain going forward. And the third one critically is actually around the ability or the facilities in order to do the recycling. Generally speaking, recycling is done where there is spare capacity in facilities. It's not that economical to build facilities purely for it. So for example, ours is spare capacity, primary production will always take priority and that capacity is limited. So, again, looking at -- we have actually not constrained our models by facilities. But that is a real constraint that is coming across the market now and hence the reason our conscious be turned on that quickly. So we do see that increasing in palladium, in particular. But the other metals still being fairly constrained and flat in terms of secondary supply.

At the back?

Hi. Thobela from Cachalia Capital. I have a few questions. So the first one is about two years ago you had indicated that the substitution would gear down about between $400 and $500 an ounce, which is the differential between palladium to platinum. And clearly, that hasn't really occurred sort of the price differential doesn't seem to be a factor. So what do you think is causing the resistance to substitution? I mean what are you seeing, especially given that you have now SFA, which does research into these things, what sort of market data are you seeing from that perspective? That's the first question. And then the other one is, at what basket price would use that investing in increasing your output, especially given the fact that you've already stated that the US basket price has risen by over 25% this year and then in rand terms that's close to 40%? So at what basket price would you sort of reinvest and putting more output? And then the other one is, with regards to Lonmin, would there be broad-based generation one closures, especially given where the prices are currently? So would you still just continue with closing those shops? And then related to that, is Lonmin had planned to sort of reduce labor by about 12,600 people. So how many jobs do you think you could save given the movement in the basket price since you took over the operations? That's all.

Okay. Yeah. There's a lot of questions there. Rob will you pick up the Lonmin stuff and -- but let me try and -- your first question was about substitution. And the first -- we always envisaged together with some of the analysts, one sitting here, that $400 to $500 an ounce was the trigger. But we always qualify that as well by saying that that's the point where I think end users would start doing the work. Today, to make those type of switches there is quite a lot of -- it's quite onerous. There is competing technologies. So, first of all, end users are doing a lot of work in the battery electric space and it's not a big issue for them, a $400 to $500 price difference, it really makes very little difference on a car. But I think they are also concerned about all the permitting issues, the licensing issues and if they get it wrong, the fines are humongous. And I mean, it's a sort of class action you have against someone like Volkswagen. So I don't think it was just the price and certainly they had other priorities. So I don't think that is why we saw any real progress on substitution. The real progress that we're seeing now is what I explained in the presentation and that is that they are real potential shortages of rhodium and palladium starting to develop. And when a car doesn't move out of the factory, that is -- it's not just the cost of the PGMs and the exhaust pipe, but they've lost that sale and they've ground to a halt. So, yeah, I think there is different factors driving substitution and the work that's being done. But that is happening. That is actually happening. I mean,…

Good morning, everybody. Insofar, as the Generation 1 shafts are concerned, that was actually part of the restructuring we've just been through. Over the last six months, we closed East 1, which was staffed largely by contractors. We've also closed East 2, sorry, I mean, West 1 and Hossy shaft. So those three Generation 1 shafts have been closed. 4B remains open and it appears as if we've got a life of mine at 4B from anything from 12 to about 24 months and in doing so we managed to save just over 3,000 jobs. The workforce or the number of employees including contractors has decreased by almost 7,500 people in total since we've acquired those assets. A very small number of those people actually retrenched but there has already been a significant number of reductions over the last seven months. Insofar, as future production is concerned, we're currently busy looking at K4, we've opened that book again. We're busy doing that evaluation. We're also looking at the Pandora area and we hope to have those evaluations completed by the end of the year. So...

Yeah. And just to add on, again, I think the current basket price and for instance, Kroondal went over ZAR40,000 a 4E ounce this morning. Supports expansions, but until we see platinum move from a surplus into a more balanced market, it would be irresponsible to produce more just to get the benefits of palladium and rhodium. We really have to think about these things in the basket and get the balance right.

I am Martin Creamer from Mining Weekly Online. Can you give us some of the volume, the estimated volume of Platinum Group Metals in tailings dumps? Can you tell us where is the main volume? Is it South Africa or US? And then what is the bias, is this sort of palladium rhodium bias? And if so, could it not be a -- taken into account, fairly quickly, would it not be in your interest to do that fairly quickly or the technical hold-ups for Platinum Group Metals being taken off tailings dumps?

Yes, look certainly, I have a view, but why don't you, and -- you've done a bit of work on it already, why don't you just go first, Rich?

Yeah, thanks Martin. As I couldn't give you across the entire industry, but speaking from our side, I mean at the moment, we've got about 3 million ounces that we have put into proved resources or mineral resources across our various operations that will be Rustenburg and Marikana. There are quite a few dumps that we haven't yet completely drilled according its resources. There is still some upside on that number. Listen, I'd imagine you could times that by three or four for the industry as a whole. I think the tailings opportunities in -- significantly with PGM, I mean that Neal will comment, because I take it a step further Neal's asked and we've answered, we are certainly going to be doing work together on that, because we do think it's significant. It does of course play quite a significant role at Rustenburg already. So there has been surface treatment. I think the technology has improved, the ability to extract has improved. Similarly at Lonmin, they started on the Marikana operations, they started a project two years ago. So technology exists. As they with, I don't know what is it, 20 years, 30 years worth of learning in gold, there's a lot that we can take across to enhance that at the PGM side. And that is certainly what excites us. And hence the relationship with DRD. Neal, then if you've go anything to add?

Thank you.

Yeah, the only thing I would add to what Richard has said is, clearly in the US, there is an opportunity, it's not as because South Africa. But what we have in the US is high quality tailings. You're mining 15- to 20-gram a ton, primary production, so your residues are a much higher than they are in South Africa. They're going to be 3 or 4 times higher.

Hi, Neal. Rene Hochreiter from Noah Capital. Congrats on turning Marikana around, and the gold division as well after that strike that you had, and setting up the company, especially with your foresight about two, three years ago and setting up to take advantage of what the markets are, right -- like right now. Just a little bit disappointing, was the AIC cost increases, they were up sharply on the previous year. I Understand about Lonmin, I understand about the strike that you had. But still a little bit disappointing, but what's a little bit more disappointing is that your cost guidance was up on those numbers. So maybe, I know you're taking advantage of the good market at the moment.

Yeah.

But also in the absence of any further mergers and acquisitions, like you've been trying to do these last few years, which is a right decision, but anyway, what sort of cost increases could we expect going forward from Sibanye in a sort of a steady state situation?

Yeah, yeah. So I think your disappointment is ours as well. And we've certainly put these cost numbers through the ring here to try and see what is happening. And Rob, maybe you want to comment about what's driving it better. The one thing you've got to factor in this is when you look at unit costs, is the volume aspect, the volume especially, if you look at costs on a dollar per ounce basis, you've got factor in this, is volume increasing or decreasing because of relatively high fixed cost. Nevertheless, we are also cognizant of exactly what you've seen and we understand the disappointment. I think we will do much better, but again Rob and Shadwick you can just comment on your own views. What we've taken opportunity, I think to try and put conservative numbers in the market and that's also part of the problem, you can be so conservative that you disappoint. So, I really do believe we can over deliver, but they are real cost pressures that we're seeing. It's almost like everyone jumps on the bandwagon when they see increasing commodity prices and we get all these applications for increases in contracts and so. That's not -- it's not our team that sits back, says, we've arrived and there is more margin now. It's not that at all. But we take your comments, Rene and we will look at it. So you want -- listen, normally, I think you've seen us do better than inflation year-on-year, once we're in steady state. And how we do that is, we try and work out what we can. For instance through synergies and economies of scale, we try and work out a few percent of that 5% or 6% by renegotiating contracts doing things smarter. We actually consciously do that. Looking forward, other than electricity, what I can say is, we will probably have an average increase of about 5%, 6% on steady state production on costs. That's what we try to work toward. Electricity pushes you and electricity is 20% flat. Now, if your cost pushes that up by another few percent, because you're talking 12%, 14%, maybe 16% here, hard to give you an exact number. But do you want to -- both of you, just share with Rene and the rest.

Yeah, Rene look, I think Neal is right. I mean we are also concerned about it. If you look at what we did in the second half of last year, in terms of all in sustaining cost, we averaged about the second half ZAR636. We've now given guidance that says ZAR635,000 to ZAR675,000. Neal is also right, the high percentage of our cost is fixed. So what we are working on at the moment is to try and reduce the amount of infrastructure that we have to manage. Neal alluded to the fact that we reduced the number of plants, reduced the number of shafts. So we are still in the process of trying to do that. In fact this year, we are planning the process of taking two shafts that are coming to the end of the economic life out of the equation next year as well, to try and reduce that fixed cost base. Because the fixed cost base is about 70% of our cost is fixed. So we -- that's something we absolutely have to do. I'm also hoping, to be very honest with you, we're going to be on the lower end of our guidance, if not possibly be at that low-end. But there's a lot of work to get us there. But I'm hoping we're going to be on the lower end. So there is work to done, Neal, and I think you are right, we all try and get number down, so that we can get our margin between that cost and the price, a little bit more in a comfortable situation. Thank you.

Rob?

Rene, -- about what Shadwick and Neal has said, I think the only other one I want to put it in the mix is the tax royalties, associated with increased metal price. If we look at the tax royalties at spot versus what we were paying last year at the same time it is ZAR400 to ZAR500 range per ounce more. And that's just on tax royalties. So that is the only thing I would like to add the price of electricity and inflation and so on.

Yeah, just to remind, it's ZAR35 an ounce for the SA PGM assets, but it's ZAR60 an ounce at our US PGM, and that's just year-on-year. Now if you look at from the time when we acquired Stillwater to where the prices of today, that is in excess of ZAR100 an ounce. For every ZAR100 move in commodity prices at Stillwater, it's about ZAR7 an ounce movement. So if you take ZAR2,100, we acquired at ZAR700, that's a ZAR1,400 announced differential, which at ZAR7 to an ounce is close to ZAR100 an ounce. So that plays a significant role.

Okay, thanks very much.

Neal, sorry, I just want to continue on this cost line. So is part of the problem not necessarily cost, but cropped up staying business capital. So, and on Slide 19, you showed that your capital expenditure is basically in line with the previous owners. But if you look at it over a longer timeframe, you could see capital numbers are actually down quite a lot. If you go back further, it's down more than that. So is that not one of the big drivers of all-in sustaining costs? Is all these capital numbers should have been spent in the past, it's not fleet replacements and other maintenance that is now being caught up? Is the element of that in driving these all-in sustaining cost levels?

Yeah, I don't believe so Arnold. It's not like these catch up capital. Our capital numbers are very consistent, and were they not we understand exactly what the difference is and it would be a feasibility study of ZAR60 million units at BlueOak. And so, no I don't believe it's in those numbers. It's that -- I didn't mention the royalties that Rob brought up, but that's a big part of the cost. But they are real inflationary pressures. Yes, James, have you got a question?

No, no. Just want to say Arnold, I mean, if you look at the gold capex, it's about, I think ZAR3.3 billion, ZAR3.4 billion. And a lot of that, these extra capital that we're spending are clear for the integration of their shaft. So that's going to come often in the next year also. So there is innovative capex, but it's related to the restructuring going forward. And then quite a lot of the cost increase is obviously, volumes, in the US, behind in terms of the production buildup at Blitz obviously. So that volume, lower volume, obviously has an impact on costs, as we build the production up, that will come back down to where we expect it to be. Marikana obviously, as the cost synergies come through that will come down as well. And I'm not sure, if Rene, but at Rustenburg, have you factored in the toll going from park to toll. Obviously there, we obviously add the tolling fees on to our costs, but they get a 100% of the basket, which obviously, in this price environment is a lot more beneficial.

Thanks, James. We got questions on the call?

Yeah. Can we go to the call please.

Thank you very much, sir. First question comes from Dominic O'Kane with JPMorgan.

Hi. Three quick questions. This question has been asked on M&A, but in a slightly different way. You talked, obviously, we plan to go around that a huge decision on the location of your listing. So is there any interplay between you making decision on the bank waiting M&A opportunities. So specifically, would you see making a relisting decision as a pre-condition of future M&A. My second question is on the synergy number. You've upped your total synergy number to around about ZAR2 billion per annum. Could you maybe give us a little bit of insight, what you're seeing on maybe the longer-term mining synergies, specifically, around cross boundary mining in Rustenburg? And then I mean, finally, I'm not sure if this question has been asked, but with respect to long-term -- longer term production guidance of Marikana, could you maybe just give us an indication, we think on the capex, the longer-term capex number of Marikana? So I'm assuming ZAR115 million of capex, there is kind of a, is a high water number.

Okay, Dominic, I'll ask Rob just to pick up on the Marikana and SA PGM issues. In terms of listing, I think, where we are now thinking is, certainly certain M&A could trigger something that is, let's say, smart. But that's not our primary focus. I think our primary focus is at the right point in time, a listing consideration may make sense. In other words, there is no point in changing your primary listing with a majority of assets in South Africa today. I don't think it will have any impact, and it will be more trouble than it's worth. I think once you have a much larger international asset base, considerations to a change in primary listing will make a lot more sense and will be far more appropriate. So yeah, I hope that clarifies the first part of your question. If I can then just ask Rob to deal with the second part.

So, as far as the cross-border, the cross-boundary mining synergies are concerned, we haven't built any of those into the numbers at this stage. Our synergies are going to be significant, especially between the Kroondal operations and the Rustenburg operations, as the Kroondal operations want go deeper, or possibly mine leading to unwind territory and which is owned by Bathopele, but those are predominantly where our specific synergies resolve. We haven't done any work on that. So none of that is brought into the numbers at this stage. A hard number for the capex at the Marikana operations going forward is approximately ZAR150 million per annum. This coming year, we're looking at spending ZAR1,6 billion, ZAR1,7 billion, and going forward that will probably go up to a little bit more than ZAR2 billion.

Okay.

Thanks, Dominic. Does that answer your questions?

Yes, thank you. Thanks.

The next question comes from Adrian Hammond of SBG Securities.

Hi, Neal. I have three questions. Firstly, you've done some hedging on palladium, was that sort of opportunistic? Or do you have a hedging strategy now going forward? And would you do some more? Secondly, this South African gold portfolio, you've now separated from the platinum assets, do you see SA gold remaining in your portfolio to address your South African discount? And then lastly, just on, I think a small question for the DRD, the Phase II capex of ZAR3.5 billion, where do you see yourself on that matter and how would you fund it please? Thanks.

Yeah, hi, Adrian. Look I think it's prudent to consider, palladium prices are, you know, we did take a position at ZAR2,500 an ounce. We did an financial instrument. Certainly, I don't know why we would do another ZAR1,000 or ZAR2,500, perhaps a little bit higher we will give consideration to that. We haven't made any financial decision, but I think that could be prudent, especially when you've got a project in buildup phase, we don't want to hedge everything in our portfolio. Shareholders we know like exposure to volatility. So those will be carefully considered. But we will do what is prudent. In terms of your next question, which was really around the gold business. Look it, certainly part of our South African discount, but I must tell you we like the combination of gold and PGMs, and so do many of our investors that we speak to. They see it as quite unique. And in fact, what we are really starting to understand is that PGMs, although we put it under precious metals banner, or industrial metals. And any global economic turmoil you will see very different PGM prices. And if you couple that with gold being considered a safe haven commodity, which it is, and it responds positively to those type of things, it's nice to have both in the portfolio. If we were to ever do something with our gold business, I think it has to be off the basis of a much bigger gold business to make sure that we retain that golden PGM portfolio. Your third question, I forgot, but it was -- it was for DRD. So yeah, let me hand it over to Niel Pretorius.

Thank you, Neal. Hi, Adrian. Adrian, following the exercise of the auction and also taking advantage of the higher gold price, our cash position looks quite a bit different. I think at the end of the reporting period it was sitting around about ZAR1.5 billion. Considering further that, at the time, when we did the transaction initially with Sibanye-Stillwater, the capital number at the high-end of the estimate, at the high-end of the range was roughly 2.5 times our market cap. Now that's less than a third of our market cap. I think relatively speaking, the ability to fund this may be moved quite a bit. On top of that, I think we may have mentioned that we are looking at a number of options and not all of those assume the high-end target for capex. We are looking at a different models which could bring the total capex number to well within what our cash position is at this point in time. So maybe the short answer to the question is that, there are other problems that the industry faced, that are bigger than the project funding challenges associated with Phase II of this project. I think it's well within our means both in terms of the lower end and also the higher end of the -- of what we estimate that project capex might be.

Thanks, Niel.

Adrian, does that conclude questions?

Yes, thank you.

Thank you very much. The next question comes from Alex Ayoub of Waha Capital.

Hi, thank you very much for the presentation, and really, congratulation for these amazing results. I have three questions. The first one relates to the leverage. We understand you want to decrease your leverage to one time, and then focus on paying dividends and potentially an extraordinary dividend. Is the target to keep the leverage around or below one time in the medium-to-long term? That's the first question. The second question relates to, sorry, can you hear me?

Yes, we can hear you clearly, Alex. Go ahead.

Thanks. The second question and relates to the palladium prices. I think you briefly touched on it and maybe I missed it, but just trying to understand why do they keep on going higher, even when core sales are going down and you're having more and more electric cars coming to the market. And the third question relates to sensitivities to FX. How much of that have you hedged? And can you just tell us if possible by how much would your EBITDA decrease if rand I appreciate or depreciates by ZAR1? Thanks a lot.

Okay. I'm going to pass the financial questions on to Charl, and the palladium question on to Richard. Charl, you go first, please.

Yeah, thank you. So in terms of ZAR1 move, if you just look at our revenue for 2019, it was $5 billion and that was off the back of ZAR15. So, that's about a sixth that will come off the revenue line, which effectively, the net effect of that will be 0.7. So if you take a six of the revenue line, that's about -- what's that's about ZAR700 million, you take off, so it's about ZAR500 million that the EBITDA will decrease by post tax. In terms of currency hedging, we haven't done any currency hedging. And as Neal said, shareholders are not to favorable when it comes to hedging decisions. And we don't take that lightly. And I can't remember what the first question was...

On the leverage, just wanted -- yeah.

Yes, so I mean there is no absolute answer to that, do we want to keep it at 1 times. I think where we don't have other uses for the cash, i.e., returns to shareholders, any projects, obviously we will pay down debt further to that number. But as we've said, our immediate target is to take the gross debt down to ZAR1 billion. So there is no specific answer to that. But we are very comfortable, as I said at ZAR1 billion, covenants are not an issue and leverage is not an issue. But that's obviously, once we reach that target, we can obviously decide how we go forward on that basis.

Understood. Thanks.

Gentlemen, we have no further questions for the line.

There is still one more answer.

So just to quickly address your palladium question without going into too much details, based on very basic supply and demand fundamentals, palladium has been in deficit now for almost 10 years. And those deficits have been made up by surface stockpiles predominantly coming out of ETFs and other working capital requirements. But those have now dried up. Forecast looking going forward is that we're still looking at anywhere up to 1.5 million to 2 million ounce deficits per annum up for the next five years. So these are substantial deficits that are coming through, and really there has not been an answer as to how to change it. The slight drop off in vehicle demand, it has come off a little bit, but we're still looking at an average of about 2.7, 2.8 growth rate per annum globally. That 2.7 to 2.8, the total market penetration of EVs is less than that. So in fact, the number of cars that are growing, that still require PGMs is still growing annually quite substantially. And then as Neal indicated in his presentations, you've got loading is going up. So fundamentally we've got no short-term supplier solutions. We've got increasing demand and certainly for the next five years, there are still substantial deficits coming through. So those prices have been rising, and I do say, there is nothing obvious that suggest that picture is going to change in the short-term anyway.

Thanks, Richard.

That's very clear. Thank you very much.

Apologizes gentlemen. There are no further questions from the lines now. Thank you.

All right, thank you. James, got anything?

Yeah, thank you I'll read from the webcast, I've got some questions, which have been sent through. First of all, Steve Shepherd. Congratulations on a positive set of results, guys. Just the beginning, aiming to that. My question is that, given the -- and the valuation of your shares that you've highlighted clearly in this presentation and the powerful cash flow you're enjoying, do you think it would make sense to return value to shareholders by buying back your shares?

Yeah, Steve, thanks. I appreciate your comments. Absolutely, I think at the time where we actually make a decision on how to utilize, let's say excess cash depending on where our share price is, that could be a very smart thing to do. So this is something we've spoken about. We're not quite there yet on let's say what is the best use of proceeds. There is still a long way to go, but that would certainly form part of the mix.

Okay. Another one from Chris, sorry, from Steve was, could Neal please share with us his latest views on power generation? Is Sibanye-Stillwater going to proceed with its generation plans? And is the government really going to open the group?

Yeah, very, very complex set of conditions that have to be considered. So I think it's positive that the Minister and the President confirmed it in SONA, have agreed to, let's call it self-generation. That's a big step forward, and I would argue that, that business was responsible for creating the pressures to get those approvals. However, they are still hurdles and it's not that clear to us exactly what the process is going to be. We've got technical teams working with the Department of Energy and the regulator and Eskom, on these things. Because the hurdles to getting into self-generation were not just from approvals from the Department of Energy, but Eskom made it very difficult, they wanted to renegotiate guarantees that are in place. They had unrealistic connection fees. It was -- they were all put in place to make it unattractive for companies to generate their own power. There is a different wind blowing, but there are still -- there is still clarity required in certain areas. So that is all positive. However, and that was made very clear to me that government would not buyback excess power. Now you get into the difficulty of you have to make decisions now, that you're going to commit for 10, 15, maybe even 20-year type of contracts or investment models, because the returns are relatively small. And you're doing that in a climate that I would still argue is not investment friendly. So, it's challenging. It's not simple. There is many facets to this. In terms of our own projects, the 150-megawatt project for gold is being reconsidered, but it will probably be a smaller project. It can only be a bigger project if we wield power to Rustenburg or we can sell power back into the grid. The life of those mines or quite a bit shorter than they were when we started with the project. And then we have a new operating area, so we have -- our center of gravity has moved to Rustenburg. And we probably need to start from scratch there. In terms of, is that a good thing to do. Yes, I think it is. But it's going to have to stack up against any other investment, reducing our carbon footprint is becoming important. Our ultra-deep level gold mines consume a lot of energy per ounce produced. And of course, most of that, well all of that energy is coming from Eskom that uses coal. We are be coming very, very sensitive to issues like that. And they could be significant driving forces in terms of what we do in the future regarding exposure to certain assets. So Steve, I don't have an absolute answer for you. But those are the things that need to be considered with regard to self-generation of power.

Thanks. The next question is Chris Nicholson from RMB Morgan Stanley. Has there been any inventory pipeline build at Lonmin's processing operations, i.e. does reported production equal refined sold? And then secondly, and I think we've answered this, oil prices at a level where we can commit to developing projects at Marikana and when? And I think, we said we're looking at them and we'll have an answer by mid-year. But maybe the first question on the inventory, and reported -- produced or sold as produced.

I see Robert's pointing to Richard.

I think the short answer on the pipeline is no. There hasn't been any significant change, broadly speaking, it doesn't match. So we haven't had a big buildup. I think what we are doing slightly differently, because of the cash position we are in, we are trying to manage those operations in fast and smoother fashion. I think historically, there were big draw downs at year-ends etc., and then big builds up, which led to quite a variable pipeline. We are trying to run the operations in a fast and smoother manner, which is better for productivity, but there is no significant build ups.

Thanks, Richard. And I must point out that Richard is responsible for PGM market development and the refining part of our business. So that's really where the pipeline happens. Rob is responsible for the mining, the smelting and the base metal refining. So just to put it in context, why I was pointing to Richard.

Next question, Philippe Vasconcelos. Good morning, Mr. Froneman. Congratulations to you and your team. I'm a happy shareholder for quite some time. I would like it, if you could, if you made some -- I would like to know if you've made any decisions on EV metal investment.

No, we haven't. We are still doing that work, Richard, probably second quarter, we could expect some output. But I think again, we never answer these questions. I know journalist is going to say, Sibanye is moving into battery metals in the third quarter now. The priority remains deleveraging, reinstating our dividend then considering these type of things carefully. But second quarter, we should get our first lot of output, Richard, from the study. Yeah. [indiscernible] Yeah, yeah, that's right. We won't be in a position to make a decision. We will just have further clarity on what are the metals, where are the best places, we then need to still do a lot of work.

Next question, Matthew Abbott, [indiscernible] Capital. I think we've answered most of it. So just a question on the excess, on the deleveraging, are we looking to buy back bonds in the open market? The math on the slides is well below the issued amount, obviously, following the buybacks.

Yeah, so just on that, now I think our first quarter call, will be to pay down our revolving credit facilities. So there is no immediate plans on the bonds.

Thank you. Next question is from Roger Williams at Centaur Asset Management. Just on the outlook on other costs, particularly the care and maintenance costs, does the debt of ZAR1.497 million include convertible bond market value? Or original issue price? And then the costs at Stillwater are around ZAR200 more than original projections, can we reconcile the difference? And what is the steady state outlook in 2022 at Stillwater?

So, listen, can we just go through those one by one. So...

Okay, let's go one by one. Okay, so first of all, other costs of approximately ZAR1.8 billion, particularly care and maintenance.

So Shadwick, a majority of those are your costs.

Yeah, [indiscernible]. So from care and maintenance point of view, I think our biggest cost sits on our Cooke operations. We have obviously applied to close those operations, which is essentially Cooke 1, 2 and 3, as well as Ezulwini shaft. So those are the ones that we are considering. There are two shafts that we are considering for next year, before we see closed Driefontein 6 and 7. So that care and maintenance will disappear, so to speak. And then obviously for 2021, there is two more shafts. And the question previously, from a fixed cost point of view, that we also considering taking those ones out of care and maintenance and issue closing them down. So, yeah, these cost, particularly on the Cooke side that we hope are going to get a favorable outcome to close those operations.

Yeah. No, we will certainly drive it in that direction, Rob. There's nothing really on your side there. Okay, next question.

On the dates, does it include the converts at the market value or original issue part?

Maybe just another comment on other cost, there is also some extraneous costs that we had to incur in terms of the strikes. So, those costs will not be repeated in 2020. And that was about ZAR400 million. On the number you are quoting, that's the net debt number of about ZAR1.5 billion, that does include the convert at market value. But that's the net debt. So it also includes cash on the balance sheet.

Okay. And then the question on Stillwater costs. I think we've spoken about the fact that volumes are a little bit lower than what we expected at this time. So that's one of the factors, and then also the royalties is another significant factor adding to costs. And then, steady state outlook would be, as the production builds up, it resumes back to the normal profile with royalties factored in, obviously, at very basic prices, but.

Yeah, well you've answered it.

I've answered it. Can we -- OK, we've also the solar project. And then last one, I think before we call it the day, because we're already at 12 now. Considering the synergies of more than ZAR1 billion a year, that you've unlocked from the merger between Rustenburg and Marikana, what is the scope for synergies with the Impala lease area. If one presumes that both groups would retain ownership of the underlying metal streams for EU and Competition Commission means?

Yeah, look I think that could be smart business, but it's not something that we focused on, and certainly it would have to be very carefully considered around competition issues. But yeah, certainly anything is possible, you just need willing parties on both sides.

And then maybe a final one, I guess it's quite relevant, it's from Nkateko at Investec is, congrats on the great safety performance in gold. We haven't received feedback on the 2018 seismic safety incidents. What were the key takeaways?

Yeah, so the DMRs run that process. That investigation is complete. They haven't come out with a final -- let's say outcome from the investigation. So it would be probably inappropriate for me to say much more than that, other than, I do not believe based on the feedback I've had from our lawyers, Wayne and Nicolas, that we were found wanting in any area. But let's respect the DMR process to come out with a finding. All right, as James said, thank you for all those questions. It's been great to present these results. It's been great to relist the company yet today. I'd like to acknowledge the effort put in by my team, and as I said this morning, all 80,000 employees, but of course also the support we've had from investors, analysts and our bankers, and the rest of the market. Thank you very much and have a good day.