Good morning, ladies and gentlemen, and welcome to our H1 2022 Presentation. We have defined this period as a challenging period and I think as we go through the presentation you will see why. Obviously, there are forward-looking statements, so please take note of our Safe Harbor statement. If I can then move on to the agenda, as always, we will start with safety and ESG, I'll cover that. I would like to do a recap on our strategic positioning, combined with a complex global backdrop, we did introduce you to our gray elephants at our year-end results in February of this year and I think it's a good time just to recap. I will then hand over to the two Chief Regional Offices being Richard and Charles Carter, Richard Stewart and Charles Carter, Richard will cover the South African region. Charles will cover the US region and our new Head of Recycling, Grant Stuart will cover the Recycling segment. Grant will hand over to Charl Keyter, our Chief Financial Officer; and Charl will cover the financial results. And then I'll conclude with a brief conclusion. So, please sit back, enjoy, and relax if you can. As I said, health and safety and ESG are our primary focus areas. They are our first, second, and third priorities. Our focus on the faecal elimination strategy is an imperative for 2022. We had a shocking 2021. I'm pleased to say we've made really good progress post all the sharp stoppages that we introduced ourselves towards the end of last year, and some of them even went in to the beginning of this year. We brought in an independent safety expert to review our safety strategy. I'm very pleased to say that he ratified our safety strategy as consistent with global industry standards,…

Thank you very much, Neal, and good morning, ladies and gentlemen. I think in terms of the Southern African region's operating update, the first half of the year was really characterized by the industrial action we experienced on our gold operations that commenced in March of the first quarter. And really, we only got back to production in July, started production again in July. In addition to that, we undertook remediation at our Beatrix tailings storage facility that commenced in December. And as a result, Beatrix did not have any production output for the first half of this year. As a result of those two things combined, production was significantly lower year-on-year than compared to the comparative period at just over 190,000 ounces for the first half. On this DRDGOLD it was not impacted by the industrial actions, contributed to just over 91,000 ounces of that total output. I think with production having commenced again in July, we certainly are looking forward to a significant improvement in the second half of the year, where we are forecasting in the region of 350,000 ounces from our operations, excluding DRDGOLD with the ramp-up post the strike period. I think it would be good just to touch a little bit on the wage negotiations. As you know, industrial action commenced on the 9th of March and that was after 10 months of extensive negotiations, many of which were facilitated by the CCMA. I think at the same time, as the strike issue was notified. We exercised our right to implement a lockout of employees, and they were likely do two reasons for doing this. The first one was, of course, to exercise our right to manage our cost in our business during the industrial action, but also to limit or to provide safety…

Thank you, Richard, and good morning, everyone. You'll be familiar by now with the impact of the flood event in Montana on the second quarter results. For those of you who did not see the specific presentation on that on August 11, you'll find it on the company website. It's very detailed, and I would encourage you to go there to give more context on the highlights that I'm going to cover now. So the Montana flood event hit just at the end of the second week of June. So it really impacted the last two weeks of the quarter. While East Boulder and the met plant were largely unaffected, it was really the Stillwater mine that was taken out for seven weeks due to no access and river infrastructure that needed addressing on the mine site. So the impact on the quarter is really 15,000 2E ounces, and for the half year has been estimated to be 60,000 2E ounces for 2022. At the detailed presentation on August 11, we went into the revised mine plan at length. And we also highlighted the fact that we're dealing with significant current events, both macro and the US and specific to Montana and the operations. And we looked at the mine plan also in the context of potential future price retracement in the context of a potential recession. And the market is well aware of the elevated inflation impacts we're currently dealing with. And then nationally in the states right now, all businesses are impacted by various skills shortages, mining specifically and in Montana reserve somewhat compounded by the nature of our operations, distance for travel, lack of housing, proximate to mine and so on. So we are dealing with a significant skill shortage at all operations right now and significant…

Thanks, Charles. And yes, let's not forget those 700,000 ounces also not only coming at a good all-in sustaining cost, but also a good carbon footprint as well. But thank you, and good day to all of those listening in. The decline of the Fed recycled ounces by 10% when compared to the first half of 2021 was not only impacted by the flooding incident and reduced underground concentrate, but also due to the planned shutdowns and the collapsing scrap steel prices. Scrap steel prices have declined by some 25% in US dollar terms in Europe, China and the US in the last three months, reducing the incentives to scrap vehicles. Despite the poor outlook, however, we have plans to secure operational sustainability by one, securing and growing our customer base received rates through proactive engagement strategic partnerships and smart contract management; and two, real margin accretion and increasing inventory turnover. The drop in adjusted EBITDA for the second half of 2021 from $50 million to $39 million in the first half of this year, despite similar feed rates is largely due to price. In the second half of 2022, we sold a similar number of ounces at a quarter of the price per arm realized in the second half of 2021. We also sit with a higher working capital balance of some $511 million at the end of June, largely due to a higher basket price with rhodium, the front runner. We are expecting a reduction in inventory and working capital when these ounces turn out in the coming months, especially with rhodium, which takes slightly longer. We should also see a lower balance following the lower quantities we are currently receiving. Our recycled business is largely self-funded from internally generated cash flows, and so advances are funded from…

Thank you, Grant, and good morning to all participants. We continue our disciplined capital allocation. Work on the Burnstone project and the K4 project is progressing well, with K4 hosting its first ore during half one 2022. The estimated capital expenditure on these two projects for 2022 is in line with plan at R2.1 billion. Our cash reserves at R27 billion exceeded our target of R20 billion, and supports our flexibility and optionality. If we turn to stakeholder shared value, we have declared an interim dividend of R1.38 per share or R3.9 billion, which remains at the top end of our dividend policy. In terms of the 1.5% of equivalent dividend value for social upliftment projects, we are in the process of setting up the mechanism and the governance structures to manage these funds. We maintained our net cash at EBITDA at 0.16 times, and we remain in a robust financial position. Three projects have been funded from the BioniCCubE. They are the investments in Verkor of €25 million, EnHywhere of €5 million, and Glint of $6 million. The ongoing disciplined capital allocation has resulted in a strengthened balance sheet, which was achieved through a combination of debt reduction and cash generation. This slide illustrates the evolution of our debt compared to EBITDA, which peaked a high of 2.6 times in half one 2018, and flipped over to a net cash position from half to 2020. A position, we have maintained for two years, despite significant returns to shareholders. The graph on the right highlights the dividends paid to shareholders, since the resumption of dividends in half two 2019. And if we include the half one 2022 interim dividend that the Board has approved, this number is over R29 billion or approximately three times our market capitalization at listing in 2013. Despite the operational challenges highlighted, we still managed to produce a solid set of results. If we start with the revenue, revenue is down 22% to R70 billion, compared to the same period in 2021. The main impact was the three-month industrial action at our SA gold operations, but also lower commodity prices across all our operations. Good cost control and cost containment during the industrial action has resulted in cost of sales being down 2% period-on-period. Amortization and depreciation was down R500 million, and this was in line with the lower production at both our SA gold and SA PGM operations. Profit before royalties on tax was just under R19 billion. Royalties and taxes for the period were R6.6 billion compared to the R10.7 billion in half one 2021. Royalties and taxes were both lower due to lower overall profitability for the period. Profit for the period was R12.3 billion, the third highest profit for a half year, since inception and normalized earnings was R11.2 billion. This translated into earnings per share of R0.0426 per share. Thank you, ladies and gentlemen. I will now hand you back to Neal to take us through the conclusion. Thank you, Neal.

Right. Thank you, Charl. And I really only have one slide left to conclude. So let's have a look at that. The challenging H1 period is behind us. I've explained why it was challenging. And what we expect in the second half of the year is that both the South African gold and the US PGM production will normalize, certainly by the fourth quarter. The South African PGM business will continue moving down the cost curve and generating strong cash flow. And certainly, getting back to the right volumes will help that. So the operational outlook for the second half of 2022 is significantly better and we're well positioned for that. In terms of other positioning, our regionalized management structures are in place. They were a refinement of our previous structure and necessary to ensure that we have capacity for growth and of course, they will focus on the strategic essentials during this period. Our strong balance sheet provides resilience against an anticipated macroeconomic downturn. We have maintained discipline when it comes to capital allocation, as you've seen with the dividend declaration. But what we haven't spoken about a lot today is we've been very deliberate and very patient regarding our approach to M&A. And you've probably heard me say a few times, in the public domain that we don't see value yet in areas that we're interested in. And we will sit on our hands until we can find value opportunities. We're well prepared for this very complex global backdrop and future Samaria's, the global geopolitical and macro environment is very volatile and uncertain, but I think you should have confidence in our assessment of these issues based on the eight gray elephants that we discussed at the beginning of the presentation. Our PGM business is very well placed for an extended internal combustion engine cycle. We've never been proponents of the demise of the internal combustion engine in the short-term. And of course, even if we're wrong in terms of the internal combustion engine, you've got very significant demand underpin being built up from the hydrogen economy. So we remain confident in the long-term demand for PGMs. In terms of the supply of critical metals into those chosen regional supply chains, which includes PGMs, by the way, but our battery metals positioning into really high quality projects, into high quality countries is actually turning out to position us well. And I can see very significant revenue generation in the not-too-distant future from these investments. On a macro scale, again, our diversification, both from a commodity and a geographical point of view has addressed risk and ensures a balance in our portfolio. So with that, I would hand over to James, and we would be very happy to take your questions. Thank you, James.

Thanks, Neal. I'll start with -- there's quite a few questions on the PGM wage negotiations. So I'll ask all of them at once, if you don't mind. When do we expect to conclude the SA PGM wage negotiations? Are we targeting a five or a three-year term for ongoing PGM wage talks? Where are we with regards to wage negotiations? Are we close to reaching a deal? And then just a question on the wage negotiation risk on SA supply, considering that the other two major miners negotiated this year or negotiated this year have already settled on a five-year period?

Thanks, James. I think Richard is best place to answer all those questions. So let me hand over to Richard.

Thanks very much, Neal, and good morning, again, ladies and gentlemen. So I think in terms of the wage negotiations, we formally commenced our negotiations or engagements towards the end of July and into early August. Over the period of Marikana, we did step down those engagements for a couple of weeks during the commemoration. So that's where we are in terms of the process. When would we like to conclude? I think we've publicly heard from AMCU that they would like to conclude these negotiations in four meetings. And I think that is certainly something we would agree with and think is possible. So from our perspective, I think we would certainly like to see these concluded by the end of the third quarter. In terms of the three versus the five years, I think, there are several aspects that we need to consider there. Obviously, the longer wage negotiation agreement is four. That does provide an element of stability. But of course, it's very important, again, to recognize that you cannot pay a premium just for a longer agreement. I think as we also recognize we are in a very volatile inflationary environment. And I think to be fair to all stakeholders, including employees, and if you are considering a longer-term agreement, that needs to be able to be flexible to cater for what the inflationary environment is going to be like in the future. And of course, that works both ways. If you ask me in an ideal world, we'll actually get to a point where we have wage increases that are linked to inflation, and we sit annually for a couple of days and settle any differences. But I think we've still got a way to go before we can get there. In terms of the risks, I think quite right, a lot of the major companies have already settled. So that risk is probably more skewed towards ourselves at the moment. But there is no doubt and as we've seen that there have been some industrial action on a smaller scale, by smaller unions. That remains in the political climate we're currently in. And when wage negotiations are on the go, those aren’t easy times and do impact on production and output. So I agree that risk is probably largely lower today than it may have been six months ago, but it is still an area that has impacted the overall output of -- from the country year-to-date. Thank you.

And Richard, it's probably safe to say that we know that our employees would really like to see a five -year wage agreement and we hope that the unions will take note of what their members also want Thanks, James.

Thank you. The next question is linked to the costs, all-in sustaining costs have only risen by 7%, while mining year-to-date, you say is at 12%. How did management achieve this, what were the levers specifics, please, if you can share, was it labor reductions, procurement, et cetera that were pulled? And how much more can these levers be pulled going into the 2023. And then also, given your small increases in all-in sustaining costs versus peers at your PGM business, do you believe that you're putting adequate sustaining CapEx into the business to ensure the future sustainability of your operations?

Yes. Those are all good questions. And certainly, we understand our cost structure as well. Let me say at a high level, we don't skimp on same business capital. But Rich, why don't you -- why don't you pick up on the details

Thanks, Neal. And I guess just to kick off, as Neal mentioned, let me say, answer the last part of that question. First, yes, we are very comfortable with the sustaining capital that is going into the operations -- both in terms of sustaining for equipments and fleets as well as development to sustain ore body. So absolutely, we are comfortable with that, and that gets a lot of focus. I think when looking at an all-in sustaining unit cost, there are obviously several aspects that go into that. On the absolute cost side, so we have seen above above-inflation increases on particular items, steel, fuel, lubricants, certain chemicals we use. So there we have seen above inflation increases. So I think coupled with that, though, we have had a very proactive project and management strategy of our supply chains to try and limit those increases where we can. Of course, the operational efficiencies that come into that as well. So it's a combination of managing supply chains, managing efficiencies and usage, while still experience higher than inflation unit costs on those individual items. I think in addition into the all-in sustaining cost, what we also get going in there, we've seen a benefit this year, of course, it have been royalty. So just relative to the period before royalties have been lower on the back of prices. And then the final aspect that I think is important is we do consider byproduct credits in our all-in sustaining unit costs. Of course, in the total cost basket is the cost of processing those byproducts and it's an area that we've paid particular attention to optimize revenue from those byproducts. So during the current half, we've seen a decrease in the relative credits from the minor PGMs with drops in prices there, the ruthenium and iridium but we've seen a significant increase, particularly in chrome, where we've had a large focus over the last half of the year, and it's been a period where prices have been high. So we did see a benefit on our unit costs from chrome in particular. I think in terms of the levers we can pull, but obviously, our production has been below where we would like to see it. So that is one of the obvious levers. We have extensive work going on at how we can continually optimize our overhead costs, which includes optimizing and minimizing our footprint. And then as I mentioned, the supply chain projects that we have. So those are all levers that we can continue to pull going forward. But I dare say, getting our production back to where we'd like to see it will probably be the single biggest lever that we still have to manage these costs going forward.

Thanks, Richard. The next set of questions is linked to CapEx and projects. I'll ask them all together. Real stated gold CapEx guidance of R3.9 billion is lower than the R5.2 billion guided previously. How much of this difference do you expect to carry over into 2023? Then a question on Burnstone, the industrial action at the gold, SA gold division impact development at Burnstone? Is it still on time and on budget? And then finally, on K4 and Klipfontein at the PGM operations, can we give color on the contribution of the Klipfontein project on production, as well as the progress on the K4 project?

Thanks, James. And again, I think, Richard, you could handle the bulk of that, but perhaps you may also want to loop in Rob.

Perfect. Thanks. Thanks, Neal. And yeah, that's great. Let me start off with the question on the carryover of CapEx and gold. So I think importantly, as I indicated, one of the key aspects to managing our cost during the industrial action was being able to put a hold on all of our costs, including significant overheads. So practically, what that means is that capital, including all the production and the capital essentially just get shifted out. So is there a carryover? Yes, there is, but it's not like there's a significant hump that comes. The ORD that we didn't spend in these three months, we will spend going forward. And likewise, that will just maintain through. So I think it's more a question of just considering that all of the CapEx has been moved out, and that will be a constant move out. It's not like there will be a hump next year to catch up, no, and similarly for the project capital. Burnstone was impacted by the industrial action. And perhaps Rob can provide us with a little bit more detail and thought specifically around Burnstone and the progress at K4, which has been very good. At Klipfontein for that question during the first half of the year, Klipfontein produced marginally over 25,000 ounces, which contributed towards the Ukraine oil production. Thank you. Rob, would you like to make any additional comments just on K4 and Burnstone?

Okay, Rich, I hope you can all see me and I’ll do that quickly. Sorry, one moment. Can I confirm that you can hear me? Okay. With respect to Burnstone, Richard, as you said, Burnstone has been impacted by the strike of the gold operations and it's impacted very similar to that as we experienced on the operations itself. But in addition to that, I would like to add that, it has also been impacted by the slower than planned buildup of labor at the Burnstone project. This is largely due to us trying to recruit predominantly from local areas. Insofar as are we going to be able to catch-up? Are we going to be able to pullback, I don't think I don't think we're going to pullback lost ground due to the strike and the slow buildup of labor. What I am confident alike is that once we are a full complement, we are not going to further behind. In addition to that, what is the impact on the overall project status we're obviously reviewing that now post the strike and I'll know exactly, what the impact is, in the short-time from that. And so far as K4 is concerned at our platinum operations, I actually went underground yesterday our surface shift with the team there, and we actually went the underground yesterday, and I was pleasantly surprised with the progress, I've seen underground. I've also reviewed that project in detail. And we are tracking the schedule very closely in terms of both development, infrastructure as well as capital spend. So let me leave it here. Thank you very much.

Thanks, Rob. I'll give Richard a bit of a break now. I'll ask Charles some questions. How do you expect working capital movements to evolve during the second half of the year? That's the first one. Second one is, restructuring costs of R36 million in the current year. What are those related to? Is it a line item we can expect to continue seeing going forward? And then finally, given the outlook for operations and PGM prices, why did the company mention that after due consideration of future requirements, the dividend may be increased beyond these levels i.e. the 25% to 35% range.

Sure. Thank you, James. And yeah, if we started the working capital, it's not a -- I cannot give you a definitive answer. But what I can say is that, obviously, working capital is impacted by one, the recycling volumes and the recycling prices that we receive, and as these go up and down, working capital response correspondingly. And then similarly, at our South African operations, it's all driven by volumes and cost performance. But assuming that volumes stay constant and we've seen a slight downturn in prices, you would expect the working capital to release over the balance or some release over the balance of the year. But as I said, it's impacted by a whole host of factors. In so far, the restructuring costs are concerned, they are predominantly voluntary separation costs and then medical separation costs which is paid at the time when these employees leave the employee of the company. If you look back over our history, this is a line item, and we can expect that to be there going forward. In terms of your question on dividends, we've always said in terms of the capital allocation framework, if we satisfy all of our priorities which, has been clearly defined in the capital allocation framework, and there's no other uses for cash, that we will return back to shareholders. So that's what that comment relates to. And there's no indication that we will increase the dividend payout. But as I said, once we've satisfied all of those priorities and we do have access. We have the ability to increase beyond that level. So it's not a cost in a low number.

Thanks, Charl. And a couple of questions on M&A. Can we please provide an update on the Rhyolite Ridge lithium boron project? Is it still on track for the H2 2024 production schedule? That's the first one. Second one is about the case regarding the Brazilian transaction, the Appian transaction. When can we expect a resolution? Does that process imply that you will not engage in M&A until that is settled? And then finally, what is the expected size of the attributable investment over three years to develop electrolyzer catalysts alongside arrays.

Thanks, James. And again, I'm going to defer some of these questions to Rob and Charles. Rob and Charles have just been to actually a site -- they've just conducted a site visit in the US at the Rhyolite Ridge project. So I'll refer that one to them. Let me just pick up on some of the other ones. In terms of Appian, we are in the middle of a legal process. We have responded to their claim and filed our papers. I expect it's still a long process. Absolutely -- well, let me say, in no ways does Appian’s legal action stop us from doing any other M&A. The issue around M&A is, as I said in the presentation, that it's all about value. And as you know, we've been through a very frothy period in terms of commodity prices. Our expectation is an economic downturn. The maintaining of a strong balance sheet puts us in a position where we can be quite opportunistic. So these sitting on our hands, not because of the Appian legal process at all. Let me just stop there and ask both Charles and Rob, just to comment on Rhyolite Ridge. Charles, you go ahead first

Thanks, Neal. I think it's a very interesting project that we partnering on. I was really impressed with what I saw and with the engagement with the team. They do have an ambitious set of objectives. We're very supportive of the intent. I think it remains to be seen exactly how those timelines evolve. But I was impressed with what I saw. And I was very impressed with the engagement within the framework of the evolving US legislation that is supportive of local production, local sourcing, and that's been touched on in your earlier question, and it was touched on in Neal's presentation. I think they have been very innovative in how they are seeking to tap US federal funds and engagement around that. And I think they are well ahead of the curve in relation to other mining companies on that ambition. It's quite an onerous set of obstacles to tap federal funding. They are on route with that. And I was really impressed with how they're going about doing that and the collaboration with regulators on that. It remains to be seen how that evolves. It's none of that is easy or quick. So, I think, from my side, impressed with the approach, cautious on what the obstacle course remains for them, not just from the regulatory side, but challenges to that. But Rob, I would pass to you and take your thoughts on that as well.

Thank you, Charles. And like yourself, I was very comfortable with what I saw in Nevada. And when we visited the site itself and interacted with Bernard as well as his team. Possibly just to add on to what Charles has said, the Ioneer and other team have now submitted a revised plan of operations for the Rhyolite Ridge project, which does not impact the teams back [ph] submitted this to the Nevada Bureau of Land Management, they've actually heard back. And Bureau of Land Management has requested some more information as they always do and Ioneer is working on providing them with that information. The Ioneer team, must really be -- very optimistic that they will receive a positive record of decision within the next 12 months to 18 months or so regarding striking up that project after which they can take out the feasibility study, updated and get cracked. So they are now in the final throws of the permitting process for that operation and are optimistic that the result will be good in the next 18 months or so. Thank you.

Thanks, Rob.

Yes, James, we've still got the….

Heraeus..

The Heraeus question. I just -- I'm going to ask Richard to answer that. But I wanted to -- before Richard does that, just say that the new regional structure has provided very substantial additional capacity within regions. And as I'm sure you are probably seeing from today has improved our focus and effectiveness in the way we operate. But in terms of that regional structure, we have individuals within the C-suite that are appointed as commodity champion. So Richard is our PGM Commodity Champion and any market development on the PGM side is managed by Richard and the team, which is why I'm going to ask him to comment on the Heraeus question. But just to complete the picture, Miko, who is unfortunately not able to join us today is our lithium and nickel commodity champion. So we expect him to be very knowledgeable when it comes to lithium and nickel, and Charles will be our gold commodity champion and specialists when it comes to gold. So Rich, why don't you please pick up the question in terms of Heraeus and the funding and so on. Thank you.

Thanks, Neil. Yes, it's actually not a number that we have publicly disclosed, and it's still something that we're working quite closely on. But I guess, to try and provide a bit of a steer for understanding purposes, we would expect the first phase of that project to be somewhere in the region of about €1.5 million, which would be a cost that would be shared by ourselves and Heraeus. So, that's a sort of a ballpark number, but that continues to be worked on and developed.

Three last questions before we go to the phone lines -- the conference call lines. Can you share your reason for expecting a lower palladium price in the second half of the current decade in view of your statement that EV penetration rates are hugely overstated? That's the first one. Second one, could you please comment on the sustainable cost profile of the SA gold operations going forward? We've seen continued deterioration in AISC over the last few years. what is the new normal once production is back at steady state? What is the new steady state production level? And then finally, a question on how much on a US inflation reduction Act? How much of a boost does the IRA give to your green metal strategy in the US? And would we be looking for more green metal acquisitions in the US? Thanks

Good. Thanks and all very good questions. I think let me put into context my comments on battery penetration rates there. There are analysts and there are sectors that believe the internal combustion engine is something that is complete or is history by the middle of this decade. We are not on that page. Our view is that battery metal or battery electric vehicle penetration rates are significant, but they're not that significant that see the demise of the internal combustion engine by the middle of the decade. Our modeling shows that there are significant impacts on internal combustion engine vehicles towards the latter half of this decade. So, it's not an extreme view. I think it's a very balanced view, it acknowledges that the internal combustion engine still has a way to go, but battery electric vehicles will make very significant inroads. And again, I just want to say that does not undermine our view in terms of the ongoing demand for PGMs. There will be a transition from the uses of PGMs in catalysts that will transition into the hydrogen economy. But the one PGM that is going to be impacted unless we find other uses for it is palladium. So, I would argue that we have a balanced view, a more balanced view in terms of the penetration rates of battery electric vehicles, which is going to be significant, but not as significant as some people say. And also we are comfortable in terms of the future role of the internal combustion engine. It will get less, and we have to acknowledge that. And certainly, our repositioning of the US operations, which are predominantly palladium is looking through that commodity cycle. Rich, in terms of the South African gold operations, I think you should answer the all-in…

Thanks, Neal. So, I think if we look at our -- and let me maybe answer that, firstly, referring to Kloof, Driefontein and Beatrix. If we look at where we are seeing the steady state production output in the short-term that would be in the region of about 850,000 to 900,000 ounces per annum. So, when you combine that with DRD and the ramp up in Burnstone, as a group our overall gold production at the moment would still be around 1 million ounces, just above 1 million ounces, but on those core assets in the medium-term, sort of 850,000 to 900,000. Looking at the all-in sustaining costs, based on where we are today, I think we can still see an all-in sustaining cost profile of between R850,000, R875,000 per kilogram is where we're forecasting to get back to now post the ramp up. I think critically importantly, moving forward, as mentioned, we do have several extensive initiatives looking at our overhead costs and how we can realize synergies across the entire operating region, which we'd look to get into there. And then we do have some older higher cost shafts, which over the next couple of years are going to need to be critically evaluated. And while that could have a negative impact on some of the production, I think it will have a positive impact on overall margins, and costs, but that is more of a medium-term view. So short term, $850 million out of those core assets, and roughly 1 million out of the group, at an all-in sustaining cost of around about 850.

Thanks, Richard. I think we'll go to the phone lines now, please. So there are a couple of calls waiting or questions on the line.

Yes, they are. [Operator Instructions] The first question comes from Patrick Mann from Bank of America. Please proceed, Patrick.

Thank you very much for the call. Three questions, please. Maybe one for Neal. Just on your strategy slide, you spoke about green metals and energy solutions that reverse climate change. I just wanted to, to dig a little bit more into that. Are you saying possibly looking at renewable energy, or is that specifically the sort of projects that you've announced around your longer life shafts in PGMs, or we have seen other mining companies and other resource companies globally start to, I suppose try to secure their energy by building out renewables. Is that kind of where you're going with that, or am I reading too much into that statement? And then the second question is maybe for Charl. Just around – you spoke about cash reserves of 27 billion and then a target of 20 million. Can you just remind us, is that your sort of operational level of cash that you expect in the business that you'd want to maintain a sort of float? And then the third question, I'm just looking at Sandouville. I mean, it was a very strong period for nickel prices in the first half of this year and the business is just about profitable. Just thinking about with energy costs rising and with the nickel price coming down, I mean, it doesn't feel like this is going to be profitable in the near-term. Is that a fair assessment? Thank you.

Thanks, Patrick. Charl, let me do the – the first and the last question, and then you can pick up on our view in terms of reserves. Patrick, in terms of green metals and energy solutions, you would remember that at the beginning of the year, we actually introduced already the concept of energy solutions. So we do expect over a long period to become more involved in energy solutions. But this is not, let's call it, the type of energy solutions you've seen – most companies moving towards, which is really renewables, up. We are primarily a mining company, and our focus remains on producing metals. We do believe over an extended period that having some exposure to the downstream side of certain businesses is valuable and appropriate. It's been a very different approach to most other PGM producers. So when we talk of energy solutions, we are probably more focused on – let's call it, grid storage solutions. Yes, solar panels use silver. Silver is a good commodity. Should we come across a good project could well take us into the commodity of silver. But things like Redox batteries, vanadium. There's other molten salt grid storage solutions that use antimony. Those are all things that are currently under investigation, and therefore, I anticipate that you will see an evolution of the portfolio of metals that we are, let’s say, focused on growing to include some of those. In 10 or 15-year’s time, well, there could be an energy division, but that's not our primary focus now. So, we -- I want to, again, just say we’re primarily a mining company, we’re focusing on the metals that provide energy solutions and we may become involved in the downstream and upstream sides to the energy solutions business. So, I hope…

Yes. So Patrick, the way we think about it in terms of the capital allocation framework is we've always said that we wanted a buffer of about an equivalent amount of the bond. And if you think about the bond $1.2 billion if you use an exchange rate 16, 17, I mean pick a number. That's how we get to the $20 billion. So that's the way we think about it. And as far as possible, we'd like to preserve that position. That is, obviously, subject to the way we manage the business and ongoing working capital that we may need in the business. But in terms of liquidity that we'd like to have in the business, we generally target about two months of operating costs, if you think about last year, where we spent about R100 billion in terms of operating cost, two months of that would be about R16 billion. And currently, we have that, excluding the cash buffer that we have in available facilities. So we've got the $600 million facility, which is roughly about R10 billion. And then we've got the R5.5 billion facility. So from a liquidity perspective and from a cash buffer perspective, we try and keep them separate. But as you would know, they may intermingle, but so think about the 20 as a buffer for the bond. And then if you think about our available facilities, we need about two months of operating costs Thanks, Patrick.

Thank you for the answers guys. Very clear. Thank you.

Thank you. The next question comes from Leroy Mnguni from HSBC. Please proceed with your question Leroy.

Good morning, guys. Neal, you mentioned earlier that you see battery electric vehicles gaining significant momentum in terms of penetration but not quite as rapidly as what most people think they would. Could you maybe share with us what you think some of the headwinds could be, or what is the market missing with their bullish adoption forecast?

Sure, Leroy. Is that your only question?

I mean my other question, Charles touched on partly, but you've said before when you gave the strategy update that if you don't find acquisitions and your balance sheet is in good shape. You would look at doing special dividends and buybacks again. We do seem to be getting into that territory now. You're seeing, you're not finding value-accretive deals, your balance sheet is looking pretty good. You've got the sort of buses that you need. Would it be unreasonable to assume that you'd resume either special dividends or buybacks at the end of the year?

Yes. Okay. No, good. Let me have a go on both and Charl. I'll start the buybacks, if you want to add, please feel free. But look, a year is very short in the life of a strategy or a company. It's -- so yes, we do have additional reserves. And we haven't seen value accretive opportunities, let's say, over the last year or so. But we do think that's going to change. So we would prefer to retain the current balance sheet so that we can be opportunistic as we move into what we believe will be a bit of a recession. Having said that, we remain committed to our dividend, absolutely. That's not even negotiable. Buybacks, we've always said are something that we can use when we also see value opportunities. But you would also note that we have moved to cash settled a share option scheme or share scheme, which over a period normally amounts to about 5% of dilution. So buybacks really continues, I want to say in a very subtle way. Whether we will step up and actually use that excess cash for buybacks at this stage is unlikely, because we see opportunities on the horizon. But that doesn't mean we've walked away from buybacks. We moved to a cash settled scheme effectively to ensure there's continuous buyback of our shares. Charl, is there anything you want to add to?

No, Neal, what I will add is -- to your point, there's nothing on the horizon in so far as M&A is concerned. But definitely, we've made some further acquisitions on the Keliber project, which we believe in time will be a fantastic project. And I think we've got commitments subject to the permitting requirements on Rhyolite-Ridge that will flow probably into 2023, 2024. So we're just keeping an eye on those as well, because we may have some commitments coming up in terms of those two projects.

Good stuff. So Leroy, the question you asked on headwinds regarding battery electric vehicle penetration rates. I think as a mining company, we are acutely aware of how difficult it is to bring new projects to account. And predominantly, I think that the markets, whether they are OEMs that are going to build battery electric vehicles and even analysts and investors that perhaps don't have a mining background, underestimate that difficulty. And therefore, there is going to be a shortage of specifically lithium and nickel of the right form. When you couple the complexity of in an environment that we used to work in, where there was, I would say, very little consideration given to carbon emissions when you overlay the carbon emission complexity related with these products, it becomes even more difficult. So that's why probably the primary reason, I believe the penetration rates are somewhat overstated. Are battery electric vehicles a good concept? Absolutely. And they will feature, especially in certain regions and in certain circumstances. The electric powertrain is here to stay with the aisle of petrol hit like it or not, that is a fact the primary drivers will, of course, not just be batteries, but will also be fuel cells and hybrids. And then, of course, when you talk to anyone that's about to buy a battery electric vehicle, most of them are still concerned about range. Most of them are still concerned about being able to do long trips. And therefore, they really only appeal to at this stage to quite a unique group of users. So I think the primary issue is the difficulty of bringing enough battery material on stream to fuller demand, and therefore, there is going to be constrained. So that's my reason.

Thanks. Thanks for the response. It’s very helpful.

The next question comes from Adrian Hammond from SBG Securities. Please proceed, Adrian.

Good morning, Neal and your team. I have two questions. Firstly, could you give us some longer-term CapEx guidance for the group into 2023, 2024? Being aware of, obviously, your plans around Sandouville, Keliber, Lonmin. That's the first question. Secondly, the -- just thinking about M&A and your liquidity. You -- sitting on net cash, R8 billion, you still got to pay off the Keliber transaction, which assuming that goes through, brings you back down to Net Zero. So you're obviously relying on building the cash balances up again. So I'd just like to know what you're prepared to consider terms of funding or future deals, whether it would be equity or debt? And what sort of leverage ratios you're prepared to go up to? Thank you.

Thanks, Patrick. Good questions. Let me start with the M&A question and Charl may want to add on to that. And then, Charl, if you can give Adrian some idea of the group's CapEx profile. So, Adrian, I think every acquisition is an acquisition or is a point in time where you consider the best way of funding it. I think what is clear, is we have a very rigid capital allocation framework, which Charl went through. It's been the same for a few years now. We won't compromise our dividend, but we can access a variety of sources for funding. There's the cash flows that currently come from the business. We can access the debt market. And, of course, we can access the capital markets. But we are reluctant to use equity, because we believe it's undervalued. Of course, it's always a relative game. So that's why it's very hard to give you an exact answer, but what we won't do is, bet the farm on debt. We won't use undervalued equity. And we will maintain our dividend. And I think that's what shareholders expect of us. We also won't do anything that's not value accretive. As you know, we do hold a view that we can create very significant value, which is also, I think, it was Leroy that asked the question, which is why we would also probably want to keep money on our balance sheet. We've got a good track record of creating value through M&A and growth. Charl, please feel free to add on to that and then deal with the CapEx question.

Neal, I think you've answered the question adequately. I don't think it's an issue currently of sourcing funding, it's just we are in a high interest rate environment. So the cost of funding might be a challenge. But, I guess, access to funding is not going to be a challenge for us. To your point, we've got adequate cash and we've got adequate facilities currently. So yes, I think, we're in a very healthy position. Adrian, in so far as long-term CapEx, it's not something I want to kick down the road. But what I can say is that, we are in the process of preparing our business plans. And then shortly after that, we do our life of mine plans. But I think conceptually, the way to think about our longer-term CapEx is to basically look at what we've put out for 2022. Obviously, you have to shave off the project CapEx like, for Burnstone, et cetera. And that's sort of a sustainable number going forward, assuming a fairly constant profile. But I think what I can say is that, as soon as we've got our life of mine plans fully bedded down, because we've had some changes in the business be it Stillwater, we've seen a delay in CapEx at our gold operations, the inclusion of Sandouville, and then we have to start thinking about the two other projects, Keliber and Dry Light Reach, we can probably share that with you once we've got those plans updated. But as I said, conceptually, the numbers we've got now, excluding CapEx is a very good sustainable number -- sorry, excluding projects is a very good sustainable number going forward.

Thanks guys.

Thank you. At this time, there are no further questions on the phone lines.

Thank you. We've got two more questions on the -- from the webcast. Just before that, I asked the questions, I'd just like to point out that we did have some Investor Days last year, where we gave 10-year profiles for all of the operations including CapEx. So, if you do want to find the CapEx for each of the segments, it is available on our website. And Charl's right, I mean, for the next few years, it's fairly consistent. But thereafter, the gold CapEx starts dropping as production starts declining. So, by about 2025 and 2026, CapEx is halved almost from the gold operations. Okay. Last two questions from the webcast. The deferred payment -- acquisition payment of 35% of cash flow from the Rustenburg operations to Anglo Platinum will conclude during Q4 2022, further enhancing cash flow from the SAPGM operations. How much of this future additional cash flows will be applied towards dividends or M&A? Can we expect similar R4.4 billion odd quantum in the deferred payment in Q4 2022? And then the final one is about zama-zamas. We've seen the risks of zama-zamas increasing in the mine operations. What role will Sibanye-Stillwater play with other stakeholders to voice its concerns or advice?

Yes. So, let's start with the zama-zamas question. As you know, we have highlighted this issue for many years. We've incurred a considerable amount of money dealing with the problem. And I dare say that has even led to sharp closures, perhaps earlier than they should have been. So, it's a tremendous problem, it is to me very unfortunate that it only gets recognized as a problem for the reasons of some angles being right. And that's a tragic incident in its own right. But the fact that Zamas -- that illegal mining is now very visible is, in my mind, a good outcome that we should declare a state of emergency. We should involve the military, it's something we have requested special assistance with from the police. It's not going to be solved by dealing with the obvious issue of the illegal miners. We've got to address the syndicates. We've got to deal with this internationally and stop just focusing on the individuals that are abused at the lower end of illegal mining. What role will we play? We will continue to engage with the international organizations, we'll continue to engage with the Minerals Council and local institutions that should be dealing with it, and we'll continue to do what we can do as a company to get rid of the courage and issue. I have to be the first one also to point out that it happens because of the lack of unemployed, because of a lack of jobs. It's a poverty issue. So this is the manifestation of low economic growth as well. So it's a big issue and it's much more complex than the poor legal miner that we continuously arrest. We really need to get to the issue of the people that sit behind us and drive this very undesirable practice. Rich, you may want to add something on to that?

I think that's well covered, Neal. I think that absolutely the terms zama-zamas obviously often makes us think of the individual at the face. But as you say, this is really a much bigger issue that needs to tackle the syndicates. I think in addition, we are of course, working with our peers across the industry. And in the short term, in our own sort of strategic operations is how we can mitigate risk and one of our immediate priorities is obviously addressing this to make sure that our employees who are going to work on a daily basis, do feel safe to work in that environment. So that is one of our short-term objectives, but it is a much bigger challenge that needs to be addressed and multifaceted.

Yeah. Thanks, Rich. And then just coming back to the question, James, on the cash flow from the Rustenburg operations. Clearly, it's dependent on commodity prices, PGM prices. We do expect a better second half to the year. So it should be a similar amount if prices hold up clearly, once those payments are completed, it's going to enhance our cash flow significantly. Remember that normalized earnings will also grow. So the portion that gets allocated to dividends will increase in the same proportion. So shareholders will get a benefit to it as well. Obviously, as I've said, M&A is dependent on many things, but one way of funding M&A is through cash flow and if our cash flow gets better, that will make the funding easier. It doesn't mean we'll do more M&A, but certainly, the pool of resources that we have to do that should be larger. Charl, is there anything you want to add?

Neal, I can finally remember 2018 and 2019 were either seat at every credit committee of our lenders, so almost selfishly I would like to hold on to that cash. But no, I think you are right, we will put it through our capital allocation framework, and we'll evaluate it based on that framework that we've set for ourselves. Just in terms of quantum, as Neal has said, it is commodity price dependent. Order of magnitude, if you look at last year versus this year, prices are down by, give or take, 20%. So at this stage, the estimation is probably in the order of about R3.5 billion potentially that outflow will be. That is payable before April next year and then thereafter those cash flows will accumulate to ourselves.

Thanks, everyone. I think that's the end of the questions. I'd like to thank everybody for joining us on this -- for this presentation. And if you've got any further questions, please send us an e-mail or give us a call, and we'll be happy to respond as soon as we can. Thank you very much.