Sibanye Stillwater (SSWJ.J)- Capital allocation is the key for elimination of deep valuation discount;reiterate Buyr此为英文文档

31August2022|3:39AMMSKSibanyeStillwater(SSWJ.J)Capitalallocationisthekeyforeliminationofdeepvaluationdiscount;reiterateBuySSWJ.J12mPriceTarget:R55.00Price:R37.84Upside:45.3%SBSW12mPriceTarget:$14.30Price:$9.05Upside:58.0%SibanyeisthecheapestwithinGSM&McoverageonEV/EBITDA.SSWtradesonEV/EBITDAon2023E,thelowestmultiplenotonlywithinourPGMandSouthAfricanminerscoverage,butalsowithinGSglobalmetals&miningcoverage.Thestoks2023EEV/EBTAmultipleimplies45%and65%discountstoPGMminers(NPH,IMPandAMS)andglobalmetals&miningcompanies,respectively.Inthisreportwediscuss3factorsthatinourviewSSWanattractiveinvestment:M&Astrategyfocus:greenmetalsanddevelopedmarkets.SSWhasgrownfromahighcost,SouthAfricangoldminingcompanytotheorldstopPGMproduce,makingvalueaccretieacquisitionswithshortperiodsamidlowPGMpricesin

NinaDergunova+7(495)645-4230|nina.dergunova@OOOGoldmanSachsBankIliaDmitriev+7(495)645-4015|ilia.dmitriev@OOOGoldmanSachsBankKeyData Marketcap:R109.7bn/$6.5bnEnterprisevalue:R97.9bn/$5.8bn3mADTV:R471.4mn/$28.8mnSouthAfricaCEEMEA(ex-MENA)BasicMaterialsM&ARank:Leasesincl.innetdebt&EV?:YesGSForecast (ROld 2016-2019—demonstratingasolidtrackrecordinwell-timedacquisitions.Managementmentioned(duringtheconferencecallpost1H22results)thatitwilltakeapricesensitiveandselectiveapproachtoM&Agrowth(givenarecentspikeinmetalprices),butwenotethatitsstrategycontinuestoonbuildingportfolioexposuretogreenmetals(targetingtobringitto~30%ofrevenue,withLithehighestpriorityandNithesecond)andexpandingoperationsinEuropeandNorthAmericainordertoeliminatetheSouthAfricanvaluationdiscountonitsshareprice.Onourestimates,thecompanyispositionedforM&Afromabalancesheetpointofwiththeoptionalitytoallocateover$5bntoacquisitionsandstillmaintainleverage1xND/EBITDAbyend-2023.recordofefficientcapitalallocation:thefocusisonlyaboutaccretiveacquisitions.believethattheSibanyehasbeenquiteprudentinitscapitalallocationframework,payingdividendsatthehighendofitsdividendpolicyandcommencing

EBIT(R EPSP/E(X) DividendyieldNt/EDAxls) ) ) ) ) EPSGSFactorProfile GrowthFinancialReturnsMultipleIntegratedSSWJ.JrelativetoEuropeCoverageSSWJ.JrelativetoCEEMEA(ex-MENA)BasicMaterialsSource:Companydata,GoldmanSachsResearchestimates.Seedisclosuresfordetails._Buy_BuyGoldmandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.aresult,investorsshouldbeawarethatthefirmhaveaconflictofinterestthatcouldtheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Forcertificationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto/researh/hedge.html.Analystsemplyedbynon-USafiliatesarenotregistered/qualifiedasresearhanalystswithFINRAintheGoldmanGoldmanSachsSibanyeStillwater(SSWJ.J)3131August2022PAGE9SibanyeStillwater(SSWJ.J) BalanceSheet(Rmn) Cash&cashequivalents30,292.034,783.746,704.061,775.9Accountsreceivable7,411.07,124.07,124.07,124.0Inventory25,080.027,005.027,005.027,005.0Ratios&Valuation currentassets2,048.01,746.01,746.01,746.0otltssts0709EV/sales(X)1.0NetPP&E62,494.073,370.079,698.184,511.6EV/EBITDAR(X)1.3Netintangibles7,727.07,987.07,987.07,987.0EV/EBITDA(excl.leases)(X)1.3Totalinvestments11,612.07,833.07,833.07,833.0EV/EBIT(X)1.6Otherlong-termassets6,330.09,430.09,430.09,430.0P/E(X)3.7Totalassets07.6Dividendyield(%)8.0Accountspayable15,162.014,392.014,392.014,392.0EV/GCI(X)0.4Short-termdebt107.0115.0115.0115.0CROCI(%)34.623.422.220.9Short-termleaseliabilitiesROIC(%)51.231.729.829.2Othercurrentliabilities5,272.04,288.04,288.04,288.0ROA(%)24.217.316.215.0Totalcurrentliabilities0000Daysinventoryoutst,sales53.067.468.065.1Long-termdebt20,191.020,772.020,772.020,772.0Assetturnover(X)1.8Long-termleaseliabilitiesD&A)153.6206.4182.2163.1Otherlong-termliabilities30,917.029,716.429,221.228,713.4Nttityxcl.lass)%)(12.3)(13.9)(21.7)(29.4)Totallong-termliabilities.0,,EBITinterestcover(X)24.2218.6225.3232.9Totalliabilities.0.FCFcoverofdividends(X)2.82.02.42.6PreferredsharesGrowth&Margins(%) TotalcommonequityMinorityinterest.7,.9..6Totalliabilities&equity07.6Totalrevenuegrowth35.2(18.0)2.74.6Capitalemployed0,9EBITDAgrowth38.9(28.9)4.62.7Adjforunfundedpensions&GWEBITgrowth44.3(30.7)3.73.4Netinc.growth26.5(26.7)3.72.5CashFlow(Rmn) EPSgrowth6.2(15.7)3.32.5DPSgrowth29.1(32.8)4.52.3NetincomeD&Aadd-back8,293.07,011.67,698.77,624.7PricePerformance Minorityinterestadd-back742.0763.2809.6830.1SSW.JNt(ic/cwrkigcaital2,455.0(2,408.0)Otheroperatingcashflow2,064.0(144.6)(495.2)(507.8)Cashflowfromoperations0009Capitalexpenditures(12,740.0)(14,472.3)(14,026.8)(12,438.2)AcquisitionsDivestituresOthers(1,828.0)Cashflowfrominvesting(.)()(.)()RepaymentofleaseliabilitiesDividendspaid(common&pref)(18,176.0)(9,291.7)(10,082.8)(9,164.3) c/c)int 4 0 -- --financingcashflows □□□□□□□hfowfomfncg ()())()Totalcashflow7.9Reinvestmentrate(%)26.641.838.933.9Source:FactSet.Priceasof30Aug2022close. Source:Companydata,GoldmanSachsResearchestimates.BuyRatingsinceMay9,2022IncomeStatement(Rmn)BuyRatingsinceMay9,2022tar tarat D rrat □□□□ □□ □□ratnartatn □□ □ □□ ttrt raat 1rtn tart □□□□□ □ □rvnrta rttt rrr □ □

□

□_ttta _□□ □ □ □□ □ □ □taar art nar __ofContentsThestockwithinGSglobalminingcoverage5M&Astrategyfocusisongreenmetalsanddevelopedmarkets6Prudentcapitalallocationframeworkwithdividends&buyback,whilefocusremainsonvalue-accretivedeals 9Exposuretogold:AnotherdistinguishingfeaturewithinPGMminingspace10StresstestingtheearningofSibanye12Zoominto1H22earnings:observationsfrom1H2214Keydiscussionpoints:Questionsformanagementpost1H22earningsrelease17Estimatechanges:Modelupdatepostresults18DisclosureAppendix20__buybackslastyear.Goingforward,wedon’texpectindustryleadingdividend/buybackpayoutsbutforthefocustobeoncreatingvaluethroughacquisitions.Yetweacknowledgeupsideriskstoourpayoutassumptionswhichwilldependonthecompany’sabilitytofindsizableacquisitiontargets(notewedonotmodelM&Ainournumbers).SSWhasuniquegoldexposurewithinourSAPGMGScommodityteamseesrecessionrisksremainingtopofmindlongerthanpolicyrisks,whichcoupledwithaUSdollarandreboundinEMwealthshouldsupportgoldpriceperformanceinthemidterm.GS2-monthtargetforgoldis$1,950/oz,implyingupsidevscurrentspotlevels.PGMssectoriscyclical;undertestscenario,Sibanyestillremainsstronginahistoricalcontext.Inourstresstest(golddownvsspotonUSDappreciation;PGMdownvsspotonrecessionconcerns),SibanyestillgenerateandFCFwellabovemid-cycle,withastrongerbalancesheetposition-netcashundersuchamarkeddropinmetalprices.WereiterateourBuyratingonSibanye.Weseeanappealingvaluation(thecheapeststockwithinGSM&McoverageonEV/EBITDA)coupledwithitsstrategicfocusonacquiringgreenmetalsassets(weviewthispositivelygiventhecompany’strackrecordinM&Aandhealthybalancesheet)indevelopedmarkets(inordertoeliminateSAvaluationdiscount)anduniqueexposuretogold(GSsees12%upsidetothegoldpriceon12-mohorizon)withinourPGMcoverage.WiththisnoteweupdateourPTandestimatesfor1H22financialresults,newgoldpriceforecastsfromourcommoditiesteam(seeGold’sbalancingactbetweengrowthworriesandrealrates,9August2022),USPGMrevisedplanandMTMmacroassumptions.ThecheapeststockwithinGSglobalminingcoverageSibanyeisthecheapestwithinGSM&McoverageonEV/EBITDA.SSWtradesatEV/EBITDAon2023E,thelowestmultiplenotonlywithinourPGMorSouthAfricanminerscoverage,butalsowithinglobalGSmetals&miningcoverage.ThestoksEV/EBITAmultipleimpliesc.45%andc.65%discountstoPGMminers(Northam,ImpalaandAngloPlatinum)andglobalmetals&miningcompanies,respectively.Exhibit1:SSWisthecheapestwithinGSM&McoverageEV/EBITDA2023E(calendaryear),x20x18x16x14x12x10x8x6x

GSM&Maverage:5.2x

Northam3.1x

Amplats4.4x4xSibanyeImpala1.8x2xSibanyeWhitehavenCoalLtd.KGHMSibanyeWhitehavenCoalLtd.KGHMImpalaUsiminasSchnitzerNewHopeLundinMiningCorp.AngloGoldAshantiSouth32Ltd.ChampionIronLtd.CoalIndiaLtd.BlueScopeSteelBaoshanIron&RioTintoTeckResourcesCSNMineracaoChinaCoalEnergyCleveland-CliffsInc.ChinaShenhuaEnergySandfireResourcesAntofagastaPlcErdemirCSNMaanshanIron&SteelIlukaResourcesSimsMetalJiangxiCopperConstelliumFreeport-McMoRanBHPGroupLtd.CMOCZijinMiningRelianceZijinSouthernCopperKaiserAluminumCorp.BefesaSAYankuangEnergyAluminumCorp.of…ZhaojinMiningIndustryDeterraRoyaltiesLtd.HuayouCobaltGanfengLithium

2.3xSource:GoldmanSachsGlobalInvestmentResearchExhibit2:SSWtradesatclosetoatroughlevelonEV/EBITDAmoforwardEV/EBITDA,x

Exhibit3:Keydata__Oct-16Apr-17Oct-17Apr-18Oct-18Apr-19Oct-19Apr-20Oct-20Apr-21Oct-21Apr-22KeydataCurrentOct-16Apr-17Oct-17Apr-18Oct-18Apr-19Oct-19Apr-20Oct-20Apr-21Oct-21Apr-22KeydataCurrentPrice(R)39.812monthpricetarget(R)55.0Upside/(downside)(%)38%Marketcap(Rmn)115,372Enterprisevalue($mn)100,5452021202220232024Revenue($mn)11,6428,9668,6028,9971.9xEBITDA($mn)4,6383,1013,0313,114EPS($)0.770.610.590.60Dividendsdeclared($mn)909579566579FCF($mn)2,5481,1301,3071,439EV/EBITDA(X)2.4x1.9x1.8x1.4xP/E(X)5.3x3.9x4.0x3.9xDividendyield(%)8.0%8.7%8.5%8.7%FCFyield(%)21.3%16.4%18.8%20.6%CROCI(%)35.8%24.3%22.1%20.8%Source:FactSet,Companydata,GoldmanSachsGlobalInvestmentResearch Source:Companydata,ThomsonReutersEikon,GoldmanSachsGlobalInvestmentResearch__M&AstrategyfocusisongreenmetalsanddevelopedmarketsSSWhasgrownahighcost,SouthAfricangoldminingcompanythetopPGMmakingvalue-accretiveacquisitionswithshortperiodsamidlowPGMin2016-2019.This,believe,demonstratesthecompany’sabilitytoconductwell-timedacquisitions.Whilemanagementmentioned(duringtheconferencecallpost1H22results)thatittakeacautiousapproachM&Agrowthposttheincreaseinbatterymetalprices,theyalsosaidthattheytothecurrentbalancesheetsothattheycanbeopportunisticonM&Amovingapotentialrecession,withbuybacksunlikelyatthisstage.strategyfocusesonbuildingportfolioexposuretogreenmetals(target-onethirdofrevenue;lithium-thehighest-thesecondhighest)andexpandingoperationsEuropeandNorthAmericainordereliminatetheSouthAfricanvaluationdiscountintheshareOnourestimates,thecompanyispositionedforM&Afromabalancesheetpointofwiththeoptionalityallocate$5bnandstillmaintainleveragebelow1xND/EBITDAbyend-2023.SSWturnaroundstory:fromhighcostSAgoldminingcompanytotheworld’stopPGMproducer.Sinceestablishmentin2013(GoldFieldsspin-off),SSWhasdiversifiedbymetalandbygeography.Thecompanyhasgrownfromahighcost,SouthAfricangoldminingcompanytotheworld’stopPGMproducer.Historically,thecompanyhasbeenveryactiveintheM&Amarket,makingvalue-accretiveacquisitionswithshortpaybackperiodsamidlowPGMpricesin2016-2019(seeExhibit5andExhibit6).Exhibit4:SSWplansnewvalueaccretivegreenmetalgrowthstrategySource:Companydata__Exhibit5:SSWExhibit5:SSWwasactiveintheM&Amarketin2016-2019,making Exhibit6:...justbeforerhodiumandpalladiumpricesstartedrisingvalue-accrectiveacquisitionsamidlowPGMprices... sharplySSWsharepriceinUS$termsandmetalbasket(indexedto100) PGMprices(indexedto100)7006005004003002001000ActiveM&AperiodinPGMs21930002700240021001800150012006003000ActiveM&AinPGMs3521,48031570Sibanyeshareprice(US$)SibanyePGMmetalbasketRhodiumPalladiumPlatinumJan-14Nov-14Apr-15Sep-15Feb-16Jul-16Dec-16Oct-17Mar-18Aug-18Jan-19Jun-19Nov-19Apr-20Sep-20Feb-21Jul-21Dec-21May-22Jan-14Jul-14Jan-15Jul-15Jan-16Jul-16Jan-17Jul-17Jan-18Jul-18Jan-19Jul-19Jan-20Jul-20Jan-21Jul-21Jan-22Jul-22MorecautiousapproachtoM&Agrowthamidescalatingbatterymetalprices,yetholdingthebalancesheetforopportunisticacquisitions.Whilemanagementmentioned(duringtheconferencecallpost1H22results)amorecautiousapproachtoM&Agrowthposttheincreaseinbatterymetalprices,theyalsosaidthatwouldtoretainthecurrentbalancesheetsothattheycanbeopportunisticonM&Amovingintoapotentialrecession,withbeingunlikelyatthisstage.SibayescurentM&Astraegy:focusonlithium(thehighestpiority),nicel(secondhighest)andothergeenmetals.Sibanesstrategyfocusesonbuildingportfolioexposuretogreenmetals,includeslithium,nickel,cobalt,uranium,manganeseandgraphite.Thecompanyhighlightedthatithasprioritizedlithiumexposure.isthesecondprioritymetal.Accordingtothecobaltisreasonablyriskyintermsofitsfuturelong-termdemand.ManagementalsohighlighteditsinterestinbuildingitsSouthAfricanresourcesofuraniumthroughacquisition.WhileSibayesgoldoutputwilldeclineoerthenextdecade,thecompaydoesnotintendacquiregoldminesnow.Managementhighlightedthatstrategicallythecompanyseesgoldexposurepositivelygivenitscounter-cyclicalandwouldliketoabiggergoldportfolio.despitedeclininggoldoutputoverdecadeduetoshortLOMofgoldmines(Beatrix:2025,Cooke:2025,Driefontein:2031,Kloof:2032),managementsaidthatitisnottherighttimetoconsidercorporateactioninthegoldindustrygivenexpectationsofmetalpriceweakness.SibanyeintendseliminatetheSouthAfricanvaluationdiscountbyexpandingoperationsEuropeandNorthAmerica.OneofthevaluationissuesSibanyeisthehighofearningsthatcomeoutofwhatthemarketperceivesasariskyenvironmentinSouthAfrica.ManagementthinksthatthisviewmightbechangedquicklywiththecompanycontinuingtotargetacquisitionsinEuropeandNorthAmerica.AstheylooktoaddressthisSouthAfricanvaluationdiscount,thecompanymentionedthattherewouldbenewinvestmentinAfrica,atleastintheshortterm.SibanyehastheoptionalitytoallocatetoM&AoverUS$5bnandmaintain__leveragewell1xND/EBITDAend-2023E.Onourestimates,thecompanywillZAR27bnnetcashpositionbytheendof2023.Onour2023estimateofZAR51bn(US$3.5bn),thecompanycouldspendover$5bnonacquisitionswithND/EBITDAstayingatacomfortableof0.9x(vslast5-yearrangeof-0.2-2.6xND/EBITA).Sibanyehasalreadyannouncedseveralacquisitions(c.US$250mninvestedwith2optionstoexpandcurrentoperationsforatotalUS$1.0bn)ingreenmetals:Keliber(Finland;lithium)-FinnishminingandbatterychemicalcompanyownstheKeliberproject,anadvancedlithiumhydroxideprojectlocatedinFinlandintendstosustainablyproducebatterygradelithiumhydroxideutilizingitsownore.Keliberaimstobethefirstfully-integratedlithiumproducerinEurope,targetingfirstproductionin2024andrampinguptoproducearound15ktoflithiumhydroxideperSSWacquiredaninitial30%shareholdinginKeliberforEUR40mn(announcedineb’21).InJu’22,Sibaneannouncedthatitintendstoexerciseitspre-emptiverighttoincreaseitsshareholdinginKeliberto50%plus1share.Inaddition,thecompanyistominorityshareholdersouttoboostitsstaketo80%.AccordingtothethetransactionisexpectedtobecompletedbyFebruary2023andwillcostEUR446mnatmost.RyoliteRide(US;lithium)-InSep’21,agreementwasreahedwithionee,anASX-listedminingdevelopmenttoestablishJVinordertodeveloptheRhyoliteRidgelithium-boronprojectintheUSthroughaninitialstrategicinvestmentofUS$70mningivingSSWastakeinthatRhyoliteRidge,anadvancedstageexplorationprojectinNevada,aimstoextractalarge,shallowlithium-borondeposit,locatedclosetoexistinginfrastructure.Accordingtomanagement,itisexpectedtobeoneofthefirstlargescalelithiumprojectstoenterproductionintheUS.Productioniscurrentlyscheduledfor2H24.Additionally,thecompanyexpectsthatonceallconditionsforthetransactionbeenmetandthenecessarypermitsobtained,SSWwillcontributeUS$490mnfora50%interestintheioneerwillretainoperationalmanagementresponsibility.Sandouville(France;andcobalt)-InFebruary2022,SSWconcluded€85mnacquisitionofSandouvillehydrometallurgicalnickelprocessingfacilitiesinFrance.Sandouvillehasstrategicaccesstoextensivelogisticalinfrastructureincludingshipping,railandkeymotorways,supportinganyfuturesupplyintotheEuropeanendusermarkets.TheSandouvillefacilitiescurrentlyincludeahydrometallurgicalnickelrefinerywithanannualproductioncapacityof12ktofhigh-puritynickel,4ktofhigh-puritynickelsaltsandsolutionsand600tofcobaltchloride.SSWcontinuestoevaluateitsoptionsforthesite,inparallelwithexistingoperations,totargetspecificnickelbatterymetalproductsandunlockthefullpotentialofthesefacilities.Adetailedinvestmentanddevelopmentplanwillbeprovidedinduecourse.NewCenturyResources(Australia;Zinc)-InOctober2021,SSWacquiredashareholdinginNewCenturyResources$46mn),aleadingtailingsmanagementandrehabilitationcurrentlyownsandoperatestheNewCenturyzinctailingsretreatmentoperationinAustralia.Centuryisamongthetop15globalzincproducerswithannualzincproductionof128ktin2021).Prudentcapitalallocationframeworkwithdividends&buyback,focusremainsonvalue-accretivedealsWebelievethattheSibanyehasaprudentcapitalallocationframeworkwiththecompanypayingdividendsatthehighendofitsdividendpolicyandcommencingbuybackslastyear.Goingforward,wedon’texpectindustry-leadingdividend/buybackpayoutsbutforthefocustobeoncreatingvaluethroughacquisitions.Yet,weacknowledgeupsideriskstothepayoutwhichwilldependonthecompany’sabilitytofindsizableacquisitiontargets.Prudentcapitalallocationwithafocusonvalue-accretivedeals.believethatSibanyehasaprudentcapitalallocationframeworkwithcompanypayingdividendsatthehighendofitsdividendpolicyinthelasttwoyears(divpayout:35%ofnormalizednetincome;divipolicyimplies25-35%payout).Inaddition,thecompanyannounceda5%lastyear(during1H22,managementhighlightedagainthattheythinkSibanyesharesareundervalued)spendingZAR8.5bnwiththecombinedanddividendbeingc.60%.believethatthebuybackprogrammeispositiveforsentimentandthereforethecompanywillspendfundsonlyonvalue-accretivedeals.Wedon’texpectindustry-leadingreturns,yetthedividend-buybackpayoutwilldependonvalue-accretiveacquisitions.Wedon’texpectanindustry-leadingdividendandbuybackpayout(comparedtokeyindustrypeers-Amplats,ImpalaandNortham)fromSibanyebutforthefocustobeoncreatingvaluethroughacquisitions.Yet,webelievethatmanagementcansurprisewithbuybacks(observedin2021)ifitdoesn’tfindsizablevalue-accretiveacquisitions(ashighlightedearlierweestimatethecompanycanspendover$5bnonshareholderreturnsoracquisitionswithleveragestillbeingbelow1.0xND/EBITDA).Exhibit7:Weexpectindustry-leadingreturnsbutforthefocustobeoncreatingvalueviaacquisitionsDividendandbuybackas%ofnormalisedearnings

Exhibit8:Leverageisroughlyinlinewithkeypeers(ifweassumeabsenceofacquisitons)ND/EBITDA,x75%49%

58%

79%55%

91%

80%70%66%

1.7x

x

0.2x 0.1x33%26%

30%

43%35% 35%30%

-0.1x -0.2x-0.5x -0.5x-0.8x -0.8x

-0.5x

-0.5x-1.5x

-0.7x

-0.5x-1.9x2020 2021 2022E 2023ESibanye Impala Northam Amplats

2020 2021 2022E 2023ENortham Sibanye Amplats Impala__Source:Companydata,GoldmanSachsGlobalInvestmentResearch Source:Companydata,GoldmanSachsGlobalInvestmentResearch3131August2022PAGE19__Exposuretogold:AnotherdistinguishingfeaturewithinPGMminingspaceSSWhasuniquegoldexposurewithinourSAPGMcoverage.GS’commodityteamseesrecessionrisksremainingtopofmindlongerthanFedpolicyrisks,whichcoupledwithaweakerUSdollarandreboundinEMwealthfactorshouldsupportgoldpriceperformanceinthemid-termwithGS12-motargetof$1,950/ozimplying12%upsidevscurrentspotlevels.SSWhasthemostdiversifiedmetalsbasketwithingPGMminerswithgoldexposurebeinguniquewithinourSAPGMcoverage,andweseeitasanadvantagewithourcommoditiesteamhavingamoderatelybullishviewonmid-termgoldpricedynamics.SibanyeandFCFby5%and7%foringoldprice,onourestimates.Exhibit9:SibanyehasuniqueexposuretogoldwithinPGMminers2021revenuebreakdownbymetal,%Source:Companydata,GoldmanSachsGlobalInvestmentResearchGSsees12%upsideingoldon12-mohorizononrecessionUS$dollarandeboundinEMwealt.WhileGS’commodityteamisneutralongoldintheshortterm(astighteningandgrowthrisksmixlookmorebalancedtheFedbroughtgrowthintoitsreactionfunction),theyexpectrecessionrisksremainingtopofmindlongerthanpolicyrisksastheextentofmonetarytighteningeffectstheeconomywithalag,impliesconstructivemid-termoutlook.Inaddition,USdollarandreboundinEMwealthshouldalsosupportgoldpriceperformance.Oerall,GSexpectsthegoldpricetoreah$1,950/ozona2-mohorizon,implying2%upsidevscurrentspotlvel.ormoredetailspleaseseeGoldsbalancingactbetweengrowthworriesandrealrates,92022.ExhibitExhibit10:GoldETFshavedisconnectedfromrecessionrisksExhibit11:TheUSdollarindexralliedstronglySource:Bloomberg,GoldmanSachsGlobalInvestmentResearch,SurveyofProfessional Source:ForecastersExhibit12:Realratestoincreasedespitehighrecessionrisksas Exhibit13:GoldisexpectedtomovehigherasthevastbulkofthemarketsgavetheFedfullcreditthatitwouldbringinflationbackto realratemovehasalreadyhappenedtarget $lhs,%invertedrhs%lhs,%rhs_Source:GoldmanSachsGlobalInvestmentResearch,Bloomberg,SurveyofForecasters_

Source:Bloomberg,GoldmanSachsGlobalInvestmentResearch__StresstestingtheearningofSibanyeWithinourSAminingcoverage,SibanyehasoneofthehighestEBITDAandFCFsensitivitiestocommoditypricesowingtolowEBITDAmargins,yetthecompanyhasauniquemixofmetalswithcounter-cyclicalgoldandpro-cyclicalPGMs(vs100%goldorPGMSAminers).Inourstresstest(golddown15%vsspotonUSDappreciation;PGMdown15%vsspotonrecessionconcerns),SibanyewouldretainEBITDAandFCFwellabovemid-cycle,withamuchbettercurrentbalancesheetposition(netcashevenundersuchprominentdropinmetalprices).SSWsensitivitytocommodityprices:highonEBITDAandFCFmainlyduetolowermargins,yetuniquemixofmetalswithcounter-cyclicalgoldandpro-cyclicalPGMs(vsgoldorPGMSAminers).WithinourSAminingcoverage,SibanyehasoneofthehighestandFCFsensitivities(seeExhibitandExhibittocommoditypriceswingsowingtoitslowmargins(38%forSibanyevs45%avg.forPGMminers).wehighlight,asmentionedabove,thatSibanyehasexposuretogoldpriceshasacounter-cyclicalvsPGMswhicharepro-cyclical(vsgoldorPGMSAminers).Underastresstestscenario,SibanyewouldEBITDA/FCFandEV/EBITDAinlinewithmid-cycle,butwithamuchbetterBSposition.Inourstresstestweconsidergoldpricesfallingfromspot,inlinewiththeworstgoldperformanceduringDXYstrengthening.Whilegoldpriceperformancetendstobestrongduringeconomicslowdowns(givensizableprofessionalinvestmentdemandinverselytobusinesscycle),inourstresstestconsidernear-termdownsiderisksfrompotentialUS$appreciation.OnPGMs,weconsiderPGMpricesfalling30%fromspot(inlinewithaveragepreviousPGMbasketsell-offs)givencyclicalofPGMdemand(formoredetailsonourstresstestscenarioseeSouthAfricaMetals&Mining:Seekingbestrisk-rewardandassessingdownsidescenarios,20June2022).Inourstresstest,SibanyewouldretainofZAR8.4bn,just7%belowmid-cycle,andmoderatelynegativeFCF(vsclosetobreaevenmid-ccle;wedo’tassumeaycapexcutinourworstcasemacroscenario)butwithabettercurrentbalancesheetposition(netcashundersuchprominentdropinmetalprices;seeExhibit16).__2023HistorySibanyeStillwater Unit Scenario1 Scenario2 BasePGM:-30%vsspot PGM:-15%spot Spot case MinMedianMaxGold:-15%vsspotGold:-15%vsspotPGMbasket$/oz1,9732,3922,7982,880Gold$/oz1,5211,5211,7792,156EBITDAZARmn5,91623,37643,25151,0486,3379,04568,606EV/EBITDAx21.1x4.8x2.3x1.8x1.1x3.3x6.2xPremia/(discount)vsMC %539%46%-31%-45%FCFZARmn(9,589)2,63316,54522,0033,358)1,80737,692FCFyield%-8%2%14%18%-10%10%41%ProfitfortheyearZARmn(4,372)7,85021,76327,221(1,437)3,01938,883DivdeclaredZARmn02,7487,6179,527-91813,452Divyield%0%2%6%8%0%5%11%%FCF%0%104%46%43%0%36%583%%NetProfit%35%35%35%35%0%17%40%NetDebtZARmn5,775(6,447)(20,359)(25,817)(9,994)3,08623,587ND/EBITDAx1.0x-0.3x-0.5x-0.5x-0.1x0.5x2.6xExhibitExhibit14:SibanyehasoneofthehighestEBITDA...EBITDAsensitivitytoa10%changeincommodityprices,%Exhibit15:...andFCFsentivitiestocommoditypricesFCFsensitivitytoa10%changeincommodityprices,%37%24%24%34%23%34%22%31%21%17%24%20%21%12%10%8%5%11%10%16%16%7%5%8%6%5%45%9%%811%8%12%%6%7%10%8%5%1%0%0%0%0%1%Implats Amplats Northam Sibanye AngloGold GoldFieldsNortham Amplats Sibanye Implats AngloGoldGoldFieldsPGMbasket(Rh,PtandPd) Rhodium Palladium Platinum GoldPGMbasket(Rh,PtandPd) Rhodium Palladium Platinum GoldSource:Companydata,GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchExhibit16:Evenwitha15%PGMpricecorrectionvs.spot,SibanyewouldretainEBITDAwellabovemid-cycleandpositiveFCF(__strikeandsuspensionofprocessingactivitiesAISC($/oz)-Impactofreducedproduction,thereclassificationofStillwaterEastdevelopmentUSPGMmining9731,0391,36631%40%1,12022%n/an/afromgrowthcapitaltosustainingcapital,inflationarypressuresonstores,andSAPGM1,1631,1341,1794%1%1,1393%n/an/apremiumsoncontractorcosts-Wellmanagedcosts,benefitingfromhigherby-productcreditsSAgold1,6911,6851,179-30%-30%2,551-54%n/an/a-Affectedbythestrikef