This is primarily due to a 31% higher average rand gold price the company said in its trading statement for the six months to June 2016.
Sibanye Gold’s headline earnings per share (HEPS) are expected to be between 484% and 611% (or 92 cents per share and 116 cents per share) higher than the 19 cents per share reported for the previous comparable period in 2015.
Earnings per share (EPS), which include certain non-recurring items, are expected to be between 70% and 110% (or 14 cents per share and 22 cents per share) higher than the 20 cents per share reported for the previous comparable period.
Normalised earnings per share which are adjusted for gains and losses on foreign exchange and financial instruments, non-recurring items and share of result of associates after taxation, are expected to be between 678% and 848%(or 183 cents per share and 229 cents per share) higher than the 27 cents per share reported for the previous comparable period.
The primary difference between the HEPS and EPS forecast is a result of an impairment of approximately R820 million on the value of the Cooke 4 mining assets, which was deemed prudent considering the continued under performance at Cooke 4 and is in accordance with International Financial Reporting Standards.
As announced on 11 July 2016, Sibanye Gold has given notice in terms of Section 189A of the Labour Relations Act 66 of 1995 and is currently engaged in consultation with affected stakeholders regarding the future of Cooke 4.
The significant increase in Sibanye Gold’s share price, which increased by approximately 120% during the six month period ended 30 June, also had a substantial impact on earnings.
The revaluing of financial instruments (predominantly related to share base payments) at higher share prices resulted in a fair value loss of approximately R1 180 million, which negatively impacted HEPS and EPS but is excluded from normalised earnings.
However, Sibanye Gold’s external auditors have not reviewed the financial statement on which the trading statement has been based on.
Sibanye Gold production statistics
Gold production for the six months ended 30 June 2016 was approximately 23 200 kg (746 00 oz), compared with 22 204 kg (713 900 oz) for the previous comparable period, with All-in Sustaining Costs (AISC) of R454 000/kg (US$920/oz) compared with R434 769/kg ($1 137/oz) for the previous comparable period and All-in Costs (AIC) of R469 000/kg ($948/oz) compared with R441 348/kg ($1 155/oz) for the previous comparable period.
PGM production (4E) for the six months ended 30 June 2016 is forecast at approximately 178 000 oz (4E) (168 000 oz) for the previous comparable period), with Kroondal and Mimosa forecast to deliver all-time record PGM production.
Both operations continue to deliver above nameplate capacity, a notable achievement given their respective challenging operating environments.