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Sibanye Stillwater: Sailing Away

Mar. 03, 2021 2:27 PM ETSibanye Stillwater Limited (SBSW)201 Comments


  • Revenues for 2020 were $7,739.5 million compared to $5,043.3 million in 2019.
  • US production 2E/PM was 603,067 2E Oz up from 593,974 2E Oz in 2019 and recycling delivered 840,170 3E Oz, down 1.5% from 2019.
  • 2020 gold production was 982,560 Au Oz, up 5.4% from 2019 (including Marikana operations). 4E PGM production was 1,576,507 4E Oz, down 2% from 2019.
  • SBSW is a great company for the long term.
  • Looking for a helping hand in the market? Members of The Gold And Oil Corner get exclusive ideas and guidance to navigate any climate. Get started today »

Stillwater mine, near Nye, Montana. (Image courtesy of Sibanye Stillwater)

Investment Thesis

Johannesburg-based company Sibanye Stillwater (NYSE:SBSW) released its six-month and full-year 2020 earnings results on Feb. 18, 2021.

Sibanye Stillwater's 2020 results were very impressive.

Sibanye's balance sheet is very complicated and requires some focus and concentration to figure out what is going on. As many of you know, the company produces palladium, platinum, and rhodium in the USA (with a little gold) from direct mining and recycling (which provides a much lower profit margin).

However, South Africa continues to be the most significant in terms of PGM and gold production.

The investment thesis is clear with Sibanye Stillwater and has not changed. The company should be considered an excellent long-term investment, and I recommend adding SBSW to your long-term premium portfolio.

SBSW can be used as a gold play and as a PGM play with palladium, platinum, and rhodium. Furthermore, Sibanye Stillwater is paying a dividend that is now 4.98%, well above the average yield in the gold industry.

One crucial element that should be factored into your investing strategy is the currency fluctuation between the US dollar and the SA Rand ZAR.

While I consider SBSW an excellent long-term miner, it is also imperative to trade short-term about 30% of your long position to take advantage of the weekly or monthly fluctuation.

CEO Neal Froneman said in the conference call:

So for the record, we made a record ZAR 19.9 billion free cash flow, that's $1.2 billion. We achieved earnings of ZAR 49 billion, which is about $3 billion. And as I said, from a deleveraging point of view, we're now in a net cash position. So very pleasing to see the transition of the company.

Below is the 1Y chart comparison between the VanEck Vectors Gold

ChartData by YCharts

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