James Wellsted: Further questions from the line?
Raj Ray: [indiscernible] portfolio. One is just a clarification on the appeals at Keliber, also the understanding that while the future outstanding, you cannot stop the mining or the growth development of the concentrator. Can you comment on that? And the second question is on Mopani, do you have a sense on how long does government’s process is going to take before they announce who the winning bidder is going to be? And then again, assuming Sibanye is the winning party, are you looking to partner with somebody on that project or are you going to or are you looking to go ahead with it by yourself?
Neal Froneman: Yes. That’s a good question as well. So let me start with Mopani and Mika if you can just ready yourself for the question on the permit. In terms of Mopani, yes, we are looking to partner with a company. One thing I should have pointed out, when I mentioned this tug of war that’s occurring between the east and the west and the role that Africa is going to play in terms of providing solutions. The one thing — the one competitive edge, and I think it’s probably the only competitive edge we have as South Africans at the moment is that we can be this bridge between the east and the west. So although, we’re a western-facing company, I do think we can involve eastern companies as partners, and to some extent, that goes a long way to resolving a conflict that the Zambian government are probably dealing with because they also have relationships with the east and the west.
So yes, we do have a partner and we think we’ve put in a very good offer, it’s probably not the best offer, but as Richard said, our ability to — and our track record of handling these difficult socioeconomic type of situations stands us in very good stead. In terms of the timing, I think we are pretty close probably in the next, I would say, two to three weeks of having an outcome. Now, when I say an outcome that would be an outcome of then negotiating, let’s call it, the stability side of an arrangement with the government. To date, it’s really been a focus on the actual assets. We haven’t had the stability discussions that are absolutely necessary to provide us with the appropriate comfort and the right commercial environment to conclude the transaction.
I think we found the process good, fair and our relationships with the government and ZTCMO are very good. So Raj, that’s about all I can say on Mopani for now. Probably one thing I should say, because I don’t want to create an overhang on our stock. I tried to allude to the type of transaction structures that we consider when we do transactions of this nature is that we prefer working with partners and we prefer working with partners and we prefer earning in. So, please don’t factor into your thinking a large capital outlay upfront. These assets require significant capital investment, but it’s going to come over a good number of years. So, please keep that in mind as well. Mika, do you want to just comment on the permitting and the fact that we can continue construction even with the small permit dispute.
Mika Seitovirta: Yes, with pleasure. The thing is that we have those appeals, but we have also an enforcement order in place and these processes how they normally go forward, is that the Administrative Court if they see a reason to take it away, they take it away after the appeals. Our dialog with the Administrative Court has been very professional and they are not planning to take the enforcement order away. So, actually, we see that we can do the construction of the concentrator and the mine and the refinery and the whole project exactly as it was planned. Thank you.
James Wellsted: Are any further more?
Operator: Thank you. The next question comes from Chris Nicholson of RMB Morgan Stanley.
Chris Nicholson: Hi. Good afternoon, and good morning, everyone. Thanks for the call. I’ll make it brief, because I know it’s gone on for a while. Just two questions from me. Just to go back to the balance sheet and the earlier comments around the net debt to EBITDA positioning. I know that there is a potential large payment that would be triggered on the Rhyolite ridge when the environmental approvals come. I think it was last guided to around $500 million, potentially higher than that. That or any other acquisitions you’re looking at, would you look to equity fund those rather than fund them through debt? That’s the first question. And then the second question is, just New Century, $28 million EBITDA negative in the first half, and over $600 million in — ZAR600 million in free cash flow, sorry.
Clearly, we had some one-off incidences. So, could you just give us a bit of guidance on kind of the, what the glide path this year to kind of free cash flow breakeven or profitability or if you can’t really give that, I mean, just what kind of a zinc price do you require for that business to be able to stand alone? Thank you.
Neal Froneman: Perfect. Thanks. Thanks, Chris. And Charl, please come in. I’m just going to — to make a general comment. I think, Chris, it’s highly unlikely we will use equity at these levels. I did see on the webcast a question about share buybacks, that would be a much better use of proceeds. But I also don’t want to create the impression that there is an endless supply of debt. I think we will be prudent, as you know, there are a number of ways also funding these without resorting to vanilla debt, if I could call it that, but Charl — and then Rob, I think it would be prudent for you to comment on New Century Resources. But again, let me just make a general comment, we are acutely aware of the one-offs that of course the pain, but as we all know, this is mining, and if you keep on having one-offs, they cannot become excuses.
If we are serious about preserving value, we will not hesitate to close down underperforming assets. Now let me make that general comment, the same can be said for Sandouville, we went through a phase of issues beyond our control such as riots, such as, well, riots and the socioeconomic issues in France were beyond our control, but they were maintenance issues that resulted in electrowinning cells not being available. There’s only so much we are going to accept and a number of our operations have been put on notice that by year-end, if these one-off events or if there is no reasonable prospect under these depressed commodity prices, they will be put on care and maintenance. So we don’t take that lightly, but we are not going to burn cash and we look at it, we actually know exactly what each one of these operations cost us in, let’s call it, dividends, we could have paid a higher dividend.
So we understand that fully, but that’s a general comment that applies not only to New Century Resources, not only to Sandouville but could even apply to the U.S. PGM business. I’m confident in all of them having been, let’s say, addressed and having plans that get us much closer to at least a breakeven situation. But Rob coming on New Century, but Charl just pick up on the balance sheet and the use of equity as well, please.
Charl Keyter: Yes. Thanks, Neal, and I think you’ve summed it up. I mean, obviously, equity is not a currency for us at this moment and we have factored in the Rhyolite ridge payments and Chris, just to remember that, I mean from when we receive the permitting, that $500 million will obviously be phased in roughly over a two-year period. So, it’s not necessarily a bullet payment, so it can be funded from a combination of depending on commodity prices and where they play out, but it can be a combination funded through earnings and then vanilla debt. Thanks, Neal.
Neal Froneman: Thanks, Charl. Rob?
Robert Van Niekerk: Thank you, Neal, and hello, Chris. The Century operations have come out of a particularly difficult period of the month, also absolutely they have little bit of cash. Going forward, are seen possibly to actually stop and we’ve run our numbers at future consensus price and just as a matter of interest, that’s about $1.30 per pound, and that’s [Technical Difficulty]
Neal Froneman: Is that just Rob that we’ve lost?
Robert Van Niekerk: Hello, Neal, are you still there?
Neal Froneman: Yes. We’re still here. James, are we still online?
James Wellsted: Yes. We are online. We can hear Rob.
