Richard Stewart: Perfect. Thanks, Neal. And Chris, good afternoon. I think there are three aspects to the SA PGM costs that are worth noting. The first one is that when we do our forecasts and budgets for the year, we do build in our budgeted price parameters for byproduct credits. And as you would know at the moment, some of those byproducts, chrome in particular is at quite a high price. So our assumptions in terms of the credits we get from byproducts are a little bit lower based on our sort of through cycle pricing. That’s probably got in the region of about a 3% impact on those costs if spot prices were to persist. So that’s the one. I think the second point is just we obviously do quote all-in sustaining costs, not cash costs.
So those all-in sustaining costs do take into account development, and we are investing significantly in the development of our assets, especially around K4, where we’re seeing a ramp up in development at those assets during the course of this year. So ORD costs do feature. And then I think the final one which you touched on, yes, the benefits of the restructuring are considered in those cost forecasts. Importantly, of course in this year, there are some one-off costs that do come with that restructuring that we had to incur, and that gets built in. Benefit that we referred to is the annualized benefit we’ll see going forward, but that does need to be offset this year or some of the one-off costs with the restructuring. So overall, our base number was in fact still below or very close to inflation in terms of what we’re looking at.
Operator: Adrian Hammond of SVG. Please go ahead.
Adrian Hammond: Good day, everyone. Question for Charl. Just a bit more understanding about your balance sheet, please. I would like to know what your working capital needs are for the entire business. And could you clarify what debt facilities you have, including the U.S. dollar RCF and what you’ve drawn down of that? And then in terms of your covenants, it’s quite obvious you’re going to get close to that covenants by June. What mechanisms do you have in place with your lenders regarding extension of those covenants please? And then, I think a bit I’d like to ask a question around the gold business, massive free cash flow loss of R10 billion in 2H. How do you get there? I’m just trying to understand what’s happening within that business. And then on Stillwater, the cost that you’ve given us, is that IRA credit included in that stipulated cost? And if so, how much? Thank you.
Charl Keyter: Yes. Thank you, Adrian. And obviously, I’ll start. I just missed your first question. Sorry, there was just a slight dip on my side. It was something on the balance sheet. Would you just mind repeating that?
Adrian Hammond: Yes. Sure. Just your working capital needs, so much cash you need at all times and then on the debt facilities?
Charl Keyter: Yes, so Adrian, our financial policy is to have liquidity or working capital for the business of two months of operating expenditure plus CapEx. So if you look at our liquidity headroom sitting at R50 billion, that is probably between 5x and 6x or five and six months of operating cost and CapEx. So but on the numbers is two months. So you know just working back from that it’s probably in the order of about R20 billion that could be a safe number. In terms of facilities, we’ve got two facilities. We’ve got the $1 billon revolving credit facility that was fully undrawn, so we’ve utilized zero of that facility. And then we’ve got the R5.5 billion facility and at year end that was drawn R4 billion and that was mainly due to timing of payments.
We have an early closure in December, which does bring that working capital need earlier. Those payments would normally either flow month end or immediately after month end. So you have a little bit of a skewed picture over year end. And then we also at any one time have available facilities which are uncommitted lines, overnight facilities, roughly about R1 billion, R1.5 billion. So we also have the ability to utilize those. On the covenant side, our covenants are I think the two main ones are the leverage covenant, which is 2.5x net debt-to-EBITDA, and then the interest coverage one, which is EBITDA divided by our net finance charges and there we have to exceed 4x. So Adrian, I mean running the numbers and assuming that these prices stay where they are, we are probably getting to a number that starts with a 2 by year end.
But as Neal said, for that reason, that is why we are looking and that assumes we run the business full tilt, spend all the CapEx, do everything that’s required. That’s without pulling any levers. We know we have the ability to flex certain elements within CapEx. So that’s a big lever that we can pull. But we are looking at what are the other forms of bridging that covenant. So yes, as I said, we’ve been here previously and we’ll definitely make sure that we don’t go into breach. But it’s a number we’ll continue to keep an eye on. But I think probably by our August results, we’d be in a much better position to say how the world has moved on and then we can provide you with an update and the planning accordingly.
Adrian Hammond: Cool. Thanks.
Charles Carter: Based on the, 45.
Neal Froneman: Sorry. Go ahead, Charles.
Charles Carter: Yes, sorry. Sorry Neal. Just on the 45x credit, we’ve made no assumption of that credit in the guidance we’ve given for the costs range for the year. So we’ll lobbying hard to try and get that credit. If that comes through, that’s an opportunity, but it’s not in the guidance.
Adrian Hammond: Okay. Cool. And then on the gold?
Neal Froneman: Yes, that’s where I was going. Adrian. Charl, can you just comment on the free cash flow from gold? Adrian, maybe you just want to ask it again.
Adrian Hammond: Sure. Just a bit confused about the large loss in 2H.
Charl Keyter: Neal, do you want me to pick that up?
Neal Froneman: Yes.
