Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — Investor Presentation (May 2008)
25 slides from Sylvania Platinum's investor presentation, May 2008
Slide 1: Investors' update | London
Terry McConnachie | CEO Investors’ update | London 19 - 24 May 2008 1
Slide 2: Disclaimer
Disclaimer Certain forward-looking statements may be contained in this presentation which include, without limitation, expectations regarding platinum prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as t
Slide 3: Who we are
Who we are Growth-focused South African PGM producer in a sector with attractive fundamentals High-margin, low-risk surface operations Strong cash flows and balance sheet to fund growth Growth-orientated board and management team 3
Slide 4: Who we are, cont'd
Who we are, cont’d ASX and AIM-listed (ASX:SLV; AIM:SLV) S&P/ASX 300 Index 180m shares in issue quality shareholders: Audley Capital, Fidelity, JP Morgan, Henderson Global, Aegon, JO Hambro Share price (9/5/08) Sylvania Share Price A$/share ASX: A$2.15 4.00 3.50 AIM: £1.055 3.00 2.50
Slide 5: Our vision
Our vision To become the pre-eminent South African mid-tier PGM producer as measured by our stakeholders, using our metallurgical and mining expertise to acquire and develop low-risk tailings and shallow mining assets 5
Slide 6: Well positioned in a high-growth sector
Well positioned in a high-growth sector Strong PGM industry fundamentals robust demand growth (pollution control, autocatalysts) supply-side constraints PGM prices forecast to remain bouyant, medium term less affected by power constraints compared with traditional miners, due to nature of
Slide 7: Our people
Our people Experienced board focused on value creation Committed and talented management team Track record of building successful businesses Empowered – Ehlobo Metals (Pty) Ltd 7
Slide 8: Our business structure
Our business structure Sylvania Resources Ltd Ehlobo Metals (Pty) Ltd 26% 74% 25% 16.6% Samancor Dump Everest North (exercising option to Exploration Great Australian Operations CTRP acquire 100% (NOPR) Resources (SDO) of Vygenhoek) Aurora (100%) Harriet’S Wish (50%) Mooiplaats Cracouw (50%) P
Slide 9: Location – in the heart of 'PGM country'
Location – in the heart of ‘PGM country’ Northern Limb Harriett's Wish/Cracouw Bushveld Igneous Polokwane Complex Great Australian Eastern Limb Resources Western Limb Steelpoort Lannex Spitzkop Broken Hill Everest North Elandsdrift /Mooinooi/Buffelsfontein East Chrome tailings ROM fines Brits Near-s
Slide 10: What we have: tailings retreatment
What we have: tailings retreatment Samancor Dump Operations (SDO) – 74% approximately 500koz contained PGMs 2-6g/t (non-JORC compliant) integrated chrome and PGM float plants Millsell, Steelpoort advanced ramp-up phase Lannex, Broken Hill, Spitzkop (ROM) under construction Mooinooi
Slide 11: PGM growth from tailings retreatment
PGM growth from tailings retreatment Ramping up to > 70koz pa 30-40% increase in original production target HERE NOW Improved recoveries ROM Base Case 11
Slide 12: Steelpoort plant – low risk surface operation
Steelpoort plant – low risk surface operation Chrome product Chrome tailings dump Chrome recovery plant PGM flotation plant Ball mill Thickener PGM concentrate 12
Slide 13: What we have: near-surface PGM exploration
What we have: near-surface PGM exploration Everest North agreement exercising option to acquire 100% of Vygenhoek 5.1 Mt @ 4.7 g/t measured resource Harriet’s Wish/Cracouw possible mineral resource of 0.9 Moz 3PGM, associated base metals (non-JORC compliant) Great Australian Resources
Slide 14: What we have: Everest North
What we have: Everest North Possible exchange with AQPSA for PGM, chrome recovery JV from AQPSA tailings streams If no agreement, Sylvania to develop mine itself Mining rights application Everest North (Vygenhoek) exploration holes under way Eastern Plats Sylvania Eastern Plats JV agreement
Slide 15: Track record – PGM (3E+Au) ramp-up
Track record – PGM (3E+Au) ramp-up Ramp-up on target 34% increase, quarter on quarter, to 4 802oz Growth continuing March 2008 Q 15
Slide 16: SDO basket PGM price; revenue, production splits
SDO basket PGM (3E+Au) price; revenue, production splits Q2 FY08 Q3 FY08 $/oz $/oz Total 2 004 2 737 Revenue split Production split 16
Slide 17: Track record – robust profit growth
Track record – robust profit growth Pre-tax profit up 146% quarter on quarter to R56m driven by: higher production (+34%) higher PGM basket prices (+36%) lower costs of US$359/oz (-21%) 120 100 80 ZAR-Millions 60 40 20 – -20 -40 March 2008 Q 17
Slide 18: Group performance: Quarter 3 v Quarter 2
Group performance: Quarter 3 v Quarter 2 Unit Previous Previous Current YTD Quarter Quarter Dec Quarter 9 months to Unaudited Sept 2007 2007 March 2008 March 2008 Financials Revenue R'000 20 920 34 814* 95 330 151 063 Profit (attributable) - before tax R'000 1 166 22 882 56 208 80 256 Ave R/US$ rate
Slide 19: SDO performance: Quarter 3 v Quarter 2
SDO performance: Quarter 3 v Quarter 2 Unit Previous Current ±% YTD 100% Quarter Quarter Quarter on 9 Months to Unaudited Dec 2007 March 2008 Quarter March 2008 Revenue Revenue R'000 27 314 81 902 200% 123 552 Basket price before charges US$/oz 2 004 2 737 37% 2 562 Gross cash margin % 54% 84% 54% 7
Slide 20: CTRP performance: Quarter 3 v Quarter 2
CTRP performance: Quarter 3 v Quarter 2 Unit Previous Current ±% YTD 25% Quarter Quarter Quarter on 9 Months to Unaudited Dec 2007 March 2008 Quarter March 2008 Revenue Revenue R'000 7 501 13 428 79% 27 511 Basket price US$/oz 1 967 2 483 26% Gross cash margin % 81% 88% 8% 84% Ave R/US$ rate R/US$ 6
Slide 21: Looking ahead: aggressive growth focus
Looking ahead: aggressive growth focus Improved recoveries ‘more from what we have’ Tailings ‘more of what we have’ Near-surface hard rock exploration, mining Smelting – JVs, off takes, tolls Consolidation via mergers, acquisitions 21
Slide 22: Illustrative targets – aggressive growth focus
Illustrative targets – aggressive growth focus 180000 160000 140000 M&A 120000 PGM oz 100000 Downstream? Upside target 80000 More tailings 60000 Shallow mining – eg. Everest North 40000 Improved recoveries 70 000 oz/year 20000 Base case For +10 years 0 Increased recoveries CTRP Samancor Chrome (orig
Slide 23: Attractive valuation
Attractive valuation Recent research reports by Landsbanki and Investec forecast 2010 P/E of ~5-6x (vs sector 10-15x) target share price upside >50% at current price* Landsbanki ‐ 2 April 2008 Investec Securities ‐ 8 April 2007 Analyst ‐ Louise Collinge Analyst ‐ Rebecca O'Dwyer Share price 02
Slide 24: Investment case
Investment case Emerging PGM producer (>70Koz pa 2010) Low risk Low cost (~US$300/oz target cash costs) High margins (target 70-80%) Well funded with robust cash flows Aggressive growth focus Strong PGM industry fundamentals Attractive valuation 24
Slide 25: Contacts
Contacts Terry McConnachie +27 82 553 4256 UK and South Africa James Duncan +27 82 892 8052 Australia Richard Rossiter +61 41 868 8338 25