Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — H1 FY2018 Earnings Presentation
37 slides from Sylvania Platinum's earnings presentation, February 2018
Slide 1: Corporate Presentation – Interim Results, Six months ended 31 December 2017
CORPORATE PRESENTATION Interim Results Six months ended 31 December 2017 London Investor presentation P L A T I N U M L I M I T E D
Slide 2: Disclaimer
Disclaimer • This document, which is personal to the recipient and has been issued by Sylvania Platinum Limited (the “Company”), comprises written materials/slides for presentations to be held in February 2018. This document does not constitute or form part of any offer or invitation to sell or issu
Slide 3: H1 FY2018 Results
H1 FY2018 RESULTS 3
Slide 4: FY2018 H1 at a glance
FY2018 H1 at a glance GROUP REVENUE GROUP EBITDA PGM PRODUCTION 15% 12% 5% SDO production of 33,892oz 4E PGM Increased 15% to $28.2m, assisted for H1 was a 5% reduction, impacted Increased 12% to $10.3m, despite by de-commissioning of Steelpoort in by higher PGM basket price lower PGM production Jun
Slide 5: FY2018 H1 Achievements
FY2018 H1 Achievements ➢ Acquisition of Phoenix Platinum, renamed Sylvania Lesedi, completed in November 2017 and operation successfully integrated into the SDO ➢ First two modules of Project ECHO successfully commissioned at Millsell and Doornbosch during December 2017 ➢ SDO delivered 33,892 4E PGM
Slide 6: Challenges
Challenges ➢ PGM ounce production guidance revised to between 71,000oz and 75,000oz for FY2018 » Lower PGM feed grades and feed stability at Millsell associated with delayed commissioning of a new tailings dam as a result of delayed water use licence approval by Authority » Current Arisings and ROM
Slide 7: Opportunities
Opportunities ➢ Improved gross basket price of $1,057 for the six months to 31 December 2017 » Higher Palladium and Rhodium prices, mitigates impact of lower PGM ounce production and boosts profit outlook for current financial year ➢ High Rhodium content in Sylvania’s PGM concentrate, enables the Co
Slide 8: Company Overview
COMPANY OVERVIEW 8
Slide 9: Share Structure and Ownership
Share Structure and Ownership CAPITALISATION SUMMARY – 31 DEC ‘17 TOP SHAREHOLDERS Africa Asia Capital 20,31% ➢ Listed: AIM 20,54% Majedie Asset Management 9,80% 9,91% ➢ Domiciled: Bermuda M&G Investment 9,74% Management 9,85% ➢ Ticker symbol: SLP LN 4,48% Miton Asset Management 4,54% ➢ Basic shares
Slide 10: Overview – Sylvania Dump Operations
Overview – Sylvania Dump Operations ➢ Sylvania Dump Operations (SDO) comprises a number of chrome beneficiation and PGM processing plants, treating a combination of current and historical chrome tailings at host-mine sites ➢ SDO is the largest PGM producer from chrome tailings re-treatment in the in
Slide 11: Overview - Development
Overview - Development ➢ Sylvania holds prospecting and mining rights for a number of PGM projects on the Northern Limb of the Bushveld Igneous Complex in South Africa ➢ Volspruit ➢ Volspruit is an open pit mine project at the southern end of Northern Limb with projected life-of- mine production of
Slide 12: Location of Operations and Projects
Location of Operations and Projects LEGEND Operating Complexes 1 ➢ Millsell (SDO) C 2 ➢ Mooinooi Dump & ROM (SDO) ➢ 3 Lesedi (SDO) ➢ Acquired: Nov ’17 ➢ Previously Phoenix Platinum 4 ➢ Doornbosch (SDO) B A 5 ➢ Lannex (SDO) 6 ➢ Tweefontein (SDO) 4 Dormant Operations 7 ➢ Steelpoort (SDO) 7 5 ➢ Decommi
Slide 13: Operations
OPERATIONS 13
Slide 14: Production profile
Production profile ➢ Lesedi operation acquired in November 2017 ➢ FY2018 production for SDO operations, excl. Lesedi, reduced from FY2017 ➢ Steelpoort reached end of life in June 2017, and Echo modules only starting to contribute after commissioning in December 2017; ➢ Operational challenges during
Slide 15: Project ECHO Progress
Project ECHO Progress ➢ Millsell and Doornbosch secondary PGM milling & flotation (MF2) circuits completed during December 2017 as first phase of Project ECHO roll-out ➢ Process optimisation currently in progress and circuits expected to reach target production during February 2018 ➢ Tweefontein MF2
Slide 16: Project ECHO Progress – Millsell & Doornbosch
Project ECHO Progress – Millsell & Doornbosch Above: Doornbosch Secondary Flotation Circuit (old Steelpoort PGM plant relocated) Below: Doornbosch Secondary Flotation circuit Above: Millsell Secondary Flotation circuit Below: Millsell Secondary SMD Milling circuit 16
Slide 17: Lesedi integration
Lesedi integration ➢ Acquisition of Phoenix Platinum Mining (Pty) Ltd (renamed Lesedi) was completed in November 2017 and Sylvania took over the operations effective 7 November 2017. ➢ Immediate priority was to increase plant production volumes in line with design capacity, to improve plant feed sta
Slide 18: Financial Performance
FINANCIAL PERFORMANCE 18
Slide 19: Operating cost
Operating cost ➢ SDO cash cost fairly flat between FY2018 and FY2021 in Rand terms, but US$/oz cost driven higher by stronger ZAR/$ exchange rate; Cash Cost $/oz 800 700 SPOT 600 Assumptions 500 Nebank CIB 400 Outlook - Feb '18 300 -10% R/$ 200 Exchange Rate 100 +10% R/$ Exchange Rate 0 2010 2011 20
Slide 20: Industry position on PGM Producers Cash Cost curve
Industry position on PGM Producers Cash Cost curve ➢ Sylvania remains one of the lowest cash cost PGM producers in the industry Western Limb Assets Global PGM Cash Cost + Capex Curve (CY17E - At Spot) Northern Limb Assets Eastern Limb (and other) Assets Cumulative Annual Production (4E Koz.) 0 500 1
Slide 21: Group EBITDA trend
Group EBITDA trend ➢ Company growing profits despite difficult market conditions and operational challenges during past six months; Group EBITDA - US$ US$ 35 000 000 30 000 000 25 000 000 20 000 000 15 000 000 10 000 000 5 000 000 - 2011 2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E SPOT Pri
Slide 22: Gross PGM Metal Price trend
Actual FY2018 H1 PGM Prill Split Rh Au Gross PGM Metal Price trend 12,3% 0,2% ➢ 4E PGM Basket price of $1,057/oz in H1 2018 is 20% higher than H1 2017, supported by improvements in Palladium and especially Rhodium prices; Pd 24,2% ➢ ZAR 4E PGM Basket price was ~14% higher compared to corresponding p
Slide 23: Capital expenditure
Capital expenditure ➢ Project capital expenditure from late 2017 to early 2021 primarily associated with Project Echo and smaller strategic projects contributing towards PGM ounce profile and tailings dam replacement projects. ➢ SDO Capital spend is primarily in ZAR, hence US$ forecasts are impacted
Slide 24: Summary
SUMMARY 24
Slide 25: Corporate Strategy
Corporate Strategy Value creation Shareholder-friendly use of cash ➢ Free cash flow generation ➢ Only commit capital to growth projects when ➢Production of approximately 75koz to 78koz/year internal hurdle rate is met from current operations1 ➢ Opportunistic buy back of shares when share ➢Low cash c
Slide 26: Why Sylvania?
Why Sylvania? • Significant industry experience and proven track record in development and operations of tailings re-treatment operations – consistently delivering on operational promises • Shareholder-friendly corporate strategy – Operations generate positive free cash flow – Disciplined capital al
Slide 27: Sylvania Platinum Limited contacts
Sylvania Platinum Limited Terry McConnachie +44 7775 337175 Liberum Capital Limited (NOMAD) Neil Elliot / Richard Crawley +44 20 3100 2000 Alma (Communications) Josh Royston / Helena Bogle +44 77 8090 1979 +27 11 673 1171 www.sylvaniaplatinum.com P L A T I N U M L I M I T E D
Slide 28: Glossary
Glossary GLOSSARY OF TERMS FY2018 4E PGM ounces include the precious metal elements Platinum, Palladium, MPRDA Mineral and Petroleum Resources Development Act 4E PGMs Rhodium and Gold MRA Mining Right Application 6E PGMs 6E ounces include the 4E elements plus additional Iridium and Ruthenium MTO Min
Slide 29: Appendices
Appendices 29
Slide 30: Basket Price & Exchange Rate Assumptions
Appendix 1 Basket Price & Exchange Rate Assumptions FY2018 to FY2020 Estimates -10% Basket Price +10% Basket Price 1 3 - February 2018 NEDBANK CIB Price Forecast Sensitivity Sensitivity 4 2018 2019 2020 2018 2019 2020 2018 2019 2020 Pt $/oz 1 050 1 150 1 250 Pt $/oz 888 888 888 Pt $/oz 1 086 1 086 1
Slide 31: H1 2018 – Key Statistics
H1 2018 – Key Statistics USD ZAR Unit Unaudited Unit HY1 2017 HY1 2018 HY1 2018 HY12017 Production 1,063,150 1,097,568 T Plant Feed T 1,097,568 1,063,150 2.40 2.46 g/t Feed Head Grade g/t 2.40 2.46 574,796 584,850 T PGM Plant Feed Tons T 584,850 574,796 4.05 3.60 g/t PGM Plant Feed Grade g/t 3.60 4.
Slide 32: Sylvania Corporate Structure
Sylvania Corporate Structure Lesedi (Phoenix) 32
Slide 33: Schematic Process Flow
Schematic Process Flow TYPICAL SDO PROCESS FLOW ➢ Generic process flow sheet for Sylvania’s Chrome Current Arisings from Beneficiation Millsell, Lannex, Doornbosch, Tweefontein, and (Spirals & WHIMS) Lanxess Plant Mooinooi Dump operations. Saleable Chrome Product ➢ Treating current and historical ch
Slide 34: Typical PGM concentrate metal prill splits
Typical PGM concentrate metal prill splits ➢ Sylvania Rhodium portion typically higher than average UG2 and Merensky ores, and Palladium portion lower. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Typical Typical Sylvania Combined Sylvania LG6 Sylvania MG2 UG2 Merensky Au 0,2% 0,2% 0,2% 0,4% 3,6% Rh
Slide 35: SDO cash operating cost breakdown
SDO cash operating cost breakdown Work in Progress Inventory Cost Sylvania Shared Services Charge 3,2% 5,4% Royalties Tax Other 0,3% 0,9% Equipment Hire 1,8% Safety , PPE & Salary & Wages Insurance 38,3% 1,8% Electrical Consumption 11,9% Tailings Deposition 3,2% Laboratory & R&D Cost 2,9% Production
Slide 36: Board of directors
Board of directors Stuart Angus Murray: Non-executive chairman Roger Williams: Non-executive director Mr Murray joined the board of Sylvania Platinum Limited as non- Mr Williams was appointed to the Board on 29 December 2011. executive chairman on 1 April 2013. He has over 25 years of He is a Charte
Slide 37: Key executives
Key executives Jaco Prinsloo: Managing Director Sylvania Metals Mr Prinsloo has been appointed as Managing Director in April 2014, after joining Sylvania as Executive Officer – Operations in January 2012. He is a metallurgical engineer who obtained a B.Eng (Extractive Metallurgy) from the University