Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — FY2016 Earnings Presentation
31 slides from Sylvania Platinum's earnings presentation, August 2016
Slide 1: Corporate Presentation: Results for the financial year ended 30 June 2016
CORPORATE PRESENTATION Results for the financial year ended 30th June 2016 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 August 2016. This document does not constitute or form part of any offer or invitation to sell or issue,
Slide 3: FY2016 at a glance
Safety Improved FY2016 at a glance Zero LTI’s (FY2015: 2 LTI’s) PGM Production (4E) Group cash cost Revenue 5% 27% 17% Higher Lower Lower 60,643oz $470/oz $39.5m (FY2015: 57,587 oz) (FY2015: $642/oz) (FY2015: $47.8m) Group EBITDA Profit after tax EPS 9% 120% 125% Higher Improvement Improvement $11.1
Slide 4: Share Structure and Ownership
Share Structure and Ownership CAPITALISATION SUMMARY – 30 JUNE ‘16 TOP SHAREHOLDERS Listed on AIM 19,96% Africa Asia Capital 20,13% Domiciled in Bermuda 9,76% M&G Investment Management 9,66% Ticker symbol: SLP LN 8,91% Audley Capital 8,30% Issued share capital: 292 539 7531 5,43% Majedie Ass
Slide 5: Overview
LOCATION OF SDO OPERATING PLANTS Overview Sylvania Dump Operations (SDO) - generating cash from treatment of current and historical chrome tailings and producing PGM’s - Sylvania was first producer to prove economic viability of recovering PGM’s from chrome tailings re-treatment of primary South A
Slide 6: Overview cont’d
Overview cont’d Where it is Grasvally open-pittable high grade chromite resources - Adjacent to Volspruit project at Grasvally - Final EIA / EMP submitted to Department of Mineral Resource (DMR), and water use licence application to allow open cast mining and waste rock treatment has been submitte
Slide 7: Results for the financial year ended 30 June 2016: Operations snapshot
Sylvania Platinum Limited Results for the financial year ended 30 June 2016 Operations snapshot No lost time injuries (“LTI’s”) at any of the operation with Steelpoort operation achieving the significant milestone of eight years LTI Free during the period Third consecutive year of record SDO pro
Slide 8: Financial snapshot
Sylvania Platinum Limited Results for the financial year ended 30 June 2016 Financial snapshot Group Adjusted EBITDA up 9% to $11.1 million (FY2015: $10.1 million) General and Administration charges down 31% to $2.3 million (FY2015: $3.3 million) SDO Capital expenditure down 56% to $1.8 millio
Slide 9: Production profile
Production profile 2016 PGM oz production reached new annual record of 60,643oz Sylvania’s tailings dump operations at steady state after several years of growth Ounce production 70 000 60 000 Tweefontein 50 000 Doornbosch 40 000 Mooinooi ROM Mooinooi 30 000 Lannex 20 000 Steelpoort 10 000 Mills
Slide 10: Production Outlook
Production Outlook Current SDO operations output decline after 2017 due to Steelpoort and Lannex operations reaching end of life in 2017 and 2019 respectively. Secondary milling and flotation technology (MF2) has been identified as feasible option to improve PGM recovery efficiencies and to fill
Slide 11: Project ECHO – Secondary milling & flotation program
Project ECHO – Secondary milling & flotation program Actual plant performance data from existing MF1 plants treating 2nd pass and even 3rd pass material (Steelpoort) material, as well as laboratory and pilot scale test work indicate that operations can achieve good flotation response with acceptab
Slide 12: Capital expenditure
Capital expenditure 2016 Capital was lowest since start-up after initial investment phase and consisted of mainly stay-in-business capital. MF2 expansion projects (Project ECHO) will require approximately $12 million over the next four years to improve PGM ounce profile. Project ECHO ounces co
Slide 13: Operating cost
Operating cost Cash costs improved due to combination of higher PGM oz production and improved operating cost discipline resulting in lower ZAR/oz and $/oz unit costs. 2017-2019 cost outlook supported by stable ounce production, effective cost control and contribution of lower operating costs as
Slide 14: Industry position on PGM Producers Cash Cost curve
Industry position on PGM Producers Cash Cost curve Sylvania remains one of the lowest cash cost PGM producers in the industry Impala Lease 1 400 1 400 Pandora Marikana Bokoni Pilanesberg Union 1 200 1 200 Zondereinde Marula Current Pt Spot Rustenburg Amandelbult 1 000 Current 4E PGM Spot (Typical
Slide 15: Cash Profit (before tax) trend
Cash Profit (before tax) trend Company has been able to grow cash profits during difficult market conditions Current 2017 to 2019 outlook higher than 2016 actual profit, assisted by higher PGM basket price and higher ZAR / US$ exchange rate US$ 20 000 000 15 000 000 10 000 000 5 000 000 - 2011 2
Slide 16: PGM Gross PGM Metal Price trend
PGM Gross PGM Metal Price trend 2016 4E PGM Basket prices were approximately 21% weaker than 2015 in US$/oz terms. ZAR 4E PGM Basket price was ~6% lower in 2016 than 2015 due to ZAR/US$ exchange rate deteriorating by approximately 26%. 3000 15 000 ZAR/oz $/oz 2500 12 500 2000 10 000 1500 7 500 1
Slide 17: Corporate Strategy
Corporate Strategy Value creation Shareholder-friendly use of cash • Free cash flow generation • Only commit capital to growth projects - Consistent production at >55koz/year from when IRR > 20% hurdle rate current infrastructure - Capex on new projects needs to - Low cash costs target c.$500oz demo
Slide 18: Highlights in 2015 / 2016
Highlights in 2015 / 2016 June 2015 • Record annual production for FY2015 of 57,587oz PGM, with a positive Group adjusted EBITDA of $10.1m in a very difficult PGM market conditions September 2015 • 2.6 million Shares repurchased • 2-year Wage Deal concluded for Sylvania Eastern Operations for 20
Slide 19: Summary
Summary • Shareholder-friendly corporate strategy – Operations generate positive free cash flow – Disciplined capital allocation and funding of expansion program from internally generated funds – No equity issuance since 2009 in a very difficult price environment, unlike some other PGM producers in
Slide 20: Sylvania Platinum Limited contacts
Sylvania Platinum Limited Terry McConnachie +44 7775 337175 Liberum Capital Limited (NOMAD) Richard Crawley / Neil Elliot +44 20 3100 2000 Newgate (Communications) Helena Bogle / Adam Lloyd +44 20 7653 98580 +27 11 673 1171 www.sylvaniaplatinum.com P L A T I N U M L I M I T E D
Slide 21: Basket Price & Exchange Rate Assumptions
Appendix 1 Basket Price & Exchange Rate Assumptions FY2017 to FY2019 Estimates -10% Basket Price +10% Basket Price - June 2016 Energy & Metals Forecast Pricing 1 Sensitivity 3 Sensitivity 4 2017 2018 2019 2016 2017 2018 2016 2017 2018 Pt $/oz 1 034 1 034 1 034 Pt $/oz 982 982 982 Pt $/oz 1 201 1 201
Slide 22: Project ECHO: MF2 Treatment Methodology
Appendix 2 PROJECT ECHO MF2 Treatment Methodology P L A T I N U M L I M I T E D
Slide 23: Why Project ECHO
Why Project ECHO • Filling the PGM oz Gap with Steelpoort and Lannex operations reaching end of life – maintaining an average of ~55koz to 60koz/year for next 10 to 15 years • Recovering PGM oz from tailings resources otherwise sterilized • More efficient PGM production – Lower $/oz Opex, Higher Rec
Slide 24: Current MF1 Strategy and Plant Configuration
Current MF1 Strategy and Plant Configuration • Plant Feed Material • 1st Pass Treatment: Plants mine a combination of Current Arisings (tails from running Host Mine chrome plants) and historic chrome plant tailings from old tailings dams which have not been treated for PGM’s before. Shareholder-frie
Slide 25: SDO Typical Process Flow – Current MF1
SDO Typical Process Flow – Current MF1 PGM Milling & Flotation 25
Slide 26: Proposed MF2 Strategy – Project ECHO
Proposed MF2 Strategy – Project ECHO • Plant Feed Material • Single Pass Treatment: Only Plants identified with viable feed material (Millsell, Doornbosch, Tweefontein, Mooinooi Dump and Mooinooi ROM) converted to MF2 plants. Shareholder-friendly use of cash • Plants will still mine a combination of
Slide 27: SDO Process Flow with MF2 Addition
SDO Process Flow with MF2 Addition Primary PGM Secondary PGM Milling & Flotation Milling & Flotation 27
Slide 28: Production Profile (Incl. MF2 Projects)
Production Profile (Incl. MF2 Projects) PGM oz SDO PGM oz Profile 90 000 Jan 2019 - MN ROM MF2 (Utilise current MN Dump Plant) Mar 2018 - MN Dump MF1 (Relocate Equipment from LN) 80 000 - TWFT MF2 (New Equipment) Jan 2020 Jul 2017 - MN Dump MF2 (New Equipment) 70 000 - DB MF2 (Relocate Equipment fro
Slide 29: Typical Operations Layout
Appendix 3 Typical Operations Layout P L A T I N U M L I M I T E D
Slide 30: Mooinooi MG2 ROM Plant
Mooinooi MG2 ROM Plant Crushing & Screening Spiral Plant Milling
Slide 31: Lannex Dump Plant (Dump & Current Arisings)
Lannex Dump Plant (Dump & Current Arisings)