Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — H1 FY2020 Earnings Presentation
29 slides from Sylvania Platinum's earnings presentation, February 2020
Slide 1: Results London Investor Presentation, half year ended 31 December 2019
RESULTS LONDON INVESTOR PRESENTATION for the financial half year ended 31 December 2019 PAGE
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 2020. This document does not constitute or form part of any offer or invitation to sell or issu
Slide 3: Corporate Strategy: Value Creation
CORPORATE STRATEGY VALUE CREATION Free cash flow generation Optimisation of value from current • Production of approximately 74koz to 76koz resources and infrastructure forecast for the financial year from current • Implementation and further optimisation of secondary operations milling and flotatio
Slide 4: HY1 FY2020 at a Glance
HY1 FY2020 AT A GLANCE FINANCIAL SNAPSHOT GROUP REVENUE GROUP EBITDA NET PROFIT Increased 244% to $23.9m after Increased 84% to $59.0m, assisted Improved 197% to $36.7m, assisted payment of income tax of $9.8m, by 52% higher PGM basket price by 52% higher PGM basket price supported by stable PGM 84%
Slide 5: Meeting the Challenges
MEETING THE CHALLENGES CHALLENGES HOW WE FARED Resulted in distribution interruptions and instability which continue to present Power utility infrastructure challenges to existing operations and the execution of expansion processes. and supply issues We continue to explore long-term solutions to hel
Slide 6: Company Overview
COMPANY OVERVIEW Share structure and ownership Dump operations Location of operations and projects PAGE 6
Slide 7: Share Structure and Ownership
SHARE STRUCTURE AND OWNERSHIP CAPITALISATION SUMMARY – 31 DECEMBER 2019 TOP SHAREHOLDERS Africa Asia Capital 20,86% ➢ Listed: AIM FIL Investment International 8,50% ➢ Domiciled: Bermuda M&G Investment Management 8,20% ➢ Ticker symbol: SLP LN Hargreaves Lansdown Asset Management 6,55% ➢ Basic shares
Slide 8: 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 on Eastern and Western Limbs of Bushveld Complex Resources Operations Produc
Slide 9: Overview – Development
OVERVIEW – DEVELOPMENT Sylvania holds mining rights for a number of PGM projects on the Northern Limb of the Bushveld Igneous Complex in South Africa ➢ Volspruit • Open-pit mine project at the southern end of Northern Limb • Projected life-of-mine production of 3.09 million ounces PGM and 272 millio
Slide 10: Location of Operations and Projects
LOCATION OF OPERATIONS AND PROJECTS PAGE 10
Slide 11: Operations
OPERATIONS Production profile Project ECHO progress Capital projects PAGE 11
Slide 12: Production Profile
PRODUCTION PROFILE ➢ HY1 FY2020 production of 40,003 4E PGM ounces, 18% increase on HY1 FY2019 and a new HY1 production record ➢ Confident that the Company should reach FY2020 Production Guidance of 74,000oz to 76,000oz 4E PGM 2 1 Mooinooi Dump & Mooinooi ROM Plant production combined from FY2019 on
Slide 13: Production Profile: Impact of Depressed Chrome Market
PRODUCTION PROFILE Impact of currently depressed chrome market ➢ Due to the depressed chrome market at present, several chrome producers have announced the possibility of having to retrench some employees and to scale down production in an effort to mitigate costs and manage supply vs demand; ➢ Sama
Slide 14: Project ECHO
PROJECT ECHO ➢ 3 of the 4 planned secondary PGM milling & flotation (MF2) circuits have been commissioned to date as part of the Group’s Project ECHO roll-out to improve PGM flotation response and recovery efficiencies. o Millsell and Doornbosch MF2 circuits commissioned during H2 FY2018 as first ph
Slide 15: Financial Performance
FINANCIAL PERFORMANCE Operating Cost Industry position on PGM producers cash cost curve Group EBITDA trend Gross PGM metal price trend Capital expenditure PAGE 15
Slide 16: Operating Cost
OPERATING COST ➢ SDO FY2020 cash cost marginal increase on FY2019 – disciplined cost control measures remain in place. Cash Cost $/oz 800 Base Case $/oz cost 700 600 -10% R/$ Exchange Rate 500 400 +10% R/$ Exchange Rate 300 200 Nedbank CIB Outlook - Jan '20 100 0 SBG Securities 2010 2011 2012 2013 2
Slide 17: Industry Position on PGM Producers Cash Cost Curve
INDUSTRY POSITION ON PGM PRODUCERS CASH COST CURVE ➢ Sylvania remains at the bottom-end of the PGM producers’ cost curve; ➢ Group actual HY1 FY2020 All-in Cost is $629/oz vs Nedbank’s previous Jul ’19 estimate of ~$750/oz Global PGM Cash Cost+Capex Curve (CY19E - At Spot) 1 Western Limb Assets North
Slide 18: Group EBITDA Trend
GROUP EBITDA TREND ➢ Combination of growing PGM ounce production profile and significant increase in metal prices contributing to significant improvement in EBITDA Group EBITDA - US$ US$ 120 000 000 Base Case - SPOT 100 000 000 -10% Basket Price 80 000 000 +10% Basket Price 60 000 000 -10% R/$ Excha
Slide 19: Gross PGM Metal Price Trend
GROSS PGM METAL PRICE TREND Actual H1 FY2020 ➢ 4E PGM Basket price of $1,830/oz for H1 FY2020 is 52% higher than H1 FY2019 PGM Prill Split Rh ($1,201/OZ); driven primarily by improvements in Palladium and especially Rhodium prices; 12,5 Au % 0,2% ➢ ZAR 4E PGM Basket price was ~54% higher, based on c
Slide 20: Capital Expenditure
CAPITAL EXPENDITURE ➢ Project capital expenditure up to 2013 was associated with construction of new PGM treatment plants, while expenditure from late 2017 to early 2022 is primarily associated with Project ECHO and smaller strategic projects contributing towards PGM ounce profile and tailings dam r
Slide 21: Summary
SUMMARY Corporate Strategy Why Sylvania? PAGE 21
Slide 22: Corporate Strategy
CORPORATE STRATEGY Value Creation Shareholder-friendly use of cash ➢ Free cash flow generation ➢ Only commit capital to growth projects when internal o Production of approximately 74koz to hurdle rate is met 76koz/year from current operations1 o Funding Project ECHO from cash resources. o Low cash c
Slide 23: Why Sylvania?
WHY SYLVANIA? Significant industry experience and proven track record in development and operations of tailings re-treatment operations PAGE 23
Slide 24: Why Sylvania?
WHY SYLVANIA? ➢ Significant industry experience and proven track record in development and operations of tailings re-treatment operations ➢ Shareholder-friendly corporate strategy • Operations generate positive free cash flow • Disciplined capital allocation and funding of expansion program from int
Slide 25: Contact Us
CONTACT US • Sylvania Platinum Limited • Terry McConnachie +44 77 7533 7175 • Jaco Prinsloo +27 11 673 1171 • Lewanne Carminati +27 11 673 1171 • Liberum Capital Limited (NOMAD) • Richard Crawley / Edward Phillips +44 20 3100 2000 • Alma PR Limited (Communications) • Josh Royston / Helena Bogle +44
Slide 26: Appendices
SYLVANIA APPENDICES PAGE 26
Slide 27: Appendix 1 – Metal Price Assumptions
APPENDIX 1 – METAL PRICE ASSUMPTIONS Sylvania FY2020 to FY2022 Estimates -10% Basket Price +10% Basket Price 1 2 3 - Current Feb '20 Spot Prices Sensitivity Sensitivity 2020 2021 2022 2020 2021 2022 2020 2021 2022 Pt $/oz 968 968 968 Pt $/oz 871 871 871 Pt $/oz 1 065 1 065 1 065 Pd $/oz 2 362 2 362
Slide 28: Appendix 2 – H1 FY2020 vs H1 FY2019: Production Summary
APPENDIX 2 – H1 FY2020 VS H1 FY2019 PRODUCTION SUMMARY PAGE 28
Slide 29: Appendix 2 – H1 FY2020 vs H1 FY2019: Financial Summary
APPENDIX 2 – H1 FY2020 VS H1 FY2019 FINANCIAL SUMMARY PAGE 29