Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — Investor Presentation (September 2013)
23 slides from Sylvania Platinum's investor presentation, September 2013
Slide 1: Success Shareholder Value Corporate Presentation
Success Shareholder Value Corporate Presentation September 2013 P L A T I N U M L I M I T E D
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: Share structure and ownership
Share structure and ownership CAPITALISATION SUMMARY TOP SHAREHOLDERS • Listed on AIM • Domiciled in Bermuda • Ticker symbol: SLP LN • Basic shares outstanding: 297,981,896 • Options outstanding: 14,600,000 • Share price: 9p¹ • Market capitalisation: $41.8M¹ • Cash position: $6.6M² • Other working c
Slide 4: Our business
Our business Sylvania Dump Operations Other projects • Seven fully operational chrome tailings processing • Development projects on hold pending improved complexes market conditions ‐ Millsell, Mooinooi ROM and Mooinooi Tailings on the ‐ Volspruit open pit mine project at southern end of western lim
Slide 5: Corporate strategy
Corporate strategy Value creation Shareholder‐friendly use of cash • Free cash flow generation • Drive growth in equity value through ‐ Consistent production at >50koz/year from cash flow generation allowing sustainably current infrastructure high return of capital to investors ‐ Low cash costs at c
Slide 6: Performance compared to targets set in January 2013
Performance compared to targets set in January 2013 Target Actual Reason for difference Production 49koz PGMs 44.2koz PGMs • Section 54 stoppages at host mines (1.5koz) • Low grade at Tweefontein due to Klarinet Mine (1.8koz) • Power outages Cash costs <$600/oz PGM $708/oz • Production issues (see a
Slide 7: Sylvania has maintained a positive cash balance compared to a sector burning cash
Sylvania has maintained a positive cash balance compared to a sector that is largely burning large amounts of cash Note: Lonmin excluded as different reporting dates and rights issue distort comparison Source: Bloomberg and company reports
Slide 8: Tailings dump operations approaching steady state after several years of growth
Sylvania’s tailings dump operations are now approaching steady state after several years of growth Note: Sylvania financial years run to 30 June Source: internal forecasts
Slide 9: Controllable production problems gradually being rectified
Controllable production problems gradually being rectified WEEKLY PRODUCTION PRODUCTION ENHANCEMENTS Already addressed • Mooinooi plants now achieving over 1,000oz per month • Tweefontein operationally stable Next steps • Debottleneck project at Mooinooi commenced • Higher grade feed for Tweefontein
Slide 10: Cash costs trending towards steady state levels post ramp-up
Cash costs are trending towards steady state levels post ramp-up and impacts of industry-wide strikes Source: internal forecasts
Slide 11: Committed capital expenditure decreasing to sustaining capital on dump operations only
Committed capital expenditure decreasing to sustaining capital on dump operations only Note: ¹Everest North, Volspruit, and head office; ²includes tailings dams Source: internal forecasts
Slide 12: Operations are now generating positive free cash flow
Operations are now generating positive free cash flow Current market capitalisation Note: ¹assumes no dividends; forecasts are as at 24/8/13 using Pt price of $1,540/oz; Pd of $750/oz; Rh of $1,010/oz; 1 USD = 10.25 ZAR Source: internal forecasts
Slide 13: Dividend policy
Dividend policy POLICY AND COMMENTS DIVIDEND YIELD COMPARISON³ • Sylvania recently formulated its dividend policy, which will be applied from calendar H2 2013 onwards • Provided the resultant company cash balance is greater than $8M, we undertake to recommend paying a minimum of 25% of the previous
Slide 14: Large valuation gap with global PGM producing peers
Large valuation gap with global PGM producing peers P/NAV EV/EBITDA Note: Data as of 24/8/13 using spot pricing Source: CIBC for NAV; Bloomberg consensus for EBITDA
Slide 15: Sylvania is in the lowest quartile on the cost curve
Sylvania is in the lowest quartile on the cost curve of African and North American producers. Larger players making low profits should imply floor to PGM prices Achieved net basket price Mine EBITDA Cash costs Note: column width corresponds to 2014 production of PGMs; excludes third party smelting o
Slide 16: Sylvania is forecast to have one of the highest EBITDA margins
Sylvania is forecast to have one of the highest EBITDA margins Note: ¹Excludes third party smelting operations Source: CIBC as of 18/1/13
Slide 17: Sylvania's business model is lower risk than other South African PGM producers
Sylvania’s business model is lower risk than other South African PGM producers SAFETY STATISTICS COMMENTS • Our surface‐based operations are exposed to fewer safety‐related risks than other producers of PGMs • We target a lost‐time injury rate of zero ‐ 9th May 2012 marked a full year free of LTIs a
Slide 18: South Africa is still considered lower risk than many other mining jurisdictions
South Africa is still considered lower risk than many other mining jurisdictions • RSA environment remains challenging • SLP continues to manage labour relations in a professional manner Source: http://www.euromoneycountryrisk.com/ as of 23rd August 2013
Slide 19: Higher ounce production per employee drives lower costs
Sylvania’s higher ounce production per employee drives lower costs and helps mitigate the impact of wage inflation Note: ¹Defined as 2014 estimated PGM production divided by latest reported total employees (including contractors) Source: CIBC and annual reports
Slide 20: Achievements in 2012-2013 and targets
Achievements in 2012-2013 and targets April 2012 • 6th plant (Mooinooi ROM) produced first ounces June 2012 • Exploration success at Harriet’s Wish August 2012 • Dividend of Ironveld shares to Sylvania shareholders September 2012 • 7th plant (Tweefontein) produced first ounces October 2012 •
Slide 21: Summary
Summary • Shareholder-friendly corporate strategy – Operations generate positive free cash flow – Disciplined capital allocation • Unwarranted discount to peer group valuations • Low cost producer with highest margins and ROCE • Lower risk business model than miners • Targeting maiden cash dividend
Slide 22: Contact us
Contact us Sylvania Platinum Limited: • Terry McConnachie +44 7775 337175 • Nigel Trevarthen +27 8 2574 2251 Liberum Capital Limited (NOMAD & broker): • Tom Fyson +44 20 3100 2230
Slide 23: Success Shareholder Value
Success Shareholder Value +27 11 673 1171 www.sylvaniaplatinum.com P L A T I N U M L I M I T E D
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