Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — FY2017 Earnings Presentation
26 slides from Sylvania Platinum's earnings presentation, August 2017
Slide 1: Corporate Presentation: Results for the financial year ended 30 June 2017
CORPORATE PRESENTATION Results for the financial year ended 30th June 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 August 2017. This document does not constitute or form part of any offer or invitation to sell or issue,
Slide 3: FY2017 at a glance
Safety FY2017 at a glance 3 LTIs (FY2016: 0’ LTIs) PGM Production (4E) Group cash cost Revenue 17% 4% 28% Higher Lower Higher 70,869oz $453/oz $50.5m (FY2016: 60,643oz) (FY2016 : $470/oz) (FY2016: $39.5m) Group EBITDA Profit after tax Basic EPS 65% 138% 139% Higher Higher Higher $18.3m $8.9m 3.06¢ (
Slide 4: Share Structure and Ownership
Share Structure and Ownership CAPITALISATION SUMMARY – 30 JUNE ‘17 TOP SHAREHOLDERS 20.13% Africa Asia Capital Listed on AIM 20.31% 6.47% Majedie Asset Management Domiciled in Bermuda 9.80% M&G Investment 9.66% Management 9.74% Ticker symbol: SLP LN 4.79% Hargreaves Lansdown 6.08% Issued share capit
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 PGMs; - Sylvania was first producer to prove economic viability of recovering PGMs from chrome tailings re-treatment of primary South Afri
Slide 6: Overview cont’d
Overview cont’d Grasvally Northern Limb - Open-pittable high grade chromite resources; Exploration - Adjacent to Volspruit project near Mokopane, Limpopo; - Final EIA was approved by Department of Mineral Resource (DMR) during Dec ‘16, initial appeal by affected parties overturned by DMR; - Water us
Slide 7: FY2017 Operational Highlights
FY2017 Operational Highlights Fourth consecutive year of record SDO production at steady state, achieving 70,869 ounces – a 17% increase from the previous record of 60,643 ounces in 2016; Group cash cost $453/oz, 4% improvement on $470/oz in FY2016; 70,000 ounces PGM forecast for 2018 financial year
Slide 8: FY2017 Financial Highlights
FY2017 Financial Highlights Group revenue increased 28% year-on-year to $50.5m (FY2016: $39.5m); Group EBITDA has increased 65% to $18.3m from $11.1m in FY2016; General and Administration charges decreased 12% to $2.0m (FY2016: $2.26m); Gross profit up by 84% year-on-year to $14.26m (FY2015: $7.73m)
Slide 9: FY2017 Financial Highlights continue
FY2017 Financial Highlights continue Group capital and exploration expenditure increased by 162% to $4.67m (FY2016: $1.78m); Group cash balance increased to $15.3m at 30 June 2017, providing for the forth-coming capital expenditure on Project Echo, and funding for the planned acquisition of Phoenix
Slide 10: Production profile
Production profile 70,869 PGM oz produced in FY2017 Continuous production growth since commissioning of first plants in 2008, building on combination of expansion and efficiency improvement opportunities SDO to maintain 70,000oz going forward, despite Steelpoort reaching end of life in Jun ’17 – Ech
Slide 11: 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), Project ECHO in progress to improve PGM recovery efficiencies and fill identified ounce ga
Slide 12: Project ECHO Progress
Project ECHO Progress Secondary PGM milling & flotation (MF2) implementation program announced in Aug ‘16, to improve PGM flotation response and recovery efficiencies, in order to fill ounce gap created when older operations reach end of life and to ensure sustainable PGM production profile into fut
Slide 13: Phoenix Platinum Acquisition - Background
Phoenix Platinum Acquisition - Background Sylvania concluded an agreement to acquire Phoenix Platinum Mining Proprietary Limited (“Phoenix”) on 31 July 2017 for a purchase price of R89 million ($6.6 million), to be settled in cash on fulfilment of all conditions precedent. Phoenix is a PGM dump oper
Slide 14: Phoenix Platinum Acquisition - Status
Phoenix Platinum Acquisition - Status The Phoenix acquisition agreement is subject to the following conditions precedent: The completion of an internal legal due diligence and fairness review of Phoenix’s operations in order to validate Sylvania’s business model assumptions and potential of synergie
Slide 15: Capital expenditure
Capital expenditure After initial investment phase and 2016 lowest capital since start-up, capital expenditure for additional Project ECHO infrastructure contributes towards increase between 2017 and 2021. Project ECHO requires approximately $12m, funded from internal cash resources. Phoenix Platinu
Slide 16: Operating cost
Operating cost Increased PGM ounce production assisted to maintain low cash unit costs despite a stronger ZAR / US$ exchange rate; 2018-2020 cost outlook remains robust despite closure of Steelpoort operation in 2017, supported by stable ounce production, effective cost control and contribution of l
Slide 17: SDO cash operating cost breakdown
SDO cash operating cost breakdown Sylvania Shared Services Charge Work in Progress Inventory 5% Other Royalties Tax Cost… 1% 0% Equipment Hire 2% Safety , PPE & Insurance 2% Salary & Wages 37% Electrical Consumption 13% Tailings Deposition 3% Laboratory & R&D Cost 4% Production Maintenance Contracto
Slide 18: 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 SLP: $453/oz Cash Cost Excl. Capex $519/oz Cash Cost Incl. Capex Source: Nedbank Corporate & Investment Banking Cost Curve (costs after capex) – CY17E at Spot (R/$13.20, Pt =
Slide 19: Group EBITDA trend
Group EBITDA trend Company has been able to grow profits during difficult market conditions; Solid near term outlook, supported by consistent PGM ounce production and disciplined cost structures. US$ Group EBITDA - US$ 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 - 2011 2012 2013
Slide 20: Gross PGM Metal Price trend
Gross PGM Metal Price trend 4E PGM Basket price strengthened approximately 10% to $935/oz in FY2017 compared to $850/0z in FY2016; ZAR 4E PGM Basket price was ~4% higher for past financial year. Sylvania Platinum Gross PGM Metal Price Trend 3000 15 000 $/oz ZAR/oz 2500 12 500 2000 10 000 1500 7 500
Slide 21: 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% Sylvania Typical Typical Sylvania LG6 Sylvania MG2 Combined UG2 Merensky Au 0.2% 0.1% 0.2% 0.4% 3.6% Rh 13
Slide 22: 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 70koz/year from IRR > 10% real rate current operations • Opportunistic buy back of shares when share - Low cash costs target c.$5
Slide 23: Highlights in 2016 / 2017
Highlights in 2016 / 2017 June 2016 • Second highest quarterly and half-year PGM ounce production of 16,219oz for Q4 and 31,124oz for H2 of FY2016, and new record annual production of 60,643oz FY2016 with a positive Group adjusted EBITDA of $11.1m. July 2016 • Doornbosch operation achieve 4 years LT
Slide 24: Summary
Summary • Significant industry experience and proven track record in development and operations of tailings re-treatment operations – consistently delivering on operational promises • Shareholder-friendly corporate strategy – Operations generate positive free cash flow – Disciplined capital allocati
Slide 25: Sylvania Platinum Limited contacts
Sylvania Platinum Limited Terry McConnachie +44 7775 337175 Liberum Capital Limited (NOMAD) Richard Crawley / Neil Elliot +44 20 3100 2000 Alma (Communications) Josh Royston / Helena Bogle +44 77 8090 1979 +27 11 673 1171 www.sylvaniaplatinum.com P L A T I N U M L I M I T E D
Slide 26: Appendix 1: Basket Price & Exchange Rate Assumptions
Appendix 1 Basket Price & Exchange Rate Assumptions Notes: 1 Investec Commodity Price Forecast for PGM prices based on 20 April 2017 Sector Research Report. 2 Actual average spot PGM metal prices and ZAR/$ Exchange rates for period of 1 to 17 August 2017. 3 Spot PGM metal prices reduced by 10% and Z