Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — Investor Presentation (December 2009)
23 slides from Sylvania Platinum's investor presentation, December 2009
Slide 1: High-Margin, Low-risk PGE Producer
High-Margin, Low-risk PGE Producer TM McConnachie, MD December 2009
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: Sylvania in Brief
Sylvania in Brief • ASX/AIM • Shares in issue: 218m 3 month share price and volume 80 12000 • Market Capitalization: GBP 101.4m* Termination of 75 Ruukki transaction 10000 • Quality shareholders 70 – Audley 65 8000 – Odey Asset Management Volume Price 60 6000 – Henderson Global 55 – JP Morgan 4000 –
Slide 4: Sylvania Key Drivers
Sylvania Key Drivers 1. Business model – High-margin, low risk tailings processing operations and near surface exploration and mining 2. Future – Growth funded by strong cash flows and balance sheet - facilitated by planned access to down stream smelting 3. People – Relevant experience with track re
Slide 5: Sylvania Corporate Structure
Sylvania Corporate Structure 5
Slide 6: Locality
Locality =, Oren eee Lemire LOCALITY WITHIN ‘ . SOUTH AFRICA LOCALITY WITHIN THE BUSHVELD IGNEOUS COMPLEX | N Harriet’s Wish (GAU) A Aurora (SXM) { LEGEND % Near Surface Exploration SLV- Sylvania wd] Plants under Construction GAU - Great Australian Resources dl Operating Sylvania Complexes SXM - SA
Slide 7: Low Risk Surface Operation
Low Risk Surface Operation Target cash cost Chrome tailings dump ~US$300/oz & current arisings Chrome Chrome product recovery plant PGM flotation plant Ball mill Thickener PGM concentrate 7
Slide 8: PGM Growth from Tailings Retreatment
PGM Growth from Tailings Retreatment • Ramping up – 17koz (FY‘08) 24koz (FY‘09) 35koz (FY‘10) 72koz (FY‘11) • Dump tailings dominated (linked to Samancor’s fortunes) • Challenge = growth beyond peak Production Profile with Samancor Reaching 5 million tons per annum Peak production increases
Slide 9: Track Record and Profitability
Track Record and Profitability Fundamentals Financial Performance FY2008 FY2009 % Change 40 Basket price 2,346 881 -62% 30 (US$/oz) 20 Revenue A$m Net Basket price 1,903 659 -65% 10 (US$/oz) Operating Profit 0 Cash cost 349 321 -8% ‐10 Op. cash flow (U$/oz) 2007 2008 2009 Operating margin 82% 51% -3
Slide 10: Growth Focus
Growth Focus • Sylvania's strategy is to build cash generative businesses that can fund future growth in the PGM sector. • Core strategic drivers are: – Operational excellence – “more from what we have” (recovery & availability) – Tailings growth – “more of what we have” (more plants) – Near surface
Slide 11: Platreef Strategy
Platreef Strategy • Development of Southern Platreef Sources – Grass Valley Project • Upgrade indicated resource to Measured status – Bulk sample for floatation testwork – Mining parameters, Metallurgical parameters • Apply for mining right – Environmental Impact Assessment, Social Labour Program, D
Slide 12: Sylvania Platreef Resource Target
Sylvania Platreef Resource Target (incl Resources) • Wide Mineralised Ore Zone (previously explored by SXM and Angloplats) • Low strip ratio • Low cost open pit mining • Modular plants 100 000 tpm • Phased roll-out of plants (8) • Initial 3 plants at Grass Valley 12
Slide 13: Platreef Strategy
Platreef Strategy -: SYLVANIA GrassValley 2009 2010 2011 2012 2013 2014 Development program |Nov |Dec |Jan -Jun|July-Dec}Jan -Jun|July-Dec)Jan Jun|July- Dec! Jan -JunjJuly- Dec! Jan JunjJuly- Dec Bulk Sample Metallurgical testwork Mine design and costing Resource upgrade EIA SLP BFS Apply for mining
Slide 14: The Proposed Jubilee Strategic Alliance
The Proposed Jubilee Strategic Alliance • Sylvania and Jubilee enter into strategic alliance to smelt Sylvania's platinum group metal concentrates from its tailings retreatment projects that are not tied into other contracts. • This alliance offers a total solution for processing chrome tailings and
Slide 15: Unlocking Value via Access to Smelting Technology
Unlocking Value via Access to Smelting Technology • Majors control smelting and this is an Industry bottleneck • Limited room for low grade and high Cr concentrates • Require DC technology to treat this material profitably 15
Slide 16: Smelting of Sylvania Low Grade Concentrate
Smelting of Sylvania Low Grade Concentrate • Jubilee has smelted low grade PGE concentrate which did not meet the specification of Sylvania’s major offtake customers in the Mintek 1.5MW DC Furnace. – The material was 104.3 tonnes with a PGE grade of 85g/t (6e) and containing 7.1% Cr2O3. • Smelter re
Slide 17: Sylvania – Growing into the Future
Sylvania – Growing into the Future 17 Everest North ounces represent a standalone operation and exclude any possible JV ounces
Slide 18: People
People VISION • Experienced board focused on value creation Leading SA mid- • Committed and talented employees and contractors tier PGM producer • SHE-driven culture • Empowered Low-risk tailings – Ehlobo Metals (Pty) Ltd and shallow mining assets 18
Slide 19: PGM markets – Positive Outlook
PGM markets – Positive Outlook • Vehicle Sector remains key demand driver – New ventures for growth – auto sector in BRIC countries – Euro IV legislation imposed in Shanghai, Beijing, Guangzhou – Euro V by end 2009 in Europe – new vehicles will need to be compliant • Supply constraints in South Afri
Slide 20: Attractive Valuation
Attractive Valuation • Recent Research Reports • Lowest Cost Producer – Ambrian (Nomad/ Broker); – RBC Capital Markets; • Buy Recommendations – Investec Securities; – Ambrian – Mirabaud; – Investec Securities; – Edison Investment – Mirabaud; Research; – Hogan & Partners; and – Evolution Securities;
Slide 21: Conclusion
Conclusion • Share Price substantially below most analysts forecasts • Lannex and Mooinooi plants fully commissioned – significant increase in ounces produced • Platinum and Rhodium prices on upward trend • Chrome production upside positive as Stainless Steel and hence Ferrochrome demand steadily in
Slide 22: Investment Case
Investment Case • Business Model – High margin, low costs and low risk • Future – Growth funded by robust cash flows • People – Growth orientated and experienced team • Sector – Positive PGM Fundamentals • Attractive Valuation 22
Slide 23: Contacts
Contacts Terry McConnachie +27 82 553 4256 UK and South Africa Louis Carroll +27 11 6731171 Australia Richard Rossiter +61 41 868 8338
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