Valterra Platinum Limited · JSE:VAL
Valterra Platinum — Anglo American Platinum — Denver Gold Forum 2020
29 slides from Valterra Platinum's conference presentation, September 2020
Slide 1: Anglo American Platinum – Denver Gold Forum 2020
ANGLO AMERICAN PLATINUM Denver Gold Forum 2020
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT Disclaimer: This presentation has been prepared by Anglo American Anglo American Platinum’s actual results, performance or from publicly available third party sources. Platinum Limited (“Anglo American Platinum”) and comprises the achievements to differ materially from those in
Slide 3: A Differentiated Precious Metals Producer
A DIFFERENTIATED PRECIOUS METALS PRODUCER Largest precious metals Mineral Resource(1) globally and best return on capital(2) Ticker: JSE / ADR 32.9% 800 AMS.SJ / 700 600 3.4% AGGPY 500 Revenue(3) 400 19.4% 28.1% $6 billion 300 18.3% 13.9% 1.5% 200 6.9% 4.6% 11.8% 1.3% (12.9)% 100 2.6% 8.1% 13.0% 201
Slide 4: Largely Open-Pit & Mechanised Operations in Southern Africa
LARGELY OPEN-PIT & MECHANISED OPERATIONS IN SOUTHERN AFRICA Mototolo / Unki Modikwa (JV) / Mogalakwena Amandelbult Processing Der Brochen (Zimbabwe) Kroondal (JV) Wholly-owned and operated 50% Joint operation & 100% wholly-owned and independently operated operated Mining method Open-pit Conventional
Slide 5: Own and Operate Full Processing Capability
OWN AND OPERATE FULL PROCESSING CAPABILITY Mining Concentrating Smelting Refining Products Conventional Open Pit Smelters Magnetic Concentrator Plant (MCP) • Amandelbult • Mogalakwena • Polokwane • Waterval • Mortimer • Unki Ni Cu Co Sodium Cobalt Sulfate Sulfate Base Metal Refinery Mechanised • Unk
Slide 6: Operational & Financial Review
OPERATIONAL & FINANCIAL REVIEW 6
Slide 7: Resilient Business…Despite Headwinds
RESILIENT BUSINESS…DESPITE HEADWINDS Safety performance Production impacted by Covid-19 Refined production Fatalities H1 2020 production down H1 2020 impacted by zero 25% ACP repairs at managed operations strong relative performance due to greater leading to a build-up in work-in-progress inventory
Slide 8: Improved Safety, Health and Environment Performance
IMPROVED SAFETY, HEALTH AND ENVIRONMENT PERFORMANCE Safety Health Environment 1,405 2,092 9.12 206 463 2.24 6 3 2 7 6 2 0 zero 0 zero 63 51 27 14 4 5 3 zero 2013 2014 2015 2016 2017 2018 2019 H1 2013 2014 2015 2016 2017 2018 2019 H1 2013 2014 2015 2016 2017 2018 2019 H10 2020 2020 2020 Fatalities TR
Slide 9: Continuing to Mine in a Socially Responsible & Sustainable Way
CONTINUING TO MINE IN A SOCIALLY RESPONSIBLE & SUSTAINABLE WAY Environmental targets ESG recognition 2020: 15% reduction on GHG emissions 2022: 10% improvement in GHG efficiency against 2019 baseline 2030: 30% reduction of GHG emissions against 2016 baseline 2040: Carbon Neutral Denver Gold Forum 20
Slide 10: Negative AISC Generating Significant Cash Margin
NEGATIVE AISC GENERATING SIGNIFICANT CASH MARGIN All-in-sustaining cost per operation ($/platinum ounce sold)(12) Production in H1 PGM cost curve H1 2020 average achieved platinum price - $861 525 ~70% Own mine EBITDA margin(13) (176) (320) (594) (480) 38% Return on Capital Employed(13) (1,503) Unki
Slide 11: Cash Flow Impacted by Working Capital Build – But Remain in Net Cash Position
CASH FLOW IMPACTED BY WORKING CAPITAL BUILD - BUT REMAIN IN NET CASH POSITION Net cash (USD billion)(14) Cash utilised(15) 1,035 $210m Liquidity headroom(16) 675 $1bn excluding customer prepayment 395 H1 2020 dividend declared(8) $165m H1 2019 2019 H1 2020 Denver Gold Forum 2020
Slide 12: Disciplined and Value Focussed Capital Allocation
DISCIPLINED AND VALUE FOCUSSED CAPITAL ALLOCATION Capital allocation framework Capital allocation H1 2020 (USD million)(17) • Free cash flow utilised of $210m $330m • Customer prepayment increase of $400m • Other: $140m • Paid dividend of $665m • Base dividend $270m $665m • Special dividend $395m •
Slide 13: The PGM Market
PLATINUM THE PGM MARKET
Slide 14: PGM Prices Are Firm, Above Pre-Crisis Levels
PGM PRICES ARE FIRM, ABOVE PRE- CRISIS LEVELS Indexed market prices log scale (2 Jan 2019 = 100) % of gross 3E demand 300 +189% 13% Jewellery 250 200 +75% 22% +72% Industrial 150 +45% +23% 100 50 65% Jan-19 Jan-19 Mar-19 Jun-19 Jul-19 Jul-19 Jan-20 Jun-20 Jul-20 Jul-20 Mar-19 Mar-20 Dec-19 Feb-19 No
Slide 15: Despite Covid-19 Impact 3E Metals Remain in Deficit
DESPITE COVID-19 IMPACT 3E METALS REMAIN IN DEFICIT Market balance 2017 to 2021 forecast (koz)(18) Palladium outlook Pd (208) deficit (754) despite lower automotive demand (950) 225 187 Platinum outlook Pt modest deficit due to lower mine production (265) 50 28 Rh Rhodium outlook (26) deficit 2017 2
Slide 16: Long-Term Automotive PGM Demand Is Robust
LONG-TERM AUTOMOTIVE PGM DEMAND IS ROBUST Global light duty automotive production outlook (million vehicles)(19) ICE vehicle sales increase 89 million 104 million PGMs in powertrain Pt Fuel Cell Electric Vehicles 65 k 9% 10 k 9m between 2019 and 2027 2m Hybrid Electric Vehicles 5m Pt Pd Rh (contain
Slide 17: Automotive PGM Demand Supported by Higher Loadings
AUTOMOTIVE PGM DEMAND SUPPORTED BY HIGHER LOADINGS Historic and forecast 3E light duty vehicle PGM loadings(17) LDV gasoline loadings increase Light duty vehicles (LDV) - gasoline Pd 40% between 2015 - 2025 due to higher emissions Rh legislation in China and Europe 2015 2020 2025 Light duty vehicles
Slide 18: Overall Outlook for 3E PGM Demand Firm
OVERALL OUTLOOK FOR 3E PGM DEMAND FIRM Short to medium term… …longer term Substitution into Electrification Commercial vehicle gasoline Hydrogen economy through fuel cell demand grows autocatalysts vehicles Platinum Global Jewellery demand Stricter emissions Industrial ‘middle class’ recovers legisl
Slide 19: Positioning the Business for the Future
POSITIONING THE BUSINESS FOR THE FUTURE
Slide 20: Building Blocks in Place to Build the Business for the Future
BUILDING BLOCKS IN PLACE TO BUILD THE BUSINESS FOR THE FUTURE Operational efficiency Breakthrough technology Achieve and beat world best practice - P101 Development of FutureSmartTM technology innovation Deployment of FutureSmartTM technology & innovation Bulk-ore sorting Digitalisation Coarse parti
Slide 21: Shaping the Future of Mogalakwena – Studies for Growth
SHAPING THE FUTURE OF MOGALAKWENA – STUDIES FOR GROWTH Optimise resource development Create trusting relationships including underground opportunities and valued partnerships Utilise downstream Shaping the Optimise mine plan and processing to maximise value mine for operational performance the futur
Slide 22: Develop & Deploy FutureSmart Mining Technology
DEVELOP & DEPLOY FUTURESMART MININGTM TECHNOLOGY Bulk-ore sorter – trial underway Coarse particle rejection – Q1 2021 Hydraulic Dry Stacking – H2 2021 • Sensors determine ore content prior to • Trial plant to be built at Mogalakwena • New approach to eliminate wet tailings processing allowing waste
Slide 23: Leading the PGM Industry's Demand Creation Efforts
LEADING THE PGM INDUSTRY’S DEMAND CREATION EFFORTS INVESTMENT JEWELLERY INDUSTRIAL Developing the world’s largest fuel-cell mining truck ‘Green hydrogen’ through Hydrogen powered Mogalakwena solar PV plant electrolysis fuel-cell truck fleet Green Electricity Hydrogen Denver Gold Forum 2020 23
Slide 24: To Conclude…
TO CONCLUDE… ✓ Resilient business through significant headwinds ✓ Zero fatalities and continued focus on safety performance ✓ Largest precious metals Mineral Resource globally ✓ ESG embedded in core strategy to support stakeholders ✓ Clean air movement underpins robust fundamentals for PGMs ✓ Strong
Slide 25: Appendix
PLATINUM APPENDIX
Slide 26: ACP Phase B Unit Repairs & Safe Ramp-Up Complete
ACP PHASE B UNIT REPAIRS & SAFE RAMP-UP COMPLETE Cross section of the Anglo American Platinum Converter Plant Increased monitoring High pressure coolers freeboard section (ACP Phase B water leak) No Increased Coal dust explosion during lance ignition (ACP Phase A explosion) measurement uncontrolled
Slide 27: Refined Production Impacted by ACP Repairs
REFINED PRODUCTION IMPACTED BY ACP REPAIRS Build up in WIP inventories (3E ounces) Refined PGM production (PGM ounces) Work-in-progress build at H1 c.500,000 oz of 3E metal inventory (800) Build due 1,300 1,450 to power disruptions and ACP c.500 Refined production(20) down repairs 950 75 Build up in
Slide 28: 2020 Guidance | Covid-19 Headwinds Remain
2020 GUIDANCE | COVID-19 HEADWINDS REMAIN Production M&C (million ounces) Refined production (million ounces) Sales volumes (million ounces) PGMs 3.1 – 3.6 PGMs 3.1 – 3.6 PGMs 3.1 – 3.6 Pt: 1.45 – 1.65 Pt: 1.45 – 1.65 Pt: 1.45 – 1.65 Pd: 1.00 – 1.15 Pd: 1.00 – 1.15 Pd: 1.00 – 1.15 Other: 0.65 – 0.90
Slide 29: Foot Notes
FOOT NOTES (1) Mineral Resources classified as Measured, Indicated and Inferred, inclusive of Ore Reserves – based on latest available information from Company sources and Company analysis (2) Return on capital sourced from Bloomberg, based on last financial year (3) 2019 full year revenue of R99 bi