Sylvania Platinum (LSE:SLP) — Annual Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the SYLVANIA PLATINUM LIMITED annual results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, as usual, we would just like to

0:32 submit the following poll. And if you'd give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from SYLVANIA PLATINUM LIMITED. Yako, good afternoon, sir. Good afternoon, Jake, and good afternoon, everyone, for joining the call. Thanks for joining us today for our annual results presentation for the 2024 financial year that ended on June 30. Myself and, our CFO, will take you through our key highlights of the year's results, and hopefully, at the end, we'll able to answer some of your questions. I think just before we start, draw your attention standard to the standard disclaimer, just to take note of in terms of any investment decisions that you might want to make, in terms of information we share with you.

1:24 Okay. So if we, I'll just wanna start off briefly the company for any of you that are not familiar, with the company. SYLVANIA PLATINUM is a cash generative dividend paying mid tier platinum mining company that's been in operation for just over sixteen years now. And in our attempt, to grow our low risk, low cost business, the board and management continuously focus on maintaining a safe and profitable production. We ensure that we maintain and strengthen our license to operate and also to invest in r and d and business improvement initiatives to ensure that we maintain a sustainable business and which is a key enabler for us to pursue further growth opportunities and to return, attractive value to our shareholders, which I also hope we are able to demonstrate in this presentation today.

2:19 So just in terms of our operations, now besides enabling us to do significant share buybacks and stable dividends since 2018, We've always been, we've also been able to reinvest our cash in our business. And over the years, our STO operations grew from the first operation to six operating plants, And we further have been able to fund, growth projects like the Tawba JV, that is currently in execution. So on this map, you are able to, see our existing six SYLVANIA dump operations on the eastern and western limb of the South African bushel complex respectively, as well as our, Tawba, very exciting addition to our portfolio, the Tawba JV to the north of the western limb of the Bushfield Complex that we'll do a little bit more about, Tawba later in the presentation in terms of progress.

3:18 Besides our dump operations, the company also owned a number of lucrative, exploration assets, on the northern limb of the Bischfeld Complex, which offers significant growth potential in in the future. And these are, false plate, which is located at the southern end of the northern limb, and the most advanced of our assets. And to the northern end is the far northern limb assets, Aurora and Accra.

3:48 And all these assets are currently still at expiration stage, so I will just touch a bit later in the presentation on the progress on them. They don't have a bearing on the production profile for our current operations. If we just look at the, results for the current financial year, the snapshot, I'm quite happy with the sustained performance of our, operations in a very challenging market environment this past year. That's that's not exclusive to SYLVANIA as we were impacted by the lower PGM prices, and many other PGM producers were facing difficulties. But we, as a company, have just ensured that we focus on the areas that we got can control, so the the controllables that we're able to to manage, and to draw on our strengths of maintaining a a low cost and low risk business.

4:48 Firstly, our production of 72,704 ounces for the year was slightly lower than the previous financial year and marginally below our, the bottom end of our guidance for the year. This was primarily impacted by a slower than anticipated ramp up after the strike, waste related strike action we've had at the beginning of the year, so in the in the third quarter. And then additionally, we've had an impact on grade and recovery from the water blend at our Lennox operation, which we'll deal with in in the next slide. And from a financial perspective, with a four e PJ basket price of a thousand $339 an ounce, which was a 36% decrease year on year in a trend experienced throughout the industry, We we the financial results have been impacted by by by that environment. And while we maintained a strong cash balance with no debt and no product pipeline financing.

6:00 We've still focused on how do we add value to our shareholders or return value to our shareholders. You know, we managed to maintain have a group EBITDA positive for the year, 13,500,000, and net translating to earnings per share of 2.66¢ and maintaining our cash balance at 90 just below $98,000,000. So we managed to announce at the end of the financial year also a 1p final dividend for the year alongside 1p interim dividend declared earlier in the year with our interim results and also a special dividends of 1p related to the early settlement of the Grass Valley loan.

6:53 And that brings us to a 3p overall for the year that

7:01 and as well as some share buybacks for the period. Now, Anne, we'll deal a little bit later in the presentation to explain more details around the, the share buybacks and also to illustrate other 3p dividend that we paid out for the year is materially higher than the minimum required under our dividend policy, which demonstrates just our commitment to return value to shareholders. But we'll deal in a bit more detail with that. If we, for a moment, just focus on the, operations. So, I've mentioned earlier the we were slightly lower than the previous year, and you can see that while we've been able to maintain the tons throughput or our plants at capacity for the year, we were primarily impacted by a 3% lower PGM feed grade and a 1% lower PGM recovery. And and that was, primarily because of instability, and and downtime post the the strike action, as some maintenance left behind during the strike period as well as, Lennox, feed blend.

8:11 However, we have managed to stabilize our Western operations since that in, since June. Our Western operations are all performing well, And, also, our attempts at Lennox managing the orbit is proven to be successful. So if you then look at the next year and and beyond, you can see how even the core operations from the STO is improving. And then you have the addition of the of the additional ounce profile from the DARPA j u JV as it's commissioned in the second half of the financial year. You also note that we have mentioned in our announcement that have the challenge was impacted by lower grade and PGM grades.

9:04 And I think that also, we have initiated a restructuring or optimization and potential restructuring program and consultation at Lesedi where although Lesedi managed to maintain the ounces and actually increased the ounces year on year because of the lower fee grades at the operation combined to the current market prices, the margins are less attractive than at the other operations. And we are engaging with necessary stakeholders now to ensure that we, improve the profitability and sustainability of the operation. If we look at the, forecast then for the, the year, our our guidance, We are looking at the guidance of, between seventy three and seventy six thousand ounces, for the year. And, as I mentioned earlier, we're it is supported by the Western operations that have improved significantly in recent month.

10:04 Continue to treat third party higher grade third party material to Eastern operations to to boost our production ounce and also profitability in the current environment and and ongoing focus on blending of our feed sources. In terms of financial results, I'm gonna hand over to Luann to just take us through the financial results, and then I'll continue a bit with overview of our growth projects as well as some of the market fundamentals. Thanks, Luanne. Thanks, Jakku. I'm pleased to be able to present the results for the 2024 financial year. For the year, the group recorded $81,000,000 net revenue, and I'll expand on this figure a little more in the next slide.

10:55 Cost of sales for the SDO was $69,000,000 and royalty tax of $1,300,000. The reduction in royalty tax is linked directly to the reduction in revenue as a result of the lower basket price for the year. Other expenses comprises of mainly corporate costs as well as the $1,200,000 interest written off on the Grass Valley loan due to the early settlement agreement. An income tax is paid in South Africa on taxable profits that are generated from the operating plants. Currently, the South African corporate income tax rate is 27%, and included in the tax expense line is also the deferred tax movement and dividend withholding tax on dividends declared from the SA operating entity to the parent.

11:48 The company reported a net profit of $6,900,000 for the year, and that translates into a 2.66 US cents earnings per share. If we look at our financial performance in a little more detail in terms of revenue and costs, SYLVANIA, as with the rest of the PGM industry, was affected by the lower metal prices for the year. For the 2024 financial year, revenue the overall revenue decreased nine 37%, of which 34% was a direct result of the lower metal prices, with rhodium dropping approximately 51% and palladium 38%. There's a slightly lower ounce production, which then had a 3.6% impact on revenue.

12:38 The increase in direct operating cost was due mainly to three areas. Firstly, power. We had a a tariff increase of just over 13% and then increased usage following the commissioning of the Lanex MF two in December. There was also less power related downtime, and that stability of the grid then allowed for for higher usage of the Eskom power and and higher costs. Consumables also increased with the Lennox m f two coming online. And thirdly, the biggest impact to the cost was the third party material that was purchased for the Eastern operations, which increased the cost per ounce by approximately 8% to 10% for the year.

13:33 This is for the 2024 financial year, and we'll continue through in the 2025 financial year until June. Our overall cost for the financial year, all in cost is $1,168 per ounce, and that includes the Tava CapEx that we incurred for the year. SYLVANIA still remains in the bottom third of the cost curve that is prepared by Nedbank. And this cost curve represents the group cash cost plus capital and further highlights the significance of our our low cost strategy when much of the industry is operating at a loss. Looking forward at our cash costs, we're estimating around $890 per ounce for 2025, and that includes the third party material.

14:24 So from 2026 onwards, we're approximately a $760 per ounce. SYLVANIA recorded a $13,500,000 EBITDA for the 2224 financial year and, again, mainly impacted by the low PGM prices. Looking forward, the company has used an internal consensus, and that's represented by the blue columns in this graph. We've also then for completeness and to show the the various analyst forecasts included two two analyst forecasts and the spot metal prices. The details of this is in the appendix of the presentation.

15:12 So for 2026 and 2027, the EBITDA forecast here or estimate includes the attributable portion of our Tarba JV, which is estimated at at approximately 14 and $15,000,000 respectively for those financial years. And we've utilized a long term forecast of $260 per ounce for the chrome. Turning to our balance sheet. The group concluded the financial year maintaining a strong balance sheet with a cash balance of $97,800,000 and trade receivables of $34,000,000. The group generated $14,700,000 from operations, and we spent $15,800,000 on capital, including $5,700,000 on Taba.

16:08 $23,400,000 was paid out in dividends, and this is made up of the final dividend for the financial year 2023, which was paid in December, the interim dividend paid in April, and the special dividend that was paid in June. Tax paid over to the South African Revenue Services amounted to $6,200,000 over the reporting period. And as you will note on the in the bottom graph, the capital requirements for 2025 have increased from our previous projections, and this includes $15,000,000 for the Tarver JV, $16,800,000 for tailings dam and related infrastructure, and $12,000,000 for strategic projects and improvements.

16:57 The capital over the next two years is significant but necessary to provide growth as well as to extend the life of the current operations. The tailings dams that we've budgeted for in 2025 and 2026 were always forecast in the capital expenditure. But over the last two years, the the funding requirement for these has increased significantly and and almost doubled due to regulatory requirements to line the dams. We are continually engaging with the regulators for more cost effective solutions to lining the dams, but those planned for 2025 and to some extent 2026 have already been approved by the the regulators and that these capital estimates are our current best estimate.

17:47 Under strategic projects, we also have the centralized filter press that is included, and that is a contractual requirement, which will ultimately reduce transport costs and enable alternate refining options for low grade PGM in the future. And then there's a small amount for allocated to the exploration assets, which is mostly for our social and labor plans for those assets. Looking at shareholder returns, the board remains committed to returning value to shareholders through dividends, share buybacks, and ensuring that SYLVANIA is a growing and sustainable business.

18:36 In order to achieve this and to balance all three strategies, prudent cash management is is required. And as you can see on the left hand side, we've included our dividend policy, which is to distribute a minimum of 40% of adjusted free cash flow. The annual dividend that we've declared of 2p per ordinary share is in excess of a 100% of the adjusted free cash flow for the year, and I think this signifies the board's commitment to maintaining dividend payments. In March and or in the March, April 2024, we bought back 1,800,000 shares in the market. And in June, we canceled 5,600,000 shares that had been bought back over the whole period from the in in market as as well as from employees.

19:31 We also declared a 1p special dividend that was paid from a portion of the Grass Valley settlement proceeds, and that was paid in June. And that brings the total dividends and buybacks for the financial year to just short of $11,400,000, and that excludes any employee buybacks. Cash preservation in our current pricing environment and ensuring that we have sufficient cash to cover the capital requirements to stay in the sustain and grow the business is is essential. I'll hand back to Yakuno to go through the growth projects. Thank you, Luanne. And I think now that we've had a overview of the historical information for the period, I wanna take you through some of our growth initiatives and progress. But before I start with this, I think it's important to stress that despite the current PGM price environment, we maintain, a robust outlook.

20:34 And we certainly still see opportunity for growth from, our position in the industry, and, and we continue to explore low risk opportunities with high yield potential and especially projects that could be brought into production fairly quickly. So to this end, in terms of our growth strategy, the, the company normally, follow the process where we first look at how we can unlock value and further potential from our existing suite of assets. That's both the current dump operations and both in terms of technology, development or unlocking further potential from our owned dump resources, as well as from our various owned exploration assets. And then secondly, we look at to create value from external growth opportunities where we can replicate our, proven operating model and leverage our successful track record and expertise.

21:29 And, if one consider, this example, you know, the Tava JV is an excellent example of how we've been able to replicate our existing technology and proven business model. We have concluded this, Java JV in, August 20, '23, which is really a transformative project, for us in the sense that it provides a very attractive and beneficial diversified revenue stream by bringing chrome production in as a revenue. So although we produce significant amount of chrome on our existing operations that returns to our host mine for their benefit, and we don't get a get a revenue stream from that. But at the Java JV, we will be sharing in the revenue and profits from the from the Java JV. So while in 2025, there'll only be a small contribution as we only commence commissioning in the second half of twenty twenty twenty five, the we will reach steady state, by towards the end of the financial year and 2026 onwards, we'll then have Tarwa at steady state production, and that will add for us 9% PGM ounces and about 210,000 tons of attributable chrome per year to our revenue.

22:55 So if you look at the the Tarawa JV at the bottom here, Lou Ann has already mentioned the contribution in terms of EBITDA, and you can see here it is, say, between 14 and $16,000,000 between 20006 and '28. I think just to also illustration two for you, this slide is one is to just get a bit of progress on the the project to date. And then also, as we're getting closer to commissioning to to give a provide a bit of a better understanding of the potential contribution towards the group, and I'll talk you through these graphs now. But in general, just important to mention that all the work streams on Tava is on track with construction on-site well advanced already, and we are positive and confident to meet our commissioning date as communicated earlier.

23:54 Our operational readiness teams have also already commenced with planning to ensure a smooth transition from the project phase into operation with recruitment in progress and all the maintenance and administrative systems being developed. So if we look at the the various contributions for the group, I've indicated here over the next you know, at steady state what the both the current product contribution as well as our attributable PGM production would be. And I think probably most note with these graphs is where you look at the revenue distribution and and contribution from Chrome to the overall revenue.

24:41 At our company assumptions, which is a solid bars, you can see that Chrome contributes about 70 to 75% of the total revenue for this project. If you would apply the spot prices, the purple line indicates that Chrome could you know, your Chrome would typically then 8282% of your total line, but you can see a significant improvement in the in the overall revenue. And at the all in cost or the total cash cost for the operation for chrome and PGMs combined at about $25 per ton, there's some very attractive growth profit margins of about 55 to 65% on the years.

25:32 So overall, I think a very exciting project, and we will definitely be very beneficial towards the group as a whole. I think this next graph just, indicates, some of the construction progress on-site. And, you can see that you know, I think this, you can appreciate the complexity and the size of the operation. While looking at some of the photos, there's some of the progress with our flotation cells that's already in place at flotation banks. Our milling civils, which is one of the the critical path areas in the projects is well advanced, and then other plate work and structural work in progress. If we then turn just our attention for a moment to our exploration assets, I'm gonna start with the full spread project, which is the most advanced of our suite of exploration assets.

26:30 And post year end, we have published an updated scoping study during August, which now includes both the self or body as well as rhodium and, ruffidium that was in the initial scoping study in 2022 excluded from the the results, because of, the chalk standards. However, the new scoping study of indicates a significant improvement on the previous study with NPV, pretax NPV at $69,000,000 and fourteen year life of mine, is which about a 150 improvement on the on the earlier study. The study also identified some areas for potential further improvement and all other ways that can strengthen the business case further. And these are relating to upgrading of the run of mine feed as well as focusing on recovery improvement work.

27:28 And the results from these studies will guide us in terms of the strategy going forward on this project. And if, and when to proceed with a PS prefeasibility study you've justified. In terms of our far northern LIM assets, which are the Aurora and Accra projects, the the most attractive of these being the Aurora project with a strike link for 14 kilometers over the project area and where we initially just declared a mineral resource estimate on about 12% of the project area on La Pacella, which had indicated very attractive resource and also discovered the very attractive near surface t t zone that's upcrop between five and ten meters below surface.

28:17 We however, in the last year and in this next year is focusing more now on investigating the continuity and understanding the continuity of the mineralization across the strike length to understand the true potential of the project. And to this end, we are currently busy with initiated geophysical surveys as well as selected metallurgical test work to give us a better understanding of the resource and also the structural setting in the area. And that, again, would be used to guide us on how to progress on the project. And then finally, the ACRA project, which is preliminary, a deep level resource with underground mining potential. We have also post year end declared exploration target for the area.

29:07 And but because of the our low cost, low risk strategy that focuses on surface or near surface resources, We believe that this could be an attractive target for the third party, and the company will focus on unlocking further value from the other assets and consider the best options to generate value for shareholders by either disposing or spinning out the ACRA asset. I think it's also important at this point maybe to to mention that we are only committing very modest spend towards our ex all the exploration assets. I think it's just around just over $2,000,000 for the year, and the bulk of that is actually towards the regulatory spend of our social and labor plans.

29:56 And whereas the rest of the spend is for the targeted studies so that we can come up with the necessary answers of what the strategy going forward should be. Before I discuss some of the the detail on on or some of the progress on some of our specific growth projects, I I just wanted to illustrate the the the benefit you get from a project like TABA where there is the complementary nature of PGMs and chrome. Across the Bushveld Complex in both the primary chrome ores, your middle group and lower group ores, as well as the UG two chrome reefs, primary PGM reefs, chrome and PGMs occur naturally together.

30:47 And and the coexistence of these metals enables the exploitation of either PGMs or chrome that would otherwise be uneconomical in some of these ores if only one of the metals were targeted. And if you look at the historical price trend of the PGMs and chrome, you can see it's very rare that that both of the metals are in a low at the same time. And that provides a very useful risk and revenue diversification mechanism. And if you look at about almost four years, history, you can see there's a in inverse correlation of about point with a ask rate of about point six four, which means there's quite a strong correlation in in this regard.

31:32 And and they're one of the reasons why SYLVANIA continues to explore similar type projects as part of our growth and diversification strategy. Looking at just the some of the specific progress, I'm I'm not gonna repeat all all of these because some of the projects we have already covered earlier in the presentation, but I'll maybe just mention that in our existing operations, we are focusing quite a lot of our attention and r and d as well as pilot work on unlocking further value from our existing dumps where we still have very attractive levels of, Chrome and PGM. And, so we're focusing good to see how do we recover that to do it, generate additional revenue stream, again, from from Chrome as well as prolong life yet operations.

32:27 And then in terms of the external Chrome opportunities, similar like the TAVALJEV, we're progressing with our studies towards establishing a facility on our Eastern limb at our Eastern operations. And we we have various exclusive resource. We have exclusive access, and we're engaging at the moment to see what is the best potential solution and also to determine the viability and feasibility of progressing the project. And finally, in terms of external growth diversification, we continue to consider alternatives, both alternative metals and jurisdictions where we can leverage our technology technology and also our experience and quick record. I think if you look at the specific technology we employ within SYLVANIA and our experience, you know, it's easily applied in the flotation space on on your nickel cobalt applications, copper.

33:27 You can look at the gravity separation for manganese, tin, and other commodities. So so we are currently pursuing a a number of opportunities to see how we can replicate that trade record. If we, for a moment, look at the the market, I think the the first one is just to see how the individual metals that make up our basket have performed during the the past year. And I think you can clearly see how, specifically, the decline in palladium and rhodium that palladium declined 38% from the previous financial year to this one, and rhodium about 51% was the primary contributors towards the four e basket price decline, and decrease of about 36% year on year.

34:21 And I think what's probably a bit disappointing from from a price point of view is that although it has been a while since analysts and researchers predicted that all three metals, the platinum, palladium, and rhodium would be in deficit for 2024, The metal prices have not, reacted accordingly. And I think also, a part of the reason is that the, the sentiment, around around internal combustion engine vehicles and also the anticipated recovery of sales that was weaker contributed to spec. And I think general investor sentiment with a perceived future and perceived rollout of electrical vehicles as a threat to catalysts have also been growing in the market. And we'll talk a bit more about that when we look at the supply demand fundamentals in just a slide or two.

35:15 But I think just important, as you've seen the significant decline on previous slide in the individual metals, you can see here on this slide the impact on the overall PGM industry. And this is the updated industry cost curve with August data from Nedbank Capital. The and the red line represents the the average gross basket price, and then you can see how the cost, which is in this graph, is based on a PGM cash cost plus capital curve. And you can see that the bulk of the industry is, is is loss making, including capital at the moment, and that's significant. The South African industry as a whole is therefore under pressure. Sylvania itself has moved slightly up from the bottom quartile, where we used to be primarily because of the capital contribution as well to this to this portion.

36:11 But still in a very favorable position at the lowest third of the cost curve where we are able to still generate cash, and that can be redeployed for growth in the company. If we focus on PGMs the PGM market briefly, I think, firstly, from a demand point of view, I've I've mentioned earlier the sentiment towards, internal combustion engines. And with, auto cats being the primary demand driver for, especially, platinum palladium and rhodium at 8395% use respectively. You know, obviously, car sales and has a big impact on on on the catalyst.

36:56 Now, fortunately, we do see the car sales recovering in the industry, which should be positive for demand. However, there's always the the threat that of the market share taken up by electric and pure electric battery electric vehicles. But I think a very interesting development in the last couple of months, especially and and over the last year, is that there's been a significant increase in hybrid vehicles. And the hybrid vehicles have taken over a significant market share of what people initially anticipated, the electric vehicles to take up. Now why is hybrid vehicles, more positive for us is hybrid vehicles still use, auto catalyst. And in fact, they, have slightly higher loadings of PGMs in the autocatalyst because of the often cold start conditions.

37:51 And and therefore, it creates a nice demand area for palladium and and rhodium still going forward. And and then finally, on the demand side, platinum demand is still boosted. So you especially when there was a a a good margin between the platinum and palladium price. There was quite a bit of platinum for palladium substitution in some of the catalysts, which now have reduced with the prices closer together, but but still created a good demand for platinum as well as the green energy transition and and hydrogen economy that is a very good demand driver for platinum. So on the demand side, I think certainly a healthy demand for the PGMs.

38:38 If we then look at the supply side, we we we know that South Africa is the largest producer of platinum and rhodium in the world and also a significant palladium supplier. And I've shown just on the previous graph that the South African PGM industry is under pressure by the current basket price. And, also, in addition to the dollar basket price being ready being low, the strengthening in the South African Rand US Dollar exchange rate has a further impact with the producers' cost being incurred in rand, and and and also profits in rand and squeezing margins. Also, at this level of prices, especially the palladium price being low, puts pressure on the North American palladium producers, and I think there's also potential slowdown or closures in in those operations that could put supply under pressure.

39:34 And then also as as a secondary supply from recycling, where we know the margins are lower, and and that has slowed down at this current price. So on a balance of the supply and demand, I think we we have a a positive outlook for the metals. I think there's largely consensus in the market that platinum, palladium, and rhodium will be in deficit for 2024 and the near term. And as I mentioned earlier, it's it's very positive that hybrid vehicles are are having quite a group taking up quite a bit of a market share from electric vehicles. And to that extent, it's changing the whole narrative about the growth rates predicted and forecasted for electric vehicles going forward. I think there's been various research published, in recent months about it. I think one of the most recent was Reuters yesterday published a paper that illustrate clearly how there's a significant improvement in hybrid electric vehicles and then how electric vehicle growth rate have slowed down.

40:43 And some of the major car manufacturers already, Volvo, Toyota, Ford, have announced the, change in their plans and commitments to to move and modify their lineups from pure electric vehicles to a much larger share hybrid vehicles going forward. The next slide is basically just I'm not going to talk too much about it. It's just a slide of the different scenarios. Luanne alluded earlier that we've used the sensitivities of the EBITDA graph, And, you know, we just give some forward looking estimates on on the individual metal prices, and this is a particular Nedbank CIB, Liberum's quarterly price deck as well as the company outlook.

41:29 Just to illustrate to you the different prices we've used. A new addition to our presentation with the DARVA JV coming closer to completion and also recognizing the importance of Chrome to our revenue stream going forward. I just included some key, information to to in terms of the market for Chrome to give you a better understanding of, the basic drivers. So the largest consumer of chrome globally is is China, and then I think the largest consumer of ferrochrome in in the industry is stainless steel. Stainless steel consumes about 80% of all ferrochrome production annually. And to that extent, what is very positive is that we've seen a very steady and consistent growth rate in in stainless steel. So from 2010, it's been consistently growing at 5% banner.

42:29 When you look at the supply side, again, and I didn't include the the graph on the supply side, but the chrome production has not been able to keep up with this growth rate in the stainless steel. And especially during COVID and post COVID, the production levels of chrome have been much under pressure, and it's only now in 2024 with the high chrome prices that the, the production rates are being picked up. So Africa ever own, has 17% of global krylamide resources that produce about 65% of world production. I think from a supply perspective, it's also important to look at the graph at the bottom that illustrate that of that 65%, you know, 45% is conventional, chrome production, while 20% is from UG2 chrome production.

43:19 Now if you look at the platinum producers, being under pressure on the cost curve, earlier, the the strong chrome price at the moment is supporting some of the UG two mines to stay open. And if the chrome price, therefore, would reduce significantly, it would put 20% of this production under pressure with the current PGM price environment. So on the balance again of the supply and demand for the chrome, you can understand that we have a robust outlook in terms of demand and pricing for chrome. There's, as I mentioned, the stable stainless steel growth. And also during the past year or so, the surface stocks over the ports and in China have been reduced, which all should be positive for the the growth market.

44:10 So before I draw to a close, I think it's always important that it's not production at all cost. We we say at the at the, at our interest light that it's beyond extraction, and that means that we also look at how we return value to our stakeholders and also being a sustainable company. So we're having sustainable profitable production. And Luanne will just briefly take us some of some of the key ESG initiatives before I close off the conclusion of the presentation. So I'm handing back to Luanne. Thank you. Principles are a way of life at SYLVANIA, and we've mentioned before that the these principles are embedded in our daily activities at our operations and in our corporate offices.

44:56 So I just thought to highlight a few of the key achievements for the year. During the year, we completed the revegetation trials that have been going on for the last three years on the East, and the final reports on these have indicated very positive results with sufficient information to enable us to amend our rehabilitation plans for the dumps, which will significantly reduce the cost of these this rehabilitation. We've also embarked on a second phase of trials that commenced on the West with the addition of different organic materials, and this is the aim is to further enhance this process. Under safety, the Durenbosch plant achieved twelve years LTI free during the financial period. It's a truly remarkable achievement, and we are incredibly proud of each and every single employee at the plant.

45:48 We have also increased our staff our female staff complement through this year for a third year running to 25%. It's a 1.4 increase on the prior year. And then just the last thing to mention, but certainly not least, the company contributed ZAR 1,700,000,000 to the South African economy through salaries, taxes and supplier spend. We will be publishing our full ESG report, which should be available on our website in October. Okay. If you'd like to conclude, thank you. Thank you, Lianne, and and thanks for closing. So I think just in closing for me, I I I think and I hope that shareholders would agree that SYLVANIA remains an attractive low cost, low risk cash generative business.

46:42 I believe we have developed a track record of strong performance over the the years and that we've been delivering strong significant value to our shareholders, both through the combination of stable dividends as well as significant share buybacks over the years. I think also important to note that while we have a material expansion and CapEx projects planned this year and the next and set against the ongoing price environment. We will continue to prioritize capital returns to our shareholders alongside our value creation and business sustaining requirements. I think it's always been a goal from us to see how do we invest in this business so that we can ensure higher returns for longer for our shareholders. So while we have, investment phase at the moment, the aim is, and we believe, creating a business that can return that sustainable, value for longer.

47:32 So thank you very much for listening to us and for this opportunity to share our results with you. Perfect. Jakob, Lewand, if I may just jump back in there. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the top right hand corner of your screen. But just while the company take a few moments to review those questions that were submitted already, I just like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can all be accessed via your investor dashboard. Jaco, Luan, as you can see, we have received a number of questions from investors, and thank you to all of those on the call for taking the time to submit their questions. But, guys, at this point, if I may just hand back to you just to read out those questions and give your responses, of course, where it's appropriate to do so. And if I pick up from you at the end, that would be great.

48:24 Thank you, Jack. I think we've first, start with some of the pre submitted questions. I think, well, the first one says, what is or are the reasons for the share price? And is is the fall in some of the precious metal prices like rhodium? So, look, I think there are various, aspects that impact on on share price. I think, but to come back to the point of the the precious metal prices. And, I think I have hopefully illustrated the significant decline in the in the in the share in the metal prices. And it is specifically rhodium that was the highest at, I think, 51 and, palladium at 38%.

49:10 So that has significant impact on on, obviously, the metal price and then also at revenues. I think if you look at the trend throughout the industry, there's generally a strong correlation for PGM or for mining companies and the commodity prices. So, I guess that could definitely be one of the reasons. But as I'm not gonna yeah. Can't give you a more definite answer on that. Then there are three questions. I'll read them out. Just to acknowledge your your questions and but, I mean, it's it's basically coming to the same answer. The one is, say, dividend sustainability going forward. What does that look like? And then the second one says I'm a retired I'm I am retired and have a small shareholding income and is and therefore, dividends are very important to me. Share buybacks are therefore of no value to me, but regular income is. The company is cash rich, and rather than reducing the dividend and continuing of share buybacks, will the board consider maintaining a sustainable level of dividend?

50:15 Any excess cash could then be used for share buybacks. And then another question that says, as a private investor, the share buybacks is of little benefit and has no not resulted in the increase in the share price. Will consideration be given to using funds to apply apply to buybacks to make the dividend payment, which should result in an all share price. So I think all three of those questions is basically asking that we've prioritized dividends above share buybacks and, you know, what is the sustainability of dividends going forward. So I think, you know, in my closing remarks, I I was stressing the point that, the company acknowledged the, and remain committed to return value to shareholders.

51:01 We continuously evaluate our cash position against the need to reinvest, our funds for strategic growth and and and also to sustain our business so that we can deliver returns for longer. And to that extent, we we take those decisions. The decision between dividend and share buyback as we are having these particular questions in favor of dividends and shareholders asking for us prioritized dividends. We often have either shareholders or institutions that have a preference for share buybacks. So we are always trying to maintain a balance, between the two and and and evaluating against the the the value of, that can be unlocked through a share buyback versus a dividend. So that's something that we, the board, continuously consider and and and remains a priority for us going forward.

52:04 I think what are the one of the next questions says, what are the approaches the company is taking to control the cost in the inflationary environment? I think that especially in a in a price environment to where the margins are being squeezed, yes, that is very important. We are looking at at stringent operational cost control. I think one of the cost items that, Luen have mentioned that increased our operating costs during the past financial year was especially the purchase of third party material, but there's a higher grade material. So although it had a higher contribution and contributed to increase in our operating cost, it also increased our revenue stream because in the current price environment, compared to the lower grade products, we would have treated as an alternative. And so it did contribute to higher cash generation.

52:59 But overall, operating cost is a is a primary focus area for us and remain one, and we are looking at the various areas for that. I'm looking at another question. Can you comment on the likely impact on demand for your metals if hydrogen fueled cars with onboard electrolyzers is developing Japan takes a significant share of the market, probably reducing demand for EVs and hybrids? Now again, there's always the the the and you're Hydrogen economy is is is definitely another option of how the cost segment of cars, especially light vehicles and industrial vehicles, can progress.

53:50 So overall, the, the hydrogen, fueled cars would not consume so much palladium and rhodium. But that again would have, so so it wouldn't be great for the palladium and rhodium demand, but it is, a very, large demand sector or driver for platinum. And, you know, as you, looked in in our overall basket price, while we have the, 22% palladium, 11% rhodium, we have 66% platinum in our basket price. So I think you're still well suited, in the industry to benefit from the basket of metals, and I think that's always, when you deal with these polymetallic, ore bodies that we do with we have the various metals, occurring together, the benefit that if one is under pressure, and there's a strong demand for another, that the company should be able to benefit.

54:49 So, yes, I think it's an area that we'll monitor and that could still unlock value. I think somebody just asked a question about the so if you separate the PGM and chrome cost, what will be the cash cost for chrome per ton from the dump assets? And why revenue for Taba JV is estimated at $260 per ton. So I think, first of all, maybe just a clarification that the we did not use the revenue of 260 per ton. The what we had mentioned is that the chrome price assumption for chrome we've used is $260 per ton, and that is also to clarify.

55:36 We do clarify it in the footnotes of the presentation is $260 per ton CIF in China. So, you know, you have to take off your logistic cost coming back to online. And then, you know, you still have your PGM basket price, so you have a combined revenue for the operation. We we have not in the presentation split the PGM and chrome operating cost yet because a lot of the costs are are combined. You you you mine the ore that contain both the PGMs and chrome, and then you apply a lot of the processing cost is is the same. So some operators in or or peer groups in the market apply a ratio percentage cost split. I think for now, in terms of especially if you wanna do modeling evaluation of the project, it is sensible to use the average SDO current SDO operating cost as your operating base for PGMs, and then the balance can be attributed to the chrome operation. But I as I mentioned on the overall, the total operating cost is still that attractive margin of 50 to 55 to 65% on the, Tawa JV project.

56:50 I think that is if I look at the, the the questions, the bulk of them. So I think if there are any other questions, Jake, let's Absolutely, Jakob, Luan. Thank you very much indeed for being so generous for your time there and addressing all of those questions that came in from investors. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review and to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But, Jakob, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that'd be great. Thank you.

57:36 And and thank you again for the opportunity. I think in in conclusion, and and as I said, I'm quite pleased with SYLVANIA's current performance and really excited about the future prospects going forward. I think it's important to note that, yes, it's a difficult price environment and for the industry as a whole. SYLVANIA is not unique or or isolated in it, and and we have been able to prove that we can operate in difficult positions and conditions before. And I'm confident in the ability of our management teams and our infrastructure that we were able to to also perform in this current environment. I have to do this and also acknowledge the, effectual work ethic and effort from all our employees in a very challenging region market environment.

58:26 I believe, that over the years, we've established ourselves as an attractive and reputable, stable, cash generative and dividend paying company and, that we can be continue to return significant value to shareholders. And we've also established ourselves as a a partner of choice in the industry, and we will, through that, continue to unlock value, both in terms of growth opportunities and also to continue value for our shareholders. So, thank you for everyone for your trust and support for our shareholders and, all our other stakeholders, and we look forward to forward to continue this journey with you. So thank you very much. Perfect. Yako, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you will now be automatically redirected the opportunity to provide your feedback in order the management team can really better understand your views and expectations.

59:23 This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of SYLVANIA PLATINUM LIMITED, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you.