Sylvania Platinum (LSE:SLP) — Annual Results

0:00 Good afternoon, and welcome to SYLVANIA PLATINUM LIMITED Annual Results Investor Presentation. Apologies for the delay in starting the meeting. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself.

0:25 However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Jakob Prinsley. Good afternoon to you, sir. Good afternoon, and thank you very much, and welcome to everybody on the call. Myself and Leanne Komunati, our CFO, will be taking you through the presentation, and we will attempt to highlight just some of the most significant features of this past year's performance. And then hopefully, we have enough time at the end for some questions as well.

1:02 I again just on the disclaimer guide you guys for in terms of the conditions, if you want to make any investment decisions on this presentation, just take note of that. But otherwise, I'll get straight into the presentation. I think maybe just to start off for those of you who are maybe new to the company, SYLVANIA is a cash generative, dividend paying mid tier platinum mining company that has been in operation for just over fifteen years now. And I think key to our success is our continuous focus to maintain safe and profitable production, to maintain and strengthen our license operate and to invest R and D and business improvement initiatives to ensure that we maintain a sustainable cash generative business. And that is a key enabler for us to pursue then further growth opportunities and to return attractive value to our shareholders.

1:48 And over the years, the attractive cash that we have generated from our STO have been reinvested to grow our PGM portfolio from one initially to six operating units at the moment and also to fund significant share buybacks and to fund stable and growing dividends since 2018.

2:09 A bit of orientation just on operations. I think this is a map indicates where our existing SYLVANIA dump operations are situated. Three of our operations, Moinouye, Mill Cell and Laceria are on the Western Limbaugh, the Bushveld Complex in South Africa and Lennox, Tourefontein and Thorenbos situated on the western limb of the Bushveld Complex. I think probably noteworthy and new addition to the slide is very exciting, our Tarvar joint venture project or operation that we have just announced both results closed, but in the first week of August, which is on the northern part of the Western Limb of the Bushveld Complex. And I'll deal a bit more about discuss a bit more details around that joint venture project a bit later in the presentation.

3:00 When we look at the exploration assets, these are current owned exploration assets the company have and have secured and acquired between two thousand and nine and twenty ten already, for which we have approved mining licenses. And those are full spreads projects on the south end of that resource and then Aurora and Accra in the northern end of the Northern LIMITED. And again, we will touch on more detail later in the presentation. So if we jump into the overview of the performance for the year, I am very proud of very solid set of results from both our operations and also financial performance.

3:45 We have managed to achieve a record performance of 75,469 ounces for E for the year, which is set to new annual record for our operations and about 13% improvement on the previous year. And just for comparative purposes to peers in the industry, that equates to about 96,000 ounces or 60 ounces. And also under our control, our group cash unit cost has decreased 14% for the corresponding period to seven seventy one dollars an ounce and largely impacted by the higher ounce profile and our large fixed cost base, and so we've seen that reduction. Unfortunately, from a PGM basket price point of view, it wasn't such a pretty picture during the past year, and we have seen a decline of about 28% in the 4E basket price based on the composition of our basket.

4:40 And most significantly there is the rhodium reducing more than 30%, I think 32% or 34% on the period and palladium 14%. But despite the PGM basket price declining over the period, we still proud of a very solid set of financial results. We still managed to have positive EBITDA and earnings per share. And you can see that it was from revenue 14% down in the corresponding period and EBITDA and basically earnings between eighteen percent and twenty percent. It is still encouraging against the backdrop of a 28% basket price for the year. So I think very good financial performance. And also encouraging that we've managed to end the financial year at a cash balance of $124,000,000 in cash, which is a 2% increase from the previous year. And that is after we funded our scheduled capital projects for the year, after we've paid $03 per share interim dividend during April and bought back about $3,600,000 worth of shares during the period.

5:48 So on the back of the cash balance and strong performance and our outlook for the year, the Board was very happy to approve a final dividend of £05 per share to be paid in December. And that together with the £03 interim dividend already paid earlier this year brings the total dividend for the year to 8p for the year maintaining our dividend that we've paid in the previous financial year. From operations perspective, maybe just chatting a bit more on what enabled us to get the 13% higher ounce production. You can see that our PGM feed tons was 12% higher. And here in particular, the performance from Alessedi that had a stable production run during the period compared to some tailings related interruption in the previous financial year have aided to the increase in PGM feed tons. Then also, TUEFONTEIN had significantly higher feed rates as based

6:54 on management's efforts to increase stability, running time on the operation and also pushing the envelope and throughput as the MF2 came up and we have adequate residence time available. So that enabled us to have the higher PGM throughput rates. From a PGM recovery point of view, we have had a 5% increase year on year. And although all our operations have seen higher PGM recoveries during the year, most notably here, is the contribution of the Lesedi and Twefontain second and related flotation circuits, the MF2 circuits that have been rolled out and optimized during the past year. And we've seen very encouraging results and it's I'm glad to see that the projects have been delivering what they've been intended to do.

7:44 And with that in mind, we're also excited about the Lennox MF2 that is just started commissioning in the last week or two and will be optimized during the next three to six months. So we're looking forward to that performance for the rest of the year. It's also important to note that this PGM L's performance was despite the 5% decline in PGM feed grade and mostly impacted by a change in resources at both our SIDI and Durhamos mine where we're targeting a lower grade dump resources as the next phase of the life of the project. But our additional efforts to work on throughput and recovery is helping to mitigate any great impacts we might have. So when you look at the graph on this slide, you can see that we are forecasting approximately 74,000 to 75,000 ounces for the 2024 financial year.

8:40 And then we will we increase that production towards 2025 as the feed grades at Lesedi and Moinouye again then improve. But then also the very encouraging contribution of the Talbah joint venture that then comes in and aim to commission during the second half of the 2025 financial year. You can see the green bars at the top there. And then in 2026, it would have the full contribution, which we equate to about an additional six five hundred ounces attributable to SYLVANIA per year. And I think that would bring our total production to just over 80,000 ounces, I think we're 84,000 ounces for the 4E and over 100,000 ounces, 6E per year once the Dalvich ABE is running consistently.

9:36 I'm not going to go into a lot more detail. We often have people asking us more on the individual operations and from this slide, maybe just worth pointing out one or two items that we have not discussed earlier. I think you'll note over here is the excellent safety performance from our Doranbos operation that achieved eleven years lost time injury free in June, which is an industry leading performance and certainly something we are very proud of. Also the record PGM feed tons and recovery efficiency and ounce production performances at Trefontein during the year was a big enabler for our overall production performance. I think on the slightly negative side, in the past financial year was just at Lesedi, where that's our one operation that has been impacted by the load the power situation is Africa for the load curtailment, and we lost about three hundred hours during the year.

10:30 But we are mitigating that impact by installing a new backup generating system at Nassidi, which is due to commission during the next quarter and we're looking forward then to mitigate even those down times. And then as I mentioned earlier, is the commissioning of the next MF2 in the next post commissioning optimization that should add significant value. Overall, we expect SDO to continue a strong performance in 2024, and therefore, we maintain our guidance as I stated.

11:07 Just before we go into the financials, it's maybe just worth considering what the impact of the metal price was, as you heard me say on the financials the results summary slide, that the 28% decline in the four e PGM price significantly impacted our financials. And you can see on the graph at the top right there, where we have both the U. S. Dollar and South African rand 4 e basket prices, you can see the decline over the past period. And at the bottom, you can see in particular how the palladium and rhodium prices have had a significant decline and primarily driven by the slower than anticipated recovery in the auto sector, especially the internal combustion auto manufacturing during the past year.

11:56 So just you'll see how we deal with this later in the presentation. I think also, which it will have bearing on the financial figures, Leanne will discuss in a moment, is we do indicate some sensitivities on some of our future looking numbers. And it's always difficult to pick one set of PGM prices or say the set of basket prices to predict future performance because it's quite a varying view from analysts on this in the medium to longer term. I think everybody is in agreement that metal prices should start to recover during the next six months

12:39 going forward. But longer term, there's a bearing view. And what we have just done is we have included the forecast from three different institutions and that we often work with and that being Nedbank, Corporate Investment Banking, Standard Bank Securities and also Liberum as an indication of what sensitivities we apply. And these graphs just give you an idea of how they view the metal prices to behave in the next couple of months. Now I think with that behind us, I'm going to hand over to Leanne to take us through the financial results. Thank you, Leanne. Thanks, Jakku.

13:21 I think that 2023 financial year has been a tough year for most in the industry with the decrease in the metal prices over the past year, but especially the sharp decline in recent months. This coupled with a high cost inflation has added further pressure to maintaining profitability in the industry. With that being said, let's take a look at our year end review, where SYLVANIA recorded a net revenue of $130,000,000 for the year. This is net of sales adjustments for ounces delivered in the prior year, but only invoiced in the current year as well as net of smelting and refinery charges. The cost of sales remained flat in dollar terms, but increased 10% in ZAR South African, which is the operations functional currency, and this is in line with inflation and contractual rate increases.

14:15 A large portion of the operating costs are fixed, so they don't increase as a result of our increased production. Mining royalty tax decreased in line with the decrease in the revenue. The other income line on our profit statement is includes a $1,600,000 profit on the sale of Grass Valley, which became unconditional in July 2022. Finance income increased significantly as a result of interest earned on cash invested. We pay income tax in South Africa on taxable profits at a rate of 27%, and the company pays dividend withholding tax on dividends distributed from SYLVANIA METHALES upwards through to the parent entity. So finally, the group recorded a net profit of $45,000,000 for the year and an earnings per share of $0.17 Looking at our revenue in a little more detail. And as I mentioned on the previous slide, we recorded $130,000,000 net revenue for the year.

15:19 This is a 14% decrease compared to the previous financial year and as a result of the decrease in the basket price. The drop in the SYLVANIA specific basket price of 28% year on year resulted in a $40,000,000 reduction in revenue. This was partially offset by the increase in ounces declared, contributed an additional 19,000,000 Rhodium still makes up the largest portion of our revenue as you can see from the pie chart at the bottom of the slide at 46% of our 6E basket. This is despite the drop in the rhodium price And then palladium and platinum makeup a further 45% of the basket.

16:05 If we look at the operating costs of the group, direct operating costs are incurred in rands as well. And in rand terms, the operating cash cost per 4e ounce increased 4% year on year. However, in dollar terms, the operating cost decreased 11% to $640 per ounce. The main contributors to the costs are employee costs, where we incurred a 7% average increase on salaries of employees in the bargaining unit. The majority of our operational employees are unionized and form part of this bargaining unit as well as the additional appointments for the Twerfontein MF2 plant, which came online during the year. Mining costs increased due to the higher feed tonnes through the plant.

16:53 Electricity, we had an increase of 18.65%, which was effective from April 2023 as well as the increase in consumption with the addition of the Tua Fontein MF2 and the ramp up of the Lesedi MF2 following commissioning in the later part of last year. Concentrate transport increased. The higher ounce production obviously resulted in an increased number of trucks required to deliver to the smelters. And our reagent costs were higher with higher than inflation increases due to certain components of the chemicals being imported and the impact of the weaker rand.

17:37 These increases in operating costs are not unique to SYLVANIA and we're still at the lowest quartile of the industry cost curve. That curve is included in the presentation as part of the appendix. So if you would like to have a look at that. At the current exchange rate and target production for 2024, we're estimating an average cash cost of between $700 and $750 per ounce for 2024.

18:08 Moving on to our group EBITDA. The group recorded an EBITDA of $66,000,000 for the financial year. Again, the decrease year on year is a direct result of the drop in metal prices and the weaker average rand dollar for the reporting period. It's uncertain what the metal prices are going to do for the next six months, but in the long term, the forecast remains positive, albeit not at the levels we saw in 2020 and 2021. Based on the range of forecasts as well as the current spot price, the EBITDA estimate for 2024 and onwards ranges from $20,000,000 to as high as $120,000,000 But I think the key takeaway from this graph is that regardless of the current prices, SYLVANIA still remains profitable at the lower basket.

19:06 The group had a cash balance of $124,000,000 at June 30. This is up slightly from the prior year's $121,000,000 Our cash inflow from operating activities was $63,000,000 after working capital adjustments of $13,700,000 net interest income of $5,100,000 and tax payments of $20,000,000

19:32 Cash outflows from investing activities include capital expenditure of $14,500,000 $12,500,000 was spent on STO Stain business and capital projects and $1,600,000 on exploration assets. The cash outflow from operating investing activities is made up of the $35,500,000 paid out in dividends in December 2022 and April 2023 as well as the 4,900,000 spent on share buybacks.

20:08 As I just mentioned from the previous slide, we spent $12,900,000 on capital at the dump operations. Most significantly was the capital spend on the Tua Fontein and Lanex MF2s of $5,300,000 and then tailings dams cost at the various sites of 2,600,000 The addition of the MF2s is expected to improve plant recoveries going forward. Dollars 1,600,000 was spent on progressing the exploration projects for the year. And the capital spend for 2024 is estimated at $13,000,000 for the current dump operations and exploration. And then the addition of the Taba JV capital is estimated at $15,000,000 for 2024 and 2025.

20:59 Although SYLVANIA is funding the full capital of $30,000,000 the JV partner will be repaying 50% of this through an interest bearing loan. Returning value to our shareholders is important to the Board, and the revised new dividend policy was announced with our half year results and was effective 07/01/2022. Under this policy, the company pays out a minimum of 40% of adjusted free cash flow. And the Board took a decision to declare a final dividend of 5p, bringing the annual dividend to 8p after the 3p dividend that was paid was declared in February 2023.

21:50 We're pleased to have been able to maintain the GBP per ordinary share that was paid in the prior year despite the drop in the metal prices and cost inflation. During the year, 4,800,000 shares were also bought back and 3,600,000 of these were canceled post year end. So in total, the company has paid out $101,000,000 in dividends since our maiden dividend was declared in 2018, And we've bought back 61,000,000 shares since 2015, of which 24,000,000 have been canceled.

22:30 Further growth and the expansion project, the Talva JV are funded from cash reserves and hence, the reason why we have kept a large cash surplus back over the past few years.

22:49 If we look at our ESG, just a brief touch on this. ESG has always been part of our business model, given the nature of our operations, being the reprocessing of historical dumps and then constructing new tailings facilities that are of high standard, but all but while prioritizing the well-being of our employees by providing a safe all inclusive working environment. Good governance is also the foundation of a good business, and the Board ensures that stakeholders are well informed through clear and transparent reporting. If we just look at a few highlights for our ESG for the year. The revegetation trial is progressing well and an increase in the grass and plant growth has been observed as well as additional insect life that's been observed in the area.

23:43 We're quite positive that the conclusion of this three year trial will have an environmentally friendly and cost effective method of rehabilitating sterile dumps in the end as opposed to a more cost intensive topsoil option. The company is also working with consultants to align our tailings management with the global industry standard on tailings management where applicable and where we have gaps in our management, but still complying with the South African laws and regulations where we operate. With regard to reducing our carbon footprint, there's increased focus on greener energy sources for new projects, and we're continuously assessing and monitoring the developments that could provide a greener solution for our existing operations.

24:38 Our Duren Bush operation celebrated eleven years lost time injury free in June 2023. And as Jaki noted, this is an exceptional achievement for the plant and by industry standards. We've increased our women in mining percentage from 20.9% in 2022 to 23.4%, and 30% of our new appointments were women. For the 2023 financial year, the group has also contributed billion to the South African economy through employee payments and related contributions as well as taxes and procurement spend. We will be releasing our full ESG report in October, so please do look out for that.

25:23 Over to you, Hakun. Thank you, Anne. And I think now that we've dealt with the past performance for the year, I think let's spend a bit of time just on what we can expect both from the market and from SYLVANIA going forward. I think first, just maybe a background to look at different metals and what the demand goes for us going forward. I think it's important just to note and I put the typical demand figures down for the original metals. And you can see why rhodium and palladium has been consumed to about 9084% respectively in auto catalysts for internal combustion engines are so significantly affected by the movement in new vehicles production and sales.

26:17 And as we see a slower recovery while these metals

26:24 are having problems coping with it. I think the platinum on the other hand at 41% reliance on auto cats a bit more shielded for the industrial and especially the jewelry demand sectors. And also the opportunity auto manufacturers had during the past year is to substitute some of the palladium and auto catalysts with platinum because of the price differential certainly assisted to improve the demand for platinum and hence why platinum is expected to be in deficit in the short to medium term. Both so while palladium is still in deficit, I think it's expected to move into surplus in the medium term and then rhodium obviously to have modest surpluses in the medium term and that's related to the car industry. But I think there is a general expectation that there should be a recovery and growth in the internal combustion vehicle supply going forward.

27:31 And also the combination of higher vehicle sales and then tighter emission standards should post well for the palladium and rhodium demand in vehicles. I think a very important view any investor would have to take on these metals is how fast the realistic conversion to electric vehicles, electric fully electric or battery electric vehicles would be because that is the one threat to the internal combustion engine. And that drives analyst outlook on in terms of what the future, the medium to longer term demand for these metals would be. I think certainly talking to a lot of analysts, the mining companies, there is a wide concern that there is not enough raw material available to meet the dissipated growth in the electric vehicle demand, and therefore, it might be slower than anticipated, the substitution, in which case palladium and rhodium will be stronger for longer.

28:34 Platinum, on the other hand, do benefit from the hydrogen economy and also especially potential fuel cell that are locked in electric vehicles and that certainly boosts well for the longer term demand and pricing for platinum. And so generally, I think with having all these metals in our basket, it gives you we're quite robust have a robust outlook on the market and therefore, still positive in terms of growth and future prospects. When we talk about growth for SYLVANIA, we've always had three areas where we looked at how do we particularly grow the business. And the first one is to look at how do we unlock further potential or value from our existing assets. And that's both our existing dump operations as well as our owned exploration assets. And initiatives like continuous R and D, the rollout of the MF2 or the second and milling flotation circuits we've added our operations is all indications of how we improve the efficiency and also the production profile from our existing operations.

29:43 And then focusing on our exploration assets, we have launched various studies during the past two years to determine and investigate how best to unlock value from these assets, where we hold approved mining rights and which I'll discuss in a bit more detail shortly. And then finally, we continue to explore external growth opportunities where we can replicate our proven operating model and leverage our successful track record and expertise. And this the Talva JV that we have just announced post period end is an example of this of such an opportunity where we can grow the business both in terms of profile and life by securing potential new sources and partners. So if we just look and try to give you some indication or indicative example of what you can expect over the next in the short, medium and longer term. I've just illustrated I have some projects for illustration here and the FDO we talked mostly about already, which is the MF2 rollout, supply chain classification.

30:51 I think probably the one part we did not discuss in detail was the higher grade third party dump material that we are sourcing to supplement lower grades at our existing operations. And that we have been doing for the past two years already and have increasing access to additional third party dump materials. So that is a nice way of us of growing by feeding into our existing operations, which increased the overall life of our operations. Then the second part, and as I mentioned earlier, with the JV formed in is where we secure a new dump and current tailings operations. And the DARBA JV is currently in execution now, both us finalizing the agreement.

31:37 The design phase is basically complete and we're progressing with procurement during the next few weeks. So we will be placing the first commercial orders with the aim of bringing that project into production in about an eighteen month time frame. And you can see there in the eighteen months of three years where we target first production by the second half of the 2025 financial year. And besides securing the DARBA JV on the Western LIM, we also have exciting opportunities on the Eastern LIM, where we have exclusive access to multiple chrome tailings resources on the Eastern LIM. And we are in the process to engage with partners and host mines there to see what the best strategies to unlock their full potential. So just to see how do we best treat that material. Our view certainly is that in the next eighteen months to two years, we should be able to add an additional chrome tailings and PGM facility on the Eastern That would be our fourth operation on the Eastern Limb.

32:45 And we're able to add significant value to the business. And we're engaging, as I said, we're specifically also smart and completing our final technical and commercial due diligences. On the Western side, we also have several opportunities to increase ROM treatment, and we're also engaging with that and that holds some very real potential. In terms of the owned exploration assets, I'm going to go in detail about it, but since we've announced the findings of the studies in October 2022, so during the first half of the previous financial year, there is not significant new deliverables to be announced, but I'll deal with what we can expect in the next six months. But we just worth saying that we continue to explore the projects and to determine how best we can add value for shareholders and to determine what strategy is best to employ.

33:47 So setting our just briefly on adding a snapshot on the PLATINUM SYLVANIA LIMITED:] Besides the raw feed material, there's also a historic dump resource of 2,000,000 tons available, and that enable us to feed the combination of 16,000 dump and 50,000 raw material per year, so that we can produce approximately 14 ounces thousand for the year, which equates to almost 16,060 ounces as well as 400,000 tons of chrome a year, 50% of which will be attributable to SYLVANIA.

34:34 And also the current life of the project is a minimum of ten years, primarily based on the period it will take us to deplete the dump resource, but the life of the mining operations and the resource is significantly longer. And we do have an option in the agreement to negotiate an extension if we would want to. The capital requirement for the project is about $32,000,000 SYLVANIA's portion of $16,000,000 And SYLVANIA will also fund the $16,000,000 initially for the of the JV partner from our cash reserves based on an interest bearing secured loan to the JV partners. The economics investment parameters for the project is very attractive and with a simple payback of less than three years.

35:25 And as I said, we aim to commission within the second half of twenty twenty five. I think worth noting here, while this is also very significant for us, this transaction is besides the fact that it diversifies away from only being dependent on a single host mine. We are adding other third party partners. It also diverses our revenue stream into chrome. And that's significant because although SYLVANIA already produced between 350,000 tons of chromite concentrate per year for our host mines, we don't generate revenue for it under our current agreement. But under this agreement, the attributable 200,000 tons of chromite to SYLVANIA based on recent chrome prices would contribute approximately 30,000,000 to $55,000,000 a year of additional revenue stream to the company. So certainly not insignificant and very attractive, especially when you're in a down market in the PGMs.

36:25 And then the third strategic benefit of this project is the location on the Northern End Of The Western Limb. And you can see our current operations, Moy Nue, the Seade Mills are at the Southern End Of The Western Limb, and that's also where Theresa Minerals is situated as well as Jubilees Crop Plant. So all the current chrome processing facility are all at the bottom of the Western LIM. And by having a license facility and capacity treatment capacity at the North of the Eastern LIM could well open the door for further opportunities in the geographic area, if that makes sense. If we quickly just glance over the exploration assets, I mentioned earlier that on full spread, we have published in October last year the initial mineral resource estimate and scoping study that was firstly focused on only part of the resource, which was a north pit representing about 58% of the overall resource and most of the work during the past or subsequent to October was to add the self pit resource as well to our mineral resource estimate and to add rhodium that was previously excluded because it was not a job compliant level of analysis at that time.

37:44 So we are looking to publish that in the next month or so updated mineral resource estimate on full spread, which will then include the South pit and rhodium. And then later in the year, towards the end of this calendar year, we will focus on delivering an updated scoping study on full spread to give an indication of the true combined project value. On the Aurora and Accra, Aurora is our project where we have a near surface and discovered the near surface T zone mineralization along strike length and initially targeting just the La Pucella target area, which is approximately 12% of the total project area, the total 14 kilometer strike length. And we've published a mineral resource estimate in October, but the subsequent work has been focusing on relogging of historical core with the aim of proving continuity across the strike length of this mineralization, so that we can eventually declare a mineral resource estimate over the entire strike length on which we can then base a scoping study for this project to determine what the value and potential for the company would be. And then the last project is our most northern project bordering platinum group metals water bill project to the north is our Hakra project and there is we have deeper level deposit, which we've announced exploration assets exploration results for in October.

39:11 And we have been working over the last year towards determining if we can declare a maiden resource estimate on this and hopefully we'll have a final outcome during the next couple of months. And we will keep you updated the progress on these projects as we go along. I think if we look in closing in terms of SYLVANIA, we certainly believe and hope that our shareholders would agree that SYLVANIA is a very attractive low cost, low risk cash generated business. And I think we've developed over the years a very strong track record with our strong production performance and we've been able to deliver very strong value to our shareholders, both through a combination of having stable and growing dividends as well as significant share buybacks. I think more importantly, the fact that we've been able to cancel most of the shares we bought back over the period.

40:06 So yes, that is our final presentation. You for your time and listening to us. We certainly are very happy with the past year's performance and quite upbeat about the future both in the next financial year as well as the medium to longer term for the company. Submit your questions using the Q and A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via our investor dashboard. Jakob Luan, as you can see, we have received a number of questions throughout today's presentation.

40:54 And if I may hand back to you and kindly ask you to read out the questions, give responses where appropriate to do so, and I will pick up from you at the end. Okay. Thank you very much. If I'm looking at the Q and A slide, and I will touch on the questions, see how much we can handle in the remaining time. I think the first one I've seen from the pre submitted questions is saying given the South African rand volatility and poor outlook, why not find a safer haven for the very significant cash balance. And I think, Lirenka, maybe just explain for us there in terms of how don't keep all our currency in South African rands. And then she can maybe give us more guidance on the balance of the dollar to rent exposure. Yes. So thanks, Janko. In the past, when we were still building a number of SYLVANIA of the dump operations, we did keep a fair amount of our cash in ZAR South African to fund these.

41:51 But post that and post the MF2 or what we're saying, the Project Echo completion, we have moved or we do keep a significant amount of our cash in U. S. Dollars. It's not kept in rands. And currently, it varies between 70% to 80% of our cash is kept in U. S. Dollars, so not impacted as significantly as it used to be by the volatility of the rand. Okay. Thanks, Lorraine. One of the next questions is to say, do you think perceived unrest in South Africa has contributed to the share price decline? And what's the reality of risk to the business? Look, it's always difficult. I think investors are know the jurisdiction quite well and the associated risks. So I don't think that there's been any significant deterioration in what we have historically seen or in the environment that we have been operating in for a number of years already. I think as South African producers, you learn to adapt to the different political and socio economical challenges we have.

43:06 And when you build your business around it to make sure you can withstand any risk that it might pose. So to come back to the question, do I think that has contributed to share price decline? I think there is certainly element and because as the South African rand weakened and given the overall credit ratings of South Africa, given the concerns about the upcoming elections in the next year, there might be an element of country risk in the share price. But if you look as well, I think the PGM price in particular, I think, been the most significant driver of share price performance of not just SYLVANIA, but all PGM mining companies in the sector. And if you would do a comparative trend of PGM mining companies in the country unfortunately, most of them are South African based. So it again, don't necessarily tell you eliminate the country risk.

44:07 But you can certainly see that it follows very closely the PGM basket price point in the share price. And I think that is the bigger component of it. And that's why we quite excited to say if there's a recovery in the metal price that we believe the share price should also follow. That's on that question. If I think the next question actually ties up very closely to it. And I just said, I appreciate you're not responsible for the price at which your shares trade, but I'd be interested in knowing what you think is behind the recent steep price decline and why you canceled the recent share buyback. So the first part, I think, is answered by my previous response to say what we think drives the share price down. Then the second part of the question say why you canceled the recent share buyback. I think we've announced in May that we launched a share buyback up to $10,000,000 that we would do.

45:05 And I think we were going into a close period after the end of at the end of June as we our production year end closed. And with this steep decline in the metal prices just in this preceding weeks do that, we have paused or halted the buyback because you can't give instructions on buying and selling when you're in a closed period. So with the potential risk to the company being in a closed period and not being able to control what happens to the buyback program, we have suspended our buyback program. However, as we have now exited the close period of the announcement of our results, the company have announced today that we are reinstating that share buyback program up to for the balance of the amount we initially announced. So of the $10,000,000 we bought back $3,600,000 of shares in the initial part of the buyback. So there's another $6,400,000 remaining under the buyback program. And we will look at opportunistic levels where we believe the value from the buyback is superior to any other investment opportunities.

46:19 But we certainly are committed to increasing the buyback. I think the next question ties into the virus, what's the company's policy on share buybacks? So I'm actually not going to answer that question again. It was just asking the same thing, and I believe I've answered it. Next question is the third question, the share buyback is why in the last two months has the company not purchased any shares of cancellation, and I think I've explained that. One of the next questions said, do you expect any improvement in production levels from your mines? So and I assume when the person says mines, I mean our operations.

47:05 I think we are running at very close to our optimum levels at all our operations. And that's why I said that we've been very excited about our production performance now over the last year. Our plants are running at capacity. We are working on improving stability and recovery efficiencies. So we get incremental improvements in ounces, but there's not going to be a significant change in the levels of production. And that's why we maintained our guidance very similar to this financial year, but we believe operations are stable and efficient where they are. And we, in a sense, are dependent production is dependent on the grade of material we have. Where we are able to supplement with higher grade external resources, there might well be an additional benefit if we can improve feed grade to the operations.

47:56 But that is as and when those are available. I think one of the other questions is focusing on the electrical situation in Africa is how do you cope with South Africa, it's many electrical failures. And I guess there's an answer of how do you cope personally and how do you cope with the business, but let's stay with the business one. I think are fortunate South Africa, while these severe stages of load shedding, industrial customers and therefore, our host mine is dealt with slightly different than your domestic or small business consumers. So it is a system of load curtailment rather than load shedding, and they give the industrial customers the opportunity to cut a percentage of the power and plan where they want to cut it. So typically, our host mine will have smelters and production mining operations, which used to cut the power and curtail do the load curtailment, cut back the consumption on the smelter facilities where they are able to catch up production to an extent later rather than losing a blasting shift or production from underground. And with five of our six plants being located at the mining operations, we are therefore not impacted by the electrical failures directly.

49:16 However, Lesedi is our one operation that's situated at the smelter site, and they have experienced this downtime due to the load curtailment during the past year or two. And that's why we have installed electrical backup power supply at Lesedi, which will be commissioned in this next three months so that we can mitigate the impact of load curtailment in that area. So that is the how we deal with that at the moment. Then there's a I think the next question is related, is there concern related to security, energy supply or political instability? And I think it ties in with what I answered on some of the first questions and the last one. There's a question to say what's the interest of the JV loan.

50:03 The interest of the JV loan is a variable rate connected to the South African prime interest rate. At the moment, that rate is 11.75 is the prime lending rate in South Africa and that loan will be aligned with the prime lending rate in South Africa. The next question says, could you comment on the very low share price in relation to the extremely low PE ratio in your opinion when you believe the rhodium price will start to recover and what level we could see the rhodium price rise from the current price of four point Thanks. So I think I'll try to highlight just the fundamentals what drives the rhodium price, as you saw, rhodium 90% consumption in auto catalyst.

51:02 And I think the other important ones are Africa being producing 95% of world rhodium. So there are two things that impacted rhodium. So I didn't probably touch on the one earlier on that slide. The one is the demand with auto sales was down. The other one is in the previous years and post COVID and thereafter, Chinese glass manufacturers and even auto manufacturers an extent have accumulated and stockpiled quite a bit of rhodium because of price concerns at the time. And because of the slower than anticipated recovery in the industry, especially in China and the consumer demand, those glass manufacturers have started to release a significant amount of rhodium from their stocks.

51:51 And that also impacted on the rhodium price significantly. So that is as the carbon manufacturing is expected to increase going forward, analysts also believe that the excess rhodium available from stockpiles from especially China is also nearing stable levels that there wouldn't be additional levels coming from that. But saying that, I think and I will go back to the outlooks from some of the investors in terms of the price outlook. I tried to give an idea. You can see there is a range longer term, certainly not going back to $50,000 an ounce. So I think Standard Bank, in particular, have quite a robust outlook, but that's specifically driven about how much they think the substitution from electrical and industrial combustion engines will come. But I think in general, if you look at the long term outlook, it's between say, $5,000 and $10,000 an ounce long term rhodium outlook.

52:59 But rhodium has proved to be very volatile. And with all respect to the current analyst and others, if you look at the forecast people had a year or two years ago of the current environment, nobody predicted the environment we're in at the moment. And that's why we try to understand the dynamics driving it at the moment, but also understand that it is quite a volatile market. So somebody asked what view do you have for the use of PGMs in lithium batteries and hydrogen fuel cell productions? How would the timeline for this? So obviously, the platinum has been already is forming a significant part in play a significant role in the hydrogen economy.

53:51 Palladium certainly to a much lesser extent than rhodium as well. You probably have iridium and ruthenium are the two metals that make up the 6E are probably more likely to benefit from the battery and electric economy and hydrogen economy going forward. But platinum certainly will benefit from it. There's a lot of work being done on advancing technologies and especially to focus on commercialization. The timeline for this, I think there's certainly Johnson Matthies and some of the big companies have outlooks based on what they think the demand would be.

54:38 But they I think is certainly concerned about supply, about can there be enough mines, lithium, copper, nickel, cobalt, manganese mines to supply this new economy and to enable electric and battery electric vehicles. So I would I think it'd be responsible for me to try and put a timeline to it, but just be aware that those things definitely play a Somebody has asked you, and I think it ties in with those battery metals, have you considered taking over Bushveld Minerals with the synergies and poor performance? And I would lie if I said this all didn't cross my mind. But Bushveld is very attractive from the manganese the vanadium part of the business, and they've also had a battery sector that done.

55:26 But you also have to look at the bigger Bushveld Minerals company. There's some significant environmental liabilities associated with the old assets smelter assets they have in Mapumalanga province. We're exploring opportunities and investigating opportunities in attractive battery or future minerals. It doesn't exclude anyone in particular. So we certainly will evaluate opportunities on the merits of it. So we'll have a look at that. I think looking at the time, there are a few more questions, but I see there's more questions than I'm going to have time for. So I would maybe just do a time check and see. Do we do it at close here and we can maybe answer the remaining questions online and publish the responses or how do we Jakob, Luan, I think you have addressed those questions you can for investors today.

56:23 And of course, the company will review all questions submitted today, and we'll publish those responses on the Investor Meet company platform. But before we direct investors to provide you with their feedback, which is important to the company, Yako, could I please ask you for a few closing comments? Thank you very much, and thank you for everybody spending their time with us and listening to our presentation. Yes, I think in conclusion, I just want to say that I'm very pleased with SYLVANIA's current performance, and I'm also very excited about the future growth prospects we have and going forward. I think not only have we established ourselves as an attractive reputable and stable cash generative business over the years and obviously, we're paying growing and stable dividends also to turning to be very shareholders. But I think also what we've seen, especially recently, is that through our track record of strong production and stable production ethics and also transparency in our reporting and business, we have also established ourselves as a partner of choice in the industry to unlock further growth opportunities going forward.

57:33 So as I said, I'm overall very happy and encouraged by the performance. And I want to thank all our shareholders and other stakeholders for their trust and support, and I'm looking forward to continue this year's year with you all. Thank you very much. Yako, Luan, thank you very much once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will 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, and good afternoon to you.