Sylvania Platinum (LSE:SLP) — Annual results for the financial year ending 30 June 2020

0:05 Good afternoon, ladies and gentlemen, and welcome to the SYLVANIA PLATINUM LIMITED Results Presentation for the Year Ended 06/30/2020. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated in the right hand corner of your screen. The company may not be in a position to answer every question it received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Me

0:35 company dashboard. I would like to remind you that this presentation is being recorded. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Jack O'Printslow, CEO and Luanne Camminatri, CFO of SYLVANIA PLATINUM LIMITED.

0:58 Good afternoon, everyone, and thanks for joining us and making the time to join us for our results presentation. And also, think worth noting, it's the first live results presentation on this virtual platform. So thank you very much for for joining us. I think maybe just by way of introduction, I I thought maybe just some background with me and Leanne. We we have recently been appointed from March this year as the new CEO and and CFO with me taking over from Terry. But we are by no means new to SYLVANIA, and Leanne have been a bit before me for about eleven years with the company, and I'm just almost on to nine years now.

1:44 And especially during the last five years, I've, we both of us worked very closely with Terry as CEO and also with our existing board. We've been working very closely. So I think we we all aligned and and as I said, have been following this the executive around for quite some time.

2:06 I'm gonna start off the presentation just by by means of overview of the of the company, and I'll go to full screen so that you can just have a better one. I'll do a bit about SYLVANIA and then going into our two different streams. SYLVANIA is a mid tier PGM mining company that has been in operation for a number of years now and focusing specifically on generating welfare of shareholders, you know, and, by applying safe and innovative processes, to focus specifically on PGMs, but also in the process exploiting value added associate minerals in the current environment where we are beneficiating chrome with our PGMs for our host mines and then also in the future exploration projects where there are some base metal components.

2:57 There are two distinct almost streams to the current SYLVANIA business at the moment, and the first one being our SYLVANIA dump operations. And so far, these are the operations that have been adding all the ounces and producing all the ounces for the company and also generating all the revenues. And then that and then the second part is our exploration asset stream. First, focusing just a little bit on the SYLVANIA dump operations. We currently have six operating plants in operation, beneficiate sorry, beneficiating PGM and chrome, and they are located on the Eastern and Western bushfelt respectively.

3:44 And at the moment, all our mines are on some property as the host mine. Important is we we always talk about our PGM recovery and and figures, and that's what we generally publish in all our reports. But, also, significantly, we are recovering a significant amount of chrome for our host mine. And and but because we returned that in a nominal value under our commercial agreement with the host mine, we don't record any other current numbers in our our financials. However, without agreement in terms of resources, have the exclusive right to reprocess all the tales, historical tales, as well as the current risings and aroma risings from the host mines where we located. And I I say that because the Mancor have subsequently, you know, since our agreements have been placed, acquired some new operations where there are other tailings operators who are already on-site with their own commercial agreements being on it.

4:48 So at the the the six complexes where we are, we have those exclusive rights. And, you know, looking at the platinum price forecasts, the the basket price outlooks, and our production profiles, we, have a profitable operational life of at least ten years. And, we're constantly, looking at the potential of extending those horizons through the adding resources where where possible. From a production point of view, we have, through our plants, steady state capacity of about 75 to 78,000 ounces depending on the grade. You will notice we said later in the presentation that we are targeting approximately 70,000 ounces for this next year and that's based on the host mine, ore profiles and, and our operations.

5:39 If I go to the to the second stream of our, business and that's specifically looking at our exploration assets, this map will show you just the location of our operations and and maybe just for reference, the operations I spoke to in the previous slides are these, orange circles on the Eastern And Western Bushveld respectively, and it entails our Mill Cell, Muenway, Lennox, Lesedi, Durambos, and Puyfontein operations. And then when we come to the exploration assets part, it is our full spread Grass Valley and Northern Limb projects to the north of the map and, on the Northern Limb of the Bushveld complex. Now the, just in summary, what those projects entail. So we, first of all, have the full spread open open cost project or shallow mining project, which is on the southern end of the northern limb with where we have existing mining right in place and for PGMs and also base metals, copper, nickel, and and chrome associated.

6:43 It is a project of a a life of mine production of around 3,000,000 ounces and and then also quite significant, you know, about 200 to 70,000,000 pounds of nickel. And then the Northern Limb project that comp composed of two smaller projects is the Hacker and Aurora projects, where we also have a mining right in place, and, that has about 13,000,000 PGM inferred resource. What is worth noting here is is that this Northern Limb exploration where we have attracted and and reported an impairment of approximately $9,000,000 on the Aurora project for this financial year. And I think maybe worth explaining the rationale behind it because a lot of you might ask why would a company at the height of, of the PGM market and the environment price environment we are now, And while we're announcing we have increased focus on these projects, impair a project like that, I think, historically, we've looked at executing this full spread in organ limb projects as one combined, almost mega mine type project.

7:52 And therefore, we've run the impairment models on the combined, project. Now with us looking at more localized high higher grade attractive projects that we probably can execute with lower capital, lower risk, We're now evaluating these individual projects on on a on a individual basis and for impairment. And, unfortunately, with the amount of available information on the Aurora project to date, we we didn't pass all the all the applicable test for impairment, and we've attracted that impairment. Through the studies, we have initiated to look at these projects, I'll deal a bit more about it later. It might well be that we discover there is more value to the project, in which case we will reevaluate it in in in the future. But at the moment, we have attracted that, impairment.

8:38 When we look at Grass Valley, at the bottom, Grass Valley is open pit minable high grade chrome resource. I think, most of you would know we have announced in, August last year that we have received a cash offer of about R115,000,000. That's just short of $7,000,000 for the project. There was then an original eight month due diligence period and for the purchasers to sort out the financing requirements. But, unfortunately, with the chrome market deteriorating quite significantly since late last year and then into this year combined with the COVID, impact, this year, that process has been delayed, and the purchaser hasn't been able to, to finalize the financing for it, and we then decided to grant a further twelve month option to these guys to, to finalize all the the financing and and due diligence and, to so hopefully for us to conclude the sale. So that's where we are on these exploration projects.

9:48 Just in terms of the the past financial year's results at a glance, I'm gonna take you through the operational part of it, and I'll hand over to Leanne as CFO for the financial snapshot. But let me jump into the operational part of it. Firstly, I think many of you have seen when we came in put our previous presentations announcement out at the half year, SYLVANIA was well on track to to achieve, you know, our guidance we've provided to the market of above 60 76,000 ounces. We had 40,000 ounces at the half year produced already, but unfortunately, with the impact of COVID that necessitated, us to shut down our operations for a six week period during the, the national, hard lockdown by the South African government in order to to address the COVID.

10:44 We have lost about 11% in treatment tons through our operations. We are we're quite fortunate that the PGM recoveries were significantly up, and that's 15% up year on year, and that helped us to mitigate some of that impact that, overall, the PGM production was only down about 4% for the, for the financial year, with COVID costing us approximately 10,000 ounces. Just for a moment stepping back to the recovery, I think you would see that we've increased to about close to 57%. The big contributors there is, first of all, you know, it's the success in in the rollout of our, project ECHO modules, Moinway m f two being the last one to being commissioned towards the end of 2019 financial year and also the front end optimization project we did at the SIDI.

11:35 And those two projects only contributed to the full financial year for the first time during 2020.

11:41 So that helped significantly to improve the recoveries, and then also we had a higher philosophy in order to to improve recoveries. That part, of the strategy is not necessarily sustainable going forward because we have to meet certain minimum requirements of concentrate quality to our, smelters, and we will therefore put, bring the recovery slightly down into the next year. And I've communicated in our, annual announcements that, we would target probably between fifty two and fifty four percent recovery for the next financial year. With all the production, behind us, when just before we go into the financials on the next slide, the PGM basket price, obviously, had a 58% year on year improvement to to a $2,015 a ounce was a prime was a significant contributor towards our financial successes for the past year. And it's a particularly in terms of rhodium that was up more than a 160% year on year and palladium close to 50% year on year improvement.

12:48 And, and we were fortunate to benefit from that. In terms of safety, health, and environment, performance for the company, we have been fortunate for a mining company to have, had a spell for twelve or thirteen years without recording any fatalities. And and and we are fortunate that we've been able to have the safety record like that, and we're doing everything in our power to keep it that way. We haven't had any significant health or environmental ins incidents on the operations barring, obviously, COVID on the health side that required us, to implement a couple of, interventions during the last half year. Because we don't have any fatalities, the next, significant parameter we use to measure safety in our operations is lost time injuries.

13:37 And, while we unfortunately recorded three for the year, one at Moinway, Lesedi, and Lennox, respectively, related to primarily slip and fall and hand injuries, we also had three operations that have exceeded five years without having a single injury where a person missed one day from work. And I think by industry standards, those are significant safety achievements. Overall, I think the barring the impact of the COVID, we had a excellent year from operational point of view. And I'll hand over to Leanne now to take us through the financials, which also is very promising. Thanks, Jakub. Before I start with the financial snapshot, just a reminder that SYLVANIA generates its revenues in USD, but all our SEO costs are incurred in South African Rands, so exchange rates impact us quite significantly.

14:29 Looking at the top of that slide, the gross revenue, group revenue increased from $104 to $114,100,000 against last year's $70,500,000 That's a 62% increase year on year and attributable mainly to that 58% increase in the basket price. The group cash costs increased to $636 per ounce against the $556 per ounce in 2019. This increase is mainly as a result of the impact of COVID and the STO not producing ounces for almost six weeks. During this time, the company paid all employee salaries and incurred fixed costs as well as care and maintenance on the plants. In addition to these costs, we also had higher than inflation increases in electricity and also higher remining costs on the dumps which impacted the cash costs.

15:24 The group's G and A costs increased from $2,000,000 to $2,170,000 that's an 8% increase on the prior year and mainly due to the increase in share based payments expense on bonus share awards to senior management and directors. The Group's adjusted EBITDA improved 130% to $69,600,000 against last year's $30,200,000 Again, this is on the back of the improved basket price.

15:53 This then filters down to a record net profit of $41,000,000 a 125% improvement on the prior year. The net profit is after taking the $9,500,000 impairment on Aurora into account as well as $15,000,000 in taxes. That all then brings us to an earnings per share, which increased to 14.62%, a 130% increase on the prior year. Group CapEx for the year decreased 35% to $5,400,000 against the prior year's $8,300,000 The decrease is largely as a result of almost no spend on Project Echo during 2020 as all the planned modules were completed in prior year except on TUIFONTAIN, which will has been delayed due to the power infrastructure.

16:40 Thankfully, COVID had little impact on our CapEx spend or projects. Then lastly on that slide, but by no means least, the dividends that's been recommended by the Board for 2020 is 1.6p per share. This is just more than double what was paid in the prior year and was calculated based on the company's dividend policy on our website. Some of the factors that were taken into account include the working capital requirements, committed capital and planned and expansion growth capital and being able to sustainably pay a dividend in the future. This should also be it should also be noted that the impact of the zero production in April will only be seen in the cash flow for the company in quarter one of financial year twenty twenty one as a result of the four month payment delay between delivery and payment from our smelters.

17:33 In addition to these factors, the Board also had to consider the possibility of a second wave of COVID and the potential cash flow impact thereof. Although the board does recognize that at the current metal prices, we that we're experiencing and will hopefully continue to experience that we're gonna generate significant cash for the business. And that's why the they're considering the once off metal price windfall dividends, which Yapu will discuss in detail a little later. Thank you, Luanne. And I think maybe just to shed some light on on, you know, related to results we've we've just taken you through, some of the major challenges during the past year and and just how we we dealt with it. I'm gonna try to be briefly take you through.

18:22 The first one is the impact on of COVID on this and and the South African government imposed lockdown. I already indicated in that slide, you know, we we have looked at about 10,000 ounce production lost, but we've we've been able to mitigate the the rest of the impact quite a bit after. The next slide deals a bit more in detail with the COVID, so I'm I'll touch on that a bit more just now. The other very significant one, and and you guys would have seen the last two or three results announcements we've put out in the past quarters. We have mentioned that there is there were retrenchments at some of the host mines where we operate, and that's primarily because of the press crow market.

19:08 So at the moment, particularly in this past, financial year from about March, April was the the impact from, the cement core, Wind way, and Lennox operations that they've published and announced. So those, employees for the underground mines did not return to the operations post COVID, and and we've had already started incurring that, impact, during May and June. So what that entails is that we will get lower current risings and raw material at those mines, but so when you have the flexibility at our operations, at all of our operations, to substitute that material with current historic dump material, and that's one of the big benefits of having the historic dump material also present. However, those dump material generally are coming at slightly lower, PGM grades and also at a lower PGM recovery efficiencies.

20:03 And that's why I've, highlighted that the net impact will probably be about 10 to 15% on our ounce profile on the year going forward. That's already built into the 70,000 estimate that we have, mentioned. We are, however, continuously looking with our host mines at other opportunities like open cast resources, to explore and see as a substitute for the underground feed that's, being lost, and and we continue to work with them in that regard. The other two relates more to the logistics around the mines and that's the power and water. Power infrastructure during the past year has been still had some impact on us through the combination of load shedding and then also the distribution interruptions from the power utility to our operations.

20:52 And we continue to engage with both the power utility and also those mines to explore long term solutions to help mitigate, the impacts. The last one being the water shortages and the two primary operations that have been impacted by this during the past financial year is, Lesedi on our Western Limb and Quefontein on the Eastern Limb. We have, through r and d initiatives, at Lesedi during the past year, been successful in recovering seepage water from the perimeter of the tailings dam complexes through, special drill holes to return water and alleviate that problem. And we are taking those learnings and positive results from Mercedes now and applying it to in the next financial year that should alleviate that problem, and and we don't, expect any significant interruptions or impact during the next financial year in that regard.

21:44 Just briefly touching on, on COVID as a as a item and repeating maybe some of the stuff we already said and and our outlook forward. We spoke about the production impact. I think from a employee point of view health, we were fortunate enough that we've had less than three percent of the employees in the group being affected by by COVID. We had, in total, for the SYLVANIA workforce, about fourteen positive cases, since the inception of since COVID arrived in the country till now. And, and we were fortunate that those were all, mild symptoms, and the employees have all subsequently returned to work. And, and and, also, we, gave, support to our local communities in terms of food parcel and social support.

22:31 Looking forward, we have seen during recent weeks that the rate of infections in the country has slowed significantly, and and that goes both for the rate of infections and the rate of mortality. And we

22:44 remain cautiously optimistic that the things will impose improve now going forward. We haven't had as a group any positive cases during the past five weeks at any other operations, so so nobody tested positive or falling ill during the past period. However, we remain vigilant. We continue with our ongoing monitoring of the short and long term impact on the employees and also with all the preventative measures in place to safeguard employees and prevent people from being affected. There should be another impact or increase in the infections. We have operational contingencies in place at the various operations to help us deal with the impact and and ensure that we can keep operations running. So I'm gonna briefly take us more in in a bit more detail of the operations, and I think let's start off just with a production ounce profile.

23:38 And I I think from from this is what I mentioned earlier, we were on on a very good trend until the emergence of COVID where 2020 would have been our seventh consecutive year of increasing on record production. And, unfortunately, we with the impact of COVID, we've just dropped slightly below 2019. And we're trying to keep that profile flat into 2021 and 2022 being a bit down. I think it's worth noting. So 2021 and 2022 estimates take into account this downscaling and the, downscaled operation at our host mines. And, and the reason for 2022 being slightly lower than 2021 is that the third mine that is, potentially being affected by this, scale down of those mines is Trefontein, But those, mines have not been scaled down yet, and and the communication from those mines would be that it will continue at at least until December.

24:43 And, you know, depending on what the crow markets does, there might be the upside that it continues. So that's why 2021 is, slightly higher than 2022, the profile, because in our planning, we've removed three front end as well from contributing to the operations. Just in terms of the project completed, we have put in announcements, and I think what we're very happy with and looking especially over the past few years, the substantial increase in recoveries and the positive contribution to the ounce profile was the successful rollout of project echo. We've been able to commission three of the four projects, destined for project echo, and that was the Mill Cell and Duranbos that was done, in the 2018, '19 financial years, and then that was done in the last 2019 financial year optimized into 2020.

25:37 And those were all all successful. We've completed those projects well within our budget that we even for project echo. So it leaves us with a module outstanding, which we have announced in in in several previous communications that due to the power supply stability from the and capacity from the utilities, we haven't, we've taken cautious approach not to start with until the power is in place. So would most likely only be looking towards financial year 2023. However, as I will indicate on the next slide and have indicated in our results announcements, we are bringing forward MF2 module at Lesedi to mitigate that ounce impact and maintain our ounce profiles. The other significant project we've completed

26:24 during the past year is the Lennox Mullen spiral upgrade, and that was also to extend the life of of Lennox. Lennox would have, based on just the historic dump material that was there at the characterizing profile, probably have scaled it down or closed down about two years ago, and we then decided to to make alternative plans with the dump resources and also to add a more for flexibility that we can treat open cast raw material or underground raw materials. So whatever on funds is available from those mines through that complex, and that mill has been commissioned during the past month. And we are starting to receive run off of mine open cost material for that project. In our future project projects that we've committed capital for the next financial year is the Mercedes NFT. As I said just now, it is very it's exact same philosophy and circuit design as we have completed at our other project echo modules or m f two modules at the other plants, so therefore, there's no technology risk or surprises in it. It's a technology and a circuit design that we know works, that we've proven works and and therefore we've we've we've decided to go ahead with it. The second project there is a classification project, classification and PGM upgrade optimization at our Moinway operation.

27:47 And again, it's a similar installation with enhanced fine screening technology that we have done and rolled out during the past two years at Millcell, Durimos, and Twiventhein, again, with successful results and adding positive value. So those are the projects, the the primary projects that we have, planned for now. I'm gonna hand back, to the end to take us through some of the more detailed financial information. Okay. Thanks, Sophie. I've already touched on the key group financial highlights. So focusing more on STO, you'll see the group act act the operating cost cost for STO increased 60% year on year from $3,535 per ounce to $615 per ounce. The reasons for this increase are much the same as for the group cash costs and include the impact of lost production due to COVID, the electricity increases and the higher remining costs associated with the dumps.

28:42 The impact of the higher dump remining costs and slightly lower ounce profile that Yakri mentioned previously due to the host mine slowdown can be seen in the cost per ounce forecast for 2021 and 2022.

28:57 Looking at our operating costs relative to the industry, it shows that SYLVANIA is still in the lower end of the cost graph. It's important to note that this graph, which is prepared by Nedbank corporate and investing is based on the 2020 calendar year. So the July to December 2020 portion of the cost is an estimate by them, which is why we're according to their estimates sitting at $770 per ounce. If we use our financial year 2020 actual cash costs and capital, the SYLVANIA cost is sitting at $713 per ounce, which moves us two spaces down the cost graph. Moving on to our group EBITDA forecast, it's pleasing to note from this graph that we've made consistent or achieved consistent increases in EBITDA since 2013.

29:52 The 2020 group EBITDA increased significantly on the back of the favorable metal prices and then you'll see the solid bars for the forecast represent the average spot metal prices for the week of 08/24/2020. This equates to a gross basket price of $2,676 per ounce. As the future is anyone's guess, we've also included the forecast of Nedbank and Standard Bank, which are significantly more conservative as well as sensitivities on the spot prices that we've provided. With the favorable metal prices, we've also had we often ask the question around hedging. The group currently doesn't hedge and there's no immediate plans to hedge. And to be honest, think if we had hedged a year ago, shareholders would be very unhappy with management today.

30:45 The following graph just gives a little more information on 4E basket. Our gross basket price for 2020 was $2,105 per ounce, a 58% increase on the prior year. And the first pie chart on the slide shows the PROL split. You'll note that the star performers of the years, palladium and rhodium, make up 25.512.5% of our concentrates. This, however, translates with the rhodium price as it is, making up 46.3% of our revenue, which is quite significant. We've received and also continue to experience record highs in the South African Rand basket price, which can be seen in the black line on the third graph on the slide.

31:35 Let's hope it continues for the following financial year. To the next graph shows our capital expenditure. The twenty seventeen to twenty nineteen capital expenditure bars showed increase as we rolled out Project ECHO. The 2020 CapEx spend included mainly the Lanex Life Extension project and the Lissedi Chrome section as well as SIV. Looking forward to 2021, the CapEx budget is estimated at around $9,000,000 and you'll see that this includes a substantial increase in SIB as we've had to bring the tailings dam construction forward to allow for the flexibility of the remining of the dumps. This cost would have been incurred.

32:20 We were just merely pulling it forward. So it's not new capital that wouldn't have been incurred. The other capital expenditure plan for 2021 include the Lesedi MF2 module and the Moinyo optimization project. Okay. Thank you, Leanne. And I think that's bring us to the summary of the presentation and I'll just try and conclude with a few thoughts. I think, first of all, from our corporate strategy point of view, and it's all about value creation, our focus remains in on free cash flow generation, and and we will do that by means of maintaining our production levels. We we are gonna produce our 70,000 ounces for the year. We're gonna maintain our low costs and and therefore maintain high margins. We also wanna have a sustainable business that we can continue adding value and therefore we will optimize the processing at our operations through improved technology and capital expansion projects.

33:22 And I think some of the examples we mentioned just in this presentation in terms of echo and other expansions are proof of that track record during the past years. We're also continuously exploring and evaluating potential surface resources and projects to extend the life of the tailings retreatment operations and we constantly negotiations with, parties in that regard. Growth of the business is significantly important and and obviously as, after many years of significant growth and the profile now flattening, off a bit is one of our utmost priorities, and we the analysis of our exploration assets in

33:59 order to consider how we're gonna develop them is key at the moment, and then r and d investments to potentially diversify the the business model. Returning value to, our stakeholders is obviously important. And when we say stakeholders, it's not just the shareholders where we are, looking at returning dividends and also free our share buyback strategies, but also, I think especially in the current, market conditions where our host mines are are are struggling a bit with the chrome prices is that we add value for them for, efficient and low cost current production return to those mines. And then also is, our employees and the communities that we contribute to. Talking a bit more about the value to to shareholders, I think just a summary of of the two mechanisms we have mentioned and now we've we've fared during the past few years. I think the first one is what we always say we will look at the opportunistic buyback of shares when the share price is lower than internal company evaluation, and we've managed to buy back about 45,000,000 shares during the past five years of which we canceled 11,000,000 shares.

35:08 That enabled us to satisfy the the bonus share award schemes without diluting shareholders and and also to enable us to push 7,500,000 shares towards a vehicle where we can, enable, employee dividend entitlement scheme when especially the lower level employees in the company can share in the fortune of the company through, through the means of dividend payments similar to shareholders without being issued the shares and, and and, you you know, just ending up maybe selling them in the long term. So that is what we've been able with the share buybacks to achieve. In terms of the cash dividends, we've commenced our dividends in after the financial year 2018 with a maiden dividend then of 0.35p per share which we've just more than doubled going to the at the end of the 2019 financial

36:00 year, 0.78p. And the board again recommending a 105% improvement to 1.6p during this financial year. I think as Luanne mentioned earlier in her part of the presentation as well is we we have looked at the amount of cash we have available and also the circumstance around our dividend. And we would look then at the payment of a specific metal price dividend that would take into account the performance of palladium and rhodium for this calendar year. And and we will distribute to shareholders a difference between a consensus value on those metals and what we actually achieve for the year.

36:46 And I think bearing in mind that we are already in the ninth month of the year, we we have some indication where that's going, but also I think we've seen in the same financial year how volatile Veronim have been, and and we will continue to focus. And that's why the board have decided that we'll make a call at the end of December so that we can evaluate the impact on this calendar year. In terms of future dividends, our we have our policy available on the website website that guides us in terms of the principles, but the NF also addressed that in in quite a bit of detail. So looking at this next financial year in our short term, our key focus areas, primarily what we said is maintain safe and profitable production.

37:31 I think most important for us in the short term is steering the company through the current COVID nineteen pandemic, ensuring that we maintain operational excellence and that we optimize the recently commissioned projects and that we also deliver on the new projects to get the benefits and maintain task tight cost control that we can remain

37:54 at the low OpEx margins. And in terms of the strategy for the exploration assets, as I explained when I spoke about the full spread in Auburn LIMITED project specifically earlier, is that we've initiated specialist studies to determine how best to optimize the respective projects by targeting more localized higher grade areas and considering less capital intensive infrastructure. Maybe just worth expanding a bit more on that because, some people have asked now, are we planning to build, the mine and go into mining ourselves that might deviate from the current strategy of low risk, low capital projects. No. That is not the idea. The original intention of the project was that, you know, what would have been quite capital intensive where we would build, several big concentrated modules and our own downstream, smelter and refining processes because of the the grade of material produced there. And and the capital estimate

38:50 would have been anything from, just less than 200 to maybe $300,000,000 to execute that project. We realized that that is not, probably would not fit into our portfolio in the current business, and you would either have to spin it out to into a separate vehicle or join up with a partner for that. However, by looking at this project, we have realized that there are more localized, almost call it hotspot areas with higher grade that we can do potentially in the same models as our current Sylvania model where it's a low capital investment. You can put smaller concentrate as a similar size to what we have now and have experience in, produce a saleable concentrate similar to our current operations that we can then produce to off take off the, of the existing smelters.

39:37 And if these studies prove to us that they we can unlock the value in that way in line with our current risk appetite and business model, then we could look at advancing those. If it if it doesn't, then at least we have done, determined the

39:52 value to ensure we get fair value if we decide to either spin it out or, or sell any of these projects. But that would be our focus for the next year, and, hopefully, in about six months time, we can shed a bit more light on this. In terms of our license to operate, always in the mining industry important for us to to focus on that. And specifically specifically under under the the the current environment is our relationship with the host mines that we maintain that excellent relationship engaged with them in a synergistic way to see how can we add add value to each other, manage the increasing community expectations, which after the effect of COVID, many people in our neighboring community have lost their income and jobs. So there's there's always that increasing interaction. And, you know, in terms of the tailings dams that we have to construct earlier, as Leyen said, is to ensure with those studies and the permitting is done in time, which we are in progress well in progress with.

40:48 In terms of growth opportunities, is specifically looking at exploring potential new PGM treatment opportunities. We we always talk to to the potential miners who have PGM or chrome tailings or PGM tailings available. Unfortunately, under the current PGM market, that is one of the as you would think it's opportunity, it's also part of a deterrent because current, owners of dumps want to value the potential on the spot price rather than a long term pricing. And when you build a a plant or operation that they have to recover or treat the dump over a number of years, you have to be more realistic in terms of that. But we are engaging and, and exploring potential in that regard, and there are some areas that we hopefully also in the next couple of months could make more progress.

41:40 In terms of the, open cost, the underground source I mentioned here is those are the some of the potential around our host mines that while at the mines where they have reduced, the throughput, there might be opportunities for cheaper contract mining on open cost resources or some of the other assets. And, we are in negotiations with them on on our best to utilize that. And then lastly, and that always has been part of our strategy to continue to look for opportunities, how do we diversify? I think everybody always ask us is, you know, are we open to other commodity or geography diversification? And and, yes, if it's in line with our strategic model and our can benefit from our skill set and expertise, then it's certainly something that we would consider.

42:28 I think that brings us to the end, and I'll conclude just with this last slide. And you would say, why SYLVANIA? Why am I staying invested here if you're an existing investor, or why should I invest here if I am a potential new investor? I think, first of all, we would like to believe and believe we have proven that we have energetic and competent leadership. We have significant industry experience and a proven track record in terms of all the way from identifying, developing, and designing these operations to building and executing it and then managing it very successfully to ensure we remain a low cost producer with one of the highest industry margins, that we maintain a low risk business model and a lot lower than primary miners with the underground exposure typically, and therefore that we can remain sustainable and profitable in terms of operational outlook. Having zero debt certainly helps to achieve that in the long run. And then especially from a shareholder perspective that we maintain a shareholder friendly corporate strategy where we generate positive free cash flow from our operations. We are disciplined in how we allocate our capital and our expansion projects from the generated funds.

43:43 We're not coming back to the market to to ask for more capital. The last year, capital raising or issuance was done in, December 2009, and then the company now paying regular dividends to the shareholders. And and we we will hope to maintain that and and grow it as the company grows. So I thank you very much for for that, and I I think we can see if there are any questions. Thank you. Yes. Yes, Laurent, thank you very much for a great update there. That's great. Ladies and gentlemen, do please continue to submit your question using the Q and A tab situated in the right hand corner of your screen. And I'd like to remind you as well that recording of the presentation, along with a copy of the slides and the published Q and A, can be accessed via your investor dashboard on the Investor Meet company platform.

44:29 And lastly, just before I hand back to Jakob and Nawal, I'd like to remind you that your feedback is very important to the company. So do please take a moment to give your feedback post this presentation. Immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order the company can better understand your views and expectations. Jakob, we've had a number of questions from investors today. Perhaps I could just ask you a selection just due to the number we've had through. And I'd like to remind investors that the company will review all questions submitted to them, where appropriate, publish responses on the platform. Eka, perhaps I could just direct this first one at you, if that's okay. Okay. Can you advise estimated lost production as a result of power supply issues? And what substantive actions can you take over the next twelve to twenty four months to alleviate those power supply and infrastructure problems now that you have a substantial cash power?

45:22 Okay. Look, as I said, I think the the power problem is is is probably gonna stay with us for another year in terms of the the utility. But as I mentioned earlier, I think the with the scale down of the operations, there is also a bit more power available from our host mine. So we hope that that impact will be less. If we think about the past year, the the net power the ounces production lost due to power, I would estimate between 800 and a thousand ounces is the is the net impact. So we've lost about 14,000 tons of treatment throughput during that period. So while it is significant, you know, if you compare it to the impact of of COVID and the more more other things, it is, luckily not catastrophic.

46:13 We have, at the plants that have been most recently affected during the past few years, Tua Fontein and Ledex, particularly on the Eastern limb, we have already installed standby generators. And in the case of, you know, for the past two years already because of the demand issue there, we've a couple of hours a day, we're running on on standby generators. It's diesel generators. It it is, however, important to note that, you know, your diesel generating is expensive and typically runs at I don't know. I'm thinking about a free free rand 50 to R4 a kilowatt hour. So that equates to, think, 22 to 28 US cents per kilowatt hour, which is very expensive compared to about R1 to 150 per kilowatt hour for the Eskom power when that's available.

47:04 So we don't see diesel generation as as a sustainable long term solution. Now for emergency power, we have the generators. We are looking at possibility of renewables like solar power. And if you wanna do it yourself, the capital unfortunately is is quite high, but, we we have been approaching contact with some suppliers who would, based on a lease agreement or a offtake agreement, can install power. And we're exploring a couple of those options. It is significantly cheaper than the diesel option. And I think with the government during the this past year now announcing that they they would be more amenable to to the mining industry generating its own power, the opportunities and the options opens up a bit more. So we continue to explore those and and as I said, where we where we feel we have the biggest risk or exposure, there we've already put diesel generators in place and and then we will consider what are the options for a longer term outlook in terms of sustainable renewable energy.

48:14 Fantastic. Thank you very much indeed. Right. Next one we've got here. The share price is significantly below where it should be according to the cash position of the company. Will the directors be taking steps to promote the company, etcetera, to change this? Also, what is the intention for the significant cash power the company has? Yes. Okay. So I think let me maybe first talk about the the share price and and, you know, what would what the company do. And a lot of people say, you know, what is the board doing to to promote the the share price? And, you know, while we all would appreciate and and a lot of our senior management and and board members also have shares in the company, so it's in our interest as well. The share price do well, you you know, is is also to to be responsible on how you act around the the the share price. I think, first of all, what we believe is our role is to ensure that, you know, we we run the company professionally and, you know, and that we we have good management, good governance in place so that we can deliver on our promises, that we maintain disciplined and efficient capital allocation, you know, we continue to generate profits from the operations and and keeping our costs down. And then, obviously, that we pay dividends and depending on on the other opportunities arise that we continue with share buybacks.

49:38 So those is what we things we believe we can do. And, also, obviously, raising capital, not coming back to the market and ask them for more capital. So those are things we can do. In terms of of also, I think that can promote it with further and and some people have criticized and said, okay. We maybe you don't do enough communication. We have just recently through our PR partners, SYLVANIA in London. I've done a perception survey with some of the key analysts in in London to try and get some feedback of how they think we should improve, especially in terms of our engagement with shareholders and how we communicate. So we we continue to do that one. And and it's perfect example of something like that is specifically this session now for the for the first time in the history of our results announcement. We are now engaging on a platform that can give access to our a large base of retail investors and give a lot of people opportunity. So it's not just the companies we engage with during the formal roadshows, which we regularly do at, result intervals in in London.

50:40 So we we try and, improve that communication. And I think then, also through this communication and what we we recognize is important is that we and we will focus a bit more on that, and I've mentioned that in the presentation. And I think, some of you that have been following the company for a while would see that, we have in the presentation already tried especially on on some of the growth prospects and and the the projects we do is to give a bit of a clearer line of sight for investors, and we will try in the as I said, with a couple of projects we do in the next six months to determine where we should go. And I think it's important that we can give better or or just a clear direction to the shareholders of of what it is we're planning and where we're going. And I think we we should do that. You know, hopefully, share price would also then look after itself. And if there's value, this generated, then there's more buyers than sellers. Hopefully, they should be pushing the price up.

51:35 Great. Thanks very much indeed. Next one we've got here. First of I'd say what a great job the company's been doing. Given the large amount of cash the company is holding in addition to the ongoing profitability of the company, Is there plans to reinvest this money into further growth prospects? Yeah. Look, think we we have mentioned that during the presentation as well. It's certainly that we are looking at growth prospects. And the two parts to it is is how do we acquire resources outside similar to the ones we have to to utilize in the same business model or potentially even infrastructure we currently have. So we are engaging and looking at additional dump resources or adding that to our portfolio, and that continues. And the second part is deciding what is the best appropriate strategy to advance with our with our current expansion projects.

52:26 So those are the things we're considering to look at and as I said hopefully the studies are underway at the moment and hopefully in about six months time we can give you a clearer picture of where that would be going and you know and if there are projects that we pursue what would be the size and the magnitude of them. Fantastic. Thank you. And next we've got, hey, could you clarify the rationale around the dividends specifically the windfall payment? Yeah. Look, I think we also I tried to explain that in the in the presentation. So I think Lou Anne highlighted the principles around, you know, based on our standard dividend policy, what we consider. But we also have decided as a board that we wanna be a sustainable dividend payer, and and therefore, you know, we the expectations about the around the dividend the the normal dividend that we've announced now is in line with with our dividend policy and and what we have can afford to pay payout.

53:28 But given the circumstances around this past years, as we recognize that the cash balance is higher and we have more money due to the that was primarily aided by the the movement in the palladium and the rhodium process. We said, let's look at at that windfall. We recognize it is a is a windfall to the profits and declare that as a once off windfall. Something that we can tangibly calculate and allocate to that, and it we don't contaminate the normal dividend payments with the the the additional cash we've been able to generate. So that was the rationale behind that, and as I said, the the rationale for looking at the full financial year is a combination that it's a tangible, we can measure it, but also, you know, a lot of the capital cash flow because of our project pipeline with the smelters. And I think maybe just worth clarifying, Lou Ann mentioned that four month quotational period or our lag in payment that is is not unique to SYLVANIA. It's it's actually every platinum company that delivers concentrate and offtake to a primary smelter are subject to that same four months quotational period.

54:37 So because that money for the for the financial year that it ended already only flows through in the second part of the year, We said let us look at having December as the cutoff date for that evaluation and then we will look at distributing with our announcements, know announcing what that windfall dividend would be with our February, March results and to distribute in that quarter. Great. Thank you very much. Just kind of conscious of time, think we've time for a couple more. Can you elaborate on the strategy around the exploration assets? Look, and I think again, so during the presentation I said some of it, but I think the the crux of it comes down to as I said, at the scale and the intention we originally added, you know, I think didn't fit into our model. It would be large cash and and relatively high risk. The smelter technology, although that being fairly standard, this the refining technology would be quite novel. It was originally based around the CVMR, the carbon or vapor metallurgical recovery process.

55:42 And and that was from a industrialization really quite risky, and we decided we wanna go for lower risk project, something that fits the skill set and experience and track record of SYLVANIA. And that's why we're considering higher grade deposits, more localized, smaller operations that that that we can do. And and and to determine what is the the real value there. And then based on on the outcome of these studies, if it's if it fits our model and it's something we can do in house, we will pursue that. And alternative, as I said, if it if it proves not to be viable and adding value to our business case and the shareholders, then we would look at rather than selling it out or splitting it off. Fantastic. That's great. I think just on the basis of time, we have answered and addressed a number of those questions we've had in from investors already.

56:33 And, of course, the company will review all questions submitted by investors today, and they'll be published in the investor meet company platform. Yeah. Perhaps I could just ask you just to wrap up, after which I'll redirect investors to to give you feedback, if that's okay. No. That is that's fine. Thanks for the for the opportunity, I think thanks for for the platform. It certainly is is very useful and and user friendly. I think it's also gives us opportunity to reach quite a lot more shareholders in in limited time. And I think in the in the future, I think, you know, COVID brought this doubt that we couldn't travel, but I think, hopefully, we'll we'll receive some feedback to see how the investors feel about it and and have experienced this.

57:19 But I think this would probably form part of our standard reporting going forward to to include this kind of forum to to reach more people. That's great. Look, thank you very much, Scipo and Lauwat. Thank you for updating investors today. As I mentioned before, can I ask investors not to close the sessions? You'll be automatically redirected to the opportunities to provide that feedback the company would love to have. If you access this meeting from our website, the feedback page will appear in front of you. If you access this through the link sent in the email, you'll have to log in. It'll take just a couple of seconds to come through. But on behalf of SYLVANIA PLATINUM LIMITED, INvestomy Company, thank you for attending today's presentation. That now concludes the session. Thank you, indeed. Good afternoon.