Sylvania Platinum (LSE:SLP) — Interim Results

0:01 Good afternoon, and welcome to SYLVANIA PLATINUM LIMITED interim results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in 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 it receives to the meeting itself. Have the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll.

0:27 I'd now like to hand you over to Jakob Princely, CEO. Good afternoon to you, sir. You much, mister Saboru, and thank you. Welcome to everybody else who's joined us in the webinar. As always, it's we welcome the opportunity to share our information with you. And myself and Grant Covenati, our CFO, will be taking you through our presentation today. We are presenting our half year results, the first half of the 2024 financial year that ended up into at December 31. So I'm just as we go into the presentation, I will show you just to point your attention to the disclaimer that, you know, we the information we share here is not intended for you to to make investment decisions.

1:15 I'll give you an overview of the performance. Okay. And if we look at the the the company and just what SYLVANIA about, maybe for those of you who are not familiar with SYLVANIA, we are a cash generative, evident paying mid tier platinum mining company that has been in operation for just over fifteen years now. And, yeah, explaining both our historic success and also looking our the strategy and vision we apply going forward. The board and management continuously focus on maintaining safe and profitable production and ensuring that we maintain and strengthen our license to operate. And we focus on strategic investments in r and d and business improvement so that we can assure we maintain a sustainable cash generative business. And that has been the key enabler for us over the past couple of years to grow our operations and also for us into the future to pursue further growth opportunities and to return attractive value to our shareholders.

2:24 So the past number of years, we have reinvested most of the cash we've generated back into our operations, growing our operations from from one to six operating units, and we are currently building the seventh unit. And and we've also been able to do significant share buybacks and, you know, pay stable dividends since 2018. So if I've if we go just into the what the business is about and where operations are located, so the results we're gonna share with you today will the revenue and production figures you will see is primarily originating from the current SYLVANIA dump operations. That's six current chrome and PGM beneficiation plants that we have operating.

3:13 Three of them, Moinoye, Millsell, and Lesedi on our western limb of the South African Bushveld Complex and Lesedi, Tuifontein, and Lennox sorry. Lennox, Durambos, and Tuifontein on the Western LIM of the Bushveld Complex. To the north of the Western LIM is also the new Tawba JV, the joint venture operation we've announced in August last year. That's currently the project in execution. And and that is a similar process flow and design and business model than our other businesses. And then in terms of the other side of our business and all all the assets we own is the exploration assets in our portfolio, and these are a number of attractive shallow open pitable resources and and mining projects that the company have owned for more than ten years already, and we've acquired a number of years ago Mhmm.

4:10 For which we own approved mineral rights and that we are currently improving studies to better understand and improve the resource classification on these projects. But I'll deal more about that in the rest of the presentation. So if we just look at a glance at the results for the half year just concluded, I think the first thing, like with most other operations in the in the industry or other PGM companies, the PGM basket price is probably the most prominent factor and something to say that. And we have seen in our basket in particular, we have had a 48% decline year on year of this off year period compared to the corresponding one in 2023 where we've been at $2,513 per ounce in '23. We are now at $1,311 an ounce. So a significant decline. However and I think due to our position in the market, we have still been able to post a good financial terms for the Spirit.

5:24 Despite the heavily declined PGM price, we still been able to post a net revenue of $40,800,000, a group EBITDA of $7,300,000. And after paying our final dividend at the during December and funding our capital commitments of our project pipeline, we're maintaining a cash balance of $107,000,000 at the end of the period. And given the strong financial performance and also taking our the the cash balance and doing financials into account, the board has approved a 1p dividend per one year share as as the interim dividend, the first interim dividend for the year. And Lou Anne will elaborate a bit more on the dividend in the finance part of the presentation. And then, obviously, worth noting that, you know, the financial performance is always underpinned by a strong production fundamentals and that cost control. And we this whole year, again, has been no exception. We've had a very good production performance achieving 58,405 ounces, four e ounces. If you equate that to six e, it would be 48,670 ounces

6:35 for the period, which is basically on par with the corresponding period in '23. And and also very important, you know, when you're in a price environment like we currently are, I'm I'm very proud that we've been able to maintain our position at the lowest quartile of the industry cost curve at $853 per ounce before we group cash cost. And so, overall, I think very satisfactory performance for the year and and well in line with expectations except the the basket price that that obviously impacted on on our operations. If we were to just now focus a bit more on the operations itself and and how the ounce production came about, the yeah. I've already said here the ounce production was about on par with previous performance.

7:27 And that is despite quite a significant drop of 9% in PGM feed grades for the period, but we have managed to improve PGM feed tons by about percent, PGM recovery by about 2% as we optimize the recently commissioned m f two circuits at Lennox and Griffin during the period, and also, know, we're working progress stock at the end of the period. I'll deal on the one of the next slides a bit more about the feed grades. I think if we look at the dump operations and the next financial the whole of the financial year, we are looking at optimizing the Lennox fine grinding circuit and also the fine screening circuits that are add ons to the m f two that's recently commissioned, and that should be, you know, optimized during the next quarter or two.

8:15 And, we're hoping to bring further efficiency improvement. And then also at Duranboss, we are supplementing, the feed with a higher grade third party material where we source the external source for the next eighteen months. In terms of the addition of our Tava JV project, you will see on the twenty twenty five and twenty twenty six production bars, right at the top of the green blocks of the car bar JV contribution coming in with the project contract to be commissioned in the second half of the '25 financial year as we originally announced, and then eventually taking our overall production profile just over 80,000 ounces, about 83,000 ounces for e or a 104,000 ounces 60 for the period.

9:05 If we look at this is just some detail on the individual operations, and I'm not gonna take you through all of it. Probably just worth highlighting are the two aspects already I've I've mentioned in terms of the lower feed grades, and that was primarily at Lesedi. And at Twerfontein, we've had lower feed grades. Lesedi was due to lower dump sources being mined and where they were in the on the current mining plan with a surface dump. And at Twerfontein, had lower volume and grade of current arising from the host mine. At both these operations, we have secured and ensured that we have higher grade third party resources to supplement the feed grades. And we're also working at with those mine collaborating in terms of improving the characterizing volumes and grade for various initiatives.

9:57 So, overall, we we still anticipate our annual production to be between twenty seventy four and seventy five thousand ounces for the financial year, and we expect operations to to perform well. I think the one other thing probably worth pointing out, and a lot of people ask about the power situation and risk in South Africa. And as I've pointed out from previous presentations, the one operation from SYLVANIA that have been exposed to to load curtailment was has been Lesedi. We've suffered three hundred hours of production downtime during the 2023 financial year. However, with lower load shedding during the past half year, that reduced only about eighty one hours downtime.

10:43 But as of the the third quarter, so post the period end, we have successfully commissioned the LASED backup generators. And and and LASED will therefore now be able to to run even though even if they are long curtailment period. So we don't anticipate any other operations to be impacted by load curtailment or load shedding going forward at the moment. Okay. I'll hand over to Leanne to take us through the financial results, and then I'll close off the presentation again. Thanks, Jakob. Looking at the financial results for the reporting period. For the first six months to December 31, the company recorded a net revenue of $40,700,000.

11:33 This includes four e PGM revenue, byproduct revenue from ruthenium and iridium, as well as base metals, copper and nickel. It also includes the sales adjustment for ounces delivered at 06/30/2023, but only invoiced in the 2024 financial year. And the cost of sales, we had a $3,000,000 increase in cost of sales, which I'll provide a little more detail on in the next slide. Our royalty tax came down as a result of a drop in the basket price. The calculated percentage is applied to the revenue resulting in the lower royalty tax for the period. The other expenses line is mostly administrative and corporate costs, and these are incurred in rands, dollars, and pounds sterling in South Africa, Bermuda, as well as The UK.

12:23 Finance income includes interest on invested cash, and this cash is has earned an average of 5% per annum as well as interest on the loan to Cromtek for their portion of the Tawba CapEx as well as the loan to Ford Africa relating to the sale of the Grass Valley that was concluded last year. The income tax expense line includes the normal income tax on taxable profits generated at our SDO or SDO plants and taxed at the South African corporate rates of 27%. It also includes the deferred tax movements and dividend withholding tax on the dividends declared by SYLVANIA METLS to the parent entity.

13:12 We look at our financial performance and our revenue and cost in a little more detail. You'll note that revenue for the period was impacted almost entirely by the drop in the basket price, much like the rest of the industry. Although the production pro has remained fairly consistent, the movement in the metal prices has shifted the revenue contributions of the six e metals with the biggest change being that of the platinum and rhodium contributions. Platinum increased 17% to 40% of our six e revenue, and rhodium decreased 12% to 30% of our revenue. With stable production, the operation still remained cash generative despite the drop in the basket price, and we continue to focus on what we can control being costs and optimizing production.

14:01 We did, however, have higher inflation increases for higher than inflation increases for electricity and reagents as well as an increase in our labor complement compared to the prior year corresponding period. And as a result, our cash cost per full ePGM ounce for the reporting period was $682 and group cash cost $833 per ounce.

14:26 All our operating costs are incurred in rands, and the largest contributors, as you can see in the bottom right of the slide, are our labor, power, mining costs, and consumables. But despite the increase in our costs, we're still one of the lowest cost producers on an all in cost basis, and you'll see that in the Nedbank industry cost curve, which is later in the presentation.

14:55 Touching on our EBITDA, we we have a $7,300,000 EBITDA for the reporting period, again, impacted by the lower basket price. At our current production guidance and a basket price based on the average forecast metal prices of a number of institutions, we've estimated a full year EBITDA between 22 and $24,000,000. If prices remain at the current spot, then this EBITDA is estimated to be around 18 to $20,000,000 as is indicated by the orange dotted line. Details of the price assumptions are included in the appendix on slide 39 if you'd like to have a look at those. Even in the current price environment, the company has a strong balance sheet.

15:46 Cash generated from operations was $10,700,000 for the six months to December. 8.4 $4,800,000 was paid in taxes to the South African revenue services, and that was provisional income tax in December as well as dividend withholding tax. We spent $7,400,000 on capital, and this includes capital for our SDO, $1,300,000 on the Taba JV, and $400,000 on exploration projects. The spend on the STO capital includes tailings dams, the milling and fine grinding grinding project at Lenox, lost payments on the m f twos, as well as the backup power. The capital estimates for the second half of the year include all budgeted capital.

16:36 But as cash management and preservation in the current price environment is critical, the management and board are constantly reviewing the capital, and each project is assessed prior to commencement, and we take the cash flow payback and contractual requirements into account. The company also paid the final dividend declared for the financial year for the last financial year in December, and that amounted to an outflow of 16,700,000.

17:10 Returning value to our shareholders has always been a priority for the board. And since 2018, the company has paid out $98,000,000 to shareholders in dividends and $3,000,000 to employees under the employee dividend plan. We've bought back 61,000,000 shares and canceled 24,000,000 shares. And as communicated last year in February, the board has revised the dividend policy with the intention to distribute a minimum of 40% of the annual adjusted free cash flow, split into a one third interim and a two third final dividend. So based on their free cash flow forecast for 2024 and adjusting for the Taba Capital, the board has declared a 1p interim dividend per share.

17:59 If we have a brief look at our ESG, ESG is entrenched in the daily lives of the company and its employees, and we continue to align our ESG strategy with the company's values. To just touch on a few of the highlights for the the six months, on the environmental side, the revegetation trial has been progressing well. It's currently in the final phase, and we will be concluding the trial in April 2024. Initial reports indicate that there are two possible solutions to rehabilitate the Tailings Dam with the third one that is currently being tested. This solution will significantly reduce the cost of rehabilitation and the impact on other areas as we'll no longer have to need to track topsoil to rehabilitate these dams.

18:50 We've also partnered with the Endangered Wildlife Trust in conservation and protection of threatened species and ecosystems in South Africa. On the social side, the Durbanburg plant remained more than eleven years LTI free, and the company's had no fatalities since the first operation was commissioned in 2007. Our female complement has increased to 23.47%, and safety and awareness campaigns are run regularly for the and for the reporting period under review, the annual safety campaign over the festive season was run from November to January, and the anti gender based violence campaign was launched in November. The company maintains its clear and transparent reporting to all stakeholders and continues to make a significant contribution to the South African economy.

19:42 And we are also in the process of reviewing the QCA corporate governance code updates, and we'll apply those where applicable for the full financial year. I'll now hand back to Yaku to take you through the the growth strategy and market outlook. Thank you, Anne. And and now that we have discussed and reviewed the past period's performance, I think it's it's we'll try to take you just through some of the projects looking forward and also our strategy for growth.

20:16 But I think before I start this, it's important to just stress that despite the current PGM price environment, you know, we still maintain a robust outlook for the industry. And, certainly, we still see an opportunity for growth, and especially from our position in the industry. And we will continue to explore and and do continue to explore low risk opportunities, especially where there's a high yield potential and especially where they can be brought into production fairly quickly. So to this end, you know, we our growth strategy focus on a on a few items. Firstly, as we've discussed in in the STO graph already, we look at how can we further unlock potential from our existing suite of assets. And that's both the dump operations where we have in improving technology, roll out new like, the m f two circuits we've done find carbon initiation so that we unlock more value from the the dump operations we already have, but also from the exploration assets we already have. And and that's all covered here in just a moment.

21:19 And then we further focus on how we can replicate this proven business model on outside of our current operations, but on similar kind of operations. And the Talbot JV is a perfect example of such an initiative where we have taken a business with proven business model from our current operations and a similar process technology and flow sheets and apply that to a to to another operation. And and then, you know, finally, we continue to explore external growth opportunities where we also can replicate or can employ our current technology, but in different metals and jurisdictions as well. So that's a continuous area for our exploration and r and d teams to focus on.

22:05 So if we go into the Talwa JV first then, and as I mentioned already, we, you know, we've announced it last year, I covered it in the previous presentations. I won't go through all the key features of the project, but I think what one aspect, for instance, to highlight on the Java JV is the the fact that it's transformative to the company in the sense that it's the first project that introduced a chrome a chromite concentrate revenue stream. And it's not just a treatment charge. There is a full full revenue stream from the sales as part of the joint venture. And, you know, which is under the especially when you view the current PJM market, it brings a very attractive revenue stream to the market. At at our attributable portion of 200 to 210,000 tons of chrome a year, This could add this project could add between 30 and $55,000,000 of revenue to Sylvania's revenue stream per year.

23:05 And so it's a nice diversification of that. I think then also just in terms of the progress, we we have progressed very well with the detailed design. Most of the process design is complete. There'll always be some design in terms of structure and the final electrical up until the final construction. But we are on track with our detailed design. We've it enabled us to place all our long lead item orders already. So the procurement of that has been done. The procurement of the other items and equipment is on track and in progress. We have commissioned earthworks and civil construction towards the end of quarter two. So that was November, December last year, and that is currently in progress with teams on-site.

23:53 And our operational management teams are currently busy with operational readiness planning as well to make sure the we have we have all the infrastructure and logistics in place before the project commission. So overall, all the work streams are are on track to to for us to ensure we deliver the project on time during the second half of the '25 financial year as we've indicated before. Then just moving to the exploration projects. And, as I said, we the aim here is for us to to see how best we can unlock value for shareholders. I think a lot of people say it's fundamentally different from your dump operations. You know? And now we're planning to to go into mining. I think I've said it a couple of times before.

24:42 The intention is is is not for us to say, listen. We suddenly gonna mine these projects, but they they have been on our books and and balance sheet for a number of years. And, and, you know, by improving the resource classification from exploration target to a nonresource estimate in completing a feasibility study. At every step, we improve the value that we could potentially unlock for our shareholders. And that will enable us to make the right investment decision to decide, do you spend these operations out? Do you do an outright sale of it? Do you partner with somebody who has the mining expertise and you stick to the processing of it? Those are decisions we can take only once these the we fully understand the value of these projects. So in terms of understanding the value, in terms of full spite, some of you might remember, we've announced the first mineral resource estimate for the full spike project in October 2022.

25:38 At that stage, we focused only on the north ore body on the project and as a proof of concept study initially. And, also, at that stage, the south ore body and the rhodium assays wasn't at a job compliant level yet. And and we spent the last year now to improve the classification of the and also to include the rhodium at the jaw compliant level so that we can then ultimately published a updated mineral resource estimate. And that was to be published on the February 16. And the table at the bottom of the slide just gives you an idea of this. It resulted in ultimately a 28,000,000 tons of of ore at and and about 2,200,000 ounces of of p g four PGMs.

26:31 I think through the exercise, and I'll just briefly touch on the on the next slide, you know, I've included the table for tables for reference so people will see how the the individual metals

26:44 are making up the mineral resource estimate. But I think just notable in the on the description or the summary on the left is that the self ore body contributed an additional 38% to the overall volume of the resource. Rhodium constituted about 6% of the overall OE grade. And and, you know, we also managed to almost double the PGM content. The original mineral resource estimate at 1,100,000 ounces of PGs, and we now have 2,200,000 ounces. So, certainly, this exercise have added significant value. The next step for full spread now is to complete a updated preliminary economic assessment or scoping study as it's also known.

27:32 And we have commissioned SRK in that regard. The the study is already in progress, and they are using the updated mineral resource estimate. In that study, we should have those results by the end of our financial year between around June, July in order for us to decide if we progress to a prefeasibility study or what the next step for the project would be. In terms of the far northern LIM projects, and that is Aurora in Accra. At the moment, we don't have any new information to to publish on that. We we we have ever continued with our by by understanding and defining the mineralization along the strike in order to determine and prove the continuity.

28:27 We have a visual mineral resource estimate we published on on Aurora, for instance, was only over La Pucella area that only constitutes about 12 to 14% of the overall strike length, and and that constituted about 16,000,000 tons. So if that there's continuity across the entire strike length, this resource is potentially significantly more. So our work at the moment is to better define that continuity and then to work towards the clearing mineral resource estimate on the entire strike length, And then only will we decide on the next steps of the scoping study or or what next to do with that project. So and I think the this slide, again, just summarize a lot of what I've said into timelines and, you know, the different streams looking at both the existing SYLVANIA dump operations, the new dump and facilities, and the exploration assets.

29:24 On the existing dump operations, I've already mentioned the Linux optimization that's in place. I've mentioned also that we, in the short term, have quite attractive high grade third party material that's available to us to supplement feed. And and then longer term on the existing operations, we believe that if we can progress our fine chrome technology, we can unlock potential in some dormant dams as additional revenue stream and also extending operational life in certain areas. On the new dump operations, I've I've covered the Taba operation already in quite details. I'm not gonna talk about that again. But then just worth noting that we have also we opportunities at both the Eastern and Western LIMITED respectively where we're engaging with specific coast mines in terms of technical commercial due diligences where we have exclusive right to chrome tailings material, both the chrome tailings and run of mine material.

30:23 And we're hoping that that can translate similar to the Taba JV into new operations at the East and the West respectively. And then we're working towards finalizing those studies in order to determine the way forward. And the exploration assets, I think, I've I've just explained maybe just the one point worth pointing out that if there's an investment decision taken on that, you know, your your time to production is typically four to five years from it. It is a lot faster than underground operations because of surface operations, but it is still quite a significant amount of time. Just briefly touching on some of the the market fundamentals, and people always ask us about it. Just to put into context how the market impact on SYLVANIA.

31:17 And, you know, I've included just the platinum, palladium, and rhodium trends here as gold is less than 1% of the growth split. But you can see a significant decline in palladium and rhodium over the period. Palladium, 43% decline over the past year, and rhodium, 63% decline. And you can see then at the top right graph how that translates into the four e grade impact. And and as I've mentioned earlier, 48% decrease over the past year. So so that is significant in the process. And I think, you know, bearing that in mind and and understanding the cost, the the the prices, it you start to better understand the importance of managing your cost and maintaining, you know, a position very low on the cost. If you look at how the prices have declined in recent years, if you look at the industry cost curve, you can see that the red line is is, you know, the the spot basket price trends.

32:15 And you could see that most operations in the industry are not able to turn a profit under the current price environment. And that is important to play, first of all, in terms of sustaining your operations. But secondly, you know, on the longer term, might impact supply and demand fundamentals. So that's always worth noting for. We are very fortunate and grateful that we are able to maintain our position in the bottom of the industry cost curve. Looking at the specific metals and just in terms of users to try and understand the market a bit better, and, you know, I've I've been talking to to various analysts over the the last couple of weeks, and it's very difficult to to make an outright prediction.

33:00 What we can try and do is look at what the supply demand do. Certainly, palladium and rhodium point of view, it's primarily driven by the automotive sector. The primary use is in the auto catalyst. Seen in palladium is about 84%. Rhodium is about 90% of the use, where platinum is a bit lower at about 41%. Looking at the supply and demand, you know, platinum is expected to be in deficit in the and continue to be in this in the short to medium term. While palladium is in deficit at the moment, it's expected to move in slight surplus in the medium term. And that is if nobody cut palladium production. And I just showed you the industry cost curve.

33:46 It's unlikely that people will sustain the production. But if we assume the the production stays on, palladium will be in surplus. And then rhodium is in a slight deficit at the moment and a bit balanced for the medium term. You know? Then it it varies between slight deficit to slight surplus. I think the important thing is if you look just at the supply demand fundamentals, you would have expected the price to be stronger for all the all the metals at the moment. We suggest that, you know, it's not just the supply demand that plays a role. I think the global social political status plays a role. I think when you have conflict in in in the the Russian Ukraine conflict, some of the inflation pressures internationally, that all plays a role on the on the current prices.

34:38 But the fundamentals are still strong. In platinum, with the use in the hydrogen economy and the industrial use of platinum, also the investment amount of platinum, You know, platinum demand should be strong. And even in palladium and rhodium, there's always the big debate about the internal combustion engines being substituted with electric vehicles. And I think it's been generally accepted and over the last couple of months or or years that that decision will probably not happen as fast as everybody anticipated. There's a lot more structural issues to to to consider charging infrastructure, raw material availability. So we believe that palladium and rhodium demand will be stronger for longer.

35:24 And and so on and, you know, with with that in in mind, you you look at the the price forecast, and I probably should have included the spot prices on the current outlooks we have here from some institutions. You know? And you can see that the forecasts are currently quite a bit higher than than the current spot price. So everyone's expecting the price even in 2024 to recover. You know? To what exactly it's gonna be is is the more difficult question, and you can see with how the different outlooks from Standard Bank, for instance, for platinum to to Liberum and Nedbank differ, that every analyst and every institution have their own own views on exactly how it's gonna play out. And we always include this as sensitivities, but it's very hard to pick a exact number.

36:13 But these are just the prices that's associated with the sensitivities, Lou Anne, explained in the EBITDA graph earlier in the presentation. So I think, you know, just in closing then, you know, looking at the the investment case for SYLVANIA, I think our shareholders would would agree that SYLVANIA remains a attractive low cost, low risk cash generative business. I hope that we have developed a track record over the years of strong performance and ensuring that we can deliver significant value to our shareholders through a combination of stable and growing dividends and as well as significant share buybacks over the years, and that we're well positioned to continue doing this for the years to come. Especially where we are positioned on the cost curve, I think we're in a unique opportunity to to look at opportunities to grow and to take our business forward.

37:10 So, yeah, that concludes the current presentation. I'll hand it back to Alexandra now for some questions, Perfect. Yeah. Hello, Anne. Thank you very much for your presentation. What I'll do is I'll just bring your cameras back up at this point. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. Just while the company take a few moments to review the questions that have been submitted today, I'd like to remind that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And, Yaka, if I could just hand back to you just to read out those questions and give responses where it's appropriate to do so, I'll pick up from you both at the end. Thank you. So I'm I'm I'm just looking at some of the presubmitted questions on there. I think the first one, Lou Anne did answer in the presentation, and somebody asked, what blended interest rate does the company enjoy on the significant cash pile? And I think, you know, there's and and I like it in the financial performance. It's it's a Average of five average percent.

38:17 Of 5%, and because some of it is offshore invested and some of it is in South Africa. The second question we had, I said, are you prepared to use some of the company's cash in order to pay dividends in the future? I mentioned this because of the falling profits, due to the low basket price of the various elements such as radon. I think we have explained in in our dividend policy that, you know, we we have stated a minimum of 40% of the free cash flow, for instance, that we we distribute to shareholders. But we also said we will take into account the capital requirements and forecast. And I think this year, already, as an example, the 1p interim dividend pence interim dividend be declared, taken that into account already. So we have promised shareholders before that we would, for instance, fund the Talbot JV out of the existing cash operations. So when we do the the calculation of the free cash flow in terms of how much we are able to distribute, we would already, you know, adjust for for instance, Talbot capital we have said we will do. So in a sense, we're already using some of the cash pile to to fund the dividend. And we we will continue to evaluate as we go forward the financial position and also the the need for, you know, cash allocation as we go forward. So every time when we have to make a dividend decision, we would review the strategic capital requirements for growth opportunities. We

39:48 review our cash requirement for maintaining adequate working capital in in difficult times. So, yeah, that's always a decision. We do appreciate that, you know, a lot of people say you still have a large cash balance relative to to what you probably need to hold just for working capital, but it's also that what enables us in this industry, especially in the downturn in industry like we are downturn cycle where we're now, that you can capitalize on opportunities if you are able to, to acquire or expand your operations. Somebody asked, are there any reason why SYLVANIA why the share buybacks was forced? Management said they would start the preview after the previous investor meeting, but nothing happened. So I think there's there's a couple of things. And always with the share buybacks, we have to, again, like with a dividend, and the philosophy I just explained to decide how much money you have available to distribute for a dividend or for a share buyback is looking at at what you strategically need the cash for and what the markets are doing.

40:54 I think in the current environment, after the, last meetings, we we saw, quite a sharp further decline in in metal prices and, where we expected and hoping for a recovery. And so we didn't think it would be prudent at that stage to to use more cash on on the share buybacks at the time. And but we continue to evaluate our position. And, you know, when opportune and affordable in future, we will again look at share buybacks. Somebody asked, what is the basket price breakeven? You know? And and they said it's a thousand dollars, for example. So because of our different operations, some of our operations are larger scale and higher grade operations like for instance, versus older operations of lower grade. So that breakeven price would vary for operations.

41:51 You know, we we got up there a place like like Griffin ten now are well below 1,000. I think we even we're below 6 or $700 an ounce when then some of the older operations are higher. If you look at the profit margin for the for the company, you would see that we're probably closer to a thousand 200, thousand $300 per ounce breakeven, but depending on what fee credits you are putting through through the operation. So we got yeah. As I said, it's always it's also varying for different operations. The next question said, why has the basket price declined so significantly? The hydrogen economy may will it be a large boost for platinum demand because it's used in electrolyzers? How do you see that playing out? I think I tried to explain that.

42:45 As I said, one of the first things that we are seeing at the moment and a lot of analysts frustratingly mentioned in the reports is that the price is not currently following pure supply demand fundamentals. There are other the political and economical factors at play. So looking at the demand, you're 100% right with platinum having to play a more pronounced role in the hydrogen economy going forward. Also, with palladium and rhodium, as I said, we are expecting to be stronger demand for longer. That should also be boost positive for prices. So, yes, it's not a 100% sure why we've seen the current supply. There's there's a lot of speculation in the market. One of them on palladium specifically is that, you know, you potentially have Russian palladium supply going directly to China because of, you know, some of the other economic constraints in in trade.

43:43 And, you know, that might even be going to China at a discount, and that might impact on us. But, I mean, that's not substantiated. And but, you know, it it certainly there's all indications that there's more to the current price decline than just the supply from demand fundamentals. Then somebody have also said that the decline in market prices suggest that changes in demand are not matched by changes supply. In other words, PJM produces optimized production and sales accepting whatever the price the market offers, but would it be preferable to scale back sales at these prices and simply building inventories or simply reducing mining activity when prices are soft.

44:29 Yeah. And I think, you know, that is very difficult to to do, especially if you have multiple commodities. We, for instance, in the production where we is there's obligations to the host mine in terms of chrome production. So if we would cut down operations, you know, you have certain contractual obligations to bear in mind. And a lot of the bigger mines, you know, it's it's it's not always possible to scale down your workforce and ramp them up again. Although, we have seen some significant announcements. I think Agla Platinum announced potential 3,700 workers or or jobs at risk. Just Agla Platinum. There was another figure of up to about 4,000 workers between Impala and Spania mentioned. So there are big announcements coming through. So far, people the the big some of the majors have announced labor restructuring and cuts, but not necessarily production.

45:26 And, you know, you can you can probably cut labor and maintain production the short term, but I do believe on the long term, structurally, it will impact on on supply if that is is prolonged. So I think that you see do see those dynamics playing out in the industry as we're going on. And and I think that ties on. There's another person who who asked, are there signs of industry players shutting production? And and as I mentioned, you know, yes, they we have seen some of the majors making significant announcements already. There's another question that says, cost information was very useful. Was that just the platinum, or does this also carry through to palladium and rhodium?

46:19 The lowest cost producer. Yes. Sorry. And when when we say the lowest cost producer, it is on the four e typical four e basket price. So it includes rhodium and palladium. So so that graph, the industry cost curve we showed is on the average four e basket price. So most of the producers, they would have all the elements in their basket, although at different ratios, and that's why you saw the step up or step down on the cost curve, and it's on on how the individual baskets for individual mines might differ, but it definitely is the four e price. Somebody else also asked you, are there any commercial sense in not selling all of the rhodium produced until prices become more profitable?

47:05 I think I explained earlier, it's very difficult for us to you know, the the four metals in the basket are all produced together. And we produce one concentrate that contains all these metals, you know, typical polymetallic concentrate that gets sold to the smelters who then have the offtake. So it's very difficult for us to to handle individual metals differently or to delay or to delay the revenue streams. There's a question that says after the tragic events in Brazil in recent years, has there been systematic reassessment of risks of insolvenia's tailings dams? Yes. I think we've done in terms of our ESG significant work on on our tailings dams in the last couple of years.

47:56 Part of it is introducing audits and aligning with the GISDM, the global industry standard on tailings dam management, which is currently at a higher standard than our existing standards in in South Africa. So we certainly do. This is significant focus, and they always been a significant focus on our tailings dam. So I think it's it's always worth pointing out that, you know, structurally, there are some big fundamental differences between our tailings dams and the the Brazilian impacts. So first of all, you know, the weather conditions is is a lot different. Topography is different where a lot of the Brazilian tailings dams are built in valleys or up against mountains because of the topography.

48:46 Our tailings dams are mostly on a flat surface. Also, the way the Brazilian dams typically had hundreds of millions of tons and up to a 100 meters in elevation high, the tailings dams. You know, our biggest tailings dam go up to three and a half or 4,000,000 ton and maybe 25 meters or 30 meters in construction. So certainly from a risk profile point of view, we are not nearly in the same category. However, saying that tailings dams remains one of the highest priorities from a risk management point of view in the industry. It doesn't matter who we are both in terms of the potential, you know, the safety of people, but also, you know, the reputation risk if something goes wrong as happened with the Brazilian clients.

49:36 And, yes, I think that brings us to the end of the of the questions I've I've seen in the presentation. So, Elsandro, I don't know if I end back to you. It it looks like Perfect. Questions. Thank you very much for answering those questions you can from investors. And, of course, the company can review all the questions submitted today, and we'll publish those responses out on the investor meet company platform. But just before redirecting investors to provide you with their feedback, which you know is particularly important to the company, Jakob, could I just ask you for a few closing comments? Yeah. Thank you very much. And I think, you know, while I've, said during the the discussion, it's it is a challenging, time. It is, we are cautious, about the industry, but at the same time, I'm I'm I'm also excited about potential opportunities.

50:24 I think if you position yourself in the industry where you where you are, you know, maintaining your cost low, keeping your production consistent and stable, You know, you're able to capitalize on opportunities when they when they come around. So we're certainly focusing to continue to do the things well that we can control. The stuff we can't control, we're certainly making sure we put measures in place to mitigate against any potential risk. And and yeah. So I think, for our track record, the ethics and transparency, how we operate, we we would continue to hopefully, continue in the market as a partner of choice for for growth and further mergers and also the opportunities going forward. And I hope our shareholders agree and and support us on this journey.

51:16 And hopefully, we have some better news about the the market and the PGM prices the next time we meet. But in the meantime, as I said, we we're doing what we can well and ensuring we are to return the best value to our shareholders that we can. Thanks. Perfect. And thank you once again for updating investors today. Could I please ask investors not to close this session? As you know, we automatically redirect it to provide your feedback in order that the management team can better understand your views and expectations. This will then take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of SYLVANIA PLATINUM LIMITED, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you.