Sylvania Platinum (LSE:SLP) — Sylvania Platinum Limited Full Year Results

0:03 Good afternoon, ladies and gentlemen, and welcome to the SYLVANIA PLATINUM Interim Full Year Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please just simply type in your question and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we'll send you an email to notify you when they're

0:33 ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you could give that your kind attention, we'd be most grateful. And I'd now like to hand over to Jacko Prentloo, CEO from SYLVANIA PLATINUM. Good afternoon.

0:52 Good afternoon, Mark, and good afternoon, everyone, who's on the call. And thank you for joining us for this presentation. And, it's a good great opportunity for us to, again, engage with you on this platform. I think it's the third and investor meet company, presentation that we we do. And, it's been proved very useful in the past, and the feedback is very available. So thank you very much for joining in and giving us opportunity to engage with you. Myself and Joanne Carmanati, our, CFO, will be taking you through the presentation to try and highlight, the most significant, points. And, as Mark said at the end, we'll try and address some, questions for you.

1:38 Just to, kick off, if you look at the 2021 as a a year in in summary and just a snapshot, I think it's a year we're very pleased of. I am very proud of what our team have managed to achieve this year. We've managed to achieve our, stated, forecast of 70,000 ounces for the year. And although it's only marginally up about 1% from the previous year, it was done under difficult circumstances where we've been experiencing lower feed grades and PGM recoveries from the all mix we have. And our plants, every single plant exceeded their production capacity, and we've, had a 17% increase in overall tons treated for the year. Then, combining that with the favorable PJM basket price we've experienced during the year, we've had, on our specific basket, about 83% increase year on year, on the basket price, primarily boosted by rhodium to which we have a unique exposure.

2:36 But, so a very good, environment for us. And, those, production combined with the basket price assisted us to post record, revenue and profit figures for the year. And, our revenue was up 79% year on year, and the net profit, 143% up. And, with all of this and the cash we've been able to generate, we, in a fortunate position where the board has been able to declare a dividend of 4p for the financial year past and which will be payable in December. And that's following on from the recent 3.75 p windfall dividend we have just paid in April this year. So overall, I'm very pleased with the results.

3:24 The the two areas that we do need to focus on and and I'll focus on my is the CGM recovery, which I've mentioned now, and I'll I'll touch a bit on a bit more shortly on it. And then the other one is group operating cost, our cash cost, and Lou Anne will elaborate a bit more in her presentation on it. If we just look at our safety, sustainability, and and ESG, and I think we we all would know that ESG means a lot of different things to a lot of different people. But, obviously, for us at SYLVANIA, it means those, systems, principles, and activities that shape the culture of our organization and and how we interact with both our environment and the communities.

4:09 It's we we have been very strong on on ESG, elements throughout our history as an organization with excellent safety records, good engagement with our communities, excellent environmental records. So it's something we've always been doing. It is being entrenched in our values and and properly communicate and left by our employees. We do recognize in in recent years and and well, probably more months than than years, especially the focus on specific ESG reporting in line with, the United Nations. The development goals become a lot more important for investors and, institutions to see in order to benchmark companies, and we are focusing a lot more, now to try and align our reporting in that regard. But, as I said, we've always had a very strong performance, and we'll continue to, to perform in in this regard.

5:12 Just touching on some of the elements of our safety health and sustainability in the, ESG, parts. You know, from a safety perspective, on its own, we've, made a excellent track record to date in just over fourteen years of operation. We've been fortunate enough not to have a single fatality to date. And and, I mean, part of our low risk business model, where we don't have any underground mines, it assist us, to achieve that in that regard. We do, however, focus then on the next, significant injury, and that is lost time injuries. And we are very proud that we have operations like Dura and Boss who have achieved nine years LTI free or lost time injury free during the year. We have had, unfortunately, had two lost time injuries across the six operations, and that was at, and.

6:01 But I think also worth pointing out that was at eight years LTI free at the time and, five years LTI LTI free when they had those accidents. So I think overall, a very strong record. In terms of environmental, we've also been fortunate that we haven't had any environmental incidents since the inception of the company or or significant incidents, any reportable incidents. And we we we are focusing a lot more on getting now carbon footprinting and assessments done and, understand where we stand in terms of the more parameters, the portable parameters, as I mentioned earlier, in terms of the ESG. One of the areas where I think we've made great progress during the past year was in terms of, processed water consumption, where we've increased, decreased our consumption, improved our efficiencies, by a reduction of 8% year on year.

7:00 And a large contributor to that was our, initiatives where we are recovering scavenging seapage water on the perimeter of our tailings dam facilities and returning that to the plants, and that has been very good to us. And then finally, just on energy consumption, we have significantly lower energy consumption per ton treated than conventional mines and primary producers. So, again, a very good achievement there. If we look at our employees and communities, obviously, both our employees and communities are extremely important and critical for us to achieve our the the success of our business, and we continually engage with both of them. And there are various initiatives and that one could list and and discuss.

7:49 But maybe just to point out one or two on the employees, probably one of the ones we, are the proudest about is the rollout of our employee dividend entitlement, plan during the, period where we are giving our opportunities in the, after our employees the opportunity to share in dividend payments. And we've already in the past year, they shared in the annual dividend, for the 2020 and also the windfall dividend. From a community point of view, again, as I said, are various ones we do, but I think what was positive for me during the past year was especially in terms of the the success and the fruits from our training and leadership programs where we train specific, employees in from our communities in terms of metallurgical and, engineering skills, artisans, which are the scare skills, and and we have quite a union operations.

8:49 And we've been able to employ quite a couple of people completing those learnerships successfully, and I think that's a good indication to us that we're just not employing at at the low level of where the employees are in the community, but we're also upskilling them and making a difference. Okay. If we focus turn our attentions more directly to the operations, And just to orientate you a bit on on where our operations are situated, our operations are typically situated in the Northwest and Mapumalanga provinces of South Africa, and that's almost in the Central Central to northern part of the country, on the eastern and western bushfelt, respectively, of the, the bushfelt complex in South Africa where all the PGMs and chrome resources are situated.

9:42 The orange dots indicate our SYLVANIA dump operations that are currently in production and currently adding, revenue and ounces to the business, and while the green dots indicates our exploration and mineral asset projects on the northern limb of the Buchfald Complex. When we look at, the production profile for the past year, you can see we've we've, had the 70,000 ounces, and we are again forecasting to do 70,000 ounces for this, for the 2022 financial year. And, and then we are forecasting your growth around 72, 73,000 ounces up through 2023 and 2024.

10:28 That particular growth specifically is coming from the execution of our Lesedi and Puyfontein m f two projects that, Lesedi to be commissioned in the second half of this financial year and then Puyfontein in the first half of the next. These modules are similar to the previous project eco modules we rolled out, proven technology, proven benefits, and, we're quite confident that it's a low risk, addition to the business. And on the negative side, only a mild setback in terms of our operations where we had to suspend temporarily suspend our production during August with related to tailings dam, but I'll discuss that a bit more in the focus area slides.

11:19 So just looking at the, at the opportunities, and I I I think I've mentioned already the second ring ring rotation, which is quite proven and and a concept that we've, identified long ago. So I'm not gonna touch too much on that now. I think the, we've been talking for a long time say, where where would external growth opportunities come from? And we continuously engage with third parties or external

11:47 parties to find, identify, evaluate resources. One such example is is off take that we've managed to secure during the past, six months and, where we see it as, in the in the near term and, immediate to near term about two to 3,000 ounces PGMs per year we can do. But we are also embarking on further sampling and evaluation work to see how we benefit and explore, and optimize the assets to gain more PGMs. Most chrome miners, when they develop the mine and the process, focus purely on the on the chrome part of it. And, once you add, especially in the current market environment, you add the PGM side to the business, you are able to, to achieve a lot more with the business. Fine chrome recovery is also, one of our r and d initiatives that is turning into a commercial opportunity now, and that's where we're focusing on recovering the really fine chrome that our current, plants are not able to recover, and that unlocks the potential from tailings dams historically, sterilized or see deemed sterilized, that you can unlock that now. So the idea is that you you sub supplement your PGM revenue stream by increased chrome revenue stream from those products, and therefore, you can retreat lower grade dumps again and extend life of operations. And and we are well advanced with some of those opportunities.

13:13 And then, obviously, you know, our strong cash position assist us to, enable us to do all that r and d and growth. On the, challenges side, and, I think just maybe to to touch on, and I've said earlier, we've been, experiencing lower recoveries and PGM grades because of the ore feed blend, and that's still associated with our host mine slowdown, that started about early last calendar year, related to the, downturn in the chrome markets. We are seeing the chrome markets to recover. But, based on our formal communications we've had to date, we expected the scenario to last another six to, twelve months. But I there are already signs from other chrome miners and analysts to say that, you know, the chrome price speaks to say it's the current trajectory that these they might be upturned sooner.

14:09 However, in the meantime, because we are supplementing these current risings and, raw material with open cost sources, it's more oxidized. It's typically lower grade, and that has a knock on effect on both our costs and the, process efficiencies. The suspension of the Tesseri tailings dam, maybe to put in perspective that this, the current Tailings Dam has been commissioned in about, prior to 2009, on the the city operation, which was then, known as the Phoenix operation, and SYLVANIA acquired that operation in 2017. So, what we have determined through our, routine, inspections and monitoring activities on the mine is that there's an increase in the, phreatic surface or the water level in the dam that, would mean that we could, sacrifice the integrity of the dam if we continue to operate and and, and then, implement mitigating measures. So we have taken the proactive and cautious approach to rather suspend the operations at Lesedi and so that we don't put the operation or environment or our people at risk.

15:21 And we are, as I said, busy with a couple of mitigating measures to try and see if we can get that operation running in the next four to six weeks. We also in the process of constructing the new Lissedi Tailings Dam, which has, been designed and approved, quite some time ago already and has always, been the plan to, go to that dam by the end of the year. And, and and we are just now balancing the period, in between. In terms of the COVID, pandemic, we were fortunate even after the phase two and the second and third waves that we haven't had any significant or, well, any production interruptions.

16:08 And and then our productions continue. We continue to support our employees and and their families, where they are as individuals affected by the virus.

16:20 Just to, maybe put a bit of the the growth plan perspective, I I did mention probably most of these initiatives that we are working at the moment. But this graph at the bottom and that they will just illustrate that our our initial years was primarily growth by adding new plants. You know, we started with only one plant with mill cell building up to seven plants by 2013. And and so initially, it was growth by adding capacity. Between 2013 and '17, you know, we were working on efficiencies, plant throughput rates, all that. And really, if you can call it almost breakthrough decision in 2017 was to execute project echo. Now I think at the bottom of that graph, you can see the black line that shows where we would have been in terms of our ounce profile had we not done echo in, in 2017 or from 2017 onwards. And a lot of times people see growth purely as the quantum of ounces per year increase, but we have also managed for our r and d initiatives and our technology to to grow the company in terms of more resources, more ounces for longer and revenue and enable us to be a steady dividend payer at the moment.

17:35 So we continue, as I said, with the next two phases of that same technology, but then we are also focusing a lot more now on new resources and capacity and, and and to see how do we add on. We have a skill set and experience in our company that can handle and, manage operations efficiently and success And, we're looking at how to leverage that, and we're continually engaging with, third parties to see how we merge that, our PGM skills and experience with, with available resources.

18:11 If you look on the exploration assets and our mineral assets, I think just a brief update is, not a huge lot that happened here during or since the last presentation in in February. We announced earlier that we've launched an additional drilling campaign at the Northern LIMITED resources, and that is now approximately 5625% complete for the two respective resources, and we expect the drilling results and final reports by about mid next year, so, say, June 2022. On the full spread front, our initial mining studies and the process test work has been completed, and we are now busy evaluating the PGM concentrate processing routes and offtakes as alternatives to determine what would be the best viability to get on that in order to inform our business model.

18:59 And we're also just looking at the alternative geological interpretation of the resource to see if we can get a higher grade out of it and streamline the resource. But there will be more to report on this after June next year. Okay. And with that, I'm gonna hand over to Luann just to take us through the financial performance, and then I'll do a close for us at the end. Thanks, Jakku. As you all have noted when Jakku went through the snapshot, SYLVANIA has had an exceptional year financially and reported record revenues and profits. This is mainly due to the basket price, but still an exceptional year for us. Net revenue increased 79% on the prior year.

19:47 The increase in the basket price resulted in an increase of $89,000,000 and the slight increase in ounces added an additional 1,700,000

19:56 The high rhodium price over the financial year accounted for 60% or $123,000,000 of the total revenue, platinum 17% and palladium 14%. Ruthenium and iridium together with copper and nickel made up 6% or $13,000,000 The sales adjustment relates to the ounces delivered at the end of financial year 2020, but only invoiced in the current year as a result of the four months delay from delivery to invoice, which is in terms of our offtake agreements. On the costs unfortunately, but not unexpectedly, the SDO direct operating costs increased 19% on the prior year in dollar terms.

20:45 The increase in operating costs over the year cost year on year was a result of the electricity incurring an average 14.5% increase over the year and higher usage at some of the plants. The 2022 increase has not been confirmed as yet, but is expected to be at least in line with 2021 or possibly higher. We had higher remining costs incurred in order to supplement the lower ROM and current arisings from the host mines, and then this resulted in the higher oxidized open cost ROM and dump material at some of the operations where the reagents included in consumables was higher. Going forward, we anticipate costs to come down slightly as the remining costs stabilize and production increases once the Lesedi and Tuaquintai Mf2 modules are commissioned in 2022 and 2023.

21:39 It was it is however pleasing also to note that despite the increase in our costs, SYLVANIA is still one of the lowest cost producers, which can be seen in the Nedbank cost curve graph, which we've included in the appendix of this presentation. You'll see there, we still remain in the lowest quartile. The group EBITDA, we had EBITDA of $144,000,000 this year, driven again by the metal prices and stable ounce production. Forecasting forward at August prices, where we've seen a pullback in the PGM prices, the EBITDA is slightly lower at the consistent 70,000 ounce target for 2022. For 2023 and 2024, we're forecasting increases due to the increase in ounce forecast and slightly lower cash costs.

22:32 You can see from the various analyst and consensus outlooks that have been included here that it's anyone's guess what the price will do. And even at the lower forecast, the group still remains profitable. We're currently forecasting somewhere in the middle of the analyst forecast, and we're quite comfortable with those forecasts. Moving on to our capital. We had a capital spend for the year of $7,500,000 This includes both the SCO capital and the drilling program on the Northern Lim assets. The STO capital includes stand business, the Lannett ROM plant, the ultra fine screening project at Moynoy, and two of the five tailings dams commenced in the current year. And this cost is included in our SRB.

23:19 For 2022 and '23, capital is higher than previous years as it includes all five tailings dams and the Lesedi and Tufantane MF2 modules, and then the balance of the Northern Limb drilling program is also budgeted in 2022. From 2024, we're only forecasting SIV at this time. Jakub did mention the two growth projects we're looking at, but as the production and revenue forecasts haven't been included in our forward looking numbers, we haven't included any capital forecast yet either.

23:54 On our cash flow, our cash balance increased from the $55,000,000 last year to $106,000,000 a 90% increase on the prior year. Inflow from operations was $68,000,000 and again, this was mostly on the back of favorable metal prices, but also stable production under sometimes difficult circumstances. Included in this net inflow is a $32,000,000 movement in working capital, 1,600,000 interest received and $48,000,000 paid in tax. We've also in net cash flow from operations is the 8,200,000 we paid in mineral royalty tax. Outflow from our investing activities was $7,600,000 of which $7,500,000 was spent on capital and E and E assets as previously mentioned.

24:46 The outflow from financing activities was $22,000,000 and comprised the payments of the financial year 2020 dividend and windfall dividend, which totaled $20,000,000, and then $1,600,000 was spent on share buybacks. The board's very pleased to have declared a 4p dividend for this financial year, and that equates to about $15,500,000 of the current exchange rates and will be payable in December this year. The company remains committed to returning share value to shareholders. The board has declared a fourth consecutive annual dividend of 4p, and it's calculated in terms of our current dividend policy, which takes into account liquidity and forecast working capital cash requirements, debt covenants, which are currently zero for us, but is one of the factors included in the policy if we were to enter into debt, forecast capital spend, forecast metal prices, and of course, any legal considerations in terms of the Muting Companies Act.

25:51 But most importantly, the payment of dividends must be sustainable in the long term. The Board has also taken a decision that we will again do a windfall calculation for the 2021 calendar year And if the average price received for PGMs for the year is higher than the consensus pricing, there may well be another windfall dividend payable in February declared in February payable around April.

26:19 With regard to share buybacks, this always remains on the board's agenda. Unfortunately, we are limited to when we can buy back shares and can only do so when the company is not in a closed period. So with the recent drop in our share price would have been an opportune time for a buyback for shares in the market, the company was unable to do so as we were in a closed period until we released our results today. We have, however, over the last seven years, bought back 47,000,000 shares and canceled just short of 13,000,000 shares. I'll hand you back to Jako now to go through the forecast and company outlook.

26:59 Thank you very much, Joanne. And I think, just, before we we look at pricing, maybe just a a recap again in terms of our basket price. And, Sylvania, as you, might know, is mining two distinct chrome tailings resource. The one is, l g x l g six seams that have a rhodium content of up to 16% and then middle group or m g seams that is slightly lower. But, both of those, resources are, or significantly higher rhodium content than your typical UG 2 or Merensky reefs that the primary, platinum mining companies are mining. So overall, you know, at almost 13% average rhodium exposure for our resources, it is a very attractive position to be in. It, unfortunately, is also a difficult place to be in when you have rhodium price falling like we've seen in the recent month or so, and you tend to get harder a lot harder than many of your competitors.

28:00 However, we've seen the strong increase in the rhodium price over the past year, and we were SYLVANIA also mentioned earlier under the 68% up year on year in terms of rhodium, and also attractive increases on our basket price and, for for our metals. And, overall, our average basket was 83%. I think it's important when we look at the markets that we remain cautiously optimistic about the markets. We do believe the the the markets are still robust, but, you know, the sharp in decrease in the rhodium price recently has just indicated to you that

28:33 you have to be aware of the volatility. If one look at what to forecast, and I've just put here the assumptions that we've used in some of the forward looking graphs in the presentation, and Leanne indicated to you the sensitivities on the EBITDA graph earlier. And we've listed here Nedbank in investment, corporate investment banking, Standard Bank Securities, and also, Ernst and Young consensus forecast. And you can see that on platinum, and gold, everybody is really well in alignment. Palladium it's a little bit more of a spread. But, when it gets to rhodium, there's quite a big discrepancy in terms of what to expect in this next year. And so going forward, so, you would have the net bank and EUI forecast, saying, you know, you're around 16 to $18,000 an ounce for rhodium in the next year or so and then steadily declining and Standard Bank again have it higher. If you add four or five more institution analysts here, I get four or five more scenarios.

29:36 But I think what I just wanna illustrate is there is some variability. We are looking at that variability all the time and trying to, ensure that, we assess. But I think most importantly, what it it makes you realize is that we can just focus on the things we can control. It's nice when we have a upswing in the market and, and and you have the benefit. But I think the the the key to our success in the business is is focusing on what we can control and and looking at streamlining and and growing the business. So if we look at the year ahead and say, okay. What it is that we're gonna continue doing, I think, first and foremost, ensuring that we continue with, safe and profitable production.

30:22 It is that stable and profitable production that they've been generating our cash, during the years and been able to fund our growth projects. You know, the last time we've relied on institutional shareholder funding was back in 2009, and we haven't raised money since then. It was all funded out of our growth and, revenue generation. And then, obviously, focusing on our license to operate, and that goes both in terms of all the ESG principles, regulatory communities, government organization, but also, very much our, host minds and, ensuring that we maintain that synergistic relationship. That, will enable us to then carry on with, more, r and d continuing to focus on the, process in the, technology that, can gain us, give us benefits.

31:16 And, also, it's the exploration projects and, that we've mentioned, Fulspread and the Northern Limb that would be adding value in your mid to longer term, three to five years, and thereafter from now depending on what the outcome of those studies are. And then I think probably the most significant focus of the the next financial year is to be more aggressive in terms of our external growth opportunities. As I said, with the recent BJ markets, there's been a lot more interest and appetite from existing chrome mining operations to look for strategic partnerships in terms of PJMs to unlock value in in the near to to midterm. And we are definitely aggressively pursuing those options.

32:04 And so so just in a to to summarize, we are looking at doing 70,000 ounces again this year, and we're confident that, we should be able to get it. We do believe the market for PGMs, are still robust, in particular, palladium and rhodium, the uranium deficit throughout the year, and good demand, for the PGMs, still in the automotive, vehicles. And, and and and we we believe with the price prices will remain healthy and robust. In terms of capital, obviously, with the number increasing quite significantly from previous years, investors are worrying and say, you know, are you not just spending this capital too easily? And and we just wanna give you the assurance that we are very diligent with our capital, allocation programs and our discipline in controlling it.

33:00 And very specifically, we've committed capital, firstly, to growing the PGM ounce profile for strategic project improvement, and those are like the Lesedi and Twerfontein m f two projects. Then the tailings dam storage facilities we're increasing is at Lesedi, Moyniw and Durambos, the current dams we're building. And, that is specifically aimed at extending the life of operations at those mines and improving our operational flexibility in terms of how we do feed sources and what other historical dams we are able to remine. And, you know, I think important to note when SYLVANIA initially started back in the first plant in 2008, the idea was that in five or ten years time these operations would have been done. And by improving technology, by our r and d, by expanding the the processes, we've managed to prolong this business and do a business that has another ten years plus in it. So the tailings dams construction and focus now is to to cater for that extended life.

34:03 And then finally, I've already spoke about the exploration assets that is longer term. So, but we we did do need to see how we, improve those assets and business case to decide how we're gonna progress with those projects going forward. And then I think I've mentioned already that our dedicated focus on strategic partnerships and external growth opportunities is create receiving a lot of attention and one of our big focus areas. And then now and then just finally taking all of it and upper the buff in consideration, you know, what I've discussed in the presentation, the strong, operational background we're coming from the consistent delivery during the past couple of years, the strong financial performance, our strong cash balance makes me excited about the next financial year. And I think the board as a whole is very confident and excited for about the year and look forward to the rest of 2022 with confidence. And, hopefully, we can provide you with some very positive feedback and update you on the progress as we go along during the year.

35:14 Yes. And that, I think, brings us to the end of my presentation, Mark, and I can maybe hand back over to you. That's great. Jakob, Luan, thank you so much for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. I just want the company to take a few moments to review those investor questions submitted already. Like to Mark, I think that brings us to the end of the presentation. I'm not sure. I see that I've muted the mic here. I'm not sure how long ago it was. No. No. Jacko Jacko, you know I've I I just muted you just to give you a small pause. So I'll I'll bring you back off of mute in just one second. Sorry. Yes. Perfect. I'd also like to remind, ladies and gentlemen, that your feedback is important to the company. And immediately after this presentation has ended, you'll be redirected for the opportunity to provide feedback in order the company can better understand your views and expectations.

36:03 Jacko, Lewand, obviously, investors have the ability to pre submit questions, and I know you've also received a number during today's event. Perhaps I could hand back to you, Jacko, to address those questions. If I could you to read them out and where appropriate give a response and then I'll pick up from you at the end if I may. Okay. That's 100%. Okay. I think, Marco, if I can start with maybe the, first one. And somebody have asked and said, can you please give your views on the PGM commodity price movements and your thoughts on the outlook? And then there was a following, a question group together, the same theme. I said, also, could you please explain how you manage commodity price risk? If you use, if you have sold futures and the market doubles, how do you consider, cash flow impact of the margin payments and how do you and have you considered, using an option strategy?

37:01 So I think I've when we look at the pigeon prices and the market, I think I tried to maybe in those last few slides, give an idea of it. I think, you know, we we what we have seen in in the last few years, and people use rhodium specifically, and I and I think maybe we're focusing on rhodium since it's it's been, making up 60% of our revenue in the, past financial year, and it's a large, exposure in our. So, I think rhodium being, primarily so Africa producing more than 80% of world rhodium, that what happens in South Africa, I think, plays a big role in in what happens with the with the rhodium prices from a supply and demand. Well, from a supply concern point of view, we know that rodent primarily consumed in the auto cats industry, and therefore, the demand is strong. It has been impacted by, by a slowdown in vehicle sales, both related to COVID and also to the the semiconductor chip, shortage that recently, hampered car production sales. But on the supply side, I think more importantly, when we saw the big increase in rhodium last year, it came on the back of the hard lockdown in South Africa where most PJ miners were impacted for that six to eight week period, of COVID when the government put the come the country on a hard lockdown.

38:26 And also in that, same period where Anglo American platinum's furnace blow up and downtime have happened. And and Anglo, again, as one of the largest producers of PGMs in South Africa and and well, and then South Africa and the world created so those two, that's created quite a big shock and from a supply concern point of view. And and I believe that's one of the big reasons why we saw the rhodium price increasing significantly. They are obviously other reasons as well, but those two in particular have, have spiked, widespread concerns about the future rhodium supply. And as the mine started ramping back up and as, the, Anglo also started releasing the inventory, suddenly the supply of rhodium have eased and and and that we've seen a stabilization in the price.

39:23 I think what's positive is that the rhodium demand and supply demand equation still is forecasted to remain in deficit. Rhodium we know in its application in nitrous oxide gas emissions control is unique and unlike platinum and palladium where you can look at substitution between the two depending on where the price go, palladium is quite unique. So I think that remained robust and going strong. I don't think at the historical levels that we forecast that I, I would be, hesitant to give you a number. I think I've given a range in the presentation where we expect it to be, but I think it's very difficult to pinpoint it. And, you know, with platinum and palladium, I think palladium definitely also forecast it to remain in a deficit, and and therefore, the price should be strong. People say, yeah, but what about substitution with platinum? And I think when that occurs, you know, we will see uptake in the uptick in the platinum price again. And luckily, we have exposure to both of those metals in the market.

40:26 And so and I think I hope that also the part on the commodity price movements. In terms of, us looking at, futures, or hedging on the metals, we don't have a hedging strategy. We we we don't sell any futures. And as a board, you know, we've we've had a made a decision. The volatility and enabled the in order to predict what the price are gonna do is very difficult. And it's also not like there are many institutions. I think in South Africa, there's one institution that is prepared to to hedge rhodium, for instance. And, you know, I always use the example. I said that had we hedged two years ago, we would have missed the last year rhodium run. And and and at the time when we were seeing rhodium levels at 20 to 30,000 25 to $35,000 an ounce, you know, you could afford that. It would be a good opportunity, but, then there was also quite widespread forecast in terms of where it will go to.

41:28 So, no, we we currently don't have a a strategy and don't intend to in the in the short term to, to do that. So we are not exposed in a drop, you know, so if the prices would pull back, we are selling at the at the market price and based on our off taker. And, yeah, so there's there's not, any features or hedging strategy there. I think if I go to the next question, it's related to power and said how are the challenges of power supply impacting you in particular? Will problems at Madupi Power Station impact on production output at SYLVANIA in the next three years? So, I think there are two points here. Generally, how are we impacted? And I did say in our, results announcement, you know, under some of our focus areas, we we have had some downtime during the year.

42:24 Not related to load shedding in particular or related to the supply capacity of the national utility of Eskom, but more related to vandalism and cable theft of the infrastructure. That's what we've been been seeing. We as as a group haven't really been interrupted by the capacity of power in the in the recent years. And even, you know, when we have the high stages of load shedding in South Africa, the mines managed to still keep on going. But the the supply infrastructure from the surrounding communities and and so on, that remains a concern as unemployment after COVID certainly increased and poverty is is high. You know, we we get more of those instances, and that does cause power disruptions, and we are working couple of strategies to see how do we those shorter term disruptions we address.

43:15 When one look at the question about Madupe power station and maybe for the people who are not aware of the Madupe story and, we've had in in recent months, I think in this past month, there was an explosion at one at the Madupe power station where some of the generating units have been damaged. And I think if you look at Madupi on its own, I think it's less than 10% of the overall Eskom power generation. I think it's just less than five gigawatts if I if I have it right, and I I might stand to be corrected. But it's generally it's definitely less than about 10% of Eskom's total generating capacity. And since the explosion happened, you know, in that first few days after the explosion, there was some domestic load shedding in the country, but since then, nothing big on the on the overall, affecting the mining arena. So we don't anticipate that to necessarily, have a impact on us. However, you know, power in the mining industry remains a concern and as the mining industry need to grow and our national utility supplies remains basically flat or or even declining because of availability.

44:24 Sometimes it it is on the high end the agenda, but government is trying to address that with the recently announced regulations that would allow mining companies or or individual companies to generate up to a 100 megawatt of power. There are some of the regulations around that that is not, that still needs to be clarified in terms of can you put it back in the grid and how you will be be done. And and I think that will alleviate also a load on the national utility. I think in, in the last month or so, the Minerals Council of South Africa released the paper that just quoted that said that, you know, just some of the mining clients or or, you know, members of the Minerals Council of Africa have already identified about 1.6 gigawatt of, independent power facilities that they're ready to roll out. You know? And I think, that that would be those kind of initiatives would be significant to help to alleviate the pressure on the overall grid in South Africa.

45:24 So, I I hope that would, resolve it. But we're keeping our eye on that and and continuously evaluating our options. Another question we got, and there was actually a few, a few questions related, I think four or five questions, all asking about the impact of the recent civil unrest or social unrest in South Africa. And as I said, is that have that been impacting on, Slovenia's operations at all? And, I think the we were fortunate enough that I can answer and say, no. It has not. We, our operations, as I shared on that map earlier, is, in more to the Central and and North Northeast of the country, Mapumalanga province and and Northwest, and most of those, unrest and rioting and and looting has been in the, on the coastal areas, KwaZulu Natal, and also in Gauteng, you know, central, and, we haven't been affected.

46:29 That being said, I think it's important for us to maintain that good relationship with our surrounding communities and ensuring that, you know, when when there is instances like that that you have at least the support of your of your neighboring surrounding communities. I think even in South Africa, some of you might have seen in the news that, when malls and areas have been looted, you had other areas of a community standing together protecting and helping the police and the armed forces to protect it. So, I think it's always good maintaining good social relations with our, communities, but we are fortunate that we haven't been impacted and don't expect to be impacted by any of the, unrest that we have seen in July.

47:18 I think there's another question to say, can you talk a bit more about fundamentals of the business and the likely impact of switching to, EVs? And, and I think, and if I interpret it correctly, is is, if I assume EVs refer to electric vehicles and and then reading the question, I guess it's, the investor was wondering the impact on metal prices with the switch of vehicles to electric vehicles rather than in the normal combustion, conventional combustion engines. And and would that have an impact because of a lower catalyst, demand?

48:05 I think there's, when you look at the development and the trends in EVs, recently, it they always see quite a, a variety of different electric vehicles that you can get, and it it depends. Is it battery electric, hydrogen electric, fuel cell, vehicle? So, I think there is definitely worldwide we can see, major, progress in that regard, and and the development is is progressing quite well. But I think what is for us from a PGM, market and company perspective, quite encouraging is that, a lot more of the focus or a lot of the focus is at fuel cell and, you know, the hydroelectric vehicles where there's some form of, that PGM still plays a role. And I I mean, in some of the fuel cell vehicles, you you even have, a higher PGM consumption per vehicle than than on the conventional catalyst.

49:00 So I think there is opportunity still there. I think when you look at especially ranges vehicles can travel, your more industrial trucks, buses, trains kind of vehicles. Battery power on its own is becoming very expensive, very heavy to fuel it. And therefore, hydrogen electric vehicles and fuel cell vehicles becomes a much more attractive option. And I think that's where we still expect PGMs to still play an important role. And and I don't think in the in the near near term, we are overly concerned about that. And I think the markets, as we said earlier, should remain robust. Another question. Mark, you must guide me on time. I'm not sure how much time we we have. I'll go to one of the next questions. Yeah. Please please. Yeah. Yeah. Feel free. There's a I think there's a few more for for you to to go. If you could spare the time, that'd be brilliant.

49:56 Thank you. Another question I had is to say, will the company consider acquisition in the short to medium term? And and I think, you know, I I've said that, we are constantly looking at growth projects and opportunities. You know, there's and I would never rule out acquisitions anywhere. We we are in the fortunate position that we we have an alpha cash balance and a and a good business model and a production or or a a revenue profile going forward that, we certainly would be able to do that. But it's important for us that the, investment fundamentals are, attractive and that we can continue adding value.

50:43 I think, rather than maybe pure acquisitions, what we are seeing a lot more is more partnerships and and also maybe pool and share kind of agreements. We as I said, there's you quite often get a coal mining partners that have the the coal mining resource, but, have realized through our business model and some of our peers in the in the industry that when you combine it with the PGM business case, you know, you could actually mine chrome resources that in the current chrome market, you would not want to, exploit, and it would not be worth, your while. We are significantly, as we are, evaluating quite a few significant opportunities in that regard, to see how is there a business case that we can can add value. So as I said, be it potential acquisition, but I think more probably, partnerships, strategic partnerships or agreements that we might typically consider.

51:41 Yeah. So maybe it's an opportune time because I can see for every question that you seem to answer, there's another two or three that follow shortly afterwards. I'm also mindful of time, and I know that you have a couple of meetings scheduled for after this. Thank you firstly to all investors that have taken time to submit their questions. And of course, all of these will be presented to the company for them to review and where appropriate, we'll publish responses back to you. But but but perhaps, Schecka, I could just ask you for maybe one final question. I know investor feedback is important to you, and then we'll ask you for a few closing comments and then direct investors. Okay. Thanks. Okay. Let me close over with this one. I think there's also, again, three or four different questions that they're they're exactly the same line. And this one said, please, could you elaborate in detail on the contract life of mine and and the growth initiatives moving forward? So I think, first of all, maybe during this in the contract life of mine, I think the one other question said, you know, for how many years do you have still access to current risings and and Rome.

52:40 So our our existing agreement with our host mines, where we currently operate off of the life of mine of those operations. And, you know, with our host mine being a private company and and not a listed entity, you know, you don't always have the the full resource disclosures and and the line of sight in the in the market. But we we we do know that we have it for life of mine. They have a mineral right that is, still approximately another twenty five or fifty years. They have one of the largest resources, scrum resources, largest and most attractive resources still in the country, And I I believe one of the the the largest in the world. So we believe there's there's quite a significant life of mine. What could change if we don't add growth projects that the profile the ounce profile could change where we're currently looking at saying, we believe we could comfortably be between, say, between sixty and seventy or 75,000 ounces for another ten years.

53:39 After that, we might do when you rely purely on the current rising and and raw material, you could, that could taper down, maybe 10,000 ounces or or so. That's still a profitable life based on our current pricing and, cost assumptions. So so we believe there's there's adequate life. But I think more importantly, and and we have seen it, during our initial growth profile this first couple of years, is that, being the size company that we are, we, we our fixed cost basis well, as I said, we have our fixed cost covered and but we have the potential with our current base to manage more and to unlock more potential. And if you add more ounces and you can grow that ounce profile, your unit costs can be can be lowered and becomes more attractive.

54:33 So we certainly are looking into adding more more growth projects. And as I I think the previous two questions and what I said in the presentation covered that as well that we are aggressively looking at at opportunities. I believe there are some attractive opportunities, available, and I believe that, we are, ideally and uniquely suited to add value, in in such a synergistic relationship and that we would be able to to grow the company going forward. So, yeah, with that, I I thank you for for the questions. Yeah. Okay. Thank you very much indeed. And and once again, you to everybody who submitted those questions. Yeah. Look. I'm gonna redirect investors to provide you some feedback so they can give you your you their thoughts and expectations.

55:20 But perhaps before doing so, I could just ask you for a few closing comments. Thanks, Mark. Look, I think as I started and said earlier, it's it's been a difficult year for us, particularly, you know, still dealing with with COVID and and and more on a emotional and impact on on the people rather than physical production related. And, with for those months being down, it was presented challenges to us. But I'm extremely proud of how our team came together and overcame those challenges to produce a solid set of results. And I'm I'm also extremely proud and and, know, very positive about the fact that we are able to again declare a solid dividend and and have, you know, a solid growth in our dividend in our annual annual dividends over the past few years. Leanne is very quick to point out to me to say, listen. Investors must not expect that you're gonna double it every year. And I and I think, you know, we we certainly I would love to do that. But I think what we said is we wanna be a stable and consistent dividend play payer.

56:24 And, you know, we wanna return value to shareholders. And I think, what we've been doing over the years and what we continue to, what we aim to continue to do should be able to put us in that position. So thanks again for all the support. You know, it's it's not, always easy. I think everybody else has his own ideas of how the company should be run, but, hopefully, we're doing it, the best we can and in a way that returns value to not just our stakeholders here in on the minds, but also to our shareholders on the call. Thank you very much. Yeah. Hello, and thank you very much indeed for updating investors once again. Could I please ask investors not to close this session? It should now be automatically redirected in order that to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team at SYLVANIA PLATINUM, we'd like to thank you for attending today's presentation.

57:14 That now concludes today's session. Good afternoon to you all.