Sylvania Platinum (LN: SLP)

Currency in GBP

Last close As at 25/01/2023

GBP1.07

1.50 (1.43%)

Market capitalisation

GBP280m

Sylvania Platinum focuses on the re-treatment and recovery of PGMs including platinum, palladium and rhodium, mainly from tailings dumps and other surface sources, but also lesser amounts of run-of-mine underground ore from Samancor chrome mines in South Africa.

PGM prices, especially platinum, iridium and ruthenium will likely benefit from their use in the future hydrogen economy. Rhodium and palladium will benefit from sharply higher auto sales in H222, as forecast by industry experts. Lower production from nearly all PGM producers will support prices further.

Equity Analyst

Key Management

  • Jaco Prinsloo

    CEO

  • Lewanne Carminati

    CFO

Balance Sheet

Forecast net debt (US$m)

130.1

Forecast gearing ratio (%)

47

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 3.9 7.6 10.9
Relative 0.0 (2.7) 8.3
52 week high/low 111.4p/77.0p

Financials

Sylvania Platinum is a low-risk, high-yielding South African platinum group metals (PGM) dump retreatment operation. The company is highly cash generative with US$138.6m cash at end September 2022, following improved Q123 results relative to Q422. Newly published exploration results include an updated Joint Ore Committee Code (JORC) compliant Mineral Resource Estimate (MRE) for the Northern Limb projects and a JORC compliant scoping study focused on the North Body (NB) of the more advanced Volspruit project, assigning a pre-tax net present value (NPV) of US$27.3m (8.8p/share) at an internal rate of return of 17.9%. This excludes any rhodium contribution, which is still being assessed. We see material potential NPV uplift to the Volspruit project from rhodium, based on a 5.5% rhodium contribution to total PGM ounces; we estimate this could increase the NB value by a multiple of up to eight times. The discovery of the T-Zone reef at the Far Northern Limb (FNL) project is also of considerable significance.

Y/E Jun Revenue (US$m) EBITDA (US$m) PBT (US$m) EPS (fd) (c) P/E (x) P/CF (x)
2021A 206.0 145.0 143.0 35.9 3.6 3.1
2022A 152.0 83.0 81.0 20.4 6.4 3.8
2023E 167.0 97.0 96.0 25.1 5.2 3.6
2024E 180.0 102.0 98.0 25.7 5.0 3.5

Thematics

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