Sylvania Platinum focuses on the re-treatment and recovery of platinum group metals (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.
Demand for PGMs dropped in 2023 and remains under pressure due to increased recycling of PGMs, particularly in China. Demand continues to be muted in 2024, with inventories remaining high. In the longer term, we see significant headwinds for electric vehicles in most countries except China, and increased regulatory and emissions legislation pressure, driving increased PGM demand and positive price momentum. Production pressures in South Africa and Russia could provide a further underpin to prices.
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Jaco Prinsloo
CEO
Lewanne Carminati
CFO
Forecast net cash (US$m)
96.5
Forecast gearing ratio (%)
N/A
% | 1M | 3M | 12M |
---|---|---|---|
Actual | (15.9) | (24.4) | (39.6) |
Relative | (15.7) | (25.8) | (44.9) |
52 week high/low | 85.5p/43.4p |
Sylvania Platinum suffered a delay in production recovery during Q424 following a strike earlier in the year, while the PGM basket price remained sluggishly low. The cash balance, however, remained strong at US$97.8m. Our valuation of 112.2p/share allows for improved production in FY25 and a recovery in PGM prices in later years. Our valuation offers upside potential from the Thaba joint venture, as well as Sylvania’s exploration assets steadily moving towards production. The new Thaba joint venture will augment PGM production and add a chromite concentrate revenue stream, while the exploration assets offer optionality to production to be exploited once PGM prices recover.
Y/E Jun | Revenue (US$m) | EBITDA (US$m) | PBT (US$m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 151.9 | 82.8 | 80.9 | 20.4 | 3.1 | 1.9 |
2023A | 130.2 | 65.9 | 67.0 | 16.7 | 3.8 | 2.2 |
2024E | 84.7 | 17.0 | 19.9 | 5.8 | 10.9 | 8.7 |
2025E | 106.4 | 30.8 | 29.8 | 7.7 | 8.2 | 6.3 |
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