Sylvania Platinum — Lower rhodium prices overshadow strong production

Sylvania Platinum (AIM: SLP)

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Research: Metals & Mining

Sylvania Platinum — Lower rhodium prices overshadow strong production

Sylvania Platinum saw a significant quarter-on-quarter reduction in EBITDA in Q423 due to lower rhodium prices. We have lowered our rhodium and palladium price forecasts for the next two years, because of predicted demand in China and some de-stocking from OEMs, and have also reduced our long-term assumptions to allow for the current uncertainty. Our FY23e EPS has been adjusted downwards to 18.3c, with FY24e and FY25e EPS reduced by 40% to 9.0c and 11.2c, respectively. Our revised valuation is now 118.2p per share, 32% down from our previous valuation of 173.7p per share.

Metals & Mining

Sylvania Platinum

Lower rhodium prices overshadow strong production

Q423 results update

Metals and mining

3 August 2023

Price

69p

Market cap

£181m

US$1.28/£; ZAR17.71/US$

Net cash (US$m) at 30 June 2023

125.0

Shares in issue

263m

Free float

88.2

Code

SLP

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(10.2)

(24.6)

(19.9)

Rel (local)

(10.8)

(22.6)

(20.5)

52-week high/low

113p

66p

Business description

Sylvania Platinum focuses on the re-treatment and recovery of platinum group metals 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.

Next events

FY23 results

September 2023

Analyst

René Hochreiter

+44 (0)20 3077 5700

is a research client of Edison Investment Research Limited

Sylvania Platinum saw a significant quarter-on-quarter reduction in EBITDA in Q423 due to lower rhodium prices. We have lowered our rhodium and palladium price forecasts for the next two years, because of predicted demand in China and some de-stocking from OEMs, and have also reduced our long-term assumptions to allow for the current uncertainty. Our FY23e EPS has been adjusted downwards to 18.3c, with FY24e and FY25e EPS reduced by 40% to 9.0c and 11.2c, respectively. Our revised valuation is now 118.2p per share, 32% down from our previous valuation of 173.7p per share.

Year

end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(p)

P/E
(x)

Yield
(%)

06/22

152

81

20.6

10.3**

4.3

14.9

06/23e

134

67

18.3

5.8

4.8

8.4

06/24e

110

35

9.0

3.0

9.8

4.3

06/25e

126

42

11.2

4.0

7.9

5.8

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Normal dividend of 8.0p and windfall dividend of 2.25p.

Strong production offset lower rhodium prices

Q423 EBITDA was 20% lower than our forecast, mainly due to an 18% q-o-q decline in the US dollar basket price. This was partly offset by Q4 production that was 7% higher quarter-on-quarter, with FY23 production coming in at 75,469koz 4E versus the guidance of 72,000–74,000koz 4E. Successful commissioning of the flagship Tweefontein MF2 plant helped to increase overall group recoveries by 3% in Q423. Sylvania Dump Operations (SDOs) cash costs per 4E PGM ounce were 1% higher in South African rand terms and 4% lower in US dollar terms because of a 5% fall in the rand.

Near-term forecasts cut

Due to the lower rhodium spot price and uncertain supply/demand situation, we have revised our rhodium price assumptions for the next two years: down 44.6% in FY24 to US$6,000/oz and down 47.1% in FY25 to US$7,500/oz. We have also reduced our FY24 price forecasts for palladium by 12.9% from US$1,503/oz to US$1,309/oz. As a result, we have lowered our EPS estimates from 14.8c to 9.0c for FY24 and from 19.3c to 11.2c for FY25.

Valuation: Rhodium price decline leads to significant downgrade to 118.2p/share

We value Sylvania at 118.2p per share, down from 173p per share previously. Our valuation includes exploration assets at book value of 13.8p per share. The reduction in our valuation is mainly driven by the lower basket price on the back of the reduced rhodium price forecasts. There is potential for further upside for the Far North Limb and Volspruit South Body exploration projects, for which there are not yet published mineral resource estimates.

Rhodium collapse with moderated long-term upside

The rhodium price has collapsed during Q423; it has dropped by 50% since the beginning of April 2023, with a 41% decline since the beginning of June 2023 alone. Sylvania is very sensitive to the level of the rhodium price as the company has up to 12% of the metal in its prill split. We had already reduced our near-term forecasts for rhodium in our 4 May update note by 18% for FY23 and 20% for FY24 and highlighted the sensitivity of our valuation of 11.5% for every 10% reduction in the rhodium price. At that stage, we did not revise our long-term rhodium price forecasts of US$17,595/oz from FY27. However, the subsequent decline in rhodium spot prices to around US$4,100/oz has necessitated further forecast adjustments, including a sharp moderation to our long-term forecasts.

Rhodium is used mainly in emissions control in catalytic converters or autocatalysts for cars, light- duty trucks and heavy-duty trucks. China is the largest car market in the world where demand has collapsed because of its COVID-19 shutdowns. This has resulted in a build-up of unsold China 6A emissions-compliant car stocks, which are being sold before 6B-compliant cars are brought in for sale. Furthermore, Chinese and Western fibreglass manufacturers have thrifted their rhodium content in the dyes used in the manufacture of fibreglass and this thrifted metal is now available for use by the autocatalyst-makers. As a result, supply has increased and demand for rhodium reduced.

The deadline for sales of 6A-compliant cars in China has been extended to December 2023 and, as a result, we think that current levels of rhodium prices will persist at least until then, and possibly into 2024. By 2025, however, Euro 7 and Tier 4 (US) legislated emission limits will come into force and heavy-duty emissions legislation in these and other jurisdictions around the world will see higher demand and better prices beyond 2025.

Despite the current price being US$4,100/oz, it is still at a level higher than it was in May 2019, which was the point at which the rhodium price began its substantial rise (see Exhibit 3).

Changes to PGM price forecasts

Given the prevailing rhodium spot price weakness and the uncertain near-term outlook, we have again reduced our near- and long-term rhodium and palladium price forecasts (Exhibit 1), which follows the prior reductions in our price assumptions made in May.

Exhibit 1: Edison updated PGM price forecasts (average June year-end prices)

 US$/oz

2021

2022

2023e

2024e

2025e

2026e

2027e

2028e

2029e

2030e

Platinum

1,089

932

969

1,110

1,200

1,238

1,269

1,323

1,378

1,500

Palladium

2,400

2,210

1,757

1,309

1,310

1,350

1,388

1,419

1,429

1,200

Rhodium

20,124

16,158

11,429

6,000

7,500

7,500

7,600

7,700

7,800

10,000

Gold

1,799

1,796

1,937

1,819

1,749

1,681

1,617

1,555

1,555

1,555

Ruthenium

564

664

490

479

500

537

585

615

646

550

Iridium

5,066

4,451

4,451

4,670

4,800

4,846

4,945

5,031

5,125

5,000

Source: Edison Investment Research, ALG, Refinitiv

This compares to our previous forecasts as shown in Exhibit 2.

Exhibit 2: Edison updated (April 2023) PGM price forecasts (average June year-end prices)

 US$/oz

2021

2022

2023e

2024e

2025e

2026e

2027e

2028e

2029e

2030e

Platinum

1,089

993

1,000

1,164

1,199

1,243

1,283

1,312

1,355

1,394

Palladium

2,400

2,210

1,711

1,503

1,507

1,610

1,700

1,700

1,700

1,700

Rhodium

20,124

16,158

11,778

10,836

14,184

16,574

17,595

17,595

17,595

17,595

Gold

1,786

1,796

1,868

1,750

1,749

1,749

1,749

1,749

1,749

1,749

Ruthenium

564

664

480

470

468

500

500

500

500

500

Iridium

5,066

4,661

4,406

4,608

4,716

4,805

4,924

5,012

5,106

5,206

Source: Edison Investment Research, ALG, Refinitiv

The rhodium market, at around a 1Moz pa demand, is small compared to the 10Moz pa palladium market, the 8Moz pa platinum market and the gold market at 130Moz pa. Volatility in the rhodium market is high because it is a less transparent market and, when significant supply suddenly comes from a previously unconventional source, like the glass industry, fluctuations in its price can be significant. When demand returns, the rhodium price could recover swiftly.

Our PGM price forecasts assume an increase in FY25 because of expected higher vehicle sales combined with higher demand as Euro 7 legislation for light vehicles comes into force and Tier 4 standards come into play in the United States and North America, possibly followed by China 7 emissions regulations (though the date of implementation is not yet certain).

A rhodium price chart over the last five years (Exhibit 3) shows its volatility compared to other PGM prices. Our adjusted rhodium forecast profile now allows for a recovery to US$10,000/oz by FY30, supported by increased vehicle sales and supply constraints, followed by a stable price thereafter, which is 43% lower than our previous long-term forecast levels. We consider this a prudent level in the current environment, with the potential for future revisions as market visibility improves. Please refer to the Sensitivity section below, which highlights such revision potential from our downgraded valuation.

Exhibit 3: PGM price change over five years

Source: Edison Investment Research, Sylvania Platinum data, Johnson Matthey

Quarterly results

Q423 saw a 22% increase in plant feed versus Q323, which was 4.5% higher than our expectation. PGM plant feed increased by 11.6%, 12.6% higher than our estimate, with a 5.7pp decline in feed grade from Q323. 4E PGM and 6E production were 6.4% and 6.6% ahead of Q323 (5.1% and 3.7% ahead of our expectation, respectively).

Achieved basket price was 18.2% down on Q323 and 26.2% lower than our expectation, mainly because of the lower rhodium price, resulting in 4E revenues 28.0% lower than expected and total revenue (allowing for sales adjustment) 26.9% lower than our expectation.

Total South African rand operating costs were 10.6% lower than we had forecast due to our anticipated higher cost increases than Sylvania achieved. Total US dollar operating costs were 15.4% lower because of a 5% fall in the rand against the US dollar.

On the back of a lower PGM basket price, Q423 group EBITDA was down 20.2% and was 45.7% below our forecast.

Cash balance decreased to US$125m from US$144.2m on the back of the company’s interim dividend of 3p per share, capex of US$6.2m and rand depreciation affecting South African cash balances in US dollar terms, as well as US$13m in taxes (dividend withholding tax, provisional income tax and mineral royalty tax). The increased capex (US$6.2m) in Q4 was spent on work on tailings dams at various plants and the MF2 plant at Lannex.

Exhibit 4 shows the quarterly results and the variance between our forecasts and Q423 financials.

Exhibit 4: Comparison of Q423 results with Q323

 

Q323

Q423

Q423e

Q423 vs Q323

Q423 vs Q423e

Production

 

 

 

 

 

Plant feed (t)

575,973

702,236

671,689

21.9%

4.5%

Feed head grade (g/t)

1.92

1.81

(5.7%)

PGM plant feed (t)

322,366

359,658

319,463

11.6%

12.6%

PGM plant feed grade (g/t)

2.98

2.89

3.16

(3.0%)

(8.4%)

Total 4E PGMs (oz)

17,926

19,072

18,139

6.4%

5.1%

Total 6E PGMs (oz)

22,884

24,383

23,513

6.6%

3.7%

Basket price ($/oz)

1,932

1,581

2,143

(18.2%)

(26.2%)

Financials (US$m)

4E revenue

25.0

21.8

30.3

(12.8%)

(28.0%)

By-product revenue

3.2

3.5

2.6

8.2%

32.7%

Total revenue before sales adjustment

28.2

25.3

32.9

(10.4%)

(23.2%)

Sales adjustment

(1.7)

(0.9)

0.5

(50.0%)

N/A

Total revenue

26.5

24.4

33.4

(7.9%)

(26.9%)

Total operating costs (ZARm)

279.6

289.8

324.3

3.7%

(10.6%)

Total operating costs

15.7

15.5

18.3

(1.4%)

(15.4%)

Other costs

0.73

0.70

0.71

(3.6%)

(0.7%)

EBITDA

9.8

7.8

14.4

(20.2%)

(45.7%)

Net interest

1.58

1.78

0.83

12.8%

114.9%

Net profit

6.1

3.1

(48.7%)

Gross margin (%)

40.6

36.5

45.1

(10.2%)

(19.2%)

Basic EPS (USc)

2.3

1.2

(49.4%)

Capex

1.9

6.2

231.8%

Cash balance

144.2

125.0

(13.3%)

Average ZAR/US$ rate

17.76

18.68

17.69

5.2%

5.6%

Spot ZAR/US$ rate

17.81

18.89

17.81

6.1%

6.1%

Unit costs (US$)

SDO cash cost /4E PGM oz

688

660

(4.1%)

SDO cash cost /6E PGM oz

539

516

(4.3%)

Group cash cost / 4E PGM oz

843

824

(2.3%)

Group cash cost / 6E PGM oz

660

645

(2.3%)

All-in-sustaining cost (4E)

932

881

(5.5%)

All-In cost (4E)

1,007

1159

15.1%

Source: Edison Investment Research, Sylvania Platinum accounts

Valuation

We have revised our valuation for producing assets downwards because of our updated rhodium forecasts, which has reduced our EPS and long-term cash flow forecasts. We have maintained the value of the exploration assets at book value at 13.8p per share, resulting in a total valuation for Sylvania of 118.2p per share, down from our previous valuation of 173.7p per share.

Valuation of producing operations: 104.4p/share

Edison values operating mining resources companies at a 10% real discount rate based on the dividend discount model (DDM), allowing for a constant currency approach to forecasts.

Our longer-term forecasts used in our DDM allow for maximum supportable dividends towards the end of our explicit forecast period (FY40), which results in a 100% payout ratio in FY40 and implied thereafter. Prior to FY40, and given the high current cash balances on Sylvania’s balance sheet, we allow for a gradual cash drawdown via higher payout ratios (ie dividend payouts somewhat higher than the net cash generated by the business), resulting in a US$50m cash balance at the end of FY40 compared to the FY23 ending cash position of US$125m.

As a result of the meaningful reduction in our near-term rhodium and palladium forecasts and the moderation of our long-term rhodium forecasts, our valuation for Sylvania’s producing assets has been reduced by 34.8% to 104.4p per share from 159.9p per share. This adjusted valuation allows for some moderating effects relating to long-term cost inflation and cash payout assumptions, where we have reduced our levels of conservatism relative to prior valuations (weaker South African rand moderating US dollar costs and reduction in cash balance to US$50m by FY40).

Valuation of the exploration assets: Book value of 13.8p/share

We continue to conservatively value Sylvania’s exploration assets at its book value of US$46m or 13.8p per share. We had previously flagged upside potential in this valuation of up to 59.1p per share because of Volspruit but, in the light of our rhodium forecast downgrades, this upside potential is under review. We will reassess this upside, as well as the upside from the Far North Limb and Volspruit South Body projects, once Joint Ore Reserve Committee (JORC)-compliant mineral resource estimates are published by the company.

Rhodium sensitivity

The key risks (both upside and downside) to our valuation relates to PGM prices, with cost increases at the operations in rand terms and the currency impacts of the rand to the US dollar also playing a role. Because of the importance of rhodium to Sylvania’s valuation, we have given sensitivities of its value to the rhodium price in most of the reports that we have published.

In our May update note, we showed in Exhibit 5 that the base case value of 160p per share (operating asset value) reduces to 123p per share, or a 23% drop in value, with a 20% decline in the rhodium price. With the adjustment of our long-term rhodium price forecasts, the actual reduction in our producing-asset valuation was also higher at 34.8%, albeit allowing for some offsetting factors (long-term US dollar cost inflation and higher cash payout assumptions), this results in our base case value of 104.4p per share (Exhibit 5).

Exhibit 5: Rhodium sensitivity analysis

 

30% Lower Rhodium Price

20% Lower Rhodium Price

10% Lower Rhodium Price

Base Case

10% Higher Rhodium Price

20% Higher Rhodium Price

30% Higher Rhodium Price

Valuation (US$m)

240

279

318

357

396

435

474

Valuation (p/share)

70

82

93

104

116

127

139

% Change

(32.8%)

(21.9%)

(10.9%)

0.0%

10.9%

21.9%

32.8%

Source: Edison Investment Research

We show the sensitivity of our downgraded Sylvania producing asset valuation of 104.4p per share in Exhibit 5 to lower and higher rhodium prices, eg a 30% drop in the basket price from current levels would result in Edison valuing Sylvania’s operating assets at 70p per share or a 32.8% decline on our current value. A 30% rise in our long-term rhodium price assumption would result in an increase in our producing asset valuation to 139p per share and our combined valuation to 153p per share.

Financials

End-June (Q423) cash was US$125m, having declined from US$144.2m at the end of Q3 because of the company’s interim dividend of 3p per share (US$9.9m), dividend withholding tax (US$1.3m), mineral royalty tax (US$2.5m), provisional income tax (US$9.9m), share buy-backs (US$3.6m) and increased capex (US$6.2m) in Q4 spent on the work on tailings dams at various plants and the MF2 plant at Lannex.

Exhibit 6 shows our forecasts to FY25. We see a decline in EBITDA to US$39m in FY24e due to our lower forecast PGM prices and anticipated cost increases. The new MF2 circuits installed at each of the SDOs, bar Lannex (due to be installed in H124), will further improve metal recoveries.

We estimate that costs will rise by 6.3% in FY24 due to continued inflation and the possibility that ESKOM (South African power utility) power cuts will become significantly worse from FY24 onwards. As a result, power costs are likely to add to total costs.

As our PGM price forecasts rise in FY25, we see a rebound in EBITDA from US$39m in FY24 to US$46m in FY25. Our EPS forecasts for the next three years show declining headline EPS (HEPS), from 20.4c per share in FY22 to 18.3c per share in FY23, falling further to 9.0c per share in FY24 (when we see the rhodium price averaging US$6,000/oz) and rising to 11.2c per share in FY25, in line with our PGM price forecasts and cost increases that we anticipate because of the factors mentioned above.

We expect ordinary dividends to reduce in FY23 to 5.8p per share, from 8.0p per share in FY22, and to 3p per share in FY24, before rising to 4.0p per share in FY25.

We expect Sylvania to continue to be cash generative with little or no debt over the next few years. Because of this ability to generate cash, we forecast cash levels in FY24 to increase to US$135m (currently US$125m) and US$152m in FY25.

Sylvania paid out its first interim dividend of 3p per share in April this year, in line with its new dividend policy which is to pay out a minimum of 40% of adjusted free cash flow for the financial year.

While our forecasts from FY26 onwards (not shown in Exhibit 6 below) have also been negatively affected by reduced PGM forecasts (rhodium in particular), the impact has been less pronounced due to a forecast improvement in PGM prices (with our FY30 rhodium price forecast of US$10,000/oz representing a more modest downgrade). In addition, our longer-term US dollar cost levels have been moderated due to the benefits of a weaker rand.

As a result, while our gross margin is forecast to decline to 35% by 2025, compared to 42% in our previous set of forecasts, it steadily improves thereafter to above 45% in subsequent years as PGM prices are expected to recover and expense efficiencies are anticipated.

Exhibit 6: Financial summary

US$m

2019

2020

2021

2022

2023e

2024e

2025e

Year ending 30 June

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

 

 

 

 

 

 

 

Revenue

71

115

206

152

134

110

126

Cost of Sales

(45)

(47)

(55)

(62)

(64)

(68)

(76)

Royalties Tax

0

(1)

(8)

(7)

(4)

(5)

(6)

Gross Profit

26

67

143

83

66

36

44

EBITDA

30

69

145

83

66

39

46

Operating Profit (before amort. And except.)

24

64

142

80

62

33

41

Intangible Amortisation

0

0

0

0

0

0

0

Exceptionals

0

(10)

0

0

0

0

0

Other

(9)

(9)

(5)

(7)

(8)

(8)

(8)

Operating Profit

24

54

142

80

62

33

41

Net Interest

1

2

1

1

5

1

1

Profit Before Tax (norm)

24

65

143

81

67

35

42

Profit Before Tax (FRS 3)

24

56

143

81

67

35

42

Tax

(6)

(15)

(43)

(25)

(19)

(11)

(13)

Profit After Tax (norm)

18

51

100

56

48

24

30

Profit After Tax (FRS 3)

18

41

100

56

48

24

30

Average Number of Shares Outstanding (m)

286

280

272

272

263

263

263

EPS – normalised (c)

6.4

14.6

36.7

20.6

18.3

9.0

11.2

EPS – normalised fully diluted (c)

6.2

14.3

35.9

20.4

18.3

9.0

11.2

EPS – (IFRS) (c)

6.2

14.3

35.9

20.4

18.3

9.0

11.2

Dividend per share (p)

0.0

1.6

4.0*

8.0*

5.8

3.0

4.0

Gross Margin (%)

36%

58%

69%

55%

49%

33%

35%

EBITDA Margin (%)

43%

60%

70%

54%

50%

35%

37%

Operating Margin (before GW and except.) (%)

34%

55%

69%

52%

46%

30%

32%

BALANCE SHEET

 

 

 

 

 

 

 

Fixed Assets

93

74

86

93

103

103

102

Intangible Assets

53

43

45

46

48

48

48

Tangible Assets

38

30

40

46

54

54

54

Investments

2

0

0

0

0

0

0

Current Assets

59

89

188

187

181

182

205

Stocks

2

2

4

4

3

2

2

Debtors

8

12

69

53

44

36

42

Cash

22

56

106

121

125

135

152

Other

28

19

9

8

9

9

9

Current Liabilities

7

9

14

11

9

7

8

Creditors

7

9

14

11

9

7

8

Short term borrowings

0

0

0

0

0

0

0

Long Term Liabilities

18

13

16

18

23

22

22

Long term borrowings

0

0

0

0

0

0

0

Other long-term liabilities

18

13

16

18

23

22

22

Net Assets

128

141

244

251

251

256

276

CASH FLOW

 

 

 

 

 

 

 

Operating Cash Flow

25

71

114

92

75

46

42

Net Interest

1

2

2

2

5

2

2

Tax

(8)

(15)

(47)

(24)

(18)

(11)

(12)

Capex

(8)

(5)

(8)

(16)

(17)

(5)

(5)

Acquisitions/disposals

0

0

0

0

0

0

0

Financing

(1)

(18)

(4)

(20)

(0)

0

0

Dividends

(1)

(3)

(20)

(23)

(26)

(19)

(10)

Net Cash Flow

8

41

39

20

(1)

13

17

Opening net (debt)/cash

14

22

56

106

121

125

135

HP finance leases initiated

0

0

0

0

0

0

0

Other

(0)

(7)

12

(5)

5

(3)

0

Closing net (debt)/cash

22

56

106

121

125

135

152

Source: Company accounts, Edison Investment Research. Note: *Excludes windfall dividend.


General disclaimer and copyright

This report has been commissioned by Sylvania Platinum and prepared and issued by Edison, in consideration of a fee payable by Sylvania Platinum. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Sylvania Platinum and prepared and issued by Edison, in consideration of a fee payable by Sylvania Platinum. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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