Sylvania Platinum — Massive rhodium gearing to exploration assets

Sylvania Platinum (AIM: SLP)

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Last close As at 30/01/2023

GBP1.07

0.50 (0.47%)

Market capitalisation

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Research: Metals & Mining

Sylvania Platinum — Massive rhodium gearing to exploration assets

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.

Metals & Mining

Sylvania Platinum

Exploration and Q123 results

Metals and mining

8 November 2022

Price

91p

Market cap

£241m

US$1.15/£; ZAR18.20/US$

Net cash ($m) at 30 September 2022

138.6

Shares in issue

266.8m

Free float

86.7

Code

SLP

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(3.2)

3.4

(7.1)

Rel (local)

(7.5)

6.5

(2.9)

52-week high/low

111p

77p

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

H123 results

January 2023

Analyst

René Hochreiter

+44 (0)20 3077 5700

Sylvania Platinum is a research client of Edison Investment Research Limited

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.

Massive rhodium gearing to exploration assets

Year end

Revenue (US$m)

PBT*
(US$m)

EPS*
(c)

DPS
(p)

P/E
(x)

Yield
(%)

06/22

152

81

20.6

10.3**

5.9

11.5

06/23e

167

96

25.1

7.9

4.8

8.9

06/24e

180

98

25.7

8.6

4.7

9.6

06/25e

188

99

25.9

9.3

4.7

10.4

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Includes windfall dividend of 2.25p declared in April 2022.

Exploration projects may offer material value upside

We value Sylvania’s exploration assets at book value, which is 14.9p/share or 9% additional value to our 164p/share core valuation. Updated MREs on the two FNL projects and the Volspruit project, as well as a Scoping Study on the Volspruit NB project are very supportive of this valuation and in fact present meaningful potential upside. The addition of rhodium to the Volspruit NB project (not yet in the JORC MRE) could potentially increase the valuation from 8.8p/share to 73.1p/share, adding 64.3p/share according to our calculations.

Q123 results improve on those of Q422

Q123 improved on good Q422 results, with a slightly higher basket price, PGM 4E production up 2% to 19,194oz, cash costs/4E PGM oz down 5% and all-in sustaining costs (AISC) are 5% up in South African rand terms and down 4% in US dollar terms, reflecting the 9% weakening of the rand over the quarter, but also thanks to the 5% higher PGM plant feed.

Valuation: 179p/share; Volspruit may add 64.3p/share

We value the Sylvania Dump Operations (SDOs) at 164p/share on a discounted dividend model at a 10% real discount rate. We include exploration assets at book value of 14.9p/share, with a total valuation of 178.9p/share. However, if rhodium is included in the Volspruit NB valuation, this could lift it by a 64.3p/share, with further upside for the FNL and Volspruit South Body (SB) projects, not tested in this report.

Improved results and significant exploration potential

The investment case for Sylvania is based on a low-risk dump retreatment operation to which the bulk of the valuation of the company can be ascribed. It also has exploration assets in the northern part of the Bushveld Igneous Complex of South Africa. Sylvania recently published first quarter results confirming its cash generative ability and that it is also focused on cost controls, targeted capex and dividend payments. Newly published Exploration Results include an updated JORC-compliant MRE for the FNL projects and a scoping study focused on the NB of the more advanced Volspruit project, which we value in this report.

Q123 results: Excellent production quarter

Q123 production showed an improvement on an already strong Q422. The first three quarters of FY22 had been quite poor, mainly because of tailings dump instability issues at the Lesedi SDO and water shortages, which are now resolved.

Q123 results outstripped our forecasts in the areas of plant feed, total 4E production and by-product revenue, with a large rise in EBITDA due to increased production ounces and a sharp rise in by-product revenue and calculated cash costs as shown in Exhibit 1, below. Our estimate for the basket price increase had been slightly higher than the actual outcome.

Plant feed increased by 6.9%, resulting in 1.9% higher 4E PGM ounces produced in Q123 relative to Q422. We have, however, not changed our production forecast for the full year as the next two quarters include several public holidays, which may affect production.

The basket price per ounce increased by 2.4% in US dollars, albeit being slightly below our expectations. At this point we are leaving our forecast gross basket price for FY23 unchanged.

We consider it likely that prices will improve in Q223 as supply chains are improving and forecast vehicle demand for 2022 by industry consultants LMC Automotive and IHS Markit was increased in October to around 82m vehicles from the previous 76m in January.

Calculated cash costs (which include direct and indirect costs) in US dollar terms were 11% below our estimates, reflecting the weakening of the South African rand during the quarter, which resulted in lower US dollar costs. Our outlook for the rand is that it will continue to weaken during FY23 supporting lower US dollar costs. We have increased our rand cash costs in our model as inflation in South Africa is running at around 8% and the cost of chemicals, a large cost component for Sylvania, has increased significantly. Despite this, a weakening local currency will support lower US dollar costs.

Overall, we leave our FY23 group forecast unchanged. Even though Q123 was a strong result, there are a number of factors leading us to err on the side of conservatism. We observe the negative effects of high global inflation are leading to high cost increases even for a low-cost operation like Sylvania. Other challenges include the possibility of Eskom’s ongoing load shedding and consequent power cuts worsening and the possibility of a global recession affecting PGM prices, albeit offset by a weakening currency.

Having said this, management is optimistic that its new MF2 circuit programme, whereby a second flotation circuit is being installed in all its plants over the next two years, will lead to significantly increased recovered grades and, with maintained throughput, will result in higher production over the course of the next few years.

Financials: Quarterly results

Exhibit 1 shows the quarterly results and differences between them and our prior forecasts:

Exhibit 1: Quarterly results and forecasts

 

Q422

Q123

Q123e

Q123 vs Q422

Q123a vs Q123e

FY23e

Production

 

 

 

 

 

 

Plant feed (t)

647,249

691,953

664,025

6.9%

4.2%

2,694,662

Feed head grade (g/t)

2.04

1.89

(7.4%)

PGM plant feed (t)

331,578

349,384

315,818

5.4%

10.6%

1,301,896

PGM plant feed grade (g/t)

3.30

3.15

3.03

(4.5%)

3.9%

3.09

Total 4E PGMs (oz)

18,837

19,194

17,226

1.9%

11.4%

71,863

Total 6E PGMs (oz)

23,751

24,067

22,538

1.3%

6.8%

92,757

Basket price ($/oz)

2,589

2,650

2,765

2.4%

(4.2%)

2,754

Financials

4E Revenue (US$m)

34.4

36.9

37.2

7.3%

(0.7%)

154.6

By-product revenue (US$m)

3.2

3.4

2.9

4.6%

16.0%

9.7

Total revenue before sales adjustment (US$m)

37.6

40.3

40.1

7.1%

0.5%

164.3

Sales adjustment (US$m)

(2.7)

2.6

0.6

2.63

Total revenue (US$m)

34.9

42.9

40.7

22.8%

5.5%

166.9

Total operating costs (ZARm)

245.9

269.6

261.4

9.6%

3.1%

1,091.7

Total operating costs (US$m)

15.8

15.8

16.0

0.3%

(0.9%)

61.2

Other costs (US$m)

0.76

0.69

0.58

(9.6%)

19.5%

2.70

EBITDA (US$m)

16.8

26.4

24.2

57.4%

9.4%

96.8

Net interest (US$m)

0.50

0.83

0.33

66.3%

148.6%

3.32

Net profit (US$m)

13.8

18.6

34.8%

66.8

Basic EPS (USc)

5.2

7.0

34.8%

25.1

Calculated cash cost (ZAR/4E oz)*

13,056

14,046

15,176

7.6%

(7.5%)

15,191

Calculated cash cost (US$/4E oz)*

837

824

927

(1.6%)

(11.0%)

852

Capex (US$m)

4.4

2.6

(41.3%)

22.0

Cash balance (US$m)

121.3

138.6

14.3%

130.1

Average ZAR/US$ rate

15.59

17.04

16.38

9.3%

4.0%

18.10

Spot ZAR/US$ rate

16.38

18.10

16.38

10.5%

10.5%

18.10

Unit cost

SDO cash cost US$/4E PGM oz

646

614

(5.0%)

SDO cash cost US$/6E PGM oz

513

490

(4.5%)

Group cash cost US$/4E PGM oz

794

737

(7.2%)

Group cash cost US$/4E PGM oz

630

588

(6.7%)

AISC (4E US$/oz)

911

873

(4.2%)

All-in cost (4E US$/oz)

1,108

987

(10.9%)

Source: Edison Investment Research, company financials. Note: *Direct and indirect costs divided by the number of ounces produced.

Exploration results for Volspruit and FNL assets

In addition to producing PGMs, Sylvania Platinum has exploration projects on the Northern Limb of the Bushveld Igneous Complex, which in its entirety, contains some 80% of the world’s PGM resources (source: P. Crowson, Minerals Handbook 2000–01: Statistics and Analyses of the World's Minerals Industry, Kent, UK, 2001).

The exploration assets comprise the advanced Volspruit project and the FNL projects, Aurora and Hacra. We discuss below the recently published Exploration Results, which include an updated JORC-compliant MRE for the FNL projects and a scoping study focused on the NB of the more advanced Volspruit project.

Volspruit: A rhodium-rich flagship project

The results of a JORC-compliant Scoping Study carried out by EARTHLAB Technical Division for the Volspruit project were published by Sylvania in October 2022. This ascribes a pre-tax NPV value of US$27.3m (10.2 US cents/share or 8.8p/share) at a real discount rate of 12.5%. Importantly, this valuation does not include any contribution from rhodium, which, as yet, does not qualify for inclusion in the Scoping Study as it is not at inferred stage at Volspruit and was not included in the historical analyses, and is still being assessed, with insufficient sampling to fulfil JORC requirements. Peak funding required is US$147.4m (ZAR2.5bn) with a payback period of 4.25 years from the first production. AISC to produce platinum (Pt), palladium (Pd), and gold (Au) ounces is US$979/oz and US$39.8 per tonne milled (ZAR675/t). The yearly projected EBITDA is US$30.6m (ZAR520m) with a pre-tax internal rate of return (IRR) of 17.9% and a life-of-mine of 8.7 years.

Furthermore, Volspruit is divided into two project areas, North and South. The scoping study includes only the NB as the SB results are still being reviewed. The NB comprises 58% of the project area and hence the Scoping Study only includes 58% of the total potential Mineral Resources of the project. Importantly, the Volspruit NB Scoping Study allows for a life of these resources of 8.7 years; hence the US$27.3m pre-tax value ascribed to this project is for this very short period of mining, which we feel optimistic will be extended to 15 years or more as MREs are updated in the future.

Even though the Scoping Study results do not meet the company’s internal investment criteria as they stand, Sylvania has already commenced a Preliminary Feasibility Study (PFS), showing management’s confidence in the project. Furthermore, the company states that rhodium could add 5–6% of additional ounces at no additional capex (Exhibit 2). With the rhodium price currently at c US$14,100/oz compared to platinum at US$950/oz and palladium at US$1,890/oz (we are estimating US$14,000/oz for Q223 (October to December 2022)), the value of the project using a 12.5% discount factor (as used in the scoping study by Sylvania) could increase by orders of magnitude according to our calculations, if rhodium is added.

Exhibit 2: Volspruit NB project PGM metals basket prill split percentage

Source: Edison Investment Research, company financials

Northern Limb T-Zone discovery

The Far Northern Limb Projects will add value in the future, but for now we value these at only 1.0USc/share using a value of US$2/in-situ resource ounce. This is based on our assumptions in the Edison study Gold stars and black holes, published in 2019. Given market conditions, in this case we have adopted the same valuation assumptions regarding the in-situ value of resources that we set out in that report. We will update our Far Northern Limb valuation as and when a Scoping Study is published or more resource ounces are added to the MRE.

The Aurora project’s La Pucella asset has a declared resource of 1.37Moz 2E+gold. Very significantly, the T-Zone has been discovered near surface on the property, which contrasts to the nearby Platinum Group Metals’ (PTM’s) Waterberg project where the zone is included at depth. PTM’s thick bulk-mineable reef zone could allow longhole open stoping, a low-cost massive mining method planned at PTM’s project. A Scoping level mining Study amenable to open-pit mining methods is being carried out at La Pucella, with results due in early 2023, after which we will be able to ascribe an NPV to the project. Again, further studies are aimed at improving analytical confidence to include rhodium and base metals in the MRE.

The Hacra Project is also showing encouraging signs, with 2021 Exploration Results showing attractive grades between 2.3g/t and 7.4g/t 2E + Au and a true intersection thickness from 3.4m up to 11.9m. This appears very much like the T-Zone that was discovered by PTM on the neighbouring Waterberg project. A maiden MRE declaration is targeted for early 2023.

Valuation

We have slightly revised our valuation for producing assets and have used the newly published Exploration Results to assess the potential valuation uplift of Sylvania’s exploration assets. The latter was carried at a book value of US$46m (14.9p/share) by Sylvania as at end FY22. The Scoping Study provides very strong support for this book value, considering that it excludes the SB of Volspruit and the Far Northern Limb assets, as well as the rhodium upside for Volspruit.

Key sensitivities to the valuation lie mainly in the prices of the PGMs, in particular the rhodium price. For context, rhodium is a key revenue generator for South African precious metals and PGM industries, contributing, by our estimates, around 39% to national industry revenues at current spot prices. Its revenues are almost twice those of palladium and platinum (Exhibit 3).

We highlight that Sylvania has more rhodium in its prill split than the average South African producer, as it re-treats the Middle Group No. 4 reef and the Lower Group No. 6 reef dumps around the Bushveld Complex. These are tailings dumps that have been mined by South African Chrome giant Samancor, its main supplier of dump material. These reefs are around 50% higher in rhodium content than the Upper Group No. 2 (UG2) reef, which most other South African producers mine.

Exhibit 3: South African PGM split (%) at 28 October 2022

Source: Edison Investment Research, company data

The critical importance of rhodium to Sylvania can be seen in our updated assessment of the potential valuation of the Volspruit project, which we examine both with and without rhodium as a future revenue contributor.

In Exhibit 4 we show the value of Sylvania’s Volspruit NB exploration project, using the NPV both with and without rhodium. The results of our NPV calculation indicate that the NB project alone could be worth 73.1p/share if rhodium (not yet in the JORC Mineral Resource) is taken into account. Sylvania’s own valuation uses a 12.5% discount rate, whereas the normal discount rate used by Edison is 10%, as shown in Exhibit 4.

Exhibit 4: Exploration valuation – Volspruit NB

Sylvania Volspruit NPV12.5 with no Rhodium*

Edison Volspruit NPV10 full value with Rhodium

Book value of exploration spend at June 2022

NPV value (US$m)

27.3

226.1

Value of exploration spend (US$m)

46.0

Shares issued (million)

266.8

Value (US cents/share)

10.2

84.8

17.3

Value (p/share)

8.8

73.1

14.9

IRR (%)

17.9

34.7

Source: Edison Investment Research, company financials. Note: *Value shown at NPV12.5 for Sylvania as used in the scoping study published in October.

Sylvania’s FY22 book value of its exploration spend was US$46m, with c 60% of this value ascribed to Volspruit and c 40% to the FNL projects according to the company.

While we conservatively continue to value exploration assets at the company’s book value of 14.9p/share, we flag that the Scoping Study could result in a write-up of this value over time and that if any of the projects, especially Volspruit, are converted into producing operations, the rhodium upside could boost our valuation by up to 64.3p/share, which is the difference between our with-rhodium NPV of 73.1p/share and the 8.8p/share NPV without rhodium provided by the company in the Scoping Study. Further upside is possible with the inclusion of the Volspruit SB, which is currently being assessed and has been excluded from our calculations.

Valuation of producing operations: 164p/share

Edison values operating mining resources companies at a 10% real discount rate based on the dividend discount method (DDM). In the case of Sylvania, while we do not forecast windfall dividends over our explicit forecast period (even though these have become a regular feature of this company), we allow for maximum supportable dividends from FY26 onwards and a pay-out ratio of close to 100%. Our PGM price forecasts remain very close to those we forecast in December 2021 and we see little need to change these at this stage (for further information, please see our PGM market report).

Our valuation is down to 164p/share from our previous 169p/share, largely driven by a large 8p/share dividend paid out in October 2022. The key risk to the downside lies in inflationary costs, although any cost increases at the operations in South African rand terms would likely be offset by a weakening of the local currency. We have also left our PGM production forecasts at those previously estimated at end June 2022, as guided by the company, of 68,000–70,000oz 4E for FY23 despite the strong Q123 production (19,194 ounces) as the next two quarters include four public holidays and the festive season.

Exploration assets value: Supportive of 14.9p/share book value and potential to add up to 64.3p/share

The potential value add of the Volspruit NB project with the contribution from rhodium is significant. The October Scoping Study for NB is based on what management states to be conservative assumptions, valuing it at 8.8p/share on an NPV basis, without any rhodium. This provides strong support for the June 2022 book value of exploration spend of US$46m or 14.9p/share, considering that the above value (and the Scoping Study) excludes the SB of Volspruit and the FNL assets, as well as the rhodium upside for Volspruit NB. With rhodium, the Volspruit NB valuation rises to as much as 73.1p/share (which is 64.3p/share higher than the 8.8p/share included in the Scoping Study). While we continue to include exploration assets at a book value of 14.9p/share on top of our 164p/share for producing operations, we see meaningful potential upside over time, especially if the company commences production and benefits from high rhodium prices.

Financials

End-September cash was US$138.6m having risen from US$121m at the end of Q4. The company is highly cash generative with sufficient funds to facilitate capex, process optimisation, exploration drilling and Pre-Feasibility Studies and dividends.

Exhibit 5 shows our forecasts to FY25. Our revenue forecasts increase at a rate of around 10% pa as the new MF2 circuits are installed at each of the SDOs, which will improve metal recoveries.

There was a large increase in costs in FY22 over FY21. Consequently, EBITDA was down in FY22 but was strongly ahead in Q123 relative to Q422. We expect this to even out into slower EBITDA growth in FY24 and FY25. The company emphasises cost controls and has managed to contain Q123 unit cost increases in South African rand terms to low single digits, which resulted in US dollar unit costs falling by around between 4.2% and 10.9% across the unit cost categories. Our EPS forecasts for the next three years are around 25 USc/share each year. We expect ordinary dividends to reduce in FY23 as a result of the cost increases of more than 10% that we are anticipating because of global inflationary pressures

We expect the company to continue to be strongly cash generative with little or no debt over the next few years. We forecast cash levels in FY23 to reduce slightly, with high inflation rates globally affecting costs adversely and PGM basket prices softening from the levels of FY21 into FY22 and FY23, but picking up again thereafter.

The company’s dividend policy is variable and takes into consideration liquidity, forecast cash requirements, debt, capital expenditure, legal considerations as the company is domiciled in Bermuda, sustainability, metal prices, currency fluctuations and the mineral rights portfolio. The board takes into account these factors rather than any formulaic approach. We would like to see the company simplify its approach by instead targeting a percentage of free cash flow after capital commitments, strategic projects, etc. The company pays ordinary dividends annually.

Historically, a windfall dividend has been paid when the actual PGM basket price realised for the full calendar year has been higher than the consensus forecast for the year published in January. The actual basket price for CY22 might well be lower than what consensus was in January, which would, in our view, likely preclude a windfall dividend payment during FY23. Over the long term, our modelling points to strong cash flow generation adding to the company’s already healthy cash position and further windfall dividends are therefore likely, although we have not forecast any during our explicit forecast period to FY25.

Exhibit 5: 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

167

180

188

Cost of Sales

(45)

(47)

(55)

(62)

(66)

(72)

(78)

Royalties Tax

0

(1)

(8)

(7)

(6)

(9)

(9)

Gross Profit

26

67

143

83

95

99

100

EBITDA

30

69

145

83

97

102

103

Operating Profit (before amort. And except.)

24

64

142

80

92

96

97

Intangible Amortisation

0

0

0

0

0

0

0

Exceptionals

0

(10)

0

0

0

0

0

Other

(9)

(9)

(5)

(7)

(7)

(9)

(9)

Operating Profit

24

54

142

80

92

96

97

Net Interest

1

2

1

1

3

1

2

Profit Before Tax (norm)

24

65

143

81

96

98

99

Profit Before Tax (FRS 3)

24

56

143

81

96

98

99

Tax

(6)

(15)

(43)

(25)

(29)

(29)

(30)

Profit After Tax (norm)

18

51

100

56

67

69

69

Profit After Tax (FRS 3)

18

41

100

56

67

69

69

Average Number of Shares Outstanding (m)

286

280

272

272

266

266

266

EPS – normalised (c)

6.4

14.6

36.7

20.6

25.1

25.7

25.9

EPS – normalised fully diluted (c)

6.2

14.3

35.9

20.4

25.1

25.7

25.9

EPS – (IFRS) (c)

6.2

14.3

35.9

20.4

25.1

25.7

25.9

Dividend per share (p)

0.0

1.6

4.0*

8.0*

7.9

8.6

9.3

Gross Margin (%)

36%

58%

69%

55%

57%

55%

53%

EBITDA Margin (%)

43%

60%

70%

54%

58%

57%

55%

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

34%

55%

69%

52%

55%

54%

52%

BALANCE SHEET

 

 

 

 

 

 

 

Fixed Assets

93

74

86

93

109

110

110

Intangible Assets

53

43

45

46

50

50

50

Tangible Assets

38

30

40

46

59

60

60

Investments

2

0

0

0

0

0

0

Current Assets

59

89

188

187

198

242

285

Stocks

2

2

4

4

3

3

4

Debtors

8

12

69

53

55

59

62

Cash

22

56

106

121

130

170

210

Other

28

19

9

8

9

9

9

Current Liabilities

7

9

14

11

11

12

12

Creditors

7

9

14

11

11

12

12

Short term borrowings

0

0

0

0

0

0

0

Long Term Liabilities

18

13

16

18

20

21

23

Long term borrowings

0

0

0

0

0

0

0

Other long term liabilities

18

13

16

18

20

21

23

Net Assets

128

141

244

251

275

318

360

CASH FLOW

 

 

 

 

 

 

 

Operating Cash Flow

25

71

114

92

96

99

101

Net Interest

1

2

2

2

4

2

2

Tax

(8)

(15)

(47)

(24)

(28)

(29)

(30)

Capex

(8)

(5)

(8)

(16)

(22)

(7)

(6)

Acquisitions/disposals

0

0

0

0

0

0

0

Financing

(1)

(18)

(4)

(20)

(0)

0

0

Dividends

(1)

(3)

(20)

(23)

(26)

(26)

(28)

Net Cash Flow

8

41

39

20

23

39

40

Opening net (debt)/cash

14

22

56

106

121

130

170

HP finance leases initiated

0

0

0

0

0

0

0

Other

(0)

(7)

12

(5)

(14)

0

0

Closing net (debt)/cash

22

56

106

121

130

170

210

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 2022 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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 2022 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.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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