Sylvania Platinum — Production guidance lifted again

Sylvania Platinum (AIM: SLP)

Last close As at 02/05/2025

GBP0.47

0.10 (0.21%)

Market capitalisation

GBP123m

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Research: Metals & Mining

Sylvania Platinum — Production guidance lifted again

Sylvania Platinum has increased its full-year 4E platinum group metals (PGM) guidance again, to 78,000–80,000oz. Positive developments at Millsell (a new column flotation cell), Lesedi (initiatives to improve feed source and profitability) and Lannex (optimisation efforts) are likely behind management’s increased confidence. Q325 results were healthy (largely in line, but for higher depreciation and royalties tax and lower finance income) and support our forecasts, which remain unchanged. The earnings outlook for FY26 remains strong. Due to the depreciation of the dollar to sterling, we have reduced our valuation by 7.5% from 99.6p/share to 92.1p/share, which is almost twice the current share price.

Lord Ashbourne

Written by

Lord Ashbourne

Director of Content, Mining

Metals and mining

Q325 results

5 May 2025

Price 46.90p
Market cap £122m

$1.37/£; ZAR18.61/US$

Net cash at end Q325

$71.2m

Shares in issue

260.1m
Free float 90.0%
Code SLP
Primary exchange AIM
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs (18.7) 2.5 (29.9)
52-week high/low 70.3p 38.4p

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

Q325 results

April 2025

Analysts

Lord Ashbourne
+44 (0)20 3077 5700
Rene Hochreiter
+44 (0)20 3077 5700
Marius Strydom
+44 (0)20 3077 5700

Sylvania Platinum is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. 1p/share declared special dividend included for FY24, but exclusive of windfall dividends thereafter.

Year end Revenue ($m) PBT ($m) EPS (¢) DPS (p) P/E (x) Yield (%)
6/24 81.7 13.5 2.66 2.00 23.4 4.3
6/25e 101.0 18.3 5.10 2.25 12.2 4.8
6/26e 135.5 34.8 9.47 3.50 6.6 7.5
6/27e 144.4 39.2 10.44 4.50 6.0 9.6

Production improvements and growing confidence

Q325 plant feed was affected by heavy rainfall, affecting tailings storage access and transport, but total 4E PGMs increased 1% to 20,490oz, with stable PGM feed grade and slightly higher PGM plant recovery, and 6E PGM production was flat on Q225 (26,358oz). Sylvania increased FY25 production guidance to 78,000–80,000oz after increasing it to 75,000–78,000 at H125. Increasing management confidence is supported by projects starting to bear fruit, including a new column flotation cell at Millsell (recovery, payability and grade upside), improvements to Lesedi’s current arisings feed source and a centralised PGM filtration plant (from Q226), as well the optimisation of the milling and fines classification at Lannex (chrome beneficiation and PGM recovery). Our full-year production forecast was already ahead of the previous guidance, and we have left it largely unchanged.

Q325 results support our unchanged forecasts

Total revenue was up 2.4% on Q225 ($26.3m), offset by 3.4% cost growth ($19m), resulting in slightly lower EBITDA of $6.5m (vs $6.7m). Net profit was down 14% ($5.4m), due to higher depreciation (recent capital expenditure), higher royalty taxes and lower interest rates. The cash balance reduced from $77.5m to $71.2m (planned capital expenditure of $6.1m). The current rand level (ZAR18.61/$) is similar to that in our recent March 2025 report, with no impact on our forecasts. We maintain our production, PGM price assumptions and EPS forecasts.

Valuation lower on dollar depreciation

Our US dollar valuation for Sylvania is largely unchanged. However, the depreciation of the dollar from $1.26/£ to $1.37/£ since our last report results in a 7.5% lower sterling valuation of 92.1p/share. The investment case for Sylvania remains healthy with a strong FY26 EPS lift as its Thaba joint venture comes into production and diversifies its revenue into chromite. Our valuation has meaningful gearing to a PGM recovery, especially in rhodium prices.

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