Earnings Call: H1 2023

Feb 22, 2023

Good afternoon, and welcome to Sylvania Platinum Limited investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated in the right-hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it received in the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Jaco Prinsloo, CEO. Good afternoon to you, sir. Thank you. Afternoon, Alessandro, and thanks for the introduction. Welcome everybody to our half-year results presentation for the year half-year ended 31 December 2022. Myself and Lewanne Carminati, our CFO, will take you through the presentation, highlight some of the key results, and highlights for the year. Then at the end, hopefully, we have enough time to answer some questions. Maybe just to start off, and for those of you who might not be familiar with the company, let's just highlight what Sylvania is about. Sylvania Platinum has two distinct parts to its business. Firstly, it has our attractive low-cost cash-generating Sylvania Dump Operations that consist of six chrome and PGM beneficiation plants located in the eastern and western limb of the Bushveld Complex, respectively. These are the current PGM-producing units of our business that's responsible for our current cash flow and profits. We will deal with the financials throughout the presentation that they're stemming from these operations. Secondly, the company also owns a number of lucrative exploration assets, on the northern limb of the Bushveld Complex, that is the north of that map that you see, which offers significant growth potential for the company. I will touch a bit more in the presentation as we go along. I think just briefly looking at some of the key highlights for the year, we are very proud of half-year performance of 38,471 ounces produced. This is the second highest half-year performance in the history of the company and the highest since COVID. Certainly, we're very excited about it. It was enabled by a significantly improved PGM feed ton performance as our historical water and tailings related issues at Lesedi have been resolved, and the operation is now running steady. Our safe operation that we've been enabled, and we had zero lost time injuries across our operations for the period. This strong production performance combined with still a robust PGM basket price, although it declined 15% on the period to about $2,513 an ounce. We have managed to deliver strong financial performance as well. We ended the year on about $124 million in cash, which enabled us, and the board, to take a decision to declare an interim dividend of 3 pence at this time, with our results. Maybe while I mention the dividend is one of the other highlights for us during this period, we are pleased to announce that the board have updated our dividend policy to provide some clearer guidelines of what we anticipate to pay out on a routine basis. This GBP 0.03 dividend is a part of the first part of the annual dividend that Lewanne will cover in a bit more detail later in the presentation. If we look at some of the more detailed parameters, highlights, I mentioned the higher PGM feed tons also enabling that higher tons was a significant improvement in PGM recovery efficiency. There we've seen a significant contribution from our Lannex operation through our reagent optimization work. We've had a step change in recovery efficiency, especially on some of the oxidized sources that they do treat. As well as at Mooinooi, where the raw quality and grade have improved, we have seen recovery improvements and also at our Tweefontein operation through optimization of the flotation plants and plant stability. On the finance side, you can see that we have had very attractive and significant growth in our net revenue as well as net profit figures. Net revenue up about 16% on the comparative period and net profit approximately 34%. Besides the fact that it was driven by the higher ounces, I mentioned earlier that we had a slight reduction in the basket price, but then also the sales adjustment we received was a slight positive adjustment in this period compared to a negative adjustment in the previous period. That's why these increases in revenue and profit are proportionally higher than just the production increase. Touching on the ESG, which is covered in quite a bit more detail later in the presentation, I think it's just worth saying that we're very proud of the progress we've made on our ESG during the last, say, two years and especially this past half year. Our ESG strategy has always been aligned with our values that have been deeply entrenched in our operations and in the company for all the years we've been operating. We've been able to publish our first standalone ESG report with our full-year financials last year. Our ESG principles certainly are well-aligned with the Sustainable Development Goals of the United Nations as well as the ICMM, and we'll touch a bit more detail later on. If I first look a bit more detail on the operations, and as I mentioned, focusing on the Dump Operations of ours. I've mentioned strong performance. You can see it here in the bars for 2023. You would have also noticed at the release of our second quarter results, we've increased the annual guidance for the year. We believe that we should be able to achieve 70,000-72,000 ounces at least. That's despite the current Eskom load shedding constraints, which we don't believe would have adverse impact on this guidance at the moment. Then also take into account the recovery improvements we expect from the optimization of the MF2 circuit at Klerksdorp that was just commissioned during December. Then looking forward towards 2024 and 2025 financial years, you will see contributions from the Lannex MF2 that's currently under construction, then coming into play as well. I think also encouraging and worth noting is that we have seen a very good performance in terms of the raw feed grade quality at our Mooinooi operation, that you would remember historically have been a challenge for us after COVID and the initial slowdown at the host mines. We, through our collaborative efforts with the host mines, we've managed to have a significant improvement in our raw grades, which we believe is now at a sustainable level going forward. Just on a bit more detail on the individual operations, and probably more for background and reference if somebody want to look at it. I've actually mentioned quite a few of these points already. Just maybe focus on one or two of the points that was not mentioned yet, and the one being Lesedi, where we are exposed currently to some downtime from the government Eskom load shedding situation. Maybe worth just briefly expanding on that. Our operations in general, so 5 of our 6 plants have not had impact from the latest load shedding, and that's because of the power utilities load curtailment plans for integrated suppliers mean that instead of cutting certain hours in a day, they ask the bigger industrial users to cut a certain percentage of supply. Our industrial integrated producers like Samancor or similar to Anglo Platinum, Impala, who have smelters and refineries as well as mines, they typically choose to do that load curtailment at the smelter facilities. Therefore, the mines where most of our plants are situated are not impacted at this stage. Our Lesedi operation is situated at a smelter site and therefore has been affected. There we are busy as a mitigating measure with a project to install a backup power generation unit that can enable us to run while there are load curtailment at the operation. The other point probably not mentioned earlier is just again, highlighting that we are busy with the execution of two tailings dam facilities, one at our Mooinooi operation, which will be the first to be constructed and the second at our Doornbosch operation that is in the design and authorization phase. While these are important, we've been building tailings dams throughout the history of the organization on a continuous basis. As we remine certain tailings resources, we build new facilities, but this do have a bearing on the capital we guide on and Lewanne will touch on a bit more detail on that later in the presentation. Just again reminding you in terms of the 4E split and looking at how that basket price then has an influence. Firstly, just highlighting on that top graph, illustrating our rhodium exposure in our 4E is about 11.4% for this past half year. That's quite consistent throughout the periods. Palladium about 23%, platinum 65%. You can see at the bottom graph where the historical metal prices and especially rhodium overshadowing that bottom graph where the rhodium price significantly increased, how that had an impact on our full-year basket price. Quite interesting on the top, the South African rand basket price. You can see it stayed fairly flat while you saw a decline in the last six months of rhodium and palladium. One of the reasons there is that these metal prices have declined in dollar terms to a large extent because of the strengthening of the dollar, and not necessarily because of strength of the metal. I think in terms of euro, rands, and some other currencies, the metal price actually stayed quite consistent. Just worth noting. When we look forward, which is probably more important, is the conflict between Russia and Ukraine is still something that bear on the industry. Certainly, we know historically the COVID-19 restrictions and lockdowns in China have had impact, and that now being eased, we have a more positive outlook. If we look at some of our key institutions, just to give you some illustrative idea of what the price is forecasted to do. We've included Nedbank CIB that covers most of the PGM producers in South Africa. Standard Bank Securities, which is our Standard Bank as being our corporate bank in South Africa, as well as Liberum Capital in the U.K., that is our Nomad and broker. It gives you an indication, maybe the one worth pointing out, and a lot of people ask why is the platinum from Standard Bank increasing significantly? That is largely due to the view on the supply and demand side. Taking on the demand side, they have quite an aggressive outlook on the role platinum will play in the hydrogen economy, hydrogen fuel cells going forward and at the rate the uptake will happen. On the supply side, they are more concerned than the other institutions in terms of the impacts that power in South Africa might have on supply. South Africa being the largest producer of platinum and rhodium in the world. You can see that the platinum and palladium outlook are higher than the other institutions in that regard. If we turn our eye now slightly to the exploration opportunities and looking at our long history at Bushveld dump operations, a lot of people ask us, "Okay, so why are you focusing on exploration projects?" I think firstly, I've mentioned before, we do own the mineral rights, approved mineral rights on a number of these projects. While the company continues to focus on the delivery of value from our existing operations and focusing and continuing on cash generation, it is important to optimize the value from these exploration assets that remain one of the important pillars of Sylvania's growth strategy and as a key value driver for shareholders. With this in mind, during 2021 financial year, we initiated some targeted studies that specifically falls right in our Far Northern Limb and Lannex projects, which are the two regions of these projects, to determine how best to optimize these projects so that we can declare the optimum value for our shareholders. Let me first focus on what we've been doing on Volspruit. You might have noticed we've published these initial optimization study results during October last year. On Volspruit in particular, we published a mineral resource estimate that focused first on the North body, and it then also continued to do a scoping study to give us some idea of the possibility of economic extraction or the probability thereafter. The reason we focused only on the North body is at that time, the South body’s drilling density and geological data was not at the JORC compliance status to include in the mineral resource estimate. Although it represent about 40% of the estimated resource on the area. Another important thing, the initial study excluded the rhodium contribution. We couldn't include rhodium again, because historically when these projects were done, rhodium was at a much lower price. Rhodium was excluded from the assays. We had to include significant assets and do a lot more work to get rhodium at the JORC compliant level. Both of those, the South body and the rhodium is being addressed at the moment. We're hoping that by the end of this financial year or when we report our results during August, September, that we can include, present updated scoping study for Volspruit that would include those two upside, that we use upside potential. On our Aurora project, which is a bit more to the north, but Aurora is typically. Well, the project is located about 30 km north of Anglo Platinum's flagship Mogalakwena operation, and then just south of Platinum Group Metals Waterberg PGM project. What we have on Aurora is a 16-km strike length of near-surface material, and there's material that subcrops at 5-10 meters below surface. Certainly very attractive from an open-cast minability point of view. I think probably more significant there is the discovery of the T-Zone mineralization or T reef that we've discovered on this property. Historically, we always interpreted this area from the historic drill cores as a Platreef deposit. It wasn't until 2017 that some academics pointed out following the discovery of the T-Zone at Waterberg project, I think between 2012 and 2014, that this could potentially also be T-Zone. Why is that significant? Whereas your Platreef is probably wider at a lower grade, this T-Zone is anywhere between, say, 2 and 11 meters thick at a significantly higher grade. You can see from the portion at La Pucella, where we already confirmed the mineral resource estimate, that we could get to about 2.6 gram per ton. This is significant because contrary to the initial strategy we had of having our own downstream refinery and smelting facilities, which would be highly capital intensive, we can now most probably produce a saleable concentrate. What we are focused on for this next year is to increase the confidence in the rest of the strike length so that we can grow the mineral resource estimate for this project, and therefore, then we can make decision on what and how to proceed with this project going forward. The last one is maybe just Hacra in the far North, and very similar to the Aurora project. We need to just confirm the mineral resource estimate. It is slightly different because it contains also a deep level, although deeper underground resource to the North that borders our neighbor at Platinum Group Metals, you can see in the yellow block. Again, we have to conclude the work, say, in the next 2-6 months in terms of declaring a maiden resource estimate on that area, and then we can decide our best way forward. Having discussed all that, I think this is just a summary of the results that I've just discussed, and including the JORC compliant resource for Volspruit North and La Pucella only, and summarizing the actions. I'll leave you for reference later. Then I'm going to hand over to Anne to have a look at the financial results, and take us through the highlights of that. Thanks, Jaco. Turning back to our historical information. We're quite pleased with our results to 31 December. I'd just like to highlight a couple of points on the income statement. Our net revenue for the period is up 16% on the corresponding whole year. Mineral royalty tax increased by $750,000 as a result of higher ounces and a higher percentage of royalty attracting ounces that were produced, as well as the higher revenues. Finance income comprises of interest received on surplus funds that we invest in South Africa, as well as interest charged on the two loans that we have outstanding with the Thaba JV and the loan to Forward Africa Mining. Income tax line includes income tax on taxable profits of the South African operations, as well as deferred tax movements, dividend withholding tax on dividends declared from the South African operations up to the parent entity, as well as a small amount of CGT on the sale of the Grasvally assets. As I mentioned on the previous slide, the group net revenue increased 16% on the corresponding year period. The main contributor to the increase in the revenue is the increase in ounces delivered with a small negative impact of the drop in the metal prices. As you can see from the pie chart at the bottom of this slide, iridium still remains a significant contributor to our total revenue, reported for the period at 52% of our 6E revenue. The SDO for 4E cash cost for the half year was $602 per ounce, and for the group it was $742 per ounce. Although this is a decrease of 18% and 16% on the corresponding period due to the higher production, the total direct cost increased 12% for the reporting period. This is mainly due to the increase in the wage costs that we saw in the latter part of the last financial year, and then pulled through into the new financial year, the increase in number of employees as we commissioned the Lannex and Tweefontein MF2s, we had some higher mining costs at the Western operations as they moved more tons through the plants, and the increase in electricity costs. For the full year, we're forecasting approximately $654 per ounce 4E, and that's at an exchange rate of R17.63 to the US dollar and is based on the revised ounce target of 70,000-72,000 ounces. In industry terms, Sylvania still operates in the lowest quartile of the cost curve with an all-in cost, including our exploration capital of just over $1,000 per ounce. The group reported $45 million EBITDA for the period ending 31 December. The full year forecast is currently forecast at between $76-$80 million, and again, based on the February 2023 metal prices and exchange rate, as well as the revised production. Our cash flow for the period, we ended the reporting period with a cash balance of $123 million. This is after paying $7.7 million in taxes, as well as the $25 million we paid out in dividends in December 2022. The group spent $6.2 million on capital for the 6 months, which is split between the SDO operations or the SDO at $5.3 million and $900,000 on the exploration projects. Then the board has declared, as Jaco mentioned, the 3 pence dividend on ordinary shares in terms of the new dividend policy, which I'll expand on a little in the next couple of slides. Our capital, as I've just mentioned, the $6.2 million that was spent for the reporting period. The forecast for the full financial year has been revised down from $22 million to $18 million. This is as a result of the delay in the implementation of our backup power, due to availability of equipment. It's not significantly delayed, but some of the capital will be pushed into the next financial year, as well as rescheduling of some of the tailings dams due to delays in permitting at the host mines. For the full year, we're looking at spending about $5 million on exploration, $8.5 million on capital expansion and optimization projects. These include the Lannex MF2, the Tweefontein MF2 optimization and the backup power, and then about $4 million on SIB, including our tailings dams. You'll see the forecast for 2025 onwards are only SIB and a small amount for exploration. That's purely because we haven't committed to large capital spend for those years. In looking at how the company returns value to shareholders, we're very pleased with that the board has revised the dividend policy, and the company now has a more clearer model-friendly policy. The new policy states that the board will distribute a minimum of 40% of the company's adjusted free cash flow for a financial year. We'll split this into an interim dividend at half year of about one-third of the forecast adjusted cash flow, and then a final dividend of approximately two-thirds. Adjusted cash flow is calculated as the cash inflow from operations less capital for that period, and then adjusted for any debt commitments and covenants and committed future growth or expansion capital. In addition to the annual dividends, the company has bought back 56 million shares since 2015 and canceled 18 million shares. Buybacks will still be done on an ad hoc basis or as the opportunity arises. Moving on to our ESG. This slide just gives a snapshot of some of the ESG progress for the reporting period and the 17 Sustainable Development Goals that will apply to our ESG policy. On the environmental side, we've received our carbon footprint report for the involved year, and we also developed water balances for each plant. We are in the process of implementing additional water flow meters to improve accuracy of water flow monitoring at each of the plants. We've concluded assessments at four of our six operations to assess and confirm compliance with the global industry standard on tailings management. Most notably under the environmental section for the six months, we're quite excited about the results of our first phase of the re-vegetation trials. We took a mixture of six indigenous grass seeds and planted them on different control areas, and it was found that the seedbeds treated with mulch were most successful. We also noted an increase in biodiversity in these areas through the increase of insects and other large species. Now we're starting phase two, where we'll be introducing further insects and earthworms, as well as other indigenous plant species, and then using processed water to lower soil alkalinity. Ultimately, this process, we expect that this method of rehabilitation will significantly reduce the rehabilitation costs and reduce the number of years of aftercare as the areas will become self-sustainable in approximately three years. Under the social banner, we're particularly proud of both our percentage female complement and our safety record. Our female representation increased to 22% from 20% at 30 June, against an industry average of 14% that was published by the Minerals Council in 2022. On the safety side, as Jackie mentioned in the snapshot, the group recorded no LTIs for the six months to 31 December, with Doornbosch remaining over 10 years LTI-free. It's also noteworthy that the company is fatality free since inception. Under governance, we have an updated legal compliance audit underway, and the company has also contributed approximately ZAR 1 billion to the South African economy over the six months, and details of this can be found in the results announcements if you would like to have a look at more. Back to you, Luca. Thank you very much, Lewanne, for taking us through the performance. Now that we've looked at the past financial performance, maybe let us just focus briefly on what you can expect from us in the next period and going forward. I think first of all, it's important, and I figure you'll agree that, in recognizing that cash generation efficiency of our current businesses, that we should continue to focus on the profitability and safe performance of our operations, so that we can continue to generate cash, both in order to generate stable returns to our shareholders, but also to enable us to fund our growth projects and explorations. We certainly continue to do that. We further, in terms of our license to operate, the ESG has become a lot more significant in recent years for especially our investors and the institutions we're dealing with, but also in terms of our license in the communities we operate with our employees and also our stakeholders. It is important that we maintain those principles. Also, more practically focusing on items like the permitting and authorizations around the tailings dams, having that timeously in place. Looking forward then in terms of growth, maintaining and increasing our PGM ounce profile, they are the two areas. With us looking at that, one is looking internally. First of all, at the current dump operations, progressing R&D initiatives and similar to what we've done in the past to grow the ounce profile from the existing operations and existing resources, improving recovery efficiencies, reducing chrome in the feed to our PGM feed, those items we'll continue with. We then also, in terms of the owned mineral resources, as I explained earlier, are looking at how best to optimize value. External to what we already own, external to the host mines where we already operate, is to look at similar host mines or third-party producers that have tailings resources or run-of-mine material where we can replicate our current business model from the current slag and dump operations to add more value. We have some projects that's quite far advanced in negotiations on the Eastern and Western Limb, respectively, of the Bushveld Complex that we hope we can make good progress in the coming period. To give you some idea of time frames and then scope, I'm just updating what I have shared before is from the existing SDO we mentioned, Tweefontein, that has just been commissioned and being in the optimization phase now. Lannex. That we are looking at commissioning early in the new financial year towards the end of this financial year. We continue to pursue higher grade third-party material that we toll in our current operations as and when the opportunity arises. forward on that, I mentioned on the R&D focus and then longer term is steady focus to see how we can unlock further potential on dumps we maybe view as stabilized or redundant at the moment. That could well still yield production in future. On the new opportunities, we've advanced quite far, as I mentioned, with technical and commercial due diligence and even some form of process design on certain projects. On the western limb, on a 100% attributable basis, you look at about 10,000-15,000 ounces a year. Should be able to add that the western limb opportunity could come as soon as 18-24 months into production. Where the eastern limb is slightly more onerous in the sense of authorizations, environmental authorizations and stuff that we are still needing to explore. That might take a little bit longer. Then longer term, we continue to explore and investigate opportunities for both very old historical dump sources but also consulting with current producers. I always say to people when Sylvania started initially about 15 years ago, the estimated production life was about 5 years. Now 15 years later, we say that from what we already know and have, we believe we can be beyond 10 years' profitable life. We therefore believe that we'll be able to continue and add on top of that profile. Then finally, in terms of the exploration assets, I mentioned in quite a bit of detail what we are busy with there. I think what we can look forward to, it's just the key dates of course, but updated scoping study by the end of this financial year and then only probably in the next year the updated mineral resource estimate on Aurora and then also the Hacra probably closer to this year. I think it's important to note there, and some people ask us what is the capital requirement or need for this. At this stage we have not applied or forecasted to apply any capital for the development of this project. Our aim currently is to unlock the value by upgrading the resource estimates and that would enable us in, say, about 18 months period to make a decision to say how best to unlock value here. Is it a disposal? Is it a partnership with somebody? Is that development in-house? Those decisions we'll only make once we have adequate data available. That's where we're progressing to. I have, as an indication only, indicated that the size of operation you can expect the typical ounce production while full spread I say, yeah, that was based on the North Body only about 70,000-100,000 ounces a year. Just comparatively what we already produce, it gives you an idea what we can produce in the Northern Limb. We also said about 80,000-120,000 ounces. That was when we initially just looked at La Pucella, which only about 12% of the overall resource, so obviously significant upside potential there. We will update the market as we progress in terms of these exploration opportunities. Finally, just final outlook and my closing slide then is to say sure, investors, we have a proven track record on delivering to shareholder returns and we will continue to do so. We'll continue to focus on our cash generation projects. We have disciplined capital allocation policies in place and also have proven over the last few years, we have mentioned five consecutive years of dividend payment that we are committed to returning value to shareholders and also our new dividend policy is testament to our commitment. I've mentioned just in the previous slide various opportunities for growth, and we believe that we will be able to continue doing that. The PGM market, although there are many external factors that impact and continuously play a role, we do believe that the market is robust. We are cautiously optimistic about pricing. We know I mentioned some of the global socio-political factors that play a role, but in general our outlook's, we're confident and remain, as I said, cautiously optimistic. Then just finally, the production ounce guidance. We've stated what our estimate for this year is. If there's no adverse or worse impact from Eskom, for instance, and our grades hold through, there might well be more upside to this guidance. Longer term, you can see that 2024, 2025 onwards the increased production profile. That I think concludes just the presentation from our side. Alessandro, I will hand over to you then if we can look at some of the questions. Perfect. Ja, Luan. Thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab, which is situated on the top right corner of your screen. While the company take a few minutes to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your investor dashboard. Ja, Luan, you can see we received a number of questions throughout today's presentation. I might just start with the first pre-submitted question here, which reads as follows. Why does Sylvania only report results against the previous period? Wouldn't like for like analysis with the same period last year also be helpful? Thank you, Alessandro. I think that one, and maybe there's a slight bit of confusion. In terms of this half year performance, we have reported half year one of 2022 to the corresponding half year of 2021. That is like for like periods. The quarterly results we do report on consecutive periods. They are slightly different because it's a quarterly period. The guys don't want to look four periods back for the results and we do that. We do, as I said, quarterly results that we produce is back to back. These half year results are in fact comparing with a comparative period. It is a like to like comparison. Perfect. Thank you very much. Just turning to the next question. How do you see the supply-demand balance for platinum evolving over the next seven years, and what are your forward plans in relation to this background? Look, I've touched on this slightly on our market outlook. I think there's two things when you look at the platinum supply and demand in particular. I think is what the question asks. Platinum has seen in recent years quite a decline as automotive manufacturers move from diesel predominantly. The amount of diesel manufacturing reduced with platinum's use in the auto catalyst to more gasoline vehicles, where palladium certainly had a higher market share. From supply and demand fundamentals, I think short-term wise, there's always the element of when do people or manufacturers start to substitute and shift between platinum and palladium. I think there's not a significant portion of that forecast at the moment. What probably is more driving at the moment is the supply risk to platinum and palladium. I think most of the primary and significant producers in their recent results announcements since December, who also announced this past week, have indicated that there was significant impact by the load shedding on production. Certainly the supply pressures are forecasted, and I mentioned earlier that Standard Bank view that as one of the key risks and the factors in them having their higher platinum price outlook. I think in the short to the midterm supply fears from South Africa, who is the major big platinum producer in the world, is driving the price. Longer term, platinum will play a more significant role in the hydrogen economy, hydrogen fuel cells going forward. Whereas, when you look at that substitution of internal combustion engines going forward, with either battery vehicles or platinum fuel cells, platinum is forecasted to play a more important role. That's why you see typically platinum's medium- to longer-term price outlook is increasing. What can we do about it? What's our plans? Unfortunately, with the PGM split we have in our baskets, from our dump operations, we're very fortunate that platinum is actually the biggest of our component, about 65% platinum in our PGM. If the platinum price increases, the dump operations would benefit significantly. On the exploration assets, the platinum PGM is actually slightly lower. There's more palladium rich. But also what the exploration projects offer in future is that they are significantly higher in nickel and copper metals. Those two, again, in the battery and the green economy, playing a major role. Palladium as well. We can't change the content of our minerals, but I think we have a quite well-diversified basket within the PGMs that if one of the PGMs have a higher price outlook, we should benefit from these to still post well for a profitable, sustainable business going forward. Perfect. Thank you. A question here on dividend, which asks if you can confirm whether you'll be paying two dividends, one in April, one in December 2023, as per 2022. Yes. I think Lewanne actually did answer that in her thing, but maybe just to clarify again, I think there was a question as well about windfall dividend. The new policy now says that we are looking at to pay two dividends, or a dividend in two tranches for the year. Roughly about one third of our estimated dividend for the year during the half year, and then a final payment equivalent about two thirds, at the end of the financial year. That is how the current policy is written. By taking this policy on board, and as we mentioned, it's a minimum of 40%, and it could well be more. We're looking to move away from a special or a windfall dividend, like we have declared in the past two years where there was a windfall dividend. I think during our extensive engagement with institutions, analysts, and shareholders during the past year or two about our dividend policy, there's certainly a lot of people indicated that it's very difficult to forecast a windfall dividend, for instance, in their modeling, because they're once off dividends and they would prefer us having a more stable, consistent, annual dividend policy. That is what we've tried to set out to do. As I said, it will be two payments as the question has been asked, roughly one third of the received dividend for the quarter estimated at the half year results, and then a two-thirds final dividend at the end of the year. Perfect. Jaco, thank you very much. Given the possible decline in the use of platinum in the motor industry, is the board planning for such eventuality? Further, what future vision has the board for the company? Look, I think it ties somewhat in with the previous question and answers. I said, we have different components in our basket. I think there are two views and asking my personal view on it as well. The big factor with our current PGM basket in the market is how fast the uptake of electric or fuel cell vehicles would be compared to the combustion vehicles. Also, once you say so, you have, first of all, it's moving away from combustion, and then it's the ratio of fuel cell, which will still be very good for the platinum market because it will consume platinum, but versus battery elements that use less PGM. It depends on what your view is about how fast that would be able to roll out. Certainly, from a mining perspective and most of the mining conferences and some presentations I've attended, there's certainly a big risk that mines globally will not be able to meet the demand for the battery metals and the green energy metals going forward, and therefore that rollout could well be slower than currently anticipated. I'm also not in a position to tell you now exactly when it will happen and at what rate. I do personally think that it's going to be slower than most people anticipate at the moment. I certainly think outside the first world countries, the more developed world, certainly there's a lot of infrastructure that have to be in place to convert and move away from internal combustion engines. That view certainly plays a massive role on how you view the market going forward. Perfect. Thank you for that. A lot of investors seem to be calling for another special dividend. Would it be better to hold cash for further projects, efficiencies, or expansion? Personally, I think the current dividend strikes the right balance. Yes. Thank you. I think I mentioned just in one of the previous answers that we would try to move away now from a special or a windfall dividend. Yes, we would try to maintain our dividend policy, and as I said, the current dividend policy allows us to distribute more. If we have periods of higher metal prices, higher production, then we are able to distribute more than the minimum 40%, but at least investors know that they'll get the minimum of 40% available. Looking at future projects, the short to medium-term projects, the items we at the moment say is in the pipeline and we know about, we're sure that the cash holding, cash reserves we currently have are able to cater for those. Going forward into the future, we certainly would evaluate the needs for the cash. That decision will impact on us to say, is it a 40% or 50% or a 60% free cash flow distribution, will be determined on what we need to provide for going forward. I think that's why Anne mentioned very importantly the adjusted free cash flow. She said it's net of debt, governance reason. We don't have any debt at the moment, so that's not the issue. The projects that we would then, if we have to provide for them, would be projects that we would announce, and shareholders would be aware of and what the benefit would be. Yeah, we will continuously see that we strike the right balance of providing for growth and providing consistent return to our shareholders. Perfect. Jaco, thank you very much. That concludes the pre-submitted questions, but as you can see, we've received a number of questions throughout today's presentation. If I could just ask you to read out the questions and give responses where it's appropriate to do so, I'll pick up from you at the end. Okay. Yeah. I see we have about 10-15 minutes. I think one of the first questions I see on the side here is somebody saying regarding the share buyback program, why the company does not buy more shares in the market. Is it not at an attractive price? I think we try to balance share buybacks with dividends, and we historically try to do that. Anne have mentioned to you that, I think over 56 million shares bought back over the last number of years. It's been a significant thing. I think, also through our engagement with our shareholders, there's always the view for that more stable return. In terms of dividends, I've seen some shareholders mention and said, "Rather return a dividend and decide which company to buy the shares, be it in Sylvania or somebody else." That's always the one argument. There's some of our shareholders that say they prefer the dividend and where you can have a clear policy. We do, however, from time to time, the board will assess if we believe there's a potential weakness in the market or if we do require shares for management or employee share buyback programs and share programs, then we might buy back in the market when the price allow. We currently don't have any formal share buyback programs announced. As I said, the board continue to view that opportunistically going forward. I hope that answered that question. I'm looking at another question that says, "Are you holding very large amount of cash? Why, and what are your plans to use it?" We do take several factors into account when we look at our cash holding. We look at providing certainly for our, typically about a 4 months working capital provision that in the eventuality, like we've seen just in recent years during the COVID period, we are able to cover our commitments and salaries and for the business. We keep working capital. We make provision for our taxes and capital allocations and also for potential growth opportunities. That's how we determine our cash holding, and we will consistently review our cash holding together with the free cash flow generation going forward to decide on the specific dividend payment going forward. As I said, we've guided the minimum amount, and these overall requirements for cash would play a role in declaring higher than the minimum dividend going forward. Another question says, "Is there any chrome associated with the Northern Limb projects?" The Northern Limb projects does not contain any chrome at all. It's below detectable limits on most of those projects. It is pure PGM projects. Well, one benefit from it. Probably on the downside is there's no chrome revenue from any chrome produced. On the positive side, one of the key impacts with your smelters being able to treat your concentrate from this project is what the chrome content is. On our current operations, chrome is viewed very negative in platinum concentrate for smelters. Whereas in these projects, there is no chrome, so that should help us in terms of the commercial marketing of the concentrates. Talking about chrome, however, on the further dump operations we are looking at, third-party opportunities as I've mentioned. They are obviously it's chrome tailings and run-of-mine material. There we're increasingly finding that the partners or the third parties we're engaging with want more exposure to PGMs, following the success we've had certainly over a number of years with some of our peers in the market. In those instances, we might take up slightly more exposure to the chrome market, which actually at the moment is on or near record high price or very attractive pricing at the moment in the chrome market. It will be a combination of balancing the PGM versus chrome exposures on new projects around the dump site, but on the exploration side, to the Northern limb, no chrome involved. There was another question that also asked about the cash. I think I have answered that one. Another question about share buybacks, and I think I've also answered that one. There's a question that says that the company produces 72,000 ounces for the year. Current spot PGM price means the net profit for the year is likely to be around $50 million versus market consensus of $60 million. Should the company update the market on this? Now, as I mentioned, at the start of the presentation and also I think we mentioned in our statements. We always, for these kind of presentations, use a spot price outlook. What is the current spot price we're receiving? It is at the time when typically, say, the last two weeks average before we do the presentation. Then we do indicate consensus and institutional sensitivities to see how it would be. That is an indicative outlook, and we always warn to say, please, it is an indicative view only. We obviously, as we get more accurate information, so twice a year when we do the updates to these investor presentations, we update the market based on the spot price and give the sensitivities in terms of the market consensus and the outlook. On guidance, certainly on a quarterly basis, we assess where we are going with our ounce production. As I said, we after our second quarter increased the guidance. We will assess at the end of our third quarter again where our production guidance is going, and then we'll certainly update the market on a quarterly basis on our PGM ounce forecast for the year. Yes, we do update the market, as I said, quarterly on the ounces and then twice a year based on the market outlook on the pricing. There's a question that says, are there any data to suggest what the demand for PGMs may be required for fuel cells that you are aware of? Now, certainly there are different types of cells. When you look at the fuel cells, most of the analysts would say to you, it can be up to double the loading for a fuel cell compared to internal combustion catalysts. I'm not qualified to tell you exactly the numbers. There are some research of analysts and suppliers that do calculate some of it. It is quite variable between the different technologies used, the different suppliers who forecast that. I think the general view is from a platinum point of view, certainly it will use significantly more platinum in a fuel cell than in an auto cat. I unfortunately can't quantify the number for you. There's a question relating to power. It says, when do you expect the current power outages to stop and the power needs to be returned to normal operation? Again, we can follow on what are being communicated to us by the Eskom utility and by government in South Africa. I certainly at the current forecasts, the estimate is and the guidance from utility, government, and also some analysts are that the current situation would most probably continue until about June, July this year. There are three things that at the moment is impacting significantly on the current power supply. The one is the most recently commissioned and built power stations, Kusile and Medupi, are not running at design capacity. There's a lot of work to try and improve that and a lot of work going in to get the power output of those two up. Secondly, because of the aging infrastructure at our existing power stations, there's a lot of downtime and unplanned maintenance. They are doing a lot of work to try and resolve that. Thirdly, that I think would be the big swing for the industry at the moment is that one of the modules or a big part of the nuclear power plant in South Africa, at Koeberg, is down for a planned upgrade, and that's necessary in order to extend the life of that power station by a number of years. That is forecasted to come back online later in the year. That's why the guidance we currently get on the power situation is that it would be going to about the middle of this year. Saying that, I think I've mentioned earlier that, barring a further significant deterioration in the situation, we don't anticipate any major or more significant downtimes. Where we do experience downtimes at the moment, we are progressing with backup power solutions so that we can mitigate that. That's all. I hope that answered that question. There was another question just on the basket price, where it is heading. I think the previous answers maybe addressed that. There's another question: how can you please comment on the continual underperformance of the share price with an extremely low P/E ratio, and could you comment on your performance on the future performance of the rhodium? Can you comment on your performance and the future performance of the rhodium? I get a bit lost in the last part of the question, but maybe let's first focus on the first part of it. What people often look at the fundamentals. We mentioned, it's a low-cost, low-risk business, cash generative, five consecutive annual dividends, growing dividend for the company, growth prospects, massive cash balance or almost a third of the market cap in cash reserves. Certainly, everybody expects the share price to trade higher. We expect the share price to trade higher and would hope for it to trade higher. Unfortunately, we're not in control of it, and the markets will do what the markets will do. I sometimes look at things we think historically, certainly, if you look a few years back, I believe that shareholders might have thought, and myself think this, there's not enough clarity in the growth potential for the company, and then the future production is one thing. What I think probably is also playing quite a big role is the sentiment around South Africa and the power. You just asked us about the power at the moment. That, I think, plays a role, and we see some of our peers also trading below what we think they should be trading. Then, probably one other important point is that, us being at the host mines, that's a private company and not posting formal resource statements or estimates for that to illustrate the life of the project. People probably feel uncomfortable to predict the life without it being published. However, I've mentioned before that our host mine relationship at Samancor has about. Samancor is the biggest producer in South Africa. South Africa, the biggest resources in the world for chrome. Certainly, we have a very positive outlook. Yes, I can't explain it for you. I hope it improves, and certainly, we observe. I think, conscious of the time, I unfortunately don't have time for further questions, Alessandro, so. Yeah. Jaco, no problem at all. Thank you very much for that. I think you've addressed all those questions you can from investors, and of course, the company will review all questions submitted today and will publish those responses on the InvestorMeetCompany platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, Jaco, could I just ask you for a few closing comments? Thank you, Alessandro. Yes, I think as we've pointed out, and I think we illustrate for these financials, that Sylvania is a very attractive business, cash generative, and we have a strong record of both in terms of performance as well as shareholder returns. Certainly, through a combination of dividends and buybacks, we would focus on building on that going forward. I also believe that by leveraging on our experience and expertise over the years, and by continuing to do what we do, and have been doing, we will continue to be able to add value to our employees, our communities, and stakeholders in South Africa, as well as our shareholders, in terms of not only continuing to pay dividends, but also to ensure that we maintain and grow the current business so that we have a sustainable business for many years to come, and we'll be able to continue adding value overall. Thank you very much for the opportunity. Thanks for all the support, and we appreciate it. Thank you. Jaco Prinsloo, and thanks once again for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Sylvania Platinum Limited, we'd like to thank you for attending today's presentation.