Sylvania Platinum Ltd. · LSE:SLP
Sylvania Platinum — Royal Bank of Canada Presentation October 2009
35 slides from Sylvania Platinum's conference presentation, October 2009
Slide 1: High-margin, low-risk PGE Producer
High-margin, low-risk PGE Producer TM McConnachie, MD Royal Bank of Canada Presentation October 2009
Slide 2: Disclaimer
Disclaimer Certain forward-looking statements may be contained in this presentation which include, without limitation, expectations regarding platinum prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as t
Slide 3: Sylvania in Brief
Sylvania in Brief • Key drivers: – Business model • High-margin, low risk surface dump processing operations and shallow opencast mines – Future • Growth facilitated by access to down stream smelting and funded by strong cash flows and balance sheet – People • Relevant experience with track record i
Slide 4: Sylvania Corporate Profile
Sylvania Corporate Profile • South African tailings dump and opencast platinum group metals producer • Shares in issue: 217m • Market Capitalization: A$277m • Largest Shareholders* – Audley Capital Advisors – 16.69% – Henderson Global Investors – 8.70% – JP Morgan Asset Management – 6.49% – Credit S
Slide 5: Sylvania Corporate Structure
Sylvania Corporate Structure
Slide 6: Locality
Locality 9 SYLVANI , ‘ (! LOCALITY WITHIN THE BUSHVELD IGNEOUS COMPLEX N | Harriet's Wish (GAU) A LOCALITY WITHIN | Aurora (SXM) SOUTH AFRICA Polokwane ® (Pietersburg) Grass Valley (SXM) ; a SOUTH AFRICA (Potgietersrus) Northern Limb q wena S . 5 eet y 2 Doornbosch (SLV) pe fea nt Nylstroom ed —__La
Slide 7: Performance to profit by year
Performance to profit by year FUNDAMENTALS 2008 2009 Basket Price US$/oz 2626 881 Our cost/oz 408 440
Slide 8: Sylvania Resources Project Ounce Profile
Sylvania Resources Project Ounce Profile
Slide 9: Total Capex 2009 – 2011 against ounces in 2011
Cost Comparison to other start-ups planned position by 2011 Total Capex 2009 – 2011 against ounces in 2011 Source: Based on RBC-Report
Slide 10: Vision
Vision Create an Integrated PGE Metals Company
Slide 11: Unlocking Value from PGE's & Ferrochrome
Unlocking Value from PGE’s & Ferrochrome • Values produced by floatation of low-grade PGE material cannot be processed by current conventional smelters • Sylvania believes using DC-smelting technology can unlock values to low PGE-grade mineral resource projects and concentrates • Apply direct DC-fur
Slide 12: Smelting Technologies
Smelting Technologies • Processing of PGE Concentrate Sources – Phase 1 - PGE ore sources from dams and UG2 feed • DC smelting of metal alloy and leach process No roasting required due to low sulphur and low base metals (normal wet scrubber and air cleaning) – Phase 2 – PGE majority sourced from Pla
Slide 13: The Proposed Ruukki Transaction
The Proposed Ruukki Transaction • Announcement for Ruukki to acquire 100% of Sylvania – 1.81 Sylvania shares for 1.0 Ruukki share • Unanimous recommendation by the independent directors of Sylvania – In the absence of a superior proposal and subject to confirmation from an independent expert that th
Slide 14: Proposed Merged Group Structure
Proposed Merged Group Structure
Slide 15: Sylvania Platreef Resource Target
Sylvania Platreef Resource Target (incl Resources) • Wide Mineralised Ore Zone (presently exploited by PPRust Angloplats) • Low cost open pit mining • Modular plants 100 000t/pm • Phased roll-out of plants ensures Mineral Resource Grasvalley* Aurora* Harriet's Wish** Ave tons (millions) 71 133 20 22
Slide 16: Sylvania – Growing into the Future
Sylvania – Growing into the Future Conceptual Production
Slide 17: People
People Leading SA mid- • Experienced board focused on value creation tier PGM producer • Committed and talented employees and contractors • SHE-driven culture Low-risk tailings and shallow • Empowered mining assets – Ehlobo Metals (Pty) Ltd
Slide 18: PGM markets – Positive Outlook
PGM markets – Positive Outlook • Vehicle Sector remains key demand driver – New ventures for growth – auto sector in BRIC countries – Euro IV legislation imposed in Shanghai, Beijing, Guangzhou – Euro V by end 2009 in Europe – new vehicles will need to be compliant • Supply constraints expected to r
Slide 19: Attractive Valuation
Attractive Valuation • Recent Research Reports • Lowest Cost Producer – Ambrian (Nomad); – RBC Capital Markets; • Buy Recommendations – Investec Securities; – Ambrian – Mirabaud; – Investec Securities; – Edison Investment – Mirabaud; Research; – Hogan & Partners; and – Evolution Securities; – Verita
Slide 20: Conclusion
Conclusion • Dump Operations – Dump operations are profitable – From 5 x 37 000 ton plants and 1 x 70 000 ton plant – At a steady state of 80 000oz/yr • Develop the Platreef Resources to produce 376 000oz/yr – From 8 x 100 000 modular plants – From opencast, low-stripping ratio operations • Develop
Slide 21: Investment Case
Investment Case • Business Model – High margin, low costs and low risks • Future – Growth funded by robust cash flows • People – Growth orientated and experienced team • Sector – Positive PGM Fundamentals • Attractive Valuation
Slide 22: Annexures Only
High-margin, low-risk PGE Producer Annexures Only TM McConnachie, MD Royal Bank of Canada Presentation October 2009
Slide 23: Disclaimer
Disclaimer Certain forward-looking statements may be contained in this presentation which include, without limitation, expectations regarding platinum prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as t
Slide 24: Annexure I – PGM Markets
Annexure I – PGM Markets Platinum Production Trends from 1999 - 2008 Source: Johnson Matthey
Slide 25: Annexure II – Mining Depths
Annexure II – Mining Depths • The opencast operations compares favorably with mainstream operations which currently average depths of around 1,400m • Majors’ new shafts averaging 1,800 – 2,200m depth Source: Quinzele Resources
Slide 26: Annexure III – Transaction Values of Sylvania's New Acquisition
Annexure III – Transaction Values of Sylvania’s New Acquisition
Slide 27: Annexure IV – Platreef Properties
Annexure IV – Platreef Properties
Slide 28: Annexure V – Northern Platreef Project
Annexure V – Northern Platreef Project Aurora / Harriet’s Wish • Platreef (Estimated grades only) – 168 million tons – 1.34g/t – 6.7 million ounces – 0.05% Ni – 78 000 tons Ni – 0.08% Cu – 139 000 tons Cu • Potential for significant iron ore and vanadium resources as secondary project (Estimated gra
Slide 29: Annexure VI – Southern Platreef Project
Annexure VI – Southern Platreef Project Grassvalley • 71 Million tons (Inferred & Indicated Resources) • 1.23 g/t (2e+Au) – 3.4 million oz • 0.11% Ni – 100 000 tons Ni • 0.03% Cu – 28 000 tons Cu
Slide 30: Annexure VII – Platreef Properties
Annexure VII – Platreef Properties Requirements for Smelting Projects • Convert 12 MVA DC Furnace to smelt PGE’s – Estimated cost of conversion R300m • Base Metal Removal Plant – Metal Atomiser or granulator estimated to cost R50m – Converter or Hydro-metallurgical removal of iron and base metals •
Slide 31: Annexure VIII – Platinum Smelting
Annexure VIII – Platinum Smelting Conventional Smelting DC Smelting
Slide 32: Annexure IX – Platinum Smelting
Annexure IX – Platinum Smelting • Sylvania believes that DC arc smelting is applicable for low grade concentrates derived from Platreef type ore bodies. • Sylvania has access to DC arc smelting technology at Mogale. • Sylvania is investigating downstream processing opportunities for the metal alloy
Slide 33: Annexure X – Platinum Smelting
Annexure X – Platinum Smelting Platreef Project Plan • Complete Bankable Feasibility 12 months • Mining licence application 1 year • Construction 9 months • 15 year life will give the following annual production – Tons mined 12 million • PGE 376 000 oz/yr (Position company above AQPSA 196 000 ounces
Slide 34: Annexure XI – Platinum Smelting
Annexure XI – Platinum Smelting Capex and time scale for Platreef Project • First 100 000t feed plant planned for 2011 on Southern Project – Produce 37 600 ounces of platinum per annum (3 100 oz/m) • Ni = 588 t/pa • Cu = 504 t/pa (from 100 000 t/m) • Business Plan – Continue building a new 100 000t
Slide 35: Annexure XII – Platinum Smelting
Annexure XII – Platinum Smelting Platinum Summary • Based on: – 75% Recovery of PGE’s and 80% of LME (US$1,200/oz) and 70% recovery of Base Metals and 70% of LME and an exchange rate of 9 ZAR/US$ • This project will yield the following returns per plant – Production • 37 600 ounces per plant per ann
Sylvania Platinum — Royal Bank of Canada Presentation October 2009 on 6ix