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.
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