Sylvania Platinum : Interim Financial Results for the six months ended 31 December 2022

Condensed Consolidated Interim Financial Statements

for the half year ended 31 December 2022

Contents

Corporate Information.............…………………………………………………………………………………………………………………………………………………………………………….……3

Directors' Report………………………………………………………………………………………………………………………………………………………………………………………………………4

Directors' Declaration………………………………………………….………………………………………………………………………………………………………………………………………….11

Audit Report………………………………………………….………………………………………………………………………………..……………………………………………………………………..12

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income…………………………………………………..……………………………….…13

Condensed Consolidated Statement of Financial Position………………………………………………………………………………………………………………………………………14

Condensed Consolidated Statement of Changes in Equity………………………………………………………………………………………………………………………………………15

Condensed Consolidated Statement of Cash Flows………………………………………………………………………………………………………………………………………………..17

Notes to the Condensed Consolidated Financial Statements………………………………………………………………………………………………………………………………….18

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Corporate Information
Directors	SA Murray
	E Carr
	AJ Reynolds
	S Scott
	JJ Prinsloo
	L Carminati
Company secretary	Conyers Corporate Services (Bermuda) Limited
Principal registered office	Clarendon House
	2 Church Street
	Hamilton HM11
	Bermuda
South African Operations	Constantia Office Park
	Ground Floor, Cycad House
	Cnr 14th Avenue & Hendrik Potgieter Road
	Weltevredenpark
	1709
	South Africa
	Telephone:	[phone]
	Facsimile:	[phone]
Share Registry	Computershare Services Plc
	The Pavilions
	Bridgewater Road
	Bedminster Down
	Bristol BS99 7NH
	United Kingdom
Auditor	PricewaterhouseCoopers Inc
	4 Lisbon Lane
	Waterfall City
	Jukskei View
	Midrand
	2090
	South Africa
Solicitors	Conyers Dill & Pearman Limited	Gowling WLB
	Clarendon House	4 More London Riverside
	2 Church Street	London
	Hamilton HM11	SE1 2AU
	Bermuda		United Kingdom

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Directors' Report

The Directors present their report on the consolidated entity (referred to hereafter in this report as the Group) consisting of Sylvania Platinum Limited (Sylvania or the Company), its subsidiaries, associates and joint arrangement for the half year ended 31 December 2022. Unless otherwise stated, the financial information contained in this report is presented in United States Dollars (USD).

Directors

The names of Directors who held office during or since the end of the half year and until the date of the report are noted below. Directors were in office for the full period unless otherwise stated.

SA Murray - Non-executive Chairman

E Carr - Non-executive Director

AJ Reynolds - Non-executive Director

S Scott - Non-executive Director

1. Prinsloo - Chief Executive Officer L Carminati - Chief Financial Officer

Review of Operations and Half Year Financial Results

The Sylvania cash generating subsidiaries are incorporated in South Africa with the functional currency of these operations being South African Rand (ZAR). Revenues from the sale of PGMs are received in United States Dollars (USD) and then converted into ZAR.

The Group's reporting currency is USD as the holding company is incorporated in Bermuda. Corporate, general and administration costs are incurred in USD, Pounds Sterling (GBP) and ZAR.

For the six months under review the average USD:ZAR exchange rate was ZAR17.32:$1 and the closing exchange rate at 31 December 2022 was

ZAR17.05:$1.

Operational performance

The Sylvania Dump Operations (SDO) achieved 38,471 ounces for the first half of the 2023 financial year which was 19% higher than the corresponding period in the 2022 financial year. The increase in production is primarily due to improved feed grades, stability and flotation performance at Mooinooi as well as the newly commissioned Lesedi MF2 plant and improved recovery efficiencies. A step change improvement in recovery following the implementation of a new flotation reagent regime at Lannex also contributed to the increased ounces.

PGM plant feed grade increased by 1% during the period and PGM plant recovery increased 5% when compared to HY1 FY2022, primarily related to the increase in and stabilisation of ROM feed from the host mine at Mooinooi.

Consequently, due to the improved production performance, an increase to the full year PGM production estimate was announced in January 2023 with 70,000 to 72,000 ounces now targeted by the Company for the full year.

SDO cash costs per ounce decreased 18% from $736/ounce to $602/ounce while the average ZAR:USD exchange rate depreciated 15%.

Operational focus areas

During the period, the SDO developed a new improved planned maintenance system which was successfully implemented at Millsell. This is expected to improve plant availabilities and runtime, resulting in improved process stability and increased efficiencies and is being rolled out to selected priority operations.

ROM grades at the Mooinooi operation have increased significantly and the operation continues to focus on communication with the host mine in relation to the preferred source of ROM and associated grades in order to sustain these better grades.

Focus remains on the operational aspects of the SDO tailings facilities by the operations teams, the engineer on record, relevant expert advisers, and associated service providers.

Reagent optimisation continues at all plants to explore improved efficiencies and further contribute to an increase in metal recoveries.

The control of operational costs has been well managed during the period with continued attention being paid by the SDO.

Capital projects

Capital spend decreased during the current period compared to the corresponding period in FY2022 from $7.4 million to $6.2 million during HY1 FY2023, comprising $5.3 million optimisation and stay-in-business capital, as well as $0.9 million spent on exploration projects. All capital projects are fully funded from current cash reserves.

The secondary milling and flotation (MF2) project at Tweefontein was completed during the period and commissioning commenced during December 2022. Full optimisation is planned to be reached in the coming months.

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Directors' report (continued)

The Lannex MF2 project is under construction and scheduled for commissioning during early FY2024. The construction of the MF2 modules will improve the upgrading and recovery of PGMs at the plants.

In order to mitigate current power interruptions at the Lesedi and Millsell operations which are most affected by the current Eskom loadshedding stages, back-up power generation projects have been initiated and are currently in execution at these operations, with commissioning of the first system at Lesedi anticipated during the next four to six months.

Health, safety and environment

During the period under review there were no significant occupational health or environmental incidents reported. There were no Lost-time Injuries (LTI) recorded and the Doornbosch operation remains 10 years LTI-free. The Lesedi operation achieved the milestone of three years LTI-free during the period and Lannex has exceeded two years LTI-free. Mooinooi and Tweefontein have each exceeded one year LTI-free.

Financial performance

Revenue

The average gross basket price for PGMs for the six months to 31 December 2022 was $2,513/ounce compared to $2,966/ounce for the period ended 31 December 2021. The Group recorded net revenue of $79.9 million for the six months to 31 December 2022, a 16% increase half-year on half-year, as a result of the higher PGM ounce production, slightly lower basket price, as well as a positive sales adjustment for the period.

Revenue split	31 December 2022	31 December 2021
$'000	$'000
Revenue on sales (4E)1	70,923	65,812
Revenue (by-products)2	7,020	5,628
Sales adjustments3	1,959	(2,384)
		79,902	69,056

1. Sales revenue from Platinum, Palladium, Rhodium and Gold
2. Sales revenue from by-product and base metals - Ruthenium, Iridium, Nickel and Copper
3. Adjustment to revenue recognised for movements in the PGM price and exchange rate

Cost of sales

The operational cost of sales represents the direct and indirect costs of producing the PGM concentrate and amounted to ZAR556.0 million for the reporting period compared to ZAR458.4 million for the six months to 31 December 2021. The main cost contributors being salaries and wages of ZAR170.4 million (HY1 FY2022: ZAR144.5million), mining costs of ZAR61.1 million (HY1 FY2022: ZAR53.2 million), reagents and milling costs of ZAR51.1 million (HY1 FY2022: ZAR33.0 million) and electricity of ZAR64.9 million (HY1 FY2022: ZAR55.8 million).

Group cash cost per ounce was ZAR12,851/ounce compared to ZAR13,247/ounce in the previous corresponding period. The all-in sustaining cost (AISC) for the Group amounted to ZAR15,398/ounce and an all-in cost (AIC) of ZAR17,623/ounce for the period to 31 December 2022. This compares to the AISC and AIC for 31 December 2021 of ZAR15,404/ounce and ZAR18,273/ounce respectively.

Other expenses

Other expenses comprise mainly general and administrative costs of $1.5 million (ZAR26.0 million) for the six months against $1.4 million (ZAR20.3 million) for the corresponding period in the prior year. These costs are incurred in USD, GBP and ZAR and relate mainly to, regulatory costs, insurance, advisory and public relations costs, consulting and legal fees, director's fees, computer expenses and travelling costs.

Finance income and finance costs

Interest is earned on surplus cash invested in South Africa at an average interest rate of 4.35% per annum as well as on the loan to Forward Africa Mining with regards to the Grasvally Chrome Mine (Pty) Ltd (Grasvally) sale at JIBOR + 3%. Interest expense is accounted for on various lease agreements for example office rental at rates intrinsic to the relevant lease agreements.

Mining and income tax

Income tax is paid in ZAR on taxable profits generated at the South African operations at a rate of 27%. The income tax charge for the six months to 31 December 2022 was ZAR228.0 million compared to ZAR136.1 million for the six months to 31 December 2021 due to the increase in profit and the capital gains tax as a result of the sale of shares with regards to Grasvally. Deferred tax movements of ZAR6.0 million for the Group relate mainly to unredeemed capital expenditure and provisions.

Cashflow

Cash is held in USD and ZAR. As at 31 December 2022, the Company's cash and cash equivalents balance was $123.9 million. Cash generated from operations before working capital was $46.8 million for the reporting period, with a change in working capital of $3.6 million mainly due to the movement in trade receivables and trade payables as a result of the higher ounces produced and an increase in the cost base. $7.7million was paid in provisional income tax and the Company spent $6.2 million on capital expenditure comprising of $5.3 million on specific optimisation and stay in business projects, and $0.9 million on exploration projects. In December 2022, $25.6 million was paid to shareholders as a dividend. The Group holds a portion of cash in ZAR to fund operational working capital and capital projects. A foreign exchange loss of $1.6 million was incurred due to the 7% depreciation of the ZAR against the USD.

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