Our combined base-case valuation is therefore 142.9p per share, 67% above the current share price. We would argue Sylvania has the ability to deliver considerable value on a number of fronts:
• Recovery rates could prove conservative and while we have raised our recovery rates to 60%, there is still room for improvement on this figure. • Grade assumptions remain key. While we have increased our average figure to 4g/t from initial guidance of 2.5g/t we believe there could still be upside on this figure, but we will await greater detail before raising this variable any higher. • Additional tailings and arisings – there remain further sources of tailings and current arisings from producing chrome mines on the Bushveld, which we expect Sylvania will continue to target in an effort to add longevity to what is currently a relatively short-term cash and earnings stream. Sylvania can now demonstrate its ability to deliver plant construction on time and within budget, returning chrome tonnage to industry players at attractive prices. • Everest North - an acceptable deal with Eastern Platinum could add to Sylvania's resource base. Further progress towards a Measured resource will add value to our current base-case. • PGM prices – not an area of influence for the company, but if we run our current valuation using spot prices for the current life of the tailings available then our company valuation rises from 142.9p to 194.1p per share.
SLV Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
