Valterra Platinum Limited

Good morning, ladies and gentlemen. My name is Teto Maage. I am the head of investor relations at Anglo American Platinum. Thank you for taking the time to join us today for our annual results, both in person as well as online. I would like to draw your attention to the question of the statement that is actually on screen. And I would appreciate if you could actually read it in full at your own time. We have, at the end, allocated time for Q&As at the end of the presentation. So with that said, I will now hand over to our CEO, Craig Miller, followed by Sayuri Naidoo, our acting CFO, to take us through the presentation. Thanks, Craig. Over to you.

Thanks, Teto. Good morning, and welcome to the presentation of our 2023 annual results. I'd like to acknowledge our chairman, Norman Mbazima, and some of the members of our board who are here today, as well as our regional director for Africa-Australia, Tembo Mkhonazi, John Weiss, Steve Peary, who are with us in the room, as well as the Anglo-Platinum Management Committee. I'll take you through our operational and market performance for the year. So Yuri will then take you through the financial results, after which we'll spend some time looking ahead and then taking your questions. So before I get into the results for the year, I'd like to start by giving you a sense of the several external factors which influenced our results in the year, many of which remain out of our control. The global market volatility, the exchange rates and interest rate uncertainties, and above CPI cost increases, and notably a 35% decrease in the PGM dollar basket price, all had a significant impact on our results. Despite this tough operating environment, we delivered on a number of our commitments. However, in responding to the challenges, we are working to improve our competitiveness and ensure our long-term sustainability of our business. These initiatives include capital and cost optimizations, which we outlined in December, and the proposed restructuring of the business, which we announced earlier this morning. So let's start with an overview of our performance for 2023. We're pleased to report and we're very grateful that we've had no fatalities at our operations in the last two years, our longest fatality free period. We also achieved a record low injury frequency rate of 1.61 per million man hours worked, which represents a 31% improvement year on year. We produced 3.8 million PGM ounces with an EBITDA of 24 billion rand and a mining margin of 35%. We ended the year in a net cash position of 15 billion rand, including the customer prepayment. These results were against the backdrop of that dollar PGM basket price of $1,657 per PGM ounce, the lowest level since 2019. So to provide more detail on safety, we remain committed to a zero harm at our operations and are constantly working on ensuring that our operations are safe, stable, and sustainable. Mojalaquena, Mototolo, and Unki have recorded more than 11 years fatality-free mining, and the Manderbilt has recorded three years without a fatality. At this moment, I would like to pause and remember the 13 Impala Platinum employees who tragically lost their lives in the incident at Impala Platinum's Rustenburg No. 11 shaft in November last year. As a result of that, we concluded a review of our own procedures through an extensive audit, and we are compliant with the standards that we have and have been taking on learnings from the incident itself. There is never room for any complacency when it comes to our commitment to zero harm. A holistic approach is required to ensure sustainability is integrated in the way we operate. In line with this, in 2023, we focus on the prioritization of our decarbonization ambitions through our renewable energy projects. Given that the production of electricity is the largest contributor to greenhouse gas emissions and the energy crisis that we face in our country, the focus on decarbonisation will enable us to secure a stable and greener energy to supply our operations. We've made significant progress to conclude the offtake agreement with Invusa Energy to supply 460 megawatts of electricity, which is expected to be commercially operational from 2026. This is part of the three to five gigawatt regional renewable energy ecosystem in South Africa, which is expected to supply the majority of renewable energy to our operations by 2030, enabling us to meet our target to be carbon neutral by 2040. We're pleased with the measures put in place to prevent environmental incidents and have not reported any levels four or five environmental incidents over the past year. We've continued to focus on employee well-being and community development through our initiatives, including those in education, health and livelihoods. And as we announced last Friday, I am pleased that three of our four mining operations have achieved their Initiative for Responsible Mining Assurance Certification. Amototolo and the Manderbilt Mines have achieved IRMA 75 and IRMA 50, respectively, while Unki in Zimbabwe has retained its IRMA 75 certification. We anticipate Makalekwena being recognized in 2025. We're the first mine, we have the first mines in South Africa to achieve this, once again demonstrating our commitment to be a responsible miner. The management of tailings storage facilities is essential for the safety of our employees and communities which surround our operations. In August last year, we reported a 96% level of conformance against the global industry standards on tailings management for what is considered extreme or very high potential consequence facilities for our own mines. GAPS identified to be closed out by the end of this year to ensure conformance of our own operations. We continue to leverage the standard to pave the way for safer and more efficient tailings management practices. We are as a company fully committed to the safety of the facilities and our actions are informed by the tailing storage facility experts. So moving on to our contribution to society. We continue to play a very significant role within the countries in where we operate. In 2023, we contributed 85 billion rand to broader society and stakeholders. We paid five billion rand in taxes and royalties. Six billion rand was paid to employees in salaries and wages. We spent 30 billion rand with local suppliers on procurement, as well as spent 700 million rand on social investment. We also reinvested 21 billion rand into the business and paid dividends to shareholders of about 12 billion rand. If we move across to our operational performance, Our metal in concentrate production was 3.8 million ounces, a decrease of 5% compared to 2022. Refined production declined marginally to 3.8 million ounces. Sales were up 2%, and we saw a marginal reduction in the production of base metals of 2% while recording a 17% increase in chrome production. The decrease in methylene concentrate production was mainly because of the planned infrastructure closures at Amunderbilt, poor ground conditions at De Schaabe, and the expected lower grade at Michalakwena. Production was further impacted by the lower output from Kroendal, reflecting the planned ramp down of its operations, as well as our disposal of our 50% share interest in the operation. These declines were partially offset by an increase in production by Unki, while production at Mototolo was relatively flat. So looking at our own mines and processing operations specifically, as I said, production at Makalakwena decreased by 5% compared to the prior year. Tons mined were up by 1% despite higher than anticipated rainfall, a mining contractor unperformance, drilling and sequencing challenges within the pit. Tons milled decreased by 1%, impacted by the breakdown in the first quarter at the Baobab Concentrator and further breakdown of the HPGR at the North Concentrator in the last quarter of the year. The 4E built-up head grade decreased, as expected, by 2% to 2.73 grams per tonne. This was in line with the guided range that we provided of between 2.7 and 2.9 grams per tonne, and is expected to remain in that range for the next two years. In the first quarter of this year, we do expect the grade to come in lower than that guided range, similar to what took place last year. However, it's anticipated to be in line with the guidance for the full year. So looking into the future at Makalakwela, we're looking at an open pit optimization, which is important to us to maximize value and to drive further efficiencies. In addition to this, we're prioritizing the drilling and the studies of the underground exploration declines, which will be an important step for securing higher grades, creating waste dumping efficiencies, and minimizing haulage costs. We have continued to work on resetting our relationships with our community stakeholders, including the cultural heritage work, as well as the work on the collaborative resettlement process. The Sarita-Rita school relocation is planned for completion in December 2024. This is to ensure that the proximity of the school to the mine is managed in line with environmental regulation requirements. In addition, our cultural heritage work has aided in identifying graves in areas earmarked for near-term waste dumping. Our diligence in following global breast practice has enabled us to relocate a significant number of graves in the last two years. We've opened up the required waste rock dump space for the next few years, and further dumping space is anticipated to be released this year. To turn into a Munderbilt, production decreased by 11%. This was as a result of the Tumela upper infrastructure and Dushaba open cost operations coming to the end, sorry, coming to the end of their life, leading to lower mining volumes. Continued poor ground conditions at Dushaba also contributed to lower production. This in turn resulted in lower productivity and higher costs when compared to 2022. Crone production exceeded expectations with a 19% increase in tons produced on the back of a 35% yield improvement, which is attributable to the optimization of the plant. As you know, the Crone price also increased by 53%, and therefore the Crone operations contributed around two billion rand to Munderbilt's economic free cash flow. We remain focused on the safety and continue to drive conventional mining excellence at Dushaba. To ensure that AmandaBuild enhances its performance, we will continue to implement modernized mining methods and cycle mining where it's feasible to do so. We've seen early successes and have learnings which will enable us to roll this out more effectively. The Middle Lachter underground project has been postponed and the Tumela 1 slabshaft will be that project which we'll look to take forward as it has a higher value case and which is required in the current environment in order to maintain current production levels. As I mentioned, Unki's production increased by 5%, benefiting from the concentrated debottlenecking project, which we completed in 2022. Total PGM production at Mototolo was in line with the prior year. And if we move across to refined production, Lower refined production was as a result of the 5% reduction in metal and concentrate production. The impact of ESCOM low curtailment was approximately 82,000 PGM ounces. This was partially offset by the release of concentrate stocks, which were built up in 2022 as a result of the Poliquani smelter rebuild. We initially guided that it would take up to 24 months to release the built-up work in progress. We were able to process a significant proportion of that in 2023 and will continue to release the remainder in 2024. Concentrate stocks have now returned to normalized levels. However, we saw an increase in match stocks as we closed the year. The availability of higher mat stocks, which are fed to the ACP, will allow for a faster release of work in progress throughout 2024. These stock levels are expected to return to more normalized levels by the end of the first half of this year. We continue to show improvements in the utilization of our smelters, driving efficiencies and freeing up capacity Rebuild cycles have been completed on time and within the expected budget. There is also an intentional mass pool reduction strategy at our concentrators to produce higher grade concentrates. This produces the same PGM content at lower concentrate volumes, which reduces the required primary furnace capacity and allows us to place the Mortimer smelter on care and maintenance, thereby reducing operating costs, capital, and enhancing our overall processing competitiveness. I'll now hand you across to Sayuri, who'll take you through the financials.

Thank you, Craig, and good morning, everyone. Our 2023 financial performance is reflective of the challenging macroeconomic environment characterized by the weaker PGM prices and the operational headwinds that Craig spoke to earlier. In summary, revenue generated was R125 billion, reflecting the significantly lower dollar basket price, partially offset by the 2% increase in sales volumes. The cash operating unit cost was R17,859 per PGM ounce as a result of lower own-mine production and above inflationary cost increases. This translated into an EBITDA of R24 billion with a mining margin of 35%. Our balance sheet remained strong with a net cash position of 15 billion rand, including the customer prepayment. And in line with our disciplined capital allocation framework, the board declared a final dividend of 2.5 billion rand, or 9.30 per share. Looking at EBITDA, which was 67% down compared to 2022, the main driver of the decrease was lower realized prices, most notably palladium and rhodium, which were down 37% and 58% respectively. The negative price impact on revenue was around R40 billion. Lower prices also impacted the purchase of concentrate inventory measurement, which resulted in a R10 billion increase in cost of sales compared to 2022. In 2023, the rand weakened 13% against the dollar, which had a R13 billion positive impact on earnings. EBITDA was negatively impacted by higher cash operating costs as a result of above CPI electricity costs, as well as increased drilling at Makalakwena and higher volumes of concentrate processed at smelters. Turning to unit costs, cash operating unit costs were R17,859 per PGM ounce. This is 1% lower than what we reported for the first half of the year, despite the 18% increase in ESCOM tariffs in the second half. This reflects our increased focus on cost management and was supported by a 5% increase in production in the second half. Looking forward, in response to the current low PGM price environment and to ensure we remain competitive, we have launched various cost optimization initiatives to drive lower costs in 2024. We are targeting approximately R5 billion in annual cost savings off a 2023 baseline. Our unit cost guidance is between R16,500 and R17,500 per ounce, which at the midpoint is around 5% lower than 2023, and therefore offsetting the forecast impact of input cost inflation of around 6%. On an all-in sustaining cost basis, this translates to $1,050 per 3 e-ounce. Cost savings are expected to be realized through operational cost efficiencies, such as improved consumption of electricity, diesel, and other consumables. the implementation of our reviewed organizational structures, the review of contractor spend, and the optimization of studies, exploration, research, and development costs based on the reprioritization of work. Working capital increased by R1 billion in the year. The release in work-in-progress inventory, as well as the drawdown in refined inventory in the year, resulted in a decrease in working capital of R3 billion. Higher purchase of concentrate creditors at year-end resulted in a further R3 billion reduction. and the impact of lower prices on purchase of concentrate inventory and creditors was a net R5 billion reduction in working capital. This was all offset by the R12 billion decrease in the customer prepayment due to lower prices. In 2024, we expect to see a further drawdown in work in progress as the furnace mat moves through the processing pipeline. This is, of course, dependent on the impact of any further ESCOM load curtailment. Total expenditure for 2023 amounted to R20.5 billion. Around R11 billion was spent on stay-in-business capital focused on improving the integrity and reliability of our assets, the delivery of replacement haul trucks at Mughalakwena, and the buttressing of the Falcorp tailings dam to ensure safety and conformance with global industry standards on tailings management. Capitalized waste stripping was R4.2 billion, and life extension capital amounted to R2.4 billion, largely on the Dibrochan project. Other project capital of R1 billion was incurred on the development of the Mukhalaqena twin exploration declines, and breakthrough capital expenditure was R1.7 billion on the copper debottlenecking and metal recovery projects. Total capital expenditure guidance is set at approximately R19 billion for 2024. We have reprioritised our stay in business capital, which is expected to be R5 billion lower, in order to preserve cash but still retain safe, stable and sustainable operations. As always, we are guided by our balanced and disciplined capital allocation framework. In line with this framework, we maintained our 40% payout of earnings for the second half of the year and declared a dividend of R2.5 billion. This translates into a total dividend of R5.7 billion or R21.30 per share for the year. Dividends declared to our employees as part of the TOBO employee share scheme, as well as our shareholders via our community trusts, amounted to 150 million rand for the year, demonstrating our commitment to creating value for all our stakeholders. I will now hand you back to Craig to touch on markets and the outlook.