Valterra Platinum Limited

Thank you. Good morning and welcome to the presentation of our 2024 annual results. So thank you for taking the time to join us both in person and online. Let me start by acknowledging our chairman, Norman Bazima and Suresh Karma, members of the Anglo-American Platinum Board who are here in the room with us today, as well as members of the executive team of Anglo-Platts. So firstly, I'd like to draw your attention to the cautionary statement, which we'd appreciate if you could read in your own time. So now briefly turning to the agenda today. First, I'll touch on safety, after which I'll take you through an update on our action plan, our 2024 operational performance, after which we'll spend some time with the markets. So Yuri will then take you through the financial results and our targeted capital structure. I'll conclude our outlook and an update on our demerger from the Anglo-American group. We have allocated time for questions and answers at the end of the presentation, which Teto will facilitate. So let me start with safety. Our commitment to eliminating fatalities and achieving zero harm in the workplace is our most important priority. As previously announced, I am deeply saddened by the devastating loss of three of our colleagues at Amanda Bilt's Tshaba operation during the year. Our thoughts and prayers are with the friends, families, and colleagues of Sir Piso Mokale, Usman Nglebe, and Basanda Langeni. We have thoroughly reviewed and strengthened our safety efforts to prevent a reoccurrence. we do believe zero harm in mining is achievable. This is demonstrated by Michalakwena, Mototolo, and Unki, recording more than 12 years fatality-free mining, and with the Manderbilt, who prior to these incidents had recorded three years fatality-free. Despite the recordable injury frequency rate rising to 1.67, there was a 2% decrease in total injuries during the year. So let me provide a short summary of some of our key performance highlights for the year. We refined 3.9 million PGM ounces, which is a 3% increase compared to the prior period. EBITDA was 20 billion Rand, mainly impacted by the 13% decline in the PGM Rand basket price. Our all in sustaining cost of $986 per three ounce was 13% lower than 2023 on the back of significant cost and capital reductions which were implemented. We ended the year with a strong balance sheet in a net cash position of 18 billion Rand, including the customer prepayment. And the board has declared a cumulative final and an additional cash dividend of R16.5 billion, which the jury will unpack later in the presentation. This is translated in a total shareholder return of R19 billion for the year. So turning to the delivery of our commitments. The cost-out program has delivered 12 billion rand in cost and capital savings, significantly exceeding our reduction targets of 10 billion rand. The Section 189a restructuring has been completed, with approximately 3,400 roles being reduced at the end of 2024. We've also finalized the review process of our contracting companies, resulting in the off-boarding of about 400 of these companies. These measures resulted in the 2024 cash operating unit cost of R17,540 per PGM ounce, 2% lower than the prior period and more than offsetting the 7% decline in production and the impact of inflation. Our efforts placed three of our four assets in the first half of the cost curve, and we remain committed to bringing all of the assets in the first half. We placed Mortimer on care and maintenance in April while reducing the work in progress inventories through the stabilization and efficiencies of the remaining smelters and our processing operations. Our performance underscores our readiness for our transformation to a standalone PGM company. So turning briefly to our operational performance. Total PGM production was 3.6 million ounces, 7% lower than in 2023, primarily due to Kroendal transitioning to a 4E total arrangement from the 1st of September, as well as slightly lower volumes from our own mines. We maintained our own mine production at about 2.2 million ounces, with good momentum demonstrated in the second half, reflecting the stability from our turnaround initiatives implemented during the year. Our processing assets were stable, which enabled the release of work in progress inventory built up in prior periods, bringing the refined PGM production to 3.9 million ounces. And as a result of this, sales volumes increased by 4% to 4.1 million ounces. Our 2025 operational priorities continue to focus on safe production from our own mines, whilst pursuing operational excellence and progressing our initiatives, such as the Michalikwena underground and the ramp up of the Brochen, as well as the ongoing reconfiguration of our processing assets. So looking at some of our own mines and processing operations in a bit more detail, starting with Michalikwena's performance. Total tons mined increased by 4% to 89 million tons, driven by the commissioning of the PNH 4800 shovel, as well as improvements from our loading and hauling activities. Waste tons mined increased by 4% to 76 million tons, with ore increasing to 13 million tons, and our stripping ratio increased marginally to 5.8. The built-up head grade of 2.7 grams per tonne was in line with the guidance, primarily due to the blending of low-grade stockpiles. PGM production decreased by about 2% compared to the prior year, partially due to the electrical failure at the primary mill at the north concentrator. Pleasingly, Michalikwena's oil and sustaining cost improved by 17%, reflecting the benefits of the operational excellence and cost reduction initiatives, offsetting the impact of inflation. For 2025, the four-year grade is expected to remain between 2.7 and 2.9 grams per tonne. However, it's anticipated, similar to 2024, to be at the lower end during the first half of the year. The mass pool reduction project is expected to be commissioned in the year as well, and the progress we continue to make on the underground studies and exploration declines will help secure higher grades, create waste rock dump efficiencies, as well as minimize our haulage costs. Our strengthened relationships with the communities remain a priority, and this is demonstrated through the unlocking of land access for mining activities for the benefits of all stakeholders. So to further unpack the outcome of our pit optimization strategy, which focused on value over volume, the adjusted mine sequence will enable us to mine less waste and target a lower mining unit cost than previously planned. We intend to mine between 90 and 120 million tons per annum, achieving a lowest associated stripping ratio of between 4.5 and 6.7, and a four-year blended grade of between 2.7 and 3 grams per ton over the next two to three years, and then increasing back to more historic levels. will maintain previously guided MNC production of between 900,000 and a million ounces for the next two to three years, further driving a lower oil and sustaining cost, which improves Michele Koenig's position on the cost curve. So turning to Amanda Bult. In the first half of the year, we did see improvements, particularly at Dushaba, driven by the crew efficiencies and the mining optimization work which we undertook through the cast-out initiatives. Our operational activities, however, were halted at Dushaba following the fatalities that I mentioned earlier in order to reset our safety performance. MNC production decreased by 9%, primarily resulting in those self-imposed safety stoppages. Chrome production was also affected and decreased by 8%. Approximately 36,000 ounces is attributed to the self-imposed safety stoppages. On a like-for-like basis, MNC production was 3% lower due to the continued poor ground conditions at Doshaba. Amundables Pearl Split positions it as a cash-generating asset within our portfolio, and Amundables generated 3.9 billion rand of economic free cash flow for the year. The complex saw a reduction of approximately 2,200 employees, or 18% of the workforce, following the Section 189a restructuring. And its oil and sustaining cost improved by 11%, reflecting the benefits of the cost-saving initiatives. So going into 2025, we absolutely remain focused on improving the safety and embedding the lessons that we learned in 2024, whilst continuing to improve cash generation and delivering on our mass pool reduction and concentrator recovery optimization initiatives. we do remain confident that we have the necessary expertise and experience to mine Amundapult, doing so safely and efficiently whilst maintaining its cash contribution to the portfolio. At Mototolo, PGM production decreased by 4% due to the challenging ground conditions at Loboa as it reaches the end of its life. This is exacerbated by the shortage of specialized skills in the first half of the year. Despite these challenges, the introduction of a new seven-day shift cycle at the end of the first quarter partially offset this impact. Productivity improved by 3% due to the operational excellence initiatives. The De Broghen project focused on replacing the infrastructure closures at Laboa is in the execution phase, with production anticipated to ramp up this year. In August, we also successfully began operating the Chrome plant and selling 100% of its production at market-related prices. Chrome production from Watertolo was about 52,000 tonnes, and our focus into 2025 is to maximise the yields from this plant. Turning to our processing assets, who delivered a really strong performance during the year. The built-up work-in-progress inventory from the previous years has now reduced to normal levels. The utilization of our smelters has increased to almost 80%, delivering similar volumes year-on-year, despite more timber being placed on care and maintenance. We continue to drive further efficiencies, particularly as we commissioned some of the mass pool reduction initiatives, as well as improved recoveries. we achieved record full-year nickel production of just under 26,000 tons, 18% higher than the previous year, and copper production increased by 24% compared to 2023. This was once again largely due to the improvements in our operating performance and the stability that we've implemented. Our focus on acid integrity and the processing of built-up furnace mats from the prior years was a key driver in the performance. So going forward, we expect refined production to be broadly in line with M&C production. However, this is as always subject to any load curtailment. We'll continue driving processing stability as well as progressing the studies to convert Mortimer to a slag cleaning duty. So turning now to the markets in which we operate. The automotive industry, as you know, is the single largest consumer of PGMs, accounting for roughly two-thirds of PGM demand. Catalyzed vehicle sales, a key determinant of demand, were steady in 2024, as hybrids, which do contain PGM catalytic converters, are winning market share in comparison to 2023. Globally, light vehicle sales continued to grow in 2024, up about 2%, although a bit slower than 2023, when pent-up demand was strong, but still a robust performance compared to initial market forecasts. The share of battery electric vehicle sales rose at a relatively modest pace. This was in line with our mid-year estimates, although undershooting forecasts made at the beginning of last year. Many of the consumers have expressed a preference for plug-in hybrids and similar vehicles that contain both batteries and engines, therefore still requiring PGM catalysts. As we've highlighted previously, there are many global indicators pointing to a greater demand of internal combustion engines and various forms of hybrid vehicles over an extended period. Many of the largest automakers over the recent months have been changing their drivetrain strategies in response to consumer demands, in tune with what we've been saying for some time. The slower pace of adoption as well as the scaling back of BEV commitments by some OEMs has seen auto analysts downgrade their long-term expectations for BEVs. A year ago, analysts on average expected about a 40% share of BEVs by 2030. Now that average is below 35% and falling below our long-held expectation. Both Platinum and Palladium's exchange-traded funds saw sizable inflows in 2024, their best performance in many years, showing an improved market sentiment and therefore improved demand in the PGM sector. So turning to our estimates of demand and supply, these are similar to what we expected at Majur, although platinum is in a slightly larger deficit than palladium's deficit as a result of the higher Russian production and slightly weaker automotive demand, which also affected rhodium. But looking ahead, platinum should remain in a substantial deficit. Palladium should shift towards a surplus by 2026, but at a slower pace than we had expected due to the slower BV rollout I mentioned. And rhodium should also remain in a deficit for longer. I'll now hand you across to Siyuri to take you through the financials.

Thank you, Craig, and good morning, everyone. I am pleased to be reporting a resilient set of financial results for 2024, showcasing our deliberate and decisive action plan in response to a challenging economic environment characterized by weaker PGM prices. To summarize our performance for 2024, we achieved revenue of 109 billion Rand for the year, 13% down from 2023, primarily due to a 13% decrease in the Rand PGM basket price. Our sales volumes, on the other hand, increased by 4%, partially offsetting the impact of lower PGM prices. The implementation of the cost out initiatives delivered 12 billion rand of total cost and capital savings, exceeding our target of 10 billion rand. 7 billion rand was delivered from operating and overhead cost reductions, resulting in a 12% decrease in cost of sales. Our decisiveness in reducing costs resulted in an EBITDA of 20 billion rand and a robust mining margin of 27%. The all-in sustaining cost for the year was $986 per 3e ounce sold, well below our target of $1,050 per 3e ounce and a decrease of 13% against 2023. We generated cash from operations of 30 billion rand and incurred 15 billion rand of sustaining capital expenditure, resulting in 15 billion rand of sustaining free cash flow. We ended the year in a net cash position of 18 billion rand. Now let me unpack our cost performance for the year. We exceeded our cost out initiative targets by delivering 7.3 billion rand of operational cost reductions, more than offsetting the impact of inflation. These cost reductions were achieved through various initiatives and decisive actions, including the following. The successful execution of our operational restructuring, supply chain efficiencies, consumption reduction for key consumables such as diesel and explosives, and a disciplined approach to study work, reduced use of third parties, and more focused market development expenditure. Looking ahead, we expect to maintain the 2024 cost run rates into 2025 to offset inflation and deliver operational savings of approximately R4 billion against a 2024 cost base. Our cash operating unit cost performance was aligned to market guidance and declined 2% from 2023 to R17,540 per PGM ounce. This was achieved despite the reduction in own mine production and inflationary impacts. The all-in sustaining cost for the year was $986 per 3e ounce sold, well below our target. In 2025, the planned cost savings of a further R4 billion is expected to result in a cash operating unit cost of between R17,500 and R18,500 per PGM ounce and an all-in-sustaining cost of between $970 and $1,000 per 3e ounce sold. We delivered a resilient EBITDA performance against the backdrop of a declining PGM price environment with a PGM basket price of $1,468 per PGM ounce, the lowest since 2019. This coupled with the strengthening of the RAND reduced EBITDA by 7.4 billion RAND. 2024 inflation of 5% had a further negative impact on earnings of around 2.6 billion RAND. These uncontrollable reductions were offset by 4% higher sales volumes and the cost reductions of 7.3 billion rand. Earnings were negatively impacted by wants of restructuring costs of about 2 billion rand, of which 1.3 billion rand related to the operational restructuring and 700 million rand to the demerger. The loss on associates of 1.5 billion rand related mainly to movement in the company's investment in AP Ventures. Capital spend amounted to 18.5 billion rand, a decrease of 9% from 2023. Stay-in-business capital expenditure was 6.4 billion rand, and this was mainly incurred on the capital maintenance program to maintain asset integrity, Makalakwena heavy mining equipment maintenance, and the extension of tailings facilities. the cost-out initiatives enabled sustainable reductions in SIB of around 5 billion rand through the reprioritization of projects and reducing the utilization of external specialists. Capitalized waste stripping increased to 5 billion rand from 4.2 billion rand in 2023, driven by revised mine plans at Makhala Quena, resulting in higher short-term waste volumes recognized. Life extension capital increased to 4.1 billion rand, which was mainly incurred on the HME fleet at Makhala Khwena and ramping up development at Dabrochen. Breakthrough project capital remained broadly flat at 1.7 billion rand, focusing on the Makhala Khwena footprint reduction project and the RBMR copper de-bottlenecking project. Makhalaqena underground project capital of 1.3 billion rand was incurred on the development of the Makhalaqena-Sansluet twin declines. Total capital expenditure in 2025 is expected to remain in line with 2024 spend of between 17.8 billion and 18.5 billion rand, reflecting our continued approach to prioritise disciplined spend. Our own mines delivered 19 billion rand of EBITDA. The overall mining margin of 27% was supported by our four own mined assets, with the Mokhalaqena EBITDA margin of 38% and an average of around 20% for the remaining assets. This further translated into all our mines being cash flow generative for 2024. Looking at our balance sheet, cash generated from operations in the year was utilized to fund R15.5 billion of sustaining capital, R3.1 billion on discretionary capital, and we paid R5.4 billion of dividends to shareholders, comprising of the final 2023 dividend and interim 2024 dividend. we have a strong and flexible balance sheet with net cash of R17.6 billion and increase of R2.2 billion from December 2023. Net cash excluding the customer prepayment was R5.7 billion. Now turning to our capital structure as a standalone company. We have been largely reliant on Anglo-American from a balance sheet and capital structure perspective historically. And in our view, our balance sheet is currently undelivered. The demerger provides us with a unique opportunity to construct a new and tailored capital structure optimized for life as an independent PGM producer. In assessing the optimal construction of our independent balance sheet and the appropriate levels of leverage through the cycle, we have factored in our world-class resource endowment, continued investment into our operations and assets, confidence in the recent delivery of operational excellence, which has secured an all-in-sustaining cost of below $1,000 per 3E ounce, and three of our four assets already in H1 of the cost curve. The above gives us confidence in our ability to continue generating positive cash flows and maintain a strong, resilient balance sheet while executing on our strategy throughout a range of possible PGA market scenarios, including one where there is continued price weakness. Going forward, we expect our leverage ratio will remain below one times through the cycle, supported by strong standalone liquidity. The board has declared a final 2024 dividend of three rand per share or 800 million rand equivalent to a 40% payout of headline earnings and in line with our capital allocation framework. The board has also approved an additional cash dividend of 59 rand per share or 15.7 billion rand which is considered to be the most efficient and simplest method of achieving the capital structure realignment prior to the demerger, supported by the excess cash on the balance sheet. The company has successfully undertaken additional dividends historically, as and when circumstances have warranted, and we believe that this will be an attractive form of capital return to all shareholders. Our disciplined capital allocation framework will remain unchanged, returning excess cash to shareholders as appropriate. It is anchored on investing in sustaining capital, our commitment to a base dividend of 40% of headline earnings, and finally, considering discretionary capital options for upgrades and growth at the appropriate time. As discussed, in determining a fit for purpose independent balance sheet, we have declared a 15.7 billion Rand additional cash dividend, post which the company retains a 1.1 billion Rand net cash position, including the customer prepayment on a pro forma basis. This translates to an 11 billion Rand net debt position, excluding the customer prepayment, which equates to around 0.5 times net debt to EBITDA. We have had positive and extensive engagements with both local and international lender banks who have expressed strong interest to support the standalone business. We are well-progressed on our local financing process, with our U.S. dollar process not far behind. We are confident of achieving our targeted committed debt liquidity levels, and the indicative pricing levels we have seen to date are within our expectations. I now hand you back to Craig to take you through the rest of the presentation.

Thanks, Yuri. So as we look forward to becoming an independent, fit-for-purpose company, the key dates from here on our journey are as follows. Firstly, we'll host the Capital Markets Day on the 24th of March, with our prospectus release date being early April, and Anglo-Americans' annual general meeting taking place on the 30th of April, at which its shareholders will vote on the demerger. We remain on track for an orderly separation from Anglo-American and transitioning to the new company from June, which will be listed both on the Johannesburg Stock Exchange as well as carrying a secondary listing on the London Stock Exchange. And consistent with the commitment to deliver a responsible demerger, Anglo-American intends to retain a 19.9% shareholding in Anglo-American platinum in order to further help manage the flow back by reducing the absolute size of the shareholding that will be demerged. Anglo American will no longer have any representation on the Anglo Platinum Board post the merger and intends to exit its residual shareholding responsibly over time and subject to the customary lockup provisions. The demergers also presented an opportunity to review the skills, expertise, and the experience, as well as ways of working to ensure that we have a fit for purpose organization structure as a standalone company. We've taken this opportunity to concentrate on simplicity, clarity, and operational efficiency with a focus on strong expertise in mining and processing with clear governance structures in place. This work is well advanced and should be completed prior to the demerger. So in terms of the executive team, which will lead this company going forward, Vili Teron has been appointed the Executive Head of Mining Operations. Ajit Singh is the Executive Head of Processing Operations. Suri Naidu is the Chief Financial Officer. Yvonne Mfolo has been appointed as Executive Head of Corporate Affairs and Sustainability. Virginia Tobeka is our Executive Head of People and Organization. Martin Poggiolini has been appointed as Executive Head of Corporate Development. And Hilton Ingram has been appointed in the combined role of Executive Head of Marketing and Market Development. We have a portfolio of world-class assets underpinned by an extensive PGM resource base and an opportunity as a standalone company to extract long-term value for all our stakeholders in a disciplined way. Our strategy remains clear now and post-emerger and can be articulated in five key priorities, all of which are measurable as we attain to achieve our objectives. Our core focus is advancing safety and health with the aim of achieving zero harm, pursuing operational excellence, which will result in expanding our cashflow margins. We also continue to invest in our portfolio as we deem appropriate, as we sustain profitability and target revenue growth from our world-class resource endowment with a strong focus on generating value over volume. We'll look towards a simplified and strengthened organization as we attract, retain, and bolster key leadership positions to deliver a sustainable and competitive advantage. And through active market development, we'll look to continue to drive demand for the products we produce. We will integrate sustainability into everything we do by playing a leadership role to protect and create value focused on climate and energy, ethical value chains, as well as local communities. So in conclusion, we started 2024 to set the business up for a sustainable future and have started to see the benefits of this work materialize. We've right-sized our business to deliver on our strategy through the completion of the operational restructuring. We focused on improving our operational performance across the value chain, recognizing that there is still more work to be done. The improvements in our processing operations have enabled a solid performance owing to their stability and reliability. And at Mahalo Kena, the pit optimization work is yielding positive momentum and the underground studies and exploration decline developments are progressing to support the long-term value creation from this asset. And we're on track with our demerger from Anglo American to become a standalone PGM leader. This positions us very firmly for an exciting future. So I think that concludes our presentation. So thank you once again for joining us. I'll hand you across to Teto who will facilitate the questions and answers.

Thank you, Craig. Good afternoon once again, everyone. I think we will now move over to the Q&As, starting first with those in the room, at least that is not changing. And then we'll ask our moderator, Dine, to facilitate the ones on the conference call. Then I'll come back with those on the webcast. For those in the room, may I request that you raise your hand if you have any question, mention your name and also the company that you are representing. Then to our EXCO as well as board members, if any questions are delegated to you, may I request that you stand up and face the cameras at the back to be able to respond to those. So coming back to the room, may I just check anyone with hands and remembering to ask your name and the company you're representing. Thank you.

Morning. Thanks very much, Craig, Siri, Teto. It's Chris Nicholson from R&B Morgan Stanley. My question primarily revolves around cash generation and the dividend payments, so three parts, but hopefully they will link. In the release, you note you've generated attributable free cash flow of 7.5 billion rand this year. So that's after all capex, not economic, also the growth capex. Could I just check with you how much the D-stock, so you D-stocked about 500,000 ounces contributed to that. I see the inventory movement to 6.7. So it pretty much looks like most of it. Second question, do you have much visibility on that customer prepayment and whether it'll be renewed? And then finally, just to put that together, so the way I'm seeing it is you haven't really generated much cash. You're not that confident at this stage or have much visibility on the customer prepayments as renewed, yet you've gone and declared 16.5 billion rand of dividends. How does that square with having a strong balance sheet into the demerger? It looks to me from the outside like that would be a decision that's been driven by your parent rather than by Anchor Platinum. Thanks.

Okay, let me take that. So in terms of the working capital benefit of the destocking, that is around the 6 billion rand in terms of, so that we've reduced all our stocks to normalised levels at this point. Looking at... So that's from an inventory perspective. In terms of the customer prepayment, so that continues until 2027 when the customer prepayment unwinds. At that point, we will look to engage with our customer to determine whether we extend that. In terms of the third question on the capital structure, so in terms of, we ended the year with 18 billion rand of cash. So once we pay out this dividend of 16 and a half billion, we're still in a cash position of 1.1 billion rand, excluding the customer prepayment, that's about 10.8 billion rand of net debt. In terms of the work that we've done to date to set up our business, all our assets are cash generative and at spot prices will be cash generative for 2025. And this is after we've paid our sustaining capex as well as our discretionary capex, as well as our base dividend. So we believe that we will be below the 0.5 times leverage or around the 0.5 times leverage, excluding the customer prepayment cash, and we'll be in a cash neutral position including the customer prepayment cash. So we do believe that our balance sheet is strong and resilient and we'll be able to cater for the 16 and a half billion rand additional dividend.

Thank you.

Harold Engelbrecht from APSA CIV. Just two questions. One is around the cost savings. Can you maybe give us, I see the biggest chunk of the cost savings come from consumables. Can you give us an idea how much of that is price and how much of that is efficiency? I guess I'm trying to figure out, you know, when the prices move against you, how much of that is sustainable. And then secondly, your guide to a strip ratio of 4.5 to 6.7 at Mojalaquena. Can you maybe give us just a little bit of an indication of when you're going to achieve what? 6.7 is quite high. What's the timeline in terms of your strip ratio in your forecast period?

Do you want to do the, I'll quickly look up the strip ratio.

So in terms of our costs, so on the 7 billion Rand, so about the people reduction aspect of that was about a billion Rand. We then had overtime reductions and contractor reductions. So that's another 600 million or so. The other aspect was inflationary rejection. So we renegotiated a lot of our procurement contracts, and that was about half a billion rand. In terms of consumables management, about 1.1 billion of that was in terms of efficiency-related management. So consumption management on diesel as a result of the Makhalakwena replan, our chemicals, tires, et cetera. And then we've also looked at supply chain spend management is about 800 million. So that's looking at some of our tail spend and alternative part sourcing, et cetera. The last part of that was sundry expenses. So about two and a half billion Rand related to our corporate costs, some of our market development expenditure and study cost. So after the seven billion rand from a consumer bill perspective, about one billion of that was your consumption-related reductions.

Just in terms of the question around the stripping at Makalakwena. So stripping will increase in 2025 to around about six and a half, and then it will decline thereafter down to around about the four for the next few years, and then it will step up again at the end of the decade. So that's sort of roughly sort of, you know, the timing.

2025 is almost like the peak.

2025 is a peak for the next few years, and you'll see that coming through in the guidance that we've given with regards to waste capital for 2025.

Okay. Good morning. I have a follow-up question on the free cash generation, especially looking at Amanda Bell. The free cash from Amanda Bell seems to be totally related to Chrome revenue, which was about $3.9 billion, and that equates to the free cash that was generated at Amanda Bell. So my question is, how are you looking at that operation, considering that Chrome prices came under pressure? I do not know where corn prices go from these levels, but it would seem that that operation is highly dependent on corn prices. So how are you looking at that operation going forward, especially from a free cash generation perspective? And it was actually the highest free cash generator compared to all the other operations. And then my second question also relates to your balance sheet that has, at this point in time, weakened. And how are you looking at Mohala Gwena capex should basket price actually not improve? Or maybe I should ask it this way. How are you looking at your capex in general? What flexibilities do you have within your capex should the basket price remain challenging for the next two, three years? The last question. is actually on the 19.9% retained by Anglo. You said there is a customary local provision. I don't know what that means, so if maybe you can share a little bit more. Thank you.

Okay, thanks, Nkoteko. So if I can, I think, yes, certainly AmandaBelt has benefited from the higher Chrome prices that were realized in 2024. We'll come back to you with the exact same split because I have a different number in my head, but we'll go with, but certainly based on current spot prices, AmandaBelt should be able to generate similar levels of cash in 2025 and thereafter. And that's really on the back of some of the operational efficiency work that we've done, realizing the full year benefits of the restructuring that we implemented in 2024 that will support some underbuilt going forward. Clearly, we've got further work to be done, particularly as we drive improvements in safety and operational discipline. But as I mentioned, I'm really comfortable and confident that we've got the right expertise and skills to be able to take that forward. But yeah, acknowledging we've got work to be done at AmandaBuilt, but given its pill split, given its contribution to the portfolio, generating that level of cash is an important component of our portfolio going forward. In terms of the balance sheet, and Siri, I'll try and then jump in where I go horribly wrong. But in terms of the capital profile, I mean, I think we've been very, very clear in terms of where we see the opportunities for Anglo-Platinum going forward. And that's very much linked back into investing into the business. I mean, that's focused not only on sustaining capital and ensuring the asset integrity and reliability of our entire value chain, but also then progressing some of the longer term options that we have. So we'll continue to invest in Dabrochen in terms of ramping up production from Mototolo in terms of sustaining its production profile. And we'll continue to invest in the underground at Machalaquena. We're going to complete those studies. So pre-feasibility study should finish around about the middle of this year. We'll go into feasibility study thereafter, hopefully with a decision to be taken at the end of 2026 into early 2027. And then we'll sort of ramp up production, particularly from Sunslut over that period of time. But back to who we are as a company and what doesn't change for us going forward. We'll maintain that capital discipline. So projects need to deliver value and we're not gonna drive value over volume. That's very, very clear. So if a project meets the hurdles and meets the criteria that we set for delivery, then we'd look to execute that project. Based on the evaluation that we've done and based on the sort of the market outlook, et cetera, we're comfortable with this level of gearing. and certainly targeting below one times debt to EBITDA through the cycle. And then in terms of Anglo-American retaining its 19.9% stake, it would be customary if you have your certain provisions placed in terms of lock-up in terms of exactly when those shares will be sold. And that's a process that we're engaged with Anglo on at the moment. But that's entirely similar to, I think, what's been done in other transactions that the Anglo-American group's been involved in and other demergers from other corporates. But I think the one thing is what Siri said associated with that. It certainly helps sort of deal with some of the flow back initially upon demerger and doing that and the sell down post demerger in an orderly manner will certainly, I think, help address some of the concerns that people have with respect to a full demerger come June.

Whether there's any other questions in the room?

If not, I'm going to move over to our moderator, Denae. Denae, any questions on the conference call? We have a few questions.

The first question we have comes from Jason Fierkla of Bank of America. Please go ahead.

Good morning, folks. Thanks for hosting us today. Two quick ones for me. First one's on the LSE listing. Second one's on the portfolio. Firstly, just in terms of the listing, I think you say in the release today that the London listing will start around the time of the demerger. I'm just wondering, why are you waiting so long? I mean, would it make sense to maybe have this start to trade sooner? Second one here, just on the portfolio, you know, I guess, do we see a future for all of the current mines? at Anglo Platinum today, or is it possible that some of these mines might be better owned and operated by somebody else? Thank you.

Yeah, thanks, Jason. Thanks very much for the question. So with respect to the demerger, just sort of the timeframes that are required in terms of the submission of documentation, the approval of that documentation, various shareholder approvals, et cetera, it's unlikely that we'll be able to bring forward the secondary listing earlier than the middle of the year. We've looked at that quite extensively, and this is the most optimized timeline that we have. In terms of the portfolio of assets, clearly we've looked, we've been through what our strategy will be as a standalone company going forward. The assets that we have within our portfolio clearly have a role to play in how we look to deliver on that strategy. And, you know, so I think there's still further value that we can extract from the portfolio of assets that we have. But as you would expect, we'll continue to evaluate that over the years to come. But for now, our predominant focus remains on extracting the value that we can from the assets that we have and delivering on our commitments that we've made to the stakeholders.

Thank you. The next question we have comes from William Dalby of Barenburg. Please go ahead.

First question is how much G merger expenses are expected in 2025 and to what extent is the Anglo group contributing The mass pool reduction strategies you set out in the 24 action plan. Wondering if you could maybe unpack a bit more how that's been implemented and perhaps maybe quantify the value you expect it to add to the business as a whole. Thank you.

I'll take the cost question.

And I'll ask you to comment on the mass pool reduction.

So in terms of the 700 million Rand that we've incurred in 2024, about 400 million of that relates to the restructuring that we've done at the corporate office as we stand up our structures as a standalone entity, as we become a more agile organization. the R300 million related to advisory costs that we've incurred to date. I think over the next two years, we expect to incur further costs related to the LSE listing, as well as regulatory requirements, as well as further advisory costs from a legal perspective, from a banking perspective. In terms of separation costs, we do expect that there will be some separation costs, for example, disentangling our IT systems, as well as rebranding. We are still in discussions with Anglo American in terms of those costs and how we will be splitting those. And we'll have more clarity at our capital markets day where we can share the quantum of that.

I'll take that. Can you hear me? Yeah.

Face you, okay. Yeah, so I'll take the question on the mass bowl. The work has been progressing really well at Mo Kala Kena. The Jameson solids are largely in place, and we will be commissioning that in the next few weeks. And we expect to see the benefits on MassPool realized in parts. Firstly, this year, we'd see probably a reduction down to about 3%, and then in the out years, see that going down to about 2.7%. The benefit of that is quite significant, particularly from a transportation point of view around low volumes, high grade material, and obviously a positive impact of that on our smelting operations from a specific energy consumption point of view. So we're progressing very well and quite confident that the technology is on track and will deliver what it needs to deliver. At Emanuel Bolt, we had a couple of setbacks last year, but that's largely back on track. The re-cleaner circuit has been implemented. Our recovery is in the last quarter of the year back up at where it belongs and our mass pools are trending definitely in the right direction and we expect to see those benefits coming through as well in H1 of this year. Really good work done at Mototolo, pretty much achieved the targets we set ourselves for there, so good progress. Overall, the progress on the MASPL project is going very well. Also, if you look at the numbers in terms of the tons smelted versus the number of smelters that we actually had in operation with Mortimer done, we had better utilization, a 9% drop in the volume of tons processed, and only a 2% reduction in the answers. So it shows that our strategy is actually working, and we'll see that full benefit coming through between 2025 and 2026. Thanks.

Thank you. The next question we have comes from Ephraim Ravi of Citigroup. Please go ahead.

Thank you. So two more questions related to the questions with Anglo on the exact cost allocation for IT and tangling and things like that. But on an ongoing basis, do you expect the allocations from the head office which you would obviously save, more than offsetting the incremental ongoing costs, you know, things like secondary listing, IT, et cetera, is that kind of your working assumption when you're thinking about the demerger? Secondly, in terms of going forward and separation, Would there be any kind of non-compete clauses with the Tang law? You know, for example, if there's a copper mine in South Africa that comes up, you know, would you have sort of first right of refusal or something like that? Thank you.

Yeah, thanks, everyone. Thanks for the questions. First of all, just very briefly, I mean, certainly as I articulated in terms of the way we're looking at the organization going forward is to be a much more agile, streamlined company. And I do think that will create opportunities for us to be able to reduce our costs into the longer term. And so I do think that in time, you should see some sort of benefits coming through from lower costs associated with some of the corporate activities that we have. But that'll come in time once we exit some of the transitional service arrangements and we do some of the reconfiguration and, sorry, complete some of the reconfiguration that we started at the end of last year. So short answer is yes, but it'll take a little bit of time for that to come through. And then in terms of the non-compete and sort of other commodities, I think as I've articulated in terms of our strategy, we're a PGM producer. We own the PGM assets in South Africa. That's where our focus will be. And I'm sure that Anglo-American will continue to invest its capital where it sees the highest value returns for its shareholders.

on top of UBS.

Please go back. Great. Yeah, thank you for the opportunity. A few quick questions. First of all, could you give us a sense as to what proportion of the PGM industry do you reckon is cashflow negative ad spot prices today? And obviously saying, well, your assets are free cashflow positive, but yeah, what proportion of the industry as a whole do you think are free cashflow negative? Maybe as well, just clarify with the refined, total refined, including third party tolling, how that is progressing. So you've closed one of your three smelters. What does that total refined, including third party, progress from and to? And when do these contracts come up for renewal? Because obviously one of the important changes is this focus on profitability with processing contracts. third-party ore. So when could we see kind of some tightness coming into the market and better margins on that processing of third-party ore? Those are the first couple of questions.

Thanks, Myles. So just in terms of the processing of third-party materials. So we refined about 3.9 million of our own material. So that's our own product plus about a... Yeah, so... Sorry. Yeah, we've found 3.9 million ounces, majority our own material, some from third parties. The tolling arrangement that we have with Subanya, that comes to the end of its contractual term at the end of 2026. You've seen some of the movement of the processing of Kruendal under a POC arrangement moving to a toll arrangement. That also comes to the end in 2026. And then you'll see some of the seander material, which we currently do under a park that moves to tolling arrangement in 2026 as well. So all of those things, sorry, big part of 2025. So those things are under flux and also under movement. And we've been very, very clear that our position around this is value over volume. And we'll continue to ensure that we utilize our facilities in order to realize that value from our assets. And given what we've outlined from and the opportunity around there, we can certainly use the capacity that we have and also linked back to the opportunity for us to repurpose more to treat slag and reduce some of the working capital that we have.

just to add in terms of the numbers. So the 3.9 was from our own minds. So from a tolling perspective, it's about 600,000 ounces. So that takes us to about 4.5 million ounces. And going forward, that makes changes. So the tolling, because of see-under, moves to about 900,000 ounces.

So Miles, could you please remind me of your first question? It was what proportion of the industry is cash flow negative? Yes, sorry. Thank you. So, look, I think I've seen various estimates sort of ranging from, you know, around about 30% to 40% is cash flow negative. I mean, clearly we're all in a reporting cycle at the moment, and we'll have to see what that looks like when everybody else is reported.

You agree with that 30% to 40% is broadly what you'd expect. from your knowledge of your competitors.

I may have a view around what that is. I think, Miles, for us, I mean, I think there's clearly, you know, we've done a significant amount of work in terms of readjusting our cost profile. Some others have also done some work in that particular space and others haven't. So it'll be interesting to see once they release their results where exactly they are and how sustainable that is going forward. Okay, done.

Any other questions from, I will take one last one and then move over to the webcast. I have a question.

Hi, good morning, everyone. And thank you very much for this opportunity. I have a couple of questions. My first question is on the medium-term strategy. How it is likely to change post the completion of team merger? And can we expect some diversification away from PGMs? And my second question is on Mogadishu Underground.

Was that Shachi? Shachi, we're struggling to hear you. Not sure, Tebi, whether it's our connection there.

It's not. Sorry, sorry. Let me repeat my questions. Can you hear me?

Yes, now we can.

Yeah, so my first question is on your medium-term strategy and how it is likely to change post the completion of the margin. Can we expect some diversification away from PGMs? And my second question is on the underground. When can we expect a clarity in terms of grades, cost, capex, et cetera? So that's it for me.

Okay, thanks very much for the question. So in terms of our strategy from here on now and post-emerger, as I've said, I mean, we are a PGM producer. That's who we are today. And I think there's certainly value that we can extract as a PGM producer into the future. And we can extract that value from the portfolio of assets that we have. And so our focus is really around extracting the values from the PGMs that we have within the portfolio. And we're not at this stage looking at any other commodities or other jurisdictions, but really focusing on all the assets and the entire value chain in terms of how we achieve the results that we're looking to achieve. In terms of the Michalakwena underground, that continues to progress, as I said. It's in pre-feasibility study at this stage, and will move into feasibility stage at the second half of the year. And as we get more details, then we'd look to provide you with that update in terms of the volumes, the potential grades, and also the associated costs and capital. It will be preliminary based on the state of the information that we have, but certainly the results that we've seen from the drilling and some of the work that we've done so far to date, we're really, really encouraged by just, you know, just re-emphasizes the quality of the resource base at Makhala Quena and certainly the grade and certainly the benefit that we will have from the polymetallic nature of that ore body. And I think through the way we'd look to mine it, I'm confident that we'll be able to extract the value that we should from this resource base.

So perhaps let me move to the webcast and then I'll come back to the last question on the conference call. So Craig Sayuri, first one is from Rene Noah Capital. One comment and two questions. So the first comment is very nice all in sustaining costs decrease and exit dividends. So that is more complimentary. And then his questions are, one is what is the probability of U.S. imposing sanctions on PGM exports from South Africa. And then the second question is on safety. Just quickly find it. So his question on safety is following the fatalities at Dishaaba, will you be looking at cutting back at the more dangerous areas for mining at Dishaaba?

Okay, thanks, Renee, for the questions. In terms of sanctions being imposed on PGMs from South Africa, look, I think, you know, I'm not entirely sure what that necessarily achieves, given sort of the necessity of PGMs being used in the automotive sector. And the automotive sector is a key component of the US economy and the US way of life. So, I mean, I think, you know, just generally, you know, the outlook for PGMs remains really robust. I'm not overly concerned around some of the geopolitical sort of, you know, machinations which are taking place at the moment. What we really need to be focused on is what are we doing within the business. But I think some of this will settle down and really then support sort of, you know, ongoing automotive demand and consequently demand for PGMs. In terms of the The safety at the Manderbilt. Look, I mean, clearly, the three fatalities at the Manderbilt were really, really tragic and something that we've taken really to heart and certainly continuing to look at in terms of how have we learned from those lessons? What can we do differently? Some of the actions that we took at the end of last year in terms of the self-imposed suffrages, and really getting back to the basics and getting back to safe mining. So it absolutely remains a core for us in terms of the modernization of a mandible. So looking through support, looking at lighting, looking at other forms in terms of how we can move material underground. But more importantly, just ensuring absolute compliance with our standards and our procedures will help us sort of eliminate the fatalities that we've seen. And we'll continue to take a very pragmatic and robust approach such that we're not putting people in harm's way as we undertake the mining.

Okay, understood. And then the next question is from David Fraser from Peregrine. Two questions from him. So one is on Tungela. So he says when Tungela demerge, they refer to looking at costs from a Tungela versus Anglo lens. So the question is, have you already been through this process, given the notice, and do you perceive there are more cost savings to come? So that is the first one. I think that's it from him for now.

In terms of, I mean, as I mentioned, from a cost perspective, we're still looking at our separation costs. And as Craig mentioned, from an end-stage perspective, we do see some benefit from being a more agile organization that will come through, and that really impacts our corporate overlay. From an operational perspective, I mentioned the R4 billion additional cost savings that we're targeting in 2025. So that's purely related, and that's irrespective of the demerger.

And then the next one is Shashi as well. So has the impact of 2020 from Citi, has the impact of 2024 restructuring on earnings over or could we expect some more impact of 2025? First question. So one is restructuring on earnings over or can we expect more? The second question is your targeted leverage ratio of 0.4 times. Is this excluding prepayment? Then the third one is on Amanda Bolt. Is there any possibility? I think this has been answered already on M&A with Nodab.

Okay. Do you want to take the restructuring?

On the restructuring, so part of that restructuring cost, about $1.1 billion of that was related to the operational restructuring that we undertook at the beginning of the year and some related expenditure on that. And as I mentioned, there were some costs relating to the demerger, and that will become more clearer towards the middle half of this year in terms of what that cost would look like. So, yes, there will be further restructuring costs, but the quantum of that we're still looking at. On the 0.4 times net debt, so I mentioned a 0.5 times net debt leverage ratio, and that is on a pro forma basis if we exclude the customer prepayment cash. So we had 5.7 billion Rand cash excluding the customer prepayment. If you then pay the 16.5 billion Rand dividend, that takes us to about 0.5 times net debt to EBITDA.

And our philosophy is roughly sort of below the one times debt to EBITDA through the cycle. And that's sort of how we've looked at the starting balance sheet. In terms of your question around AmandaVault, I think I have answered it. AmandaVault in the portfolio is clearly a generator of cash. And we've got further opportunities to be able to extract further value from that. And that's where our focus is.

Understood. Just checking the last question on the conference call. Is it Adrian from Standard Bank? I've got a very long question from here. Is it Adrian? Can I then rather move over to the conference call?

Of course. The question we have comes from Adrian Hammond of SBG. Please go ahead.

Yeah. Good day, everyone. Thanks for the opportunity, Craig and Sayuri. Thanks for your time. Yeah, so good cut performance. Thanks. Given the year-on-year improvement, particularly with Khalid Quinn, it was really, really good. And hopefully you can continue with that. But I just want to circle around to demerger, the AMS waiting post-demerger. Where do you see that? So it's going to be 19.9% is retained by your parents. And is that 19.9% an overhang, do you think, parents?

So thanks, Adrian. Thanks for the comment. Look, I think the 19.9% certainly helps deal with some of the flowback that, you know, we would have anticipated as part of the demerger. I expect that, you know, there will be an orderly reduction of that 19.9% over time. And I think that will certainly, you know, once again be done in a disciplined way. I think, you know, more importantly for us is, you know, we're looking forward. If you take the quality of the assets that we have, the work that we have underway in terms of driving the operational performance, sort of the outlook for PGM prices and then the work that we've done in terms of restructuring the business to where we are today, I think that does set ourselves up for a very, very good future and an attractive value proposition. And then it's on that basis that I think we'll get a significant amount of interest. and some really happy shareholders going forward. And maintaining the capital allocation framework that we have going forward, I think certainly sets us apart from the rest in the PGM industry.

And just on the weighting, managers would want to position ahead of the demergers. Have you done any work on the weighting post-demerger?

On the indexing, I think I'm going to need to come back to you, Adrian. Sorry, there has been work done. I think we just need to just make sure that it's updated.

Thanks. I don't know if Ron's in the room, but I'd love to hear his comments and what opportunities Imani is seeing. I mean, I know it's early days, but he knows that that's pretty well.

Yeah, Vili's in the room. So very happy to put him on the spot.

Thank you for the question, Adrian. I have been able to go to a few operations. I've been at Mojala Gwena, I've been at, you know, the Almanabald operation, Bo Schaft, and I think given the portfolio that Craig has alluded to, there's always some opportunities that we can still match. I think one thing, you know, is that the assets is in good nick the engineering aspects of those assets in good nick and the work that has been done thus far has really set those assets up to really extract the value going forward. I think the aspect of the demerger is really exciting in terms of agility that can come with it. And then I think that's where a lot of value can still definitely be extracted of those assets. I think decision making is going to be a lot more agile And generally from what I've seen from the Anglo-Platinum employees, there's solid people working for Anglo-Platinum, there's good skills working for Anglo-Platinum, and this will give them the opportunity to really bring that to the fore. And so generally, I still need to go and see some of the other operations, but definitely the ones that I've seen thus far is I'm very excited to be part of this company. and very excited to the possibilities that this will unlock. Thanks. Thanks, Willie. Thank you.

Thank you so much, Craig. Sayuri, I'm just going to read out two last questions for the day. First one comes from Nkanguta from NEDBEC Private Wealth. So at what PGM price does Mahalakwena become financially unstable? and sustainable apologies. In terms of the basket price, how far are we off from the worst case scenario? For example, will a 15% additional decline in the basket get us to the worst case scenario?

So I think it's a really interesting question. I mean, we've certainly seen the decline in PGM prices are still 13% lower than where they were in 2023, but relatively stable last year. You know, we've obviously done the work in terms of reducing McAlequina's cost by 17%. And I think, you know, if prices declined by that level, a significant proportion of the industry will be in some serious trouble. And just given where Makhala Qaena is on the cost curve, how sustainable that level of pricing will necessarily be, I'm not sure. But we'll need to take the appropriate action if we see that that's a long-term sustainable price. And then we'll take the appropriate action as we did in 2024 to ensure the sustainability of the business and ensuring that we create the value that we think is really there. So, you know, I think, you know, certainly just based on the fundamentals from a PGM perspective for both platinum and palladium and rhodium, you know, I certainly don't see that as a long-term price outlook, but I'm not saying that it can't happen in the short term. supported last question for the day um are you in a position to do any share buybacks so um in terms of in terms of the capital allocation framework which the year he spoke about earlier um you know very clear for us generate the cash invest back into sustaining capex, pay an earnings-based dividend of 40%, and any additional cash which remains will either invest it back into the business in terms of the growth projects that we have, provided they meet the requisite returns. And if they don't, then that extra cash will be distributed back to the shareholders. It'll either be distributed back to the shareholders in the form of a dividend or we'll consider a buyback. It all depends on the circumstances at that time. And that capsule allocation framework has not changed and will not change post the merger.

Yep. Thank you, Craig. Ladies and gentlemen, that brings us to the end of our 2024 annual results. Thank you once again for joining us in person as well as online. So many of you, we will be seeing you on the road for the next two or three weeks. So thank you so much. Thanks.