Sylvania Platinum : Results of Initial Optimisation Studies

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24 October 2022

Sylvania Platinum Limited ("Sylvania", the "Company" or the "Group")

Results of Initial Optimisation Studies for Northern Limb Mineral Assets

Sylvania (AIM:SLP), the platinum group metals ("PGM") producer and developer with assets in South Africa, is pleased to announce the results of its successful optimisation studies carried out on its exploration targets located on the Northern Limb of the Bushveld Complex in South Africa.

The results include an updated Mineral Resource Estimate ("MRE") and Scoping Study for the Volspruit Project, which focussed solely on the Volspruit North Body and a MRE and Exploration Results for the Far Northern Limb Projects, which consists of the Aurora Project containing the La Pucella Target, and the Hacra Project.

Highlights

Volspruit Project

• Volspruit North Body JORC MRE (Measured and Indicated):

1. 14.87 million tonnes ("Mt") at 2E + gold ("Au") (2E includes platinum ("Pt") and palladium ("Pd")) grade

of 2.27 grammes per tonne ("g/t");

1. 1.08 million 2E + Au ounces;

• 1. 19.47 million pounds ("lb") of copper ("Cu") at a grade of 0.06%; and
  1. 55.79 million lb of nickel ("Ni") at a grade of 0.18%.
• Volspruit North Body JORC Scoping Study completed (based on long-term metal prices and exchange rate consensus forecast):
• 1. Pre-taxNPV (using a discount factor of 12.5%) of $27.3 million (ZAR 464.0 million), excluding significant potential upside from rhodium ("Rh") contribution and South Body PGM ounce inclusion currently being assessed;

1. Pre-taxIRR of 17.9%;

1. Pre-FeasibilityStudy milestone expected to be completed in FY2023, followed by the Feasibility Study

starting in FY2024;

• 1. First production milestone expected in approximately four years from investment decision; o Payback Period from first production of 4.25 years;
     o Life of Mine of 8.7 years;
     o EBITDA per annum of $30.6 million (ZAR 520.0 million); and o Peak funding requirement of $147.4 million (ZAR 2.5 billion).
• The Scoping Study was produced on conservative assumptions and does not currently include a JORC compliant rhodium resource. The potential rhodium contribution is currently being evaluated and is expected to provide significant upside. Additionally, and important to note, the Volspruit North Body covers 58% of the Volspruit Project area and excludes the Volspruit South Body which is still being reviewed. This could add

additional material to be treated through capitalised infrastructure in the future, and thus provide further upside potential.

• While the current Scoping Study economics do not meet the Company's internal investment criteria, it does illustrate the project's promising potential value, based on conservative assumptions and ignoring upside potential, and so supports the Company's competently evaluated decision to progress to a Pre-Feasibility Study during the current financial year.

Far Northern Limb Projects

Aurora Project

• La Pucella JORC MRE (Measured and Indicated): o 16.21 Mt at 2E + Au grade of 2.63 g/t; and o 1.37 million 2E + Au ounces.
• The La Pucella Target area is a near-surfaceT-Zone discovery and currently covers just 12% of the combined Aurora project area.
  o The discovery of the T-Zone near surface indicates that this high grade zone previously found at depth, has the potential to be mined utilising open pit mining methods.
• A scoping level mining study is being carried out with results expected in early 2023.
• Mineralisation is known to continue at depth and with future additional drilling an additional underground MRE could be reported.
• Future studies are aimed at improving analytical confidence to include Rh and base metals in the MRE that are currently at inferred level.

Hacra Project

• Encouraging 2021 Exploration Results with various intersections indicating attractive grades between 2.3g/t and 7.4g/t 2E + Au and a true intersection thickness from 3.4m up to 11.9m.
• Contiguous to the Waterberg PGM project.
• Working towards a maiden MRE in early 2023.

Next Steps

• As part of its commitment to further improve the viability of its exploration assets at both the Volspruit and Far Northern Limb projects, and to further unlock economic potential from these owned and licenced assets, the Company anticipates spending approximately ZAR70.0 million ($4.4 million) during FY2023 to perform further resource optimisation and to undertake additional exploration drilling and will continue to apply the same study parameters as used in the initial investigations to the remaining target areas, to ensure future value is realised at its exploration assets.

Jaco Prinsloo, CEO of Sylvania, commented:

"I am excited to share the results of our extensive optimisation studies at our Northern Limb Mineral Assets. These results include detailed Mineral Resource Estimates and a Scoping Study, and even though these were evaluated using conservative parameters, all results demonstrate attractive projects with significant upside potential across our entire Northern Limb asset portfolio.

"While the current Volspruit Scoping Study economics do not meet the Company's internal investment criteria and would not currently trigger a formal investment decision, I believe that the PFS that has already commenced will illustrate the significant upside that the inclusion of the Rh resource and South Body material would contribute. From existing metallurgical data (non-JORC compliant), we know that Rh could for example contribute approximately 5% to 6% additional ounces at no additional capex, demonstrates substantial additional value and which would significantly improve the attractiveness of the project.

"In terms of the Aurora Project, I am particularly excited by the presence of the near surface T-Zone, similar to that previously encountered at depth by Platinum Group Metals Ltd on its Waterberg project. However, this newly

discovered near surface T-Zone suggests a lower cost and lower risk opportunity than typical deep level underground mining techniques.

"These targeted exploration studies were commissioned during FY2021 for both the Volspruit and Far Northern Limb Projects and the rapid delivery of these exploration results is a testament to the team's hard work and the Company's ability to deliver, in an effective and efficient manner, on its strategic goals.

"During FY2023, the Company will continue to produce additional optimisation studies for the remaining target areas held under the Company's approved Mining Rights and that we deem to hold further value for Sylvania. These exploration activities will be internally funded and have already been included in the Company's announced cashflow planning for this current year.

"While the Company continues to focus on delivering value from and growing its existing cash generating dump reprocessing operations, the optimisation of value from its exploration assets remains one of the important pillars of Sylvania Platinum's growth strategy and a future value driver. With that in mind, we are proud to deliver these exploration results which I have no doubt will generate significant future value for the Company and all of its stakeholders. We look forward to sharing further updates in due course."

Further Information

The Company's Northern Limb Mineral Assets constitute various mineral asset exploration projects, that are endowed with PGE-Ni-Cu mineralisation, on the Northern Limb of the Bushveld Igneous Complex located in South Africa. Sylvania has approved Mining Rights for its Mineral Asset portfolio.

Volspruit Project

The Company initiated a resource optimisation study, with the assistance of Earthlab Technical Division ("Earthlab"), a mining and exploration specialist company, at the Volspruit North Body. The primary objective was to improve the Run of Mine ("ROM") ore feed grades for the project to enable the production of a higher grade, saleable PGM concentrate, eliminating the need for expensive and complicated downstream processing infrastructure.

Earthlab has reviewed historical exploration results of the Volspruit North Body and a revised geological interpretation was applied. This allows for higher grades, reducing the Mineral Resource Estimate to a smaller volume, but of a higher quality. Due to the alternative definition of mineralised zones, estimated as separate domains, the 2E PGM + Au grade of the MRE increased significantly and has enhanced the economic potential of the Volspruit North Body, especially when combined with the relatively low waste to reef stripping ratios anticipated.

We continue to meet the investment and workstream requirements relating to the permits under the existing Mining Right, with specialist technical teams currently working on the authorisations. These authorisations include the Water Use Licence for the mining and on-site processing of the ore, updating of the Environmental Impact Assessment and the finalisation of the amended Social and Labour Plan ("SLP") which will update the Local Economic Development ("LED") project that is included in the Mining Right held by the Company.

Mineral Resource Estimate

Table 1 shows the Volspruit North Body Mineral Resource tonnes and grades in g/t of Pt, Pd, Au and summed up as 2E + Au grade as well as Cu and Ni as percentages. The tonnes and the metal content are reported on a 100% attributable basis for all the PGMs and Base Metals (Table 2). Tables 1 and 2 furthermore divide the tonnes, ounces, and metal contained base metals into the three Resource Classification parameters as per the JORC Code (2012). The categories in decreasing confidence levels are Measured, Indicated and Inferred categories.

A significantly large proportion of the 2E + Au oz (96%) of the North Body reports to the Measured (21%) and Indicated (75%) Mineral Resources. As for the contained Ni, 20% reports to the Measured and 77% reports to the Indicated categories, respectively. The Inferred Mineral Resources are attributed to faulting which caused elevation differences with sparse drilling as well as the presence of the Nyl River and its associated flood lines with sparse drilling.

Table 1: Volspruit North Body Mineral Resources and grades at a 100% attributable basis

Footnotes that are relevant to all Mineral Resource tables:

• Rounding of numbers may lead to computational discrepancies;
• Mineral Resources are reported as in-situ, without any dilution of immediate hanging wall or footwall waste;
• If cut-off grade is applied at the Mineral Resource level, it will be stated accordingly.

Scoping Study

Earthlab completed a Scoping Study on the North Body of the Volspruit Project in accordance with the JORC Code (2012). Due to the specific JORC Code requirements, Rh has not been included in the current resource and its potential value contribution has therefore not been included in the Scoping Study valuation.

The Technical Study accuracy ranges between a Scoping Study and a Feasibility Study. A large portion of the study was completed with an accuracy better than that required at a Pre-Feasibility study level, including resource estimation, detailed mine design and scheduling to produce a Run of Mine ("ROM") profile to feed a concentrator. However, most of the processing infrastructure, in terms of the Capital Expenditure estimates, is currently at a scoping level of accuracy, which results in the project defaulting back to a Scoping Study. The Technical Study reasonably justifies the project's likelihood of progressing to a Pre-Feasibility Study and beyond.

Steady state mining production is designed and planned to feed the mills with a capacity of 150,000 tonnes per month ("ktpm") at average feed grade of 2.13 g/t 2E +Au, 0.06% Cu and 0.17% Ni. The mine plan comprises 15.7 million ROM tonnes, at a strip ratio of 6.67 (Metric t:t ROM) for the North Pit. Mining is scheduled in three pushbacks over a production life of 8.7 years with a maximum pit depth of 150 metres below the surface. The business case is built on delivering and selling concentrate to a third-party smelter similar to the model employed at the Company's existing dump operations. The metal recoveries, as used in the financial model to determine the recovered metal available to sell, are based on test work undertaken by Mintek in South Africa, which in its current level of progress is at a scoping level of accuracy.

The project returns $27.3 million (ZAR 464.0 million) at a pre-tax NPV12.5% and an IRR of 17.9%. The total contained metal in concentrate is: 704,000 oz of Pt, Pd, and Au; 13.6 million lb of Cu; and 33.7 million lb of Ni. This valuation currently excludes potential upside from Rh contribution and South Body PGM ounce inclusion which are currently being assessed.

Peak funding required is $147.4 million (ZAR 2.5 billion) with a payback period of 4.25 years from the first production. All-in Sustaining Cost ("AISC") to produce Pt, Pd, and Au ounces is $979/oz and $39.8 per tonne milled (ZAR 675/t). The yearly projected EBITDA is $30.6 million (ZAR 520 million).

Investment returns:

• Investment Returns currently exclude any Rh upside potential as well as any potential contribution from the Volspruit South Body which is still being evaluated.
  # Converted to US$ at the long-term forecast exchange rate of ZAR16.97.

Far Northern Limb Projects

The Company currently holds approved Mining Rights for PGMs and Base Metals for both the Aurora and Hacra project areas as part of its Far Northern Limb Projects.

In 2020 the Company, together with Earthlab, initiated a targeted review of the Hacra and Aurora PGM and Base Metal projects through an infill drilling programme, re-evaluation of existing drill hole data and an optimisation study.

Aurora Project

Through the re-interpretation of the geology, stratigraphy and the mineralisation, a significant Measured and Indicated Mineral Resource representing the first near-surface discovery of the Waterberg T-Zone geology and mineralisation is being declared. These results from the La Pucella Target area of the Far Northern Limb provide only the second known occurrence of the T-Zone mineralisation, with the initial discovery in 2011 found at depths more than 220 metres below surface underlying the Waterberg PGM Project.

Table 5 shows the Mineral Resource tonnes (discounted by 10% geological losses) and grades in g/t of Pt, Pd, Au and summed up as 2E +Au grade for the La Pucella target area which also includes a small portion of the contiguous Nonnenwerth farm. The tonnes and the metal content are reported on a 100% attributable basis.

A significantly large proportion of the 2E +Au oz (99 %) reports to the Measured (31%) and Indicated (68%) Mineral Resources. The Inferred Mineral Resources are attributed to faulting which caused elevation differences with sparse drilling. While no blocks deeper than 200 metres below the surface are included in the reported numbers, the mineralisation is known to extend beyond this depth, and with future additional drilling, an underground Mineral Resource could potentially be reported.

Table 5: Aurora Project T1 and T2 Mineral Resources and grades at La Pucella and Nonnenwerth1

1 Footnotes:

• To perform block model estimation, wireframes of the mineralised T-Zone underlying the farm of La Pucella were un-faulted and rotated to an approximated horizontal plane. The Mineral Resource constitutes the T1-main and T2-main zones. The Mineral Resource is reported from a orthogonal block model in its actual spatial position with no rotations or translations. The orthogonal block model is fit-for-purpose to be subjected to Whittle Pit Optimisation procedures.
• The numbers reported in this disclosure are before any cut-off grade applied to the block model.
• The parent block size is set to X=2.5m ; Y=20m ; Z=5m. There are however millions of subcells which resulted from the intricate steps followed to produce the Mineral Resource. The subcells are retained at this stage to honor the stratigraphic populations (T1_main vs T1_waste and T2_main vs T2_waste) as well as the 3E classification. Block optimisation was done without regarding Rh, Cu, or Ni classification since these metals are downgraded to Inferred for the entire model.