TIDMSLP
RNS Number : 3594I
Sylvania Platinum Limited
30 August 2016
_____________________________________________________________________________________________________________________________
Sylvania Platinum Limited
Results for the year ended 30 June 2016
("Sylvania", "the Company" or "the Group")
AIM (SLP)
30 August 2016
The Directors of the Company are pleased to present the results
for the financial year ended 30 June 2016. Unless otherwise stated,
the consolidated financial information contained in this report is
presented in US Dollars. The complete Annual Report for the
financial year ended 30 June 2016 is available on the Company
website (www.sylvaniaplatinum.com).
Financial snapshot
-- EBITDA increased 3% to $13.0 million for the Sylvania Dump
Operations ("SDO") (FY2015: $12.6 million);
-- Group adjusted EBITDA improved by 9% to $11.1 million (FY2015 $10.1 million);
-- General and administrative costs are down by 31% from $3.3
million in FY2015 to $2.3 million;
-- Gross profit up by 19% year-on-year from $6.5 million in FY2015 to $7.7 million;
-- Profit after income tax of $3.7 million achieved (FY2015: $1.7 million);
-- Group Cash profit achieved of $8.2 million (FY2015: $8.4 million);
-- Basic earnings per share ("EPS") improved 125% to 1.28 US
cents per share from 0.57 US cents per share in FY2015;
-- Group capital and exploration expenditure down by 56% to $1.8
million (FY2015: $4.1 million);
Operations snapshot
-- Lost-Time Injury ("LTI") free across all operations for the year;
-- Third consecutive year of record SDO production at steady
state, achieving 60,643 ounces - a 5% increase from the previous
record of 57,587 ounces achieved in FY2015;
-- Group cash cost $470/oz, 33% below the Company's guidance of $700/oz.
SYLVANIA OVERVIEW
For the third consecutive year at steady state, the SDO achieved
record production of 60,643 ounces - a 5% increase from the
previous record of 57,587 ounces achieved in FY2015, largely as a
result of more tons treated and improved recovery efficiency.
At 30 June 2016, the Group cash balance grew by 31% from $5.1
million reported at the end of H1 to $6.7 million in H2.
This, however is a $1.7 million (20%) decrease from $8.4 million
in the previous year. Cash generated from operations before working
capital movements was $11.5 million, with net changes in working
capital amounting to a reduction of $6.2 million, $1.9 million of
which can be attributed to the repayment of the 3 month pipeline
financing on the sale of concentrate. A further $3.6 million in tax
payments was made. During the year, $0.3 million was spent on the
rehabilitation insurance guarantee, $0.3 million on exploration
activities and $1.2 million on stay in business capital for the SDO
plants (FY2015: $2.7 million). A repayment of $0.3 million was
received from Ironveld Holdings (Pty) Ltd under the terms of the
loan agreement with Ironveld plc. The Company spent $1.1 million on
share transactions and the impact of exchange rate fluctuations on
cash held at year end was $0.8 million. Group cash profit (earnings
after interest and tax paid before non-cash items including
depreciation, amortisation, impairment, foreign exchange gain/loss,
share-based payments, rehabilitation provision movements and
deferred tax) was $8.2 million.
The Company achieved a profit after income tax of $3.73 million
- an improvement of 120% from $1.7 million in FY2015. General and
administrative costs are down by 31% from $3.3 million in FY2015 to
$2.3 million this year, with gross profit showing a 19% growth
year-on-year from $6.5 million in FY2015 to $7.7 million. The
Company's basic EPS has improved significantly from the prior year
to 1.28 US cents per share (a 125% improvement).
Group capital expenditure is also down by 56% to $1.8 million
from $4.1 million in FY2015.
Commenting on the annual results, Sylvania Platinum's CEO, Terry
McConnachie, said:
"I congratulate our management team for the excellent production
performance in excess of 60,000 ounces for the year. This is an
all-time record and marks the third consecutive year of increased
production as well as some 6% better than budget. Further, we
produced the ounces at a Group cash cost of $470/oz which is 27%
down from the previous year. Our Group capex was contained to $1.8
million for the year. The Group made a cash profit of $8.2 million
in spite of the average gross basket price of $850/oz dropping to a
low of $785/oz in Q2 from $1,072/oz recorded at the end of the
prior financial year.
I am proud to report that the Company achieved one year LTI-free
at all operations and did not receive any Section 54 stoppage
notices from the Department of Mineral Resources during the year.
This is an exceptional achievement and testament to dedicated
management and a work force that has bought in to our zero
tolerance on safety issues.
Our Group is cash positive and we have not drawn down on
overdraft facilities or project financing, however the Group
available cash balance reduced to $6.7 million (a 20% reduction)
largely due to a $2.7 million tax payment at the end of June.
In addition to the tax payment, we extinguished all the pipeline
financing from our off-take agreement in this year and we bought
back some 7,383,974 shares that were transferred into
treasury."
Financial and production summary Half-year and Full year
Jan - Jun Jul - Dec +- % +-
Unit 2016 2015 Change FY 2016 FY 2015 % Change
H2 H1
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Group Revenue
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Revenue(1) $'000 20,660 18,532 11% 39,511 47,790 -17%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Basket
Price $/oz 873 829 5% 850 1,072 -21%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Cash
Margin - Group % 35% 19% 84% 28% 23% 22%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Capital &
Exploration
Expenditure $'000 863 912 -5% 1,780 4,051 -56%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Adjusted EBITDA(2) $'000 7,190 3,612 99% 11,083 10,140 9%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Ave R/$ rate(1) R/$ 15.41 13.59 13% 14.43 11.43 26%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Group Cash
Cost(3)
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Per 3E & Au
oz $/oz 432 508 -15% 470 642 -27%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
SDO Revenue
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Revenue $'000 20,660 18,532 11% 39,511 47,790 -17%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Basket
Price $/oz 873 829 5% 850 1,072 -21%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Cash
Margin - SDO % 39% 25% 56% 33% 27% 22%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Capital Expenditure $'000 676 742 -9% 1,420 2,916 -51%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
EBITDA $'000 8,086 4,590 76% 12,957 12,554 3%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Ave R/$ rate R/$ 15.41 13.59 13% 14.43 11.43 26%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Jan - Jun Jul - Dec +- % +-
Unit 2016 2015 Change FY 2016 FY 2015 % Change
H2 H1
----------------- ------ --------- --------- ------- --------- ----------- ----------
SDO Cash Cost(3)
----------------- ------ --------- --------- ------- --------- ----------- ----------
Per PGM Feed
ton $/t 22 25 -12% 23 32 -28%
----------------- ------ --------- --------- ------- --------- ----------- ----------
Per 3E & Au
oz $/oz 402 471 -15% 437 603 -28%
----------------- ------ --------- --------- ------- --------- ----------- ----------
Production
- SDO
----------------- ------ --------- --------- ------- --------- ----------- ----------
Plant Feed T 1,055,446 1,124,022 -6% 2,179,468 2,129,352 2%
----------------- ------ --------- --------- ------- --------- ----------- ----------
Feed Head
Grade g/t 2.65 2.26 17% 2.40 2.31 4%
----------------- ------ --------- --------- ------- --------- ----------- ----------
PGM Plant
Feed Tons T 570,111 563,797 1% 1,133,908 1,090,783 4%
----------------- ------ --------- --------- ------- --------- ----------- ----------
PGM Plant
Grade g/t 4.04 4.01 1% 4.03 4.22 -5%
----------------- ------ --------- --------- ------- --------- ----------- ----------
PGM Plant
Recovery % 42.0% 41.8% 1% 43.2% 38.3% 13%
----------------- ------ --------- --------- ------- --------- ----------- ----------
Total 3E and
Au Oz 31,124 29,519 5% 60,643 57,587 5%
----------------- ------ --------- --------- ------- --------- ----------- ----------
(1) The functional currency for SDO is SA Rand and the exchange
rate shown is the average over the period indicated.
(2) Adjusted EBITDA is Earnings before Interest, taxation,
impairment adjustments, depreciation and amortisation.
(3) Cash costs include plant operating costs such as mining,
processing, administration, royalties and production taxes, but are
exclusive of depreciation, amortisation, reclamation, capital,
project development and exploration costs.
A. SYLVANIA DUMP OPERATIONS
Health, safety and environment
The Company achieved one year LTI-free at all operations and did
not receive any Section 54 stoppage notices from the Department of
Mineral Resources ("DMR") during the year. This is an exceptional
achievement, which again demonstrates our commitment towards the
safety of our employees and operations. Particularly notable is the
Steelpoort Plant, which has been LTI-free for more than eight years
while Tweefontein and Doornbosch both achieved the significant
milestone of four years LTI-free during the year.
Health, safety and environmental compliance remains a key
priority for the Company. The collaborative efforts of management
and all employees across the operations, upholding the safety
culture, contribute to the high safety standards and plant
conditions at the respective operations.
Operations
For the third consecutive year at steady state, SDO production
set an annual record by achieving 60,643 ounces - a 5% increase
from the previous record of 57,587 ounces achieved in FY2015. Both
stated and revised guidance of 57,000 ounces to 58,000 ounces was
exceeded and the Company broke through the 60,000 ounce mark for
the first time.
Cash costs per PGM feed ton decreased by 28% to $23/ton (FY2015:
$32/ton) and cash costs per 3E & Au ounce decreased 28% to
$437/oz from $603/oz disclosed in the previous year. SDO capital
expenditure is also down 52% from $2.9 million recorded in FY2015
to $1.4 million.
The SDO continued to build on steady performance in recent years
and, despite a lower PGM feed grade and some production
interruptions due to the electrical substation fire at Mooinooi, as
well as community protests related to municipal service delivery
and job opportunities at our Eastern Limb operations during the
year, the operations managed to improve on the treatment tons of
FY2015 and significantly exceeded the previous recovery efficiency
in order to achieve a record annual PGM ounce production.
While the overall plant feed head grades were slightly higher
than in FY2015, the FY2016 PGM feed grades were 5% lower at
4.03g/ton from 4.22g/ton in the previous year. Plant feed tons for
the year are up 2% to 2,179,468 tons from 2,129,352 tons recorded
in FY2015 and PGM plant recovery increased by 13% from 38% in
FY2015 to 43%.
More disciplined production management, improved plant stability
and continuous process improvement initiatives helped maintain
stable feed tonnages and to achieve higher PGM recovery
efficiencies over the past year. The Company is now able to build
further on this by expanding its metallurgical plant infrastructure
in order to achieve even higher process efficiencies at lower
overall production cost through the execution of Project "ECHO".
This project will enable transformation of the Millsell,
Doornbosch, Tweefontein and Mooinooi Dump and ROM operations from
single stream milling and flotation ("MF1") circuits to primary and
secondary milling and flotation ("MF2") circuits over the next two
to three years.
From a financial perspective, SDO revenue decreased by 17%
year-on-year to $39.5 million from $47.8 million in FY2015,
primarily due to the gross basket price dropping 21% from $1,072/oz
in FY2015 to $850/oz. However, SDO EBITDA improved by 3% to $13.0
million from $12.6 million recorded in FY2015, aided by
significantly lower operating costs during the period. SDO capital
expenditure decreased by 51% as a result of stringent cost
controls.
EXPLORATION AND OPENCAST MINING PROJECTS
Harriet's Wish, Aurora and Cracouw Exploration
The Company submitted financial guarantees in order to provide
for financial security for rehabilitation, as required by the DMR,
and notarial execution of the mining right for this project
occurred on 9 December 2015.
In terms of the Mineral and Petroleum Resources Development Act
("MPRDA"), application to transfer the right to mine iron ore,
vanadium and heavy minerals to Ironveld, pursuant to the iron ore
transaction concluded in FY2013, was granted on 15 April 2016. The
notarial cession of this right was also concluded and the documents
were lodged with the Mining Titles Office for registration. When
any further update is available, this will be communicated to all
stakeholders.
The Company intends to proceed with a water use license
application ("WULA") but, as communicated in our Interim Report
this year, this process will be delayed as transfer of the title
deeds from the deceased original landowners to lawful occupants and
descendants will need to be facilitated.
Volspruit Platinum Exploration
In the first quarter, we reported that a biodiversity and
wetland offset strategy was delivered to the Limpopo Department of
Economic Development, Environment and Tourism ("LEDET") and the DMR
on 14 September 2015. This forms the basis of implementing
remediation towards zero net impact should planned mitigation
during the mine's operation prove to be insufficient. In the form
of an addendum to the environmental impact assessment ("EIA"), as
part of the Company's application for environmental authorisation
("EA"), the documents were submitted together with the comments and
responses report following public review. Unfortunately, in the
third quarter, we were informed that the EA application had been
refused, and that LEDET had listed various reasons for the refusal.
Our advisors believe that the reasons for the refusal indicated
that LEDET had not duly considered the contents of the addendum
submitted in the first quarter and, as such, an appeal against the
refusal was submitted to the relevant authority on 3 June 2016.
Sylvania continues to await the outcome of the mining right
application ("MRA") from the DMR for this project, believing that a
decision will be reached when the appeal of the EA has been
concluded.
As communicated in the prior year, the Company intends to
proceed with a WULA although this will require preliminary detailed
civil designs of all dam facilities. As this will incur additional
costs, it has been postponed pending the decision on the MRA and EA
as part of our continuous focus on improving cost controls.
Grasvally Chrome Exploration
A mineral resource estimate statement, which declared a South
African Mineral Resources Committee ("SAMREC") compliant resource
over the entire strike length of 5.2km of the known chromitite body
on the prospect of this project, was completed in the second
quarter of the financial year. This is necessary for the Company to
exercise a mining right over the resource.
The MRA for Grasvally was submitted in the first quarter and
public participation meetings with interested and affected parties
were held in February 2016. Stakeholders at these meetings
requested an assessment of potential loss of agriculture and income
should the project proceed. The DMR then granted a 50-day extension
to the submission of the EIA, which was finally submitted on 10 May
2016. We await a decision by the DMR.
In addition, the WULA for opencast mining and waste rock
treatment was submitted to the Department of Water and Sanitation
("DWS") on 1 June 2016 and we also await a decision on this
application.
During the second quarter, we communicated that the Company
intends to sell this asset. An international agent was appointed to
manage the process and a marketing "teaser" was released in March
2016. Unfortunately, due to the recent performance of the chrome
market, potential purchasers have been slow to show interest.
However, we expect this to change as the market improves.
FINANCIALS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2016
2016 2015
Notes $ $
Revenue 1 39,510,771 47,790,535
Cost of sales (31,780,332) (41,280,681)
Gross profit 7,730,439 6,509,854
Other income 42,985 54,534
Profit/(loss) on sale of property,
plant and equipment 5,734 (78)
Foreign exchange gain 288,528 235,109
Profit on sale of financial
assets at fair value through
profit and loss 729 -
Loss on sale of available-for-sale
financial assets (4,851) -
Impairment of available-for-sale
financial assets - (7,250)
Impairment of exploration
and evaluation assets 2 (8,280) (18,552)
General and administrative
costs 3 (2,259,578) (3,270,718)
Operating profit before finance
costs and income tax expense 5,795,706 3,502,899
Finance income 396,399 413,245
Finance costs (218,270) (311,688)
Profit before income tax expense 5,973,835 3,604,456
Income tax expense (2,240,300) (1,907,567)
Net profit for the year 3,733,535 1,696,889
============= =============
Cents Cents
Profit per share for profit
attributable to the ordinary
equity holders of the Company:
Basic earnings per share 1.28 0.57
Diluted earnings per share 1.24 0.55
1. Revenue is generated from the sale of PGM ounces produced at
the seven retreatment plants.
2. Additional exploration and evaluation costs incurred in terms
of the agreement with Aquarius Platinum SA (Pty) Ltd in the current
financial year relating to the Group's Everest North project which
was fully impaired in prior years were also impaired.
3. General and administrative costs include consulting fees
($0.3 million), legal fees ($0.2 million), travel ($0.2 million),
advisor and PR costs ($0.2 million), directors' fees ($0.3
million), share based payments ($0.3 million) and other smaller
administrative costs.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
Notes 2016 2015
$ $
Net cash inflow from operating
activities 4 1,929,245 9,082,095
Net cash outflow from investing
activities 5 (1,437,476) (3,262,109)
Net cash outflow from financing
activities 6 (1,368,254) (1,732,439)
------------------------------------------- ------------
Net (decrease)/increase
in cash and cash equivalents (876,485) 4,087,547
Effect of exchange fluctuations
on cash held (832,835) (991,552)
Cash and cash equivalents
beginning of year 8,416,342 5,320,347
Cash and cash equivalents,
end of year 6,707,022 8,416,342
------------------------------------------- ------------
4. Net cash inflow from operating activities includes a net
operating cash inflow of $5,290,603, net finance income of $198,734
and taxation paid of $3,560,092.
5. Net cash outflow from investing activities includes payments
for property, plant and equipment of $1,180,453, exploration and
evaluation assets of $283,128, cash inflow of $277,200 from
Ironveld Holdings for a loan facility granted, cash inflow of
$13,908 proceeds from the sale of financial assets and an amount
paid of $265,003 for the rehabilitation investment guarantee.
6. The net cash outflow from financing activities consists of
the repayment of borrowings of $241,079 and payments for share
transactions of $1,127,175.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2016
2015 2015
Notes $ $
Assets
Non-current assets
Other financial assets 7 710,055 509,106
Exploration and evaluation
assets 55,723,424 58,785,429
Property, plant and
equipment 30,132,591 40,984,682
Total non-current assets 86,566,070 100,279,217
------------ ------------
Current assets
Cash and cash equivalents 8 6,707,022 8,416,342
Trade and other receivables 9 16,055,698 13,150,608
Other financial assets 7 1,343,255 1,823,362
Inventories 10 1,693,024 964,973
Current tax asset 80,679 -
Total current assets 25,879,678 24,355,285
------------ ------------
Total assets 112,445,748 124,634,502
------------ ------------
Equity and liabilities
Shareholders' equity
Issued capital 11 2,979,819 29,798,190
Reserves 12 66,917,322 50,910,179
Retained profit 21,164,125 17,430,590
------------ ------------
Total equity 91,061,266 98,138,959
------------ ------------
Non-current liabilities
Interest bearing loans
and borrowings 13 171,286 216,547
Provisions 14 2,809,228 2,974,536
Deferred tax liability 12,076,899 16,090,844
Total non-current liabilities 15,057,413 19,281,927
------------ ------------
Current liabilities
Trade and other payables 6,115,147 6,938,983
Interest bearing loans
and borrowings 13 211,922 265,442
Current tax liability - 9,191
Total current liabilities 6,327,069 7,213,616
------------ ------------
Total liabilities 21,384,482 26,495,543
------------ ------------
Total liabilities and
shareholders' equity 112,445,748 124,634,502
------------ ------------
7. Other financial assets consist of the investment linked to
the rehabilitation insurance guarantee included in non-current
assets and the loan receivable granted to Ironveld Holdings (Pty)
Ltd from Sylvania Metals (Pty) Ltd, a South African subsidiary of
the Group which is included in current assets. The loan receivable
granted to Ironveld Holdings (Pty) Ltd from Sylvania South Africa
(Pty) Ltd, also a South African subsidiary of the Group, was repaid
in full during the current year. The available-for-sale financial
assets and financial assets at fair value through profit and loss
were sold during the current year.
8. The majority of the cash and cash equivalents are held in
South Africa and ZAR denominated balances amount to $6,024,044 (ZAR
89,113,081).
9. Trade and other receivables consist mainly of amounts receivable for the sale of PGM's.
10. Inventory held is stores and materials for the SDO and finished goods not yet delivered.
11. The total number of issued ordinary shares at 30 June 2016
is 297,981,896 (including shares held in treasury).
12. Reserves include the share premium reserve, foreign currency
translation reserve, which is used to record exchange differences
arising from the translation of financial statements of foreign
controlled entities, share-based payments reserve, reserve for own
shares, the non-controlling interests reserve and the equity
reserve.
13. Interest bearing loans and borrowings are secured instalment
sale agreements over various motor vehicles and plant and
equipment.
14. Provision is made for the present value of closure,
restoration and environmental rehabilitation costs in the financial
period when the related environmental disturbance occurs.
1. The financial information contained in this announcement does
not comprise full financial statements.
2. The consolidated financial statements have been prepared on a
historical cost basis, except for available-for-sale investments,
embedded derivatives, and investments carried at fair value through
profit or loss, which have been measured at fair value. The
consolidated financial information is presented in US Dollars and
the parent's functional currency is Australian Dollars. The
presentation currency differs from the functional currency of the
parent as the sales of platinum are denominated in US Dollars; and
alignment of the functional currency with the sales price is
considered to provide more appropriate information to the users of
the financial statements.
CORPORATE INFORMATION
Registered Sylvania Platinum Limited
office:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Postal address: PO Box 976
Florida Hills, 1716
South Africa
Sylvania Website: www.sylvaniaplatinum.com
CONTACT DETAILS
For further information,
please contact:
Terence McConnachie (Chief
Executive Officer) +44 777 533 7175
Nominated Advisor and Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Neil
Elliot
Communications
Newgate +44 (0) 20 7653 9850
Adam Lloyd / Ed Treadwell
/ Helena Bogle
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BCGDIUDDBGLC
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