TIDMSLP
RNS Number : 4214V
Sylvania Platinum Limited
30 January 2017
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
Second Quarter Report to 31 December 2016
"Highest quarterly production in the history of the Company of
18,562 ounces."
30 January 2017
Sylvania Platinum Limited, the low cost Platinum Group Metal
("PGM") processor and developer, today announces its results for
the quarter ended 31 December 2016 ("Q2" or the "quarter") from its
PGM production and development operations in the Bushveld region of
South Africa.
SNAPSHOT
-- 18,562 ounces produced by the SDO marking a new Company
production record (8% increase on last quarter's Company record of
17,257 ounces).
-- Group cash balance of $12.7 million, a $1.6 million increase
on the previous quarter's $11.1 million.
-- Group cash cost of $417/oz, down 3% from previous quarter.
-- Gross basket price decreased 6% to $881/oz from $937/oz for the previous quarter.
-- Revenue decreased 11% in US dollar terms to $11.6 million
(Q1: $13.0 million) and decreased 12% in Rand terms to R161.4
million (Q1: R182.7 million) as a result of the drop in basket
price, a negative price adjustment for Q1 and slightly higher PGM
penalties during Q2.
-- SDO expected to exceed the previously stated guidance of 60,000oz.
SYLVANIA OVERVIEW
The Sylvania Dump Operations ("SDO") has once again achieved
record production for the quarter, producing 18,562 ounces against
17,257 ounces in the previous quarter. This 8% quarter-on-quarter
improvement was aided primarily by slightly higher PGM feed tons
and feed grades, while the PGM recovery efficiency was slightly
down from the previous quarter's record performance. Based on its
solid year-to-date performance and the expected outlook for the
remainder of the year, the SDO is expected to exceed the previously
stated guidance of 60,000oz. A revised guidance is currently under
review and will be announced in the forthcoming half year report to
be published in February 2017.
The cash costs for the SDO in Rand terms have decreased 2% from
R5,745/oz in Q1 to R5,603/oz, due to a combination of higher PGM
ounce production and disciplined operating cost control.
Furthermore there was a 1% decrease in cash costs in US dollar
terms from $408/oz to $402/oz impacted by the 1% movement in the
R/$ exchange rate. Revenue however decreased 11% in US dollar terms
to $11.6 million (Q1: $13.0 million) and decreased 12% in Rand
terms to R161.4 million (Q1: R182.7 million). This decrease in
revenue is partly a result of the drop in basket price, which
decreased 6% to $881/oz (Q1: $937/oz), as well as the impact of a
negative price adjustment for Q1 and slightly higher PGM penalties
during Q2. Capital Expenditure increased 209% primarily as a result
of the rollout of Project ECHO, previously communicated in the 2016
Annual Report, to ensure a sustainable PGM production profile.
The Group cash balance at 31 December 2016 was $12.7 million
(including guarantees), a $1.6 million increase on the previous
quarter's $11.1 million. Cash generated from operations before
working capital movements was $3 million with net changes in
working capital amounting to a reduction of $1.3 million. $0.5
million was spent on the stay-in-business capital for the SDO
plants, $0.05 million expenditure on exploration assets, $0.5
million paid for the rehabilitation insurance guarantee, $0.6
million received from Ironveld Holdings for the part repayment of
the loan, $0.09 million invested in a joint venture R&D
project, and the impact of exchange rate fluctuations on cash held
at the quarter end was $0.08 million.
Commenting on the quarter, Sylvania's CEO Terry McConnachie
said:
"I am pleased to report on another excellent quarter where
production has once again exceeded expectations and resulted in
another record quarter. Our Group costs are well contained and are
3% lower than the previous quarter's costs, and are in the lowest
quartile of the industry cost curve.
Despite the lower basket price compared to the previous quarter,
the Company generated positive cash inflows to increase its cash
balance to $12.7million (Q1: $11.1million).
All seven of the Sylvania chrome and platinum plants are
producing at steady state and the Board is pleased to see that the
initiatives implemented last year, including changing from
Mechanical mining to Hydro mining, improving the engineering
preventative maintenance schedules and concentrating on reducing
penalties, are yielding positive results.
The Company is well on track to exceed its 60,000 ounce
production guidance for the year ending in June 2017."
GROUP PERFORMANCE
Unaudited - Group Unit % Change
December September
2016 2016
Quarter Quarter
----------------------- ------ ---------- ----------- ---------
Financials
----------------------- ------ ---------- ----------- ---------
Revenue $'000 11,577 12,965 -11%
----------------------- ------ ---------- ----------- ---------
Capital Expenditure(1) $'000 684 305 124%
----------------------- ------ ---------- ----------- ---------
Ave R/$ rate R/$ 13.94 14.09 -1%
----------------------- ------ ---------- ----------- ---------
EBITDA(2) $'000 3,665 5,538 -34%
----------------------- ------ ---------- ----------- ---------
Production
----------------------- ------ ---------- ----------- ---------
PGM Plant Feed T 290,832 283,964 2%
----------------------- ------ ---------- ----------- ---------
Total 3E and Au Oz 18,562 17,257 8%
----------------------- ------ ---------- ----------- ---------
Group Cash Cost(3)
----------------------- ------ ---------- ----------- ---------
Per 3E & Au oz $/oz 417 431 -3%
----------------------- ------ ---------- ----------- ---------
(1) Capital expenditure on SDO and exploration and evaluation
assets.
(2) EBITDA is Earnings before interest, foreign exchange gains
and losses, taxation, depreciation and amortisation.
(3) Group cash costs include plant operating costs and group
general and administration costs, but are exclusive of
depreciation, amortisation, reclamation capital, project
development and administration costs and share-based payments.
A. SYLVANIA DUMP OPERATIONS
Health, safety and environment
There were no significant safety, health or environmental
incidents during the quarter. The SDO operations continued their
excellent safety performance during the quarter with Steelpoort
remaining LTI free for more than eight years now, Tweefontein and
Doornbosch both being LTI free for more than four years, and
Millsell on two years LTI-free.
Through the continued focus and dedication of the respective
operational management teams and employees, the Company is able to
remain compliant in terms of health, safety and environmental
systems and legislation, which is a key-priority for the
Company.
Operations
We are very pleased with the quarter's SDO production of 18,562
PGM ounces, an 8% increase on the previous quarter's performance of
17,257 ounces, representing a new consecutive quarterly record for
the Company.
Most operations performed exceptionally well during the quarter,
with Lannex, Mooinooi and Tweefontein achieving the best quarterly
PGM ounce production figures in the history of the operations,
Doornbosch achieved slightly lower performance than the previous
quarter, associated with the repositioning of its hydro-mining pump
station at the dam.
The higher PGM ounces during the quarter can be attributed to
higher PGM feed tons and feed grades, while the PGM recovery
efficiency was slightly down from the previous quarter's record
performance. The hydro-mining stability and tonnage feed rates at
Lannex and Steelpoort in particular, improved during the quarter
based on optimisation initiatives, which contributed to the overall
increase in PGM feed tons for the Group and mitigated the impact of
the slightly lower feed tons from Doornbosch. While the PGM feed
grade was slightly higher than the previous quarter, the PGM
recovery efficiency was slightly down due to lower recoveries at
Lannex and Mooinooi, associated with higher tonnage throughput and
lower flotation mass pull respectively during the quarter.
Cash cost of production decreased in both US dollar and Rand
terms and the SDO reported figures of $402/oz (R5,603/oz) down from
the $408/oz (R5,745/oz) recorded in the previous quarter. The R/$
exchange rate remained fairly flat over the past two quarters with
only a 1% movement.
Operational and Financial Summary
Unaudited - SDO Unit December September +- % 6 months
2016 2016 Quarter to December
Quarter Quarter on Quarter 2016
---------------------- ----- -------- ---------- ------------ -------------
Revenue
---------------------- ----- -------- ---------- ------------ -------------
Revenue $'000 11,577 12,965 -11% 24,551
---------------------- ----- -------- ---------- ------------ -------------
Revenue R'000 161,428 182,740 -12% 344,168
---------------------- ----- -------- ---------- ------------ -------------
Gross Basket Price(1) $/oz 881 937 -6% 883
---------------------- ----- -------- ---------- ------------ -------------
Gross Cash Margin
- SDO % 36% 46% -22% 41%
---------------------- ----- -------- ---------- ------------ -------------
Capital Expenditure $'000 633 205 209% 837
---------------------- ----- -------- ---------- ------------ -------------
Capital Expenditure R'000 8,830 2,896 205% 11,727
---------------------- ----- -------- ---------- ------------ -------------
Ave R/US$ rate(2) R/$ 13.94 14.09 -1% 14.02
---------------------- ----- -------- ---------- ------------ -------------
EBITDA $'000 4,003 5,931 -33% 9,945
---------------------- ----- -------- ---------- ------------ -------------
EBITDA R'000 55,820 83,589 -33% 139,408
---------------------- ----- -------- ---------- ------------ -------------
SDO Cash Cost(3)
---------------------- ----- -------- ---------- ------------ -------------
Per PGM Feed ton $/t 26 25 4% 25
---------------------- ----- -------- ---------- ------------ -------------
Per PGM Feed ton R/t 358 349 3% 353
---------------------- ----- -------- ---------- ------------ -------------
Per 3E & Au oz $/oz 402 408 -1% 405
---------------------- ----- -------- ---------- ------------ -------------
Per 3E & Au oz R/oz 5,603 5,745 -2% 5,671
---------------------- ----- -------- ---------- ------------ -------------
Production
---------------------- ----- -------- ---------- ------------ -------------
Plant Feed T 545,598 517,552 5% 1,063,150
---------------------- ----- -------- ---------- ------------ -------------
Feed Head Grade g/t 2.62 2.40 9% 2.40
---------------------- ----- -------- ---------- ------------ -------------
PGM Plant Feed
Tons T 290,832 283,964 2% 574,796
---------------------- ----- -------- ---------- ------------ -------------
PGM Plant Grade g/t 4.12 3.99 3% 4.05
---------------------- ----- -------- ---------- ------------ -------------
PGM Plant Recovery % 46.2% 47.3% -2% 46.7%
---------------------- ----- -------- ---------- ------------ -------------
Total 3E and Au Oz 18,562 17,257 8% 35,819
---------------------- ----- -------- ---------- ------------ -------------
(1) The gross basket price reported is the total estimated price
for deliveries made in the quarter and does not include any
penalties or smelting costs. The actual net basket price received
is only determined in the invoicing month which is three months
after the delivery month, prior quarter adjusted for actual prices
received if necessary.
(2) The functional currency for SDO is SA Rand and the exchange
rate shown is the average over the period indicated.
(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.
Project Echo
Project Echo, the secondary milling and flotation program at
various operations, which was announced by the company during
August 2016, has commenced during previous quarters and the company
is on track to deliver on the PGM production profile as
communicated earlier.
This secondary milling and flotation technology ("MF2") roll-out
will lead to improved PGM recovery efficiencies, lower PGM
production unit costs, increased cash generation, and enable the
SDO to extend its profitable operating life and to sustain its
production profile at 55,000oz to 60,000oz going forward.
B. EXPLORATION AND OPENCAST MINING PROJECTS
Volspruit Platinum Exploration
The Company continues to await a decision by the Member of the
Executive Council for Economic Development, Environment and Tourism
whether to accept the Company's Appeal and set aside the initial
refusal of the Environmental Authorisation ("EA") for the project
and will report any update as soon as it is received.
Grasvally Chrome Exploration
The Company received approval for its EA for the Grasvally
project on 29 November 2016. An Appeal by certain Interested and
Affected Parties was received on 6 January 2017. Sylvania and its
Consultants are in the process of preparing an Answering Statement
in response to the comments received in the Appeal and will submit
their response by mid-February 2017.
Sylvania continues to await approval of its Water Use License
for processing the waste rock dumps approved under Section 29 of
the Act.
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
Alma PR Limited +44 (0) 77 8090 1979
Josh Royston / Hilary Buchanan
This information is provided by RNS
The company news service from the London Stock Exchange
END
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