TIDMSLP
RNS Number : 5058M
Sylvania Platinum Limited
31 July 2017
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
Fourth Quarter Report to 30 June 2017
"Another excellent quarter's production of 17,954 ounces
bringing total annual production to 70,869 ounces - a new Company
record."
28 July 2017
Sylvania Platinum Limited, the low cost Platinum Group Metal
("PGM") processor and developer, today announces its results for
the quarter ended 30 June 2017 ("Q4" or the "quarter") from its PGM
production and development operations in the Bushveld region of
South Africa.
SNAPSHOT
-- Consistently strong production throughout the year sees
another strong quarter with 17,954 ounces produced by the Sylvania
Dump Operations ("SDO");
-- SDO costs decreased 11% from R6,236/oz to R5,572/oz
quarter-on-quarter (10% reduction in costs from $471/oz to
$422/oz)
-- Revenue increased 4% in US dollar terms to $13.2 million (Q3:
$12.7 million) and increased 3% in Rand terms to R174.4 million
(Q3: R168.8 million);
-- Group EBITDA improved 22% from $4.1 million to $5.0 million quarter-on-quarter; and
-- Group cash costs down 11% quarter-on-quarter to $446/oz (Q3: $501/oz).
SYLVANIA OVERVIEW
The SDO has consistently achieved strong production for the
year, with the fourth quarter producing 17,954 ounces which is a 5%
increase on the previous quarter's production of 17,096 ounces.
This also supersedes Q1 production as the second highest quarterly
production achieved by the Company. Consequently, the SDO has
exceeded the upper end of the revised guidance range of 65,000
ounces by achieving 70,869 ounces for the financial year - a new
annual record for the Company.
The cash costs for the SDO in Dollar and Rand terms have
decreased 10% and 11% respectively from $471/oz (R6,236/oz) in Q3
to $422/oz (R5,572/oz), due to a combination of higher PGM ounce
production and disciplined cost control during the period. The
exchange rate of the Rand against the US Dollar remained stable
over the period and Revenue increased marginally by 4% in US dollar
terms to $13.2 million (Q3: $12.7 million) as well as 3% in Rand
terms to R174.4 million (Q3: R168.8 million). SDO capital
expenditure decreased 5% in line with the project schedule for
Project Echo which is currently in progress to ensure a sustainable
PGM production profile going forward.
Cash generated from operations before working capital movements
was $2 million, despite an income tax payment of $3.2 million at
the end of the quarter. However, the Group cash balance at 30 June
2017 was $15.3 million (including guarantees), a $1.3 million
decrease on the previous quarter's $16.6 million. This decrease in
cash is due to a net decrease in working capital amounting to $1.4
million, a further $1.4 million spent on stay-in-business capital
for the SDO plants, $0.6 million expenditure on exploration assets,
$0.05 million paid for rehabilitation insurance guarantee and $0.1
million spent on an investment in a Joint Venture R&D project.
The exchange rate fluctuations on cash held at the quarter end was
$0.3 million. The cash balance allows the Company to not only fund
Project Echo, its internal growth project but also the acquisition
of Phoenix Platinum which was announced today, should that
acquisition proceed successfully.
Commenting on the quarter, Sylvania's CEO Terry McConnachie
said:
"I am exceptionally proud of our management and production teams
in their achievement of yet another strong quarter for the Company
and exceeding guidance for the year. This is testament to the
strong competency and skills of our employees and I am proud to be
a part of this remarkable achievement and noteworthy period for the
Company.
Project Echo is progressing well and it is pleasing to note that
Group cash costs have decreased 11% for the quarter. From a
production perspective I am confident we will see the fruits of our
labour as the production profile is supplemented and offsets
potential losses as a result of the planned closure of the
Steelpoort plant. The acquisition of Phoenix will further
strengthen Sylvania's position in tailings retreatment.
In a market where the gross basket price has not moved
significantly for some time, our measures of prudent cost controls
and focus on ounce production is paying off and is further
evidenced by these strong results.
The Company plans to release its annual results to the market on
or before 30 August 2017. A notification will also be sent to those
registered for notifications through the Company website:
www.sylvaniaplatinum.com."
GROUP PERFORMANCE
Unaudited - Group Unit June 2017 % Change
Quarter March 2017
Quarter
----------------------- ------ --------- ------------ ---------
Financials
----------------------- ------ --------- ------------ ---------
Revenue $'000 13,202 12,754 4%
----------------------- ------ --------- ------------ ---------
Capital Expenditure(1) $'000 1,780 1,599 11%
----------------------- ------ --------- ------------ ---------
Ave R/$ rate R/$ 13.21 13.23 0%
----------------------- ------ --------- ------------ ---------
EBITDA(2) $'000 5,072 4,141 22%
----------------------- ------ --------- ------------ ---------
Production
----------------------- ------ --------- ------------ ---------
PGM Plant Feed T 305,757 288,359 6%
----------------------- ------ --------- ------------ ---------
Total 3E and Au Oz 17,954 17,096 5%
----------------------- ------ --------- ------------ ---------
Group Cash Cost(3)
----------------------- ------ --------- ------------ ---------
Per 3E & Au oz $/oz 446 501 -11%
----------------------- ------ --------- ------------ ---------
(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 health or environmental incidents
during the quarter, and Tweefontein and Doornbosch operations both
reached five years Lost Time Injury (LTI) free during the period.
Unfortunately Steelpoort and Mooinooi operations had one LTI each,
after being LTI-free for nine and a half years and 11 months
respectively. Lannex and Millsell both remain more than two years
LTI-free.
Despite the incidents at Steelpoort and Mooinooi, the dump
operations remain focused on safety and the respective management
teams continue to work diligently towards ensuring that the Company
remains compliant in terms of health, safety and environmental
systems and legislation.
Operations
The Company is pleased to present the quarter's SDO production
of 17,954 PGM ounces, a 5% increase on the previous quarter's
performance of 17,096 ounces and surpasses Q1 production as the
second highest quarterly production for the Company.
While the PGM feed grades were approximately 2% lower for the
quarter, based on the blend of material treated, the PGM feed tons
and recovery efficiencies were 6% and 5% higher respectively than
the previous quarter and contributed significantly towards the
higher PGM ounce production. Overall the SDO continued to perform
very well and delivered results better than forecast which
contributed towards the new annual production record of 70,869
ounces for FY2017.
The cash costs for the SDO in Dollar and Rand terms have
decreased 10% and 11% respectively from $471/oz (R6,236/oz) in Q3
to $422/oz (R5,572/oz), due to a combination of higher PGM ounce
production and disciplined cost control during the period.
Operational and Financial Summary
Unaudited - SDO Unit June 2017 March 2017 +- % 12 months
Quarter Quarter Quarter to June
on Quarter 2017
---------------------- ----- --------- ----------- ------------ -----------
Revenue
---------------------- ----- --------- ----------- ------------ -----------
Revenue $'000 13,202 12,754 4% 50,497
---------------------- ----- --------- ----------- ------------ -----------
Revenue R'000 174,380 168,776 3% 687,325
---------------------- ----- --------- ----------- ------------ -----------
Gross Basket Price(1) $/oz 963 951 1% 897
---------------------- ----- --------- ----------- ------------ -----------
Gross Cash Margin
- SDO % 43% 37% 16% 40%
---------------------- ----- --------- ----------- ------------ -----------
Capital Expenditure $'000 1,474 1,545 -5% 3,794
---------------------- ----- --------- ----------- ------------ -----------
Capital Expenditure R'000 19,474 20,447 -5% 51,648
---------------------- ----- --------- ----------- ------------ -----------
Ave R/US$ rate(2) R/$ 13.21 13.23 0% 13.61
---------------------- ----- --------- ----------- ------------ -----------
EBITDA $'000 5,535 4,628 20% 20,098
---------------------- ----- --------- ----------- ------------ -----------
EBITDA R'000 73,103 61,249 19% 273,562
---------------------- ----- --------- ----------- ------------ -----------
SDO Cash Cost(3)
---------------------- ----- --------- ----------- ------------ -----------
Per PGM Feed ton $/t 25 28 -11% 26
---------------------- ----- --------- ----------- ------------ -----------
Per PGM Feed ton R/t 327 370 -12% 351
---------------------- ----- --------- ----------- ------------ -----------
Per 3E & Au oz $/oz 422 471 -10% 425
---------------------- ----- --------- ----------- ------------ -----------
Per 3E & Au oz R/oz 5,572 6,236 -11% 5,785
---------------------- ----- --------- ----------- ------------ -----------
Production
---------------------- ----- --------- ----------- ------------ -----------
Plant Feed T 544,281 529,576 3% 2,137,007
---------------------- ----- --------- ----------- ------------ -----------
Feed Head Grade g/t 2.67 2.83 -6% 2.65
---------------------- ----- --------- ----------- ------------ -----------
PGM Plant Feed
Tons T 305,757 288,359 6% 1,168,912
---------------------- ----- --------- ----------- ------------ -----------
PGM Plant Grade g/t 4.02 4.12 -2% 4.06
---------------------- ----- --------- ----------- ------------ -----------
PGM Plant Recovery % 47.2% 43.7% 8% 46.4%
---------------------- ----- --------- ----------- ------------ -----------
Total 3E and Au Oz 17,954 17,096 5% 70,869
---------------------- ----- --------- ----------- ------------ -----------
(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 progresses well with both the Millsell and
Doornbosch secondary milling and flotation technology ("MF2")
modules under construction as the first phase of the program and
will be commissioned during the next 6 months to fill the ounce gap
after the planned closure of the Steelpoort operation that reached
its end of life during June 2017.
This 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 operating life and to
sustain its production profile above 60,000 ounces going
forward.
B. EXPLORATION AND OPENCAST MINING PROJECTS
Volspruit Platinum Exploration
The Company is pleased to announce that it received notification
from the DMR that the Mining Right ("MR") to mine PGM's, gold,
copper, nickel and chrome was granted on 28 June 2017. Sylvania
will now take steps to execute and register the right at the Mining
Titles Office.
Mining activities for the project cannot commence until the
Company receives a decision by the Member of the Executive Council
for Economic Development, Environment on the Company's appeal
against the initial refusal of the Environmental Authorisation
("EA"). Once this is received the next step will be the application
for a Water Use License ("WUL").
Grasvally Chrome Exploration
The Company received communication from the DMR that the appeal
against the granting of the EA, lodged by interested and affected
parties ("I&AP's") was set aside on 20 June 2017. Accordingly
the EA for processing the waste rock dumps stands but activities
cannot yet commence until such time as the approval of the WUL from
the Department of Water and Sanitation ("DWS") is received and a MR
is granted.
The bulk sampling of a planned 15,000 tons of Run of Mine
("ROM") is well underway. A total of five bulk sample open-pits has
been blasted with total excavated ROM stockpiles currently
measuring 6,167 tons. The extraction of the remaining tonnage has
been halted pending the beneficiation testing of the initial 6,167
tons. Initial tests completed at a beneficiation plant has
indicated good results with a combined concentrate of >50% Cr(2)
O(3) and a Cr:Fe ratio above 2.2:1. Although the plant was not
tailored to process the ore typical of the Grasvally deposit, these
initial results look positive. A sample of more than 6,000 tons
will be beneficiated in a more suitable plant at Steelpoort to
better liberate the chrome from the ore. Following the
beneficiation testing, a further 9,000 tons will be extracted from
the already blasted and stripped open-pits to complete phase 1 of
the Grasvally Bulk Sample.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
CORPORATE INFORMATION
Registered and Sylvania Platinum Limited
postal address:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
SA Operations postal PO Box 976
address:
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 / Helena Bogle
/ Hilary Buchanan
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLLFLRDDIIVID
(END) Dow Jones Newswires
July 31, 2017 02:00 ET (06:00 GMT)
Sylvania Platinum (LSE:SLP)
Historical Stock Chart
From Apr 2024 to May 2024
Sylvania Platinum (LSE:SLP)
Historical Stock Chart
From May 2023 to May 2024