TIDMSLP
RNS Number : 6326F
Sylvania Platinum Limited
29 July 2016
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
Fourth Quarter Report to 30 June 2016
"Record annual production of 60,643 ounces."
29 July 2016
Sylvania Platinum Limited, the low cost Platinum Group Metal
("PGM") processor and developer, today announces its results for
the quarter ended 30 June 2016 ("Q4" or the "quarter") from its PGM
production and development operations in the Bushveld region of
South Africa.
HIGHLIGHTS
-- SDO produced 16,219 ounces for the quarter, the second
highest achieved in the Company's history and 9% higher than the
previous quarter, contributing to an annual record for the Company
of 60,643 ounces.
-- SDO operating cash cost down 4% in Rand terms to R6,070/oz
($404/oz) (Q3: R6,317/oz ($399/oz)).
-- SDO capital expenditure down 18% quarter-on-quarter to $0.3 million (Q3: $0.4 million).
-- No Lost-Time Injuries ("LTI's") during the quarter as well as for the year.
SYLVANIA OVERVIEW
The Sylvania Dump Operations ("SDO") achieved the second highest
production in the history of the Company for the quarter, producing
16,219 ounces, bringing the total production for the 2016 financial
year to a Company record of 60,643 ounces. The PGM feed tons and
grades improved and contributed towards the higher ounce production
for the quarter. The solid performance during this last quarter
enabled the Company to exceed the previously stated guidance of
57,000 to 58,000 ounces for the current financial year.
The cash costs for the SDO in Rand terms have decreased by 4%
from R6,317/oz to R6,070/oz, due to a combination of higher PGM
ounce production and good operating cost control, but increased
slightly in US dollar terms from $399/oz to $404/oz due to a
stronger R/$ exchange rate. Revenue increased 5% in US dollar terms
to $10.6 million (Q3: $10.1 million) but decreased by 1% in Rand
terms to R158.7 million (Q3: R159.7 million). The gross basket
price remained unchanged at $859/oz for the quarter compared to the
previous quarter's $860/oz.
The Group cash balance at 30 June 2016 was $6.7 million, a $0.5
million decrease on the previous quarter's $7.2 million. Cash
generated from operations before working capital movements was $3.6
million with net changes in working capital amounting to a
reduction of $1.3 million, $1.0 million of which can be
attributable to the repayment of the 3 month pipeline financing on
the sale of concentrate. A further $2.7 million was paid in income
taxes, $0.2 million spent on the stay-in-business capital for the
SDO plants and $0.1 million spent on share transactions in Sylvania
Platinum Limited.
Commenting on the quarter, Sylvania's CEO Terry McConnachie
said:
"Most platinum companies continue to fight losses due to the
depressed platinum basket price and rising costs. Despite these
negative market conditions, where Sylvania, like other platinum
miners, have very little influence on such fundamentals, we are
however easily managing to keep our head above water by making sure
production targets are achieved, costs are continuously reduced and
capital spending is controlled by stringent allocation discipline.
Our costs are lower this year than they were last year and our
capital expenditure is just less than 4% of turnover (3.59%).
Sylvania achieved an exceptional production quarter and, for the
first time ever, exceeded 60,000 ounces of production for the year.
Moreover, costs on the lowest quartile of any producer have
resulted in Sylvania generating a decent net profit. We are proud
that this year we paid back our pipeline finance package and bought
back 7,383,974 Sylvania shares. We have also achieved the
significant milestone of one year LTI-free across all operations
and received no Section 54 Stoppage Orders for the year.
Furthermore, we have not had any electricity load-shedding
affecting operations.
Wage negotiations for our Western Operations are underway and we
anticipate a decision before the end of the next quarter, whereas
our Eastern Operations were negotiated as applicable for two years
and as such remain in force until 2017.
I am delighted with the Sylvania production performance, not
only this quarter but over the past year. The record ounce
production is testament to the abilities of our operation
management team's abilities to optimise the opportunities before
them."
GROUP PERFORMANCE
Unaudited - Group Unit % Change
June 2016 March 2016
Quarter Quarter
----------------------- ------ ----------- ------------ ---------
Financials
----------------------- ------ ----------- ------------ ---------
Revenue $'000 10,566 10,092 5%
----------------------- ------ ----------- ------------ ---------
Capital Expenditure(1) $'000 345 385 -10%
----------------------- ------ ----------- ------------ ---------
Ave R/$ rate R/$ 15.02 15.82 -5%
----------------------- ------ ----------- ------------ ---------
EBITDA(2) $'000 3,422 3,747 -9%
----------------------- ------ ----------- ------------ ---------
Production
----------------------- ------ ----------- ------------ ---------
PGM Plant Feed T 292,577 277,534 5%
----------------------- ------ ----------- ------------ ---------
Total 3E and Au Oz 16,219 14,905 9%
----------------------- ------ ----------- ------------ ---------
Group Cash Cost(3)
----------------------- ------ ----------- ------------ ---------
Per 3E & Au oz $/oz 443 420 5%
----------------------- ------ ----------- ------------ ---------
1 Capital expenditure on SDO and exploration and evaluation
assets.
2 EBITDA is Earnings before interest, 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 LTI's or significant health or environmental
incidents during the quarter, with all operations remaining
LTI-free for the year, and Tweefontein achieving the noteworthy
milestone of four years LTI-free.
Health, safety and environmental compliance remains a
key-priority for the Company and the combined effort between
management and all the employees across the operations, together
with the overall safety culture, contribute towards the high safety
standards and plant conditions at the respective operations.
Operations
The combined production for all the SDO was 16,219 PGM ounces
for the period, a 9% increase on the previous quarter's performance
(Q3: 14,905 ounces) and the second highest production for a quarter
in the history of the Company.
The higher than planned PGM production for the quarter can be
attributed primarily to increased PGM plant feed tons and higher
than anticipated grades, with stable production at all operations.
The group recovery efficiency was slightly down from the previous
quarter due to a combination of higher PGM ounce contributions from
lower recovery operations and the impact of PGM concentrate stock
movement at the end of the quarter.
SDO cash cost of production was $404/oz (R6,070/oz) which was 1%
higher in US dollar terms compared to the previous quarter (Q3 :
$399/oz (R6,317/oz)) due to a stronger R/$ exchange rate, while the
cash cost was down 4% in Rand terms.
Operational and Financial Summary
Unaudited - SDO Unit June 2016 March 2016 +- % 12 months
Quarter Quarter Quarter to June 2016
on Quarter
---------------------- ----- --------- ----------- ------------ --------------
Revenue
---------------------- ----- --------- ----------- ------------ --------------
Revenue $'000 10,566 10,092 5% 39,511
---------------------- ----- --------- ----------- ------------ --------------
Revenue R'000 158,655 159,689 -1% 570,141
---------------------- ----- --------- ----------- ------------ --------------
Gross Basket Price(1) $/oz 859 860 0% 850
---------------------- ----- --------- ----------- ------------ --------------
Gross Cash Margin -
SDO % 38% 41% -7% 33%
---------------------- ----- --------- ----------- ------------ --------------
Capital Expenditure $'000 303 370 -18% 1,420
---------------------- ----- --------- ----------- ------------ --------------
Capital Expenditure R'000 4,556 5,853 -22% 20,495
---------------------- ----- --------- ----------- ------------ --------------
Ave R/US$ rate(2) R/$ 15.02 15.82 -5% 14.43
---------------------- ----- --------- ----------- ------------ --------------
EBITDA $'000 3,993 4,133 -3% 12,999
---------------------- ----- --------- ----------- ------------ --------------
EBITDA R'000 59,959 65,390 -8% 187,570
---------------------- ----- --------- ----------- ------------ --------------
SDO Cash Cost(3)
---------------------- ----- --------- ----------- ------------ --------------
Per PGM Feed ton $/t 22 21 5% 23
---------------------- ----- --------- ----------- ------------ --------------
Per PGM Feed ton R/t 336 339 -1% 337
---------------------- ----- --------- ----------- ------------ --------------
Per 3E & Au oz $/oz 404 399 1% 436
---------------------- ----- --------- ----------- ------------ --------------
Per 3E & Au oz R/oz 6,070 6,317 -4% 6,295
---------------------- ----- --------- ----------- ------------ --------------
Production
---------------------- ----- --------- ----------- ------------ --------------
Plant Feed T 521,598 533,848 -2% 2,179,468
---------------------- ----- --------- ----------- ------------ --------------
Feed Head Grade g/t 2.68 2.63 2% 2.40
---------------------- ----- --------- ----------- ------------ --------------
PGM Plant Feed Tons T 292,577 277,534 5% 1,133,908
---------------------- ----- --------- ----------- ------------ --------------
PGM Plant Grade g/t 4.20 3.87 9% 4.03
---------------------- ----- --------- ----------- ------------ --------------
PGM Plant Recovery % 41.0% 43.2% -5% 43.2%
---------------------- ----- --------- ----------- ------------ --------------
Total 3E and Au Oz 16,219 14,905 9% 60,643
---------------------- ----- --------- ----------- ------------ --------------
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.
B. EXPLORATION AND OPENCAST MINING PROJECTS
Volspruit Platinum Exploration
An appeal against the decision by the Limpopo Department of
Economic Development, Environment and Tourism ("LEDET") to refuse
the Environmental Authorisation was submitted to the relevant
appeal authority and the outcome of the appeal is awaited.
Grasvally Chrome Exploration
The final Environmental Impact Assessment/Environmental
Management Programme ("EIA/EMP") was submitted to the Department of
Mineral Resources ("DMR") on 10 May 2016. The Water Use License
Application ("WULA") for the Grasvally project (Open Cast mining
and waste rock treatment) was submitted to the Department of Water
and Sanitation ("DWS") on 1 June 2016. The Company now awaits the
DWS review process to commence.
With regard to the potential sale of the Grasvally Chrome
deposit, the international agent handling this process is in the
process of setting up meetings with interested parties in order to
explore options and share more information. The process has taken a
little longer than anticipated due to a downturn in chrome markets
in recent months, but prices have recovered somewhat and Sylvania
remains optimistic that potential buyers will understand the value
of the project given the premium quality of the minerals.
Harriet's Wish, Aurora and Cracouw Platinum Exploration
The notarial cession of the right to mine iron ore, vanadium and
heavy minerals in favour of a subsidiary of Ironveld Plc has been
attended to and the documents were lodged with the Mining Titles
Office for registration. The Company will report with any updates
as they arise.
This announcement contains inside information.
CORPORATE INFORMATION
Registered office: Sylvania Platinum Limited
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 / Tom Fyson
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
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