TIDMSLP
RNS Number : 6985L
Sylvania Platinum Limited
07 September 2023
_____________________________________________________________________________________________________________________________
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse regulation (EU) no.596/2014 as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019.
7 September 2023
Sylvania Platinum Limited
("Sylvania", the "Company" or the "Group")
Final Results to 30 June 2023
Sylvania (AIM: SLP) the platinum group metals ("PGM") producer
and developer, with assets in South Africa, is pleased to announce
its final results for the year ended 30 June 2023. Unless otherwise
stated, the consolidated financial information contained in this
report is presented in United States Dollars ("USD").
Operational Highlights
-- Sylvania Dump Operations ("SDO") exceeded target production
by delivering 75,469 4E PGM ounces for the year (FY2022: 67,053 4E
PGM ounces);
-- Run of Mine ("ROM") grades received from the host mine at
Mooinooi increased significantly over the year contributing to
additional ounce production;
-- Successful commissioning of Tweefontein MF2 improved metal recoveries;
-- Optimisation of blending improved grade, recovery and ounce
production, especially at the Eastern operations; and
-- Pilot-scale work on pelletizer project completed; the Company
is currently engaging with potential industry partners to assess
the commercial viability of the technology.
Financial Highlights
-- Net revenue generated for the period totalled $130.2 million (FY2022: $152.0 million);
-- Group EBITDA of $66.0 million (FY2022: $82.8 million);
-- Net profit of $45.4 million (FY2022: $56.2 million);
-- New Dividend Policy approved by the Board and effective from 1 July 2022;
-- Interim dividend of three pence per Ordinary Share declared
by the Board and paid in April 2023;
-- Final cash dividend of five pence per Ordinary Share declared
by the Board, maintaining an annual eight pence per Ordinary Share
dividend for FY2023 (FY2022: eight pence per Ordinary Share);
-- Group cash balance of $124.2 million (excluding $0.8 million
restricted cash held as guarantees) with no debt and no pipeline
financing; and
-- Bought back a total of 4.8 million Ordinary Shares during the
year at an average price of 81.5 pence per share, equating to $4.9
million in aggregate.
ESG Highlights
-- Doornbosch achieved 11-years Lost-Time Injury ("LTI") free in June 2023;
-- New initiatives relating to improved water management
undertaken at the Company's operations during the period and a
Dynamic Water Balance developed for each plant;
-- 24 local community members took part in this year's training
and development programme, 11 of whom are women;
-- Support for three ongoing internships and eight internal
learnerships, plus 12 external bursaries maintained, and Community
Based Employee Training provided to 10 employees; and
-- No occupational illnesses were recorded in FY2023.
Outlook
-- Re-mining of Dam 6A at the Mooinooi Plant has commenced with
the focus on optimising the blend to ensure the planned grade
profile is achieved;
-- Continuous operational performance improvements relating to
the optimisation of feed sources, throughput, recoveries, and cost
saving initiatives planned;
-- The updated Mineral Resource Estimate ("MRE") at Volspruit is
expected to be completed during Q1 FY2024, and the Preliminary
Economic Assessment ("PEA") for the entire project is expected
during Q3 FY2024;
-- The Group maintains strong cash reserves to allow funding of
expansion and process optimisation capital, and upgrading of the
Group's exploration and evaluation assets with the potential to
return value to shareholders;
-- The commissioning of the Lannex MF2 flotation circuit to
commence in Q1 FY2024, which will further improve PGM recovery
efficiencies; and
-- Annual production target of 74,000 to 75,000 4E PGM ounces for FY2024.
Post Period End
-- On 14 July 2023, the Company announced that 3,624,275
Ordinary Shares held in Treasury had been cancelled; and
-- On 9 August 2023, the Company announced that its wholly owned
South African subsidiary, Sylvania Metals (Pty) Limited ("Sylvania
Metals"), entered into an unincorporated Joint Venture Agreement
("JV") with Limberg Mining Company (Pty) Limited ("LMC"), a
subsidiary of ChromTech Mining Company (Pty) Limited ("ChromTech"),
the Thaba Joint Venture ("Thaba JV").
Share Buyback
-- The Company will reinstate the Share Buyback programme
initiated in May 2023 and will purchase on market Ordinary US$0.01
Shares ("Ordinary Shares") of the Company's issued share capital up
to a maximum of $6.4 million. This is the balance of the $10.0
million originally allocated to the Share Buyback.
Commenting on the results, Sylvania's CEO Jaco Prinsloo
said:
"I am pleased with another strong production performance by the
SDO in delivering 75,469 4E PGM ounces for the period, exceeding
our original forecast production. This performance, once again,
emphasises our teams' impeccable work ethic, a big thank you to all
of you. Keep up the great work!
"The performance was achieved as a result of several factors
including the Tweefontein MF2 circuit optimisation following
commissioning in Q2 FY2023 which continues to contribute to
improved recoveries. The Lesedi MF2 plant was fully commissioned
with optimisation of the fine grinding and flotation circuit
resulting in improved performance, which, together with improved
feed stability and flotation performance at Mooinooi, has
contributed towards the overall improved recovery performance.
Focus has remained on increasing runtime and improving operational
stability and has contributed to improved efficiencies at all
sites.
"With regards to safety, our Doornbosch plant achieved 11-years
LTI-free in June 2023, which is a major milestone for the operation
and is testament to Sylvania's high safety standards. Regrettably,
during FY2023, there were two LTIs recorded, an ankle and a knee
sprain. Fortunately, both employees recovered well. We have
increased our efforts to instil a safety-first mindset by launching
the 'Make It Personal' safety campaign during H2 FY2023, designed
to improve and maintain personal safety across all our
operations.
"Commodity prices remained a challenge with declines of around
28% in the average basket price received for the period. This
negatively impacted our overall financial results for the year;
however, we remain optimistic about price improvements.
"Rising input costs are a reality for the Group, and for the
broader sector, therefore we continue to sustain a pragmatic cash
management policy with disciplined capital allocation and control,
as well as production cost control. This approach has ensured that
the Company has the necessary cash reserves to cover working
capital for the pipeline period, finance capital projects, fund
growth and exploration, and mitigate any potential future
difficulties it may have to deal with. Nonetheless, despite these
challenges, I am pleased to report that the Board has declared a
final cash dividend of five pence per Ordinary Share for FY2023,
resulting in a combined annual dividend of eight pence for the
financial year.
"The announcement of the Thaba JV with LMC post year-end
represents a major step forward in Sylvania's growth strategy and
is a significant step forward for Sylvania Metals in expanding our
operations and leveraging the Group's expertise in the recovery of
chrome and PGM concentrates. The Thaba JV combines the strengths
and expertise of both companies in the mining and processing
industry. Sylvania Metals has a proven record in the recovery, sale
and distribution of PGMs, while LMC contributes ChromTech's
extensive experience of chrome operations, with particular
expertise in fine chrome beneficiation.
"I am enthusiastic about the year ahead and believe our
operations will continue to deliver a strong production performance
and, as a consequence, have set an annual production target of
74,000 to 75,000 4E PGM ounces for FY2024."
The Sylvania cash generating subsidiaries are incorporated in
South Africa with the functional currency of these operations being
South African Rand ("ZAR"). Revenues from the sale of PGMs are
received in USD and then converted into ZAR. The Group's reporting
currency is USD as the parent company is incorporated in Bermuda.
Corporate and general and administration costs are incurred in USD,
Pounds Sterling ("GBP") and ZAR.
For the 12 months under review, the average ZAR:USD exchange
rate was ZAR17.75:$1 and the spot exchange rate was
ZAR18.89:$1.
Operational and Financial Summary
Production Unit % Change FY 2023 FY 2022
Plant Feed T 9% 2,615,994 2,393,355
--------- ---------- ----------
Feed Head Grade g/t -4% 1.89 1.96
--------- ---------- ----------
PGM Plant Feed Tons T 12% 1,372,936 1,221,687
--------- ---------- ----------
PGM Plant Feed Grade g/t -5% 3.06 3.21
--------- ---------- ----------
PGM Plant Recovery % 5% 55.86% 53.24%
--------- ---------- ----------
Total 4E PGMs Oz 13% 75,469 67,053
--------- ---------- ----------
Total 6E PGMs Oz 12% 95,965 85,659
-------------------------- --------- ---------- ----------
USD Audited ZAR
FY 2022 FY 2023 % Change Unit Unit % Change FY 2023 FY 2022
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Financials
Average 4E Gross
2,890 2,086 -28% $/oz Basket Price(1) R/oz -16% 37,035 43,964
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
142,489 116,575 -18% $'000 Revenue (4E) R'000 -5% 2,069,339 2,167,753
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Revenue (by-products
12,368 13,312 8% $'000 including base metals) R'000 26% 236,295 188,154
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
-2,912 309 111% $'000 Sales Adjustments R'000 112% 5,491 -44,299
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
151,944 130,196 -14% $'000 Net Revenue R'000 0% 2,311,125 2,311,608
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Direct Operating
48,039 48,277 0% $'000 costs R'000 17% 856,920 730,842
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Indirect Operating
17,426 13,492 -23% $'000 costs R'000 -10% 239,477 265,115
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
General and Administrative
2,860 2,790 -2% $'000 costs R'000 14% 49,523 43,510
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
82,768 65,964 -20% $'000 Group EBITDA(4) R'000 -7% 1,170,861 1,259,195
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
1,254 5,203 315% $'000 Net Interest R'000 384% 92,353 19,078
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
56,151 45,352 -19% $'000 Net Profit(4) R'000 -6% 804,998 854,252
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
16,405 14,491 -12% $'000 Capital Expenditure R'000 3% 257,215 249,579
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
121,282 124,160 2% $'000 Cash Balance(5) R'000 18% 2,345,382 1,986,185
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Ave R/$ rate R/$ 17% 17.75 15.21
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Spot R/$ rate R/$ 15% 18.89 16.38
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Unit Cost/Efficiencies
SDO Cash Cost per
716 640 -11% $/oz 4E PGM oz (3) R/oz 4% 11,355 10,899
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
SDO Cash Cost per
561 503 -10% $/oz 6E PGM oz (3) R/oz 5% 8,930 8,532
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Group Cash Cost Per
897 771 -14% $/oz 4E PGM oz (3) R/oz 0% 13,685 13,643
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
Group Cash Cost Per
702 606 -14% $/oz 6E PGM oz (3) R/oz 1% 10,757 10,679
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
All-in Sustaining
1,052 874 -17% $/oz Cost (4E) R/oz -3% 15,509 16,008
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
1,256 1,033 -18% $/oz All-in Cost (4E) R/oz -4% 18,345 19,109
-------- --------- ------ --------------------------- ------ --------- ---------- ----------
(1) The gross basket price in the table is the average gross
basket for the year, used for revenue recognition of ounces
delivered over FY2023, before penalties/smelting costs and applying
the contractual payability.
(2) Revenue (6E) for FY2023, before adjustments is $129.1
million (6E prill split is Pt 52%, Pd 17%, Rh 9%, Au 0.2%, Ru 17%,
Ir 5%).
(3) The cash costs include operating costs and exclude indirect
cost for example royalty tax and EDEP payments.
(4) The net profit and Group EBITDA include the profit on the
sale of Grasvally Chrome (Pty) Ltd of $1.3 million.
(5) An additional $823,144 restricted cash is held which serves
as guarantees to Eskom and the DMRE.
A. OPERATIONAL OVERVIEW
Health, safety and environment
During the period under review, the operations continued to
focus on health, safety and environmental compliance. The Group is
proud to report that there were no significant health or
environmental incidents reported during the year and that it
remains fatality-free since inception in 2006.
The Doornbosch operation achieved 11 years LTI-free on 26 June
2023, which is a remarkable achievement by industry and global
standards, and management are exceptionally proud of the Doornbosch
team. Lannex achieved three years LTI-free during the period and
Millsell and Tweefontein are now both LTI-free for more than a
year. Regrettably, there was one LTI at the Mooinooi operation (an
ankle sprain) and one LTI at the Lesedi operation (a knee sprain)
during Q3 FY2023.
The Company continues to target zero harm to employees and every
injury that is recorded is fully investigated and corrective
measures are implemented to prevent any future reoccurrences. By
working together with management and all our employees, we
continuously strive to maintain high safety standards and a safe
working environment at all operating sites, with each plant
continuing to operate in accordance with legislated safety and
occupational regulations pertaining to the industry. Moreover, we
launched the 'Make It Personal' campaign, which is designed to
improve and maintain personal safety on site. We believe that by
making safety a personal matter that everyone is responsible for,
it will become second nature for all. This will assist to ensure
all workers make it home safely, every day, in line with Sylvania's
goal of achieving zero harm.
Operational performance
The SDO surpassed the Company's original guidance for the
financial year by delivering an annual production of 75,469 4E PGM
ounces, w hich was 13% higher than the prior financial year.
PGM plant feed tons were 12% higher than the previous period
owing primarily to the improvement of feed stability and running
time at Lesedi, following the tailings related disruptions
experienced during FY2022, and optimisation of feed stability and
feed sources received from the host mines at the other operations.
PGM feed grades decreased by 5% year-on-year, impacted by a lower
grade feed source being mined at Lesedi, while recovery
efficiencies increased by 5%. This significant recovery improvement
was enabled by successful optimisation and commissioning of the
Lesedi MF2 and Tweefontein MF2 circuits, respectively during the
year, while Mooinooi also saw improved performance as flotation
stability and ROM quality improved.
The SDO cash cost per 4E PGM ounce increased by 4% in ZAR (the
functional currency) from ZAR10,899/ounce to ZAR11,355/ounce while
the USD cash cost decreased 11% to $640/ounce against $716/ounce in
the prior year, due to currency movements. The increase in local
currency costs was again primarily driven by higher electricity
costs and reagent price increases. The effects of rising inflation
worldwide and international instability continues to directly
impact the cost of reagents, fuel and transport, which all cause
operating costs to increase.
Operational focus areas
Based on the success of the roll-out of our secondary milling
and flotation programme, Lannex will be the last of our SDO plants
where a MF2 circuit will be commissioned, and we expect to complete
this by the end of Q1 FY2024. This will further improve PGM
recovery efficiencies and enable optimisation of PGM concentrate
quality.
PGM concentrate quality remains a focus area with the potential
to improve smelter payability, as both concentrate grade and metal
recoveries contribute positively towards the revenue stream of the
Group. We are also evaluating a filtration plant to convert to dry
filtered concentrate transport instead of the current slurry
tankers, which would assist in reducing concentrate transport costs
and remediate handling challenges at off-take smelters.
Unfortunately, the Company again experienced localised power
supply constraints to operations during the year as a result of
load curtailment by the national power utility, as well as
vandalism and cable theft at its substations, which especially
impacted on production performance at the Lesedi operation that
experienced over 300 hours downtime during FY2023. Fortunately, no
other operations were materially affected by load reduction. The
procurement, installation and commissioning of a back-up generator
for Lesedi is expected to be completed by the end of Q1 FY2024.
This forms part of the power mitigation strategy.
Capital Projects
Capital expenditure for the year increased 3% to ZAR257.2
million ($14.5 million) from ZAR249.6 million ($16.4 million) in
the 2022 financial year in line with the Group's capital project
strategy. Capital expenditure for the year was mainly incurred on
the construction of the Lannex and Tweefontein MF2 flotation
circuit s of ZAR94.1 million ($5.3 million) and ZAR46.2 million
($2.6 million) on various tailings deposition facilities.
The Lannex MF2 project was executed during the year and
commissioning of the flotation circuit has commenced in Q1 FY2024
with the fine grinding circuit commissioning to commence in Q3
FY2024. Progressive improvement in recoveries is expected at Lannex
throughout the year.
The procurement and installation of the back-up generators for
the Lesedi and Millsell operations are on track to be commissioned
during early FY2024 in order to reduce the impact of power
interruptions caused by instability of the national and provincial
supply grids. While the Company is fully committed to reducing its
carbon footprint in line with its ESG objectives, standalone
emergency backup plants operating fully on renewable technologies
are still not currently a viable option for the operations.
However, these will be introduced in future, where feasible, to
lower diesel consumption and boost energy capacity during peak day
time running hours.
Approximately ZAR20.2 million ($1.1 million) was spent during
FY2023, with a further ZAR15.9 million ($0.9 million) planned for
FY2024 for the required expansion of the Company's tailing
facilities. This is to ensure integrity and capacity at the
tailings deposition facilities, cater for remaining sources that
need to be processed at the operations and extend operational life
at selected operations.
As part of its commitment to further improve the viability of
its exploration projects at the Volspruit and Far Northern Limb
projects, the Company anticipates spending approximately ZAR9.0
million ($0.5 million) during FY2024 on the required regulatory
Social and Labour Plan ("SLP") spend. More work is currently being
carried out through assays and testwork to improve the fundamental
parameters that underpin the projects' viability. The outcome of
these will be considered before further investment in resource
optimisation and feasibility studies is made.
Sylvania partnered with a 'binding technology' player to
co-develop a novel chemical bonding process. The aim is to create a
cold-bonded chromite ore pellet suitable for ferrochrome ("FeCr")
smelters but with the added potential to markedly cut the smelters'
electrical energy consumption per ton of FeCr produced. In exchange
for funding development costs in the venture, Sylvania holds the
licence for any future chrome pellet production in South Africa.
This research and development project is expected to yield positive
results and may enable the Company to diversify into other areas
and commodities. The pelletizer project has progressed well, and
pilot-scale work has been completed. Additionally, potential
industry partners are being engaged with to assess the commercial
viability of the technology.
Post-period end, on 9 August 2023, Sylvania announced that its
wholly owned South African subsidiary, Sylvania Metals has entered
into an unincorporated JV with LMC, a subsidiary of ChromTech, the
Thaba JV. T he Thaba JV will process PGM and chrome ores from
historical tailings dumps and current arisings from the Limberg
Chrome Mine, located on the northern part of the Western Limb of
the Bushveld Complex, South Africa. The Thaba JV will add
attributable production of approximately 6,500 4E PGM ounces and
introduce 200,000 tons of chromite concentrate to Sylvania Metals'
existing annual production profile. Construction is expected to
commence in November 2023, with orders for long-lead time equipment
being placed from the end of September 2023.
Outlook
Based on the very robust performance during FY2023 and the
continued drive for operational enhancements, particularly in
optimising feed sources, throughput, recoveries, and cost-saving
initiatives, I am expecting another strong operational performance
during FY2024. As the optimisation of the Tweefontein MF2 circuit
continues and Lannex MF2 circuit comes online during the year, it
will assist to mitigate the impact of slightly lower PGM feed
grades at some operations, and Sylvania will therefore be able to
maintain an annual production guidance between 74,000 to 75,000 4E
PGM ounces for the financial year.
B. FINANCIAL OVERVIEW
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2023
2023 2022
Note(s) $ $
Revenue 1 130,196,100 151,944,273
Cost of sales (61,290,716) (61,823,181)
Royalties tax 2 (4,903,977) (6,920,404)
Gross profit 64,001,407 83,200,688
Other income 3 1,792,134 82,132
Other expenses 4 (4,020,070) (3,608,140)
------------- -------------
Operating profit before net finance costs
and income tax expense 61,773,471 79,674,680
Finance income 5,780,364 1,711,371
Finance costs (576,958) (457,363)
------------- -------------
Profit before income tax expense 66,976,877 80,928,688
Income tax expense 5 (21,625,108) (24,777,844)
Net profit for the period 45,351,769 56,150,844
------------- -------------
Items that are or may be subsequently reclassified
to profit and loss:
Foreign operations - foreign currency translation
differences (17,183,248) (17,747,559)
Total other comprehensive loss (net of tax) (17,183,248) (17,747,559)
------------- -------------
Total comprehensive income for the year 28,168,521 38,403,285
------------- -------------
Cents Cents
---------------------------------------------------- -------- ------------- -------------
Earnings per share attributable to the ordinary
equity holders of the Company:
Basic earnings per share 17.01 20.62
Diluted earnings per share 16.95 20.40
---------------------------------------------------- -------- ------------- -------------
1. Revenue is generated from the sale of PGM ounces produced at
the six retreatment plants, net of pipeline sales adjustments,
penalties and smelting charges. Revenue excludes profit/loss on
foreign exchange.
2. Royalty tax was paid at a rate of 5.6% on attributable
platinum ounces and decreased from the prior reporting period due
to the lower revenue.
3. Other income includes the profit on the sale of Grasvally Chrome (Pty) Ltd.
4. Other expenses relate to corporate activities and include
consulting fees, travel cost, audit fees, insurance, forex
profit/(loss) on revenue, Directors' fees, share based payments and
other administrative costs.
5. Income tax expense include current tax, deferred tax and dividend withholding tax.
The average gross basket price for PGMs in the financial year
was $2,086/ounce - a 28% decrease on the previous year's basket
price of $2,890/ounce. The decrease in the overall PGM basket price
was primarily due to a circa 40% decrease in rhodium and palladium
prices.
Revenue on 4E PGM ounces delivered decreased by 18% in dollar
terms to $116.6 million year-on-year (FY2022: $142.5 million) with
revenue from base metals and by-products contributing $13.3 million
to the total revenue (FY2022: $12.4 million). Net revenue, after
adjustments for ounces delivered in the prior year but invoiced in
FY2023, decreased 14% on the previous year's $151.9 million to
$130.2 million. The decrease in revenue is as a result of the 28%
drop in the basket price, mitigated by the increase in
production.
The operational cost of sales is incurred in ZAR and represents
the direct and indirect costs of producing the PGM concentrate and
amounted to ZAR1.1 billion for the reporting period compared to
ZAR996.0 million for the period ended 30 June 2022. The main cost
contributors being employee costs of ZAR354.0 million (FY2022:
ZAR300.6 million), reagents and milling costs of ZAR114.4 million
(FY2022: ZAR81.1 million), and electricity costs of ZAR135.3
million (FY2022: ZAR113.4 million). In addition to these the
Company paid mineral royalty tax of ZAR87.1 million (FY2022:
ZAR105.3 million). The decrease in mineral royalty tax is directly
related to the decrease in net revenue and earnings
year-on-year.
Group cash costs decreased by 14% year-on-year from $897/ounce
(ZAR13,643/ounce) to $771/ounce (ZAR13,685/ounce). Direct operating
costs increased 17% in ZAR (the functional currency) from ZAR730.8
million to ZAR856.9 million and indirect operating costs decreased
10% from ZAR265.1 million to ZAR239.5 million. The decrease in
indirect costs is attributable to the decrease to the annual
rehabilitation closure cost provision adjustment of ZAR22.2 million
(FY2022: ZAR23.0 million increase) and the reduction in mineral
royalty taxes.
All-in sustaining costs ("AISC") decreased by 17% to $874/ounce
(ZAR15,509/ounce) from $1,052/ounce (ZAR16,008/ounce). Similarly
all-in costs ("AIC") of 4E PGMs decreased by 18% to $1,033/ounce
(ZAR18,345/ounce) from $1,256/ounce (ZAR19,109/ounce) recorded in
the previous period as a result of the higher ounce production
during FY2023.
General and administrative costs, included in the Group cash
costs, are incurred in USD, GBP and ZAR and are impacted by
exchange rate fluctuations over the reporting period. These costs
decreased 2% to $2.8 million from $2.9 million in the reporting
currency year-on-year mainly due to the depreciation of the ZAR
against the USD in USD terms.
However, in ZAR terms there was a 14% increase to ZAR49.5
million from ZAR43.5 million in FY2022. The increase relates mainly
to administrative and shared services employee costs (ZAR2.6
million), professional services and fees (ZAR0.6 million), and
overseas travel (ZAR2.8 million).
Group EBITDA decreased 20% year-on-year to $66.0 million
(FY2022: $82.8 million), the decrease is mainly attributable to the
lower metal prices in FY2023 compared to FY2022.
The Group net profit for the year was $45.4 million (FY2022:
$56.2 million).
Interest is earned on surplus cash invested in South Africa and
Mauritius at an average interest rate of 5.52% per annum across the
portfolio. Interest is accounted for on various leases that are in
place.
The Group paid ZAR317.0 million ($17.9 million) in income tax
for the financial year compared to ZAR342.6 million ($22.5 million)
for the previous financial year. The decrease is as a result of
decreased taxable profits mainly due to the decrease in the metal
prices during the year. Income tax is paid in ZAR on taxable
profits generated at the South African operations. Dividend
withholding tax of $1.8 million (ZAR32.6million) was paid during
the year.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2023
2023 2022
Note(s) $ $
Net cash inflow from operating activities 6 62,986,987 69,611,329
Net cash outflow from investing activities 7 (15,568,808) (17,168,387)
Net cash outflow from financing activities 8 (40,778,927) (32,748,480)
------------ ------------
Net increase in cash and cash equivalents 6,639,252 19,694,462
Effect of exchange fluctuations on cash held (3,761,823) (4,547,472)
Cash and cash equivalents at the beginning
of reporting period 121,282,425 106,135,435
Cash and cash equivalents at the end of the
reporting period 124,159,854 121,282,425
------------ ------------
6. Net cash inflow from operating activities includes net cash
inflow from operations of $77,677,868, finance income of $5,093,760
and taxation paid of $19,784,637.
7. Net cash outflow from investing activities includes payments
for property, plant and equipment of $12,869,246, exploration and
evaluation assets of $1,621,616 and advances paid to the joint
operation and third-party loan of $239,528.
8. Net cash outflow from financing activities includes dividend
payments $35,460,674, payment for share transactions $4,912,348 and
the repayment of borrowings and leases $405,905.
The cash balance on 30 June 2023 was $125.0 million (FY2022:
$121.3 million), including $0.8 million in financial guarantees
(FY2022: $0.9 million) which was reallocated to 'other financial
assets' for reporting purposes in FY2023. Cash generated from
operations before working capital movements was $64.0 million, with
net changes in working capital of $13.7 million mainly due to the
movement in trade receivables of $12.1 million. Net finance income
amounted to $5.1 million and $19.8 million was paid in income tax
for the period, including dividend withholding tax of $1.8
million.
At the corporate level, 3.6 million shares were bought back
through the Share Buyback programme for a cost of $3.6 million. In
December 2022, the Company cancelled 1.2 million Ordinary Shares
held in Treasury and a further 3.6 million Ordinary Shares held in
Treasury were cancelled post year-end, on 13 July 2023. Bonus
shares of 1.8 million Ordinary Shares were exercised by various
persons displaying management responsibilities ("PDMRs") and
employees which vested from bonus shares awarded to them in August
2019. 0.7 million of the vested bonus shares were repurchased by
the Company to satisfy the tax liabilities of PDMRs and certain
employees and a further 0.5 million shares were repurchased from
PDMRs and certain employees during September 2022 and May 2023. The
Company paid its first cash interim dividend of three pence per
Ordinary Share amounting to $9.9 million. Dividends of $35.5
million were paid out and a further $1.0 million was paid through
the Employee Dividend Entitlement Plan ("EDEP").
The impact of exchange rate fluctuations on cash held at year
end was a $3.8 million loss due to the ZAR depreciating against the
USD by 15%.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 JUNE 2023
2023 2022
Note(s) $ $
ASSETS
Non-current assets
Exploration and evaluation expenditure 46,464,143 46,087,453
Property, plant and equipment 48,650,611 46,298,978
Other financial assets 9 6,352,325 283,450
Other assets 30,024 -
Deferred tax asset 11,088 -
Total non-current assets 101,508,191 92,669,881
------------ ------------
Current assets
Cash and cash equivalents 10 124,159,854 121,282,425
Trade and other receivables 11 35,714,003 52,939,589
Other financial assets 9 1,800,402 1,029,205
Inventories 12 5,103,550 4,258,960
Current tax asset 1,472,104 3,486,226
------------ ------------
168,249,913 182,996,405
Assets held for sale - 3,771,661
------------ ------------
Total current assets 168,249,913 186,768,066
Total assets 269,758,104 279,437,947
------------ ------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 30 JUNE 2023 (continued)
2023 2022
Note(s) $ $
EQUITY AND LIABILITIES
Shareholders' equity
Issued capital 13 2,790,000 2,801,557
Reserves 14 17,461,465 38,663,288
Retained profit 219,112,582 209,221,487
Total equity 239,364,047 250,686,332
------------ --------------
Non-current liabilities
Borrowings and leases 15 380,833 35,031
Provisions 16 4,040,854 5,936,804
Deferred tax liability 12,118,702 11,614,765
Total non-current liabilities 16,540,389 17,586,600
------------ --------------
Current liabilities
Trade and other payables 13,522,940 11,110,196
Borrowings and leases 15 330,729 48,957
------------ --------------
13,853,669 11,159,153
Liabilities directly associated with
the assets classified as held for sale - 5,862
------------ --------------
Total current liabilities 13,853,669 11,165,015
------------ --------------
Total liabilities 30,394,057 28,751,615
------------ --------------
Total liabilities and shareholder's
equity 269,758,104 279,437,947
------------ --------------
9. Other financial assets consist of:
a. Contribution paid to the host mine for rehabilitation purposes.
b. A loan receivable granted to TS Consortium from Sylvania
South Africa (Pty) Ltd. Sylvania South Africa (Pty) Ltd interest in
the TS Consortium joint operation increased to 75% in the assets
and liabilities during the reporting period.
c. Two separate loans to Forward Africa Mining Pty (Ltd) secured
over the Grasvally Plant and bearing interest at the Johannesburg
inter-Bank Offer Rate (JIBOR) + 3%.
10. The majority of the cash and cash equivalents are held in ZAR and USD.
11. Trade and other receivables consist mainly of amounts receivable for the sale of PGMs.
12. Inventory held includes spares and consumables for the SDO.
13. The total number of issued ordinary shares at 30 June 2023
was 279,000,000 Ordinary Shares of US$0.01 each (including
15,939,737 shares held in Treasury).
14. Reserves include the share premium, 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, treasury share
reserve, the non-controlling interests reserve and the equity
reserve. The decrease relates mainly to the movement in the foreign
currency translation of $17,747,559 due to the weakening of the ZAR
against the USD.
15. Borrowings and leases consist of right-of-use lease liabilities.
16. Provision is made for the present value of closure,
restoration and environmental rehabilitation costs in the financial
period when the related environmental disturbance occurs.
C. MINERAL ASSET DEVELOPMENT
The Group owns various mineral asset development projects on the
Northern Limb of the Bushveld Igneous Complex located in South
Africa for which it has approved mining rights. In the 2021
financial year, a new phase of targeted studies was commissioned on
both the Volspruit and Far Northern Limb PGM opportunities to
determine how best to optimise the respective projects. In October
2022, significant progress was reported in the Exploration Results
and Resource Statement and work continued during FY2023 towards
unlocking mineral potential on these projects.
Volspruit Project
Historical resource statements for Volspruit reported relatively
low in-situ grades and, consequently, low PGM concentrates would
have necessitated capital-intensive in-house smelting and refining
facilities using unproven technologies. This was one of the primary
reasons for the relatively slow progress on this project in earlier
years. Based on the improved metal prices in recent years and an
improved focus on unlocking the potential and further value from
existing assets, the Company initiated a resource optimisation
study in 2021.
The primary objective was to improve the 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.
The Statement of Exploration Results, Mineral Resources, and
Scoping Study released in October 2022 provided a revised Mineral
Resource Estimate (" MRE") defining a narrower mineralised zone of
the Volspruit North Body, on which a Preliminary Economic
Assessment ("PEA") was completed. The result of this initial study
was a ROM/Mill feed grade of 15.7 million tons at a grade of 2.13
g/t 3E and a stripping ratio of 6.7 over the life of mine.
Further optimisation studies were identified during the initial
study that have continued into the 2023 financial year. More
specifically, these include a MRE of the South Body, and the
inclusion of the rhodium into an updated Mineral Resource over the
entire project area. Updated geological information has been
included in the current study phase through the completion of a
detailed relogging programme on the historical core which will be
included in the interpretation for the new MRE expected to be
completed by the end of Q1 FY2024.
A drilling programme of 10 large diameter drillholes was
completed in the third quarter of 2023, from which further
metallurgical test work will be completed with the aim of
increasing the metal recoveries and providing the required detail
for plant and infrastructure design to be carried out during the
Preliminary Feasibility Study ("PFS") phase. The metallurgical test
work results are expected in the third quarter of FY2024. An
updated PEA is expected in the same quarter that will include the
updated Mineral Resources of the North and South Bodies with the
addition of rhodium.
All capital and operational cost inputs will be updated and
revised. With the completion of the updated scoping study, the
Company will assess whether to proceed to a PFS and the declaration
of a Joint Ore Reserves Committee (" JORC") compliant mineral ore
reserve over the entire Volspruit project.
The investment in the permitting requirements necessary for the
existing mining right has made steady progress during the 2023
financial year with the updated SLP including revised Local
Economic Development projects submitted in the fourth quarter. The
Water Use License application for mining and on-site processing
operations and the updated Environmental Impact Assessment
submissions are expected to occur in the first quarter of
FY2024.
Far Northern Limb Projects
The Company currently holds approved mining rights for PGMs and
Base Metals for both the Hacra and Aurora project areas. Similarly
to Volspruit, historical MREs for the project areas did not provide
sufficient ore feed grade to produce a saleable PGM concentrate,
and consequently limited progress was made in previous years to
develop these projects.
As reported last year, the Company commissioned a targeted
review of both the Hacra and Aurora projects through infill
drilling projects, relogging programmes and selected optimisation
studies, which was reported in the Statement of Exploration
Results, Mineral Resources, and Scoping Study released in October
of 2022. A proof-of-concept study that included the
reinterpretation of the mineralisation at Aurora enabled the
identification of the near surface T-zone on the La Pucella farm.
This represents approximately 12% of the potential strike length
held under mining rights on Aurora.
A JORC-compliant Measured and Indicated Resource of 16.2 million
tons (including 10% geological loss) at a grade of 2.63 g/t 3E was
declared for this proof-of-concept study over the limited area.
Initial economic evaluation of the resource indicated a need for
increased resource volume, and further studies during the 2023
financial year were conducted to determine the continuity of
mineralisation along the remaining strike length. At the end of
FY2023, 30,385 metres (76%) of the 40,230 metres of historical core
available within the mining right had been relogged. This programme
will be completed in Q2 FY2024. A technical study, to be completed
in the third quarter of FY2024, will assess the continuity of the
T-Zone mineralisation and allow for targeted resource upgrade
drilling programmes to be designed.
As reported in the Statement of Exploration Results, Mineral
Resources, and Scoping Study released in October 2022, the Hacra
North underground target has provided for some significant drilling
results. Work continues to evaluate the underground potential with
a technical review of the project expected to be completed during
the first quarter of FY2024.
D. CORPORATE ACTIVITIES
Dividend Approval and Payment
The Board declared the payment of a cash dividend for FY2022 of
eight pence per Ordinary Share, paid on 2 December 2022. Payment of
the dividend was made to shareholders on the register at the close
of business on 28 October 2022 and the ex-dividend date was 27
October 2022.
As stated in the FY2022 report the Board committed to review the
Company's Dividend Policy and effective 1 July 2022, the new
Dividend Policy was instituted. The new Dividend Policy allows for
a pay out of a minimum of 40% of adjusted free cash flow for the
financial year. Where annual dividends are declared, these will be
paid in two tranches with an interim dividend equating to one third
of the expected full dividend and the final dividend equating to
the remaining unpaid balance of the minimum of 40% of actual
adjusted free cash flow. The payment of dividends remains at the
discretion of the Board. In accordance with the new Dividend
Policy, the Board declared its first interim dividend of three
pence per Ordinary Share, which was paid out on 6 April 2023.
Payment of the interim dividend was made to shareholders on the
register at the close of business on 3 March 2023 and the
ex-dividend date was 2 March 2023.
The Board has now declared the payment of a final cash dividend
for FY2023 of five pence per Ordinary Share, payable on 1 December
2023, which will bring the combined dividend for FY2023 to eight
pence per Ordinary Share. Payment of the final dividend will be
made to shareholders on the register at the close of business on 27
October 2023 and the ex-dividend date is 26 October 2023.
Further to the dividends paid to shareholders, in accordance
with the Company's EDEP whereby eligible employees receive an
equivalent dividend paid on shares bought back by the Company in
the market and ring-fenced for the EDEP, a total of ZAR16.9 million
($1.0 million) was paid out during the financial year.
Transactions in Own Shares
Returning capital to shareholders remains a key element of the
Company's strategic goals and it will continue to review
opportunities to do so, when and wherever possible.
At the commencement of the 2023 financial year, shares in the
Company were valued at 88 pence per Ordinary Share and at the close
of FY2023, the share price had depreciated 9% to 80 pence per
Ordinary Share, largely influenced by the macroeconomic environment
and volatile PGM prices . As stated previously, even though a great
many of the factors influencing the share price are outside of the
Company's control, management always pays close attention and will
continue to manage the business in the best way possible to provide
maximum value for shareholders.
Options over 1,755,000 Ordinary Shares were exercised by various
PDMRs and employees which vested from bonus shares awarded to them
in August 2019. All shares awarded came from Treasury. 702,300 of
the vested bonus shares were repurchased by the Company to satisfy
the tax liabilities of PDMRs and certain employees, and an
additional 498,950 shares were bought back from various employees
during FY2023.
In May 2023, the Company announced an on-market Share Buyback
programme to purchase Ordinary $0.01 Shares of the Company's issued
share capital, up to a maximum consideration of $10.0 million. 3. 6
million shares were bought back through the programme for a cost of
$3.6 million up to 30 June 2023. The Board has taken the decision
to reinstate this Share Buyback programme to acquire Ordinary
US$0.01 Shares to a maximum consideration of $6.4 million.
On 15 December 2022, 1,155,657 Ordinary Shares held in Treasury
were cancelled. Additionally, post financial year-end, on 13 July
2023, a total of 3,624,275 Ordinary Shares held in Treasury were
cancelled.
At 30 June, the Company's issued share capital was 279,000,000
Ordinary Shares, of which a total of 15,939,737 Ordinary Shares
were held in Treasury. Therefore, the total number of Ordinary
Shares with voting rights was 263,060,263.
E. ENVIRONMENT, SOCIAL AND GOVERNANCE ("ESG")
Operating as a values-centric business, sustainability remains
at the core of our business operations, forming the bedrock of our
comprehensive ESG approach. Sylvania stands resolute in its
dedication to fostering a constructive impact on its workforce, the
sector, and the communities in which it operates.
Sylvania's ESG journey follows a pathway that began with
identifying and activating the drivers of ESG, gathering baseline
information on potential material risks to ensure that future
targets are based on verifiable information and assumptions. The
transition phase included designing an ESG strategy and reporting
framework. Finally, ESG was embedded throughout Sylvania's business
strategy, identifying and including ESG in the Sylvania strategic
risk register. This ensures that mitigation strategies for risks or
opportunities linked to ESG elements are prioritised.
The spotlight is increasingly on the mining and processing
sector due to potential operational hazards and environmental
impacts, affecting both employees and communities. As a mineral
re-processor, our Company treats its commitment to the planet and
people as seriously as its obligations to customers and
shareholders. Sylvania believes that a sustainable industry player
fosters diversity and inclusivity among its workforce for their
growth, while responsibly lessening its environmental footprint and
benefiting local communities. Our strategy aligns with the
International Council on Mining and Metals' ("ICMM") principles for
sustainable development, harmonizing with the United Nations
Sustainable Development Goals ("UNSDGs").
In the current year, our ESG review accentuates climate action,
water security, tailings management and rehabilitation for
environmental aspects. Socially, it underscores female empowerment,
workforce diversity, safety, health, training, community relations,
and addressing gender-based violence. Governance-wise, the focus
encompasses process, code of conduct, sustainable growth,
stakeholder engagement, economic contribution, and resource
management. Further details will be outlined in the Company's
upcoming report, ESG: Supporting our Strategy.
CONTACT DETAILS
For further information, please
contact:
Jaco Prinsloo CEO
Lewanne Carminati CFO +27 11 673 1171
Nominated Adviser and Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Scott Mathieson
/ Kane Collings
Communications
BlytheRay +44 (0) 20 7138 3205
Tim Blythe / Megan Ray sylvania@BlytheRay.com
CORPORATE INFORMATION
Registered and postal address: Sylvania Platinum Limited
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
SA Operations postal address: PO Box 976
Florida Hills, 1716
South Africa
Sylvania Website : www.sylvaniaplatinum.com
About Sylvania Platinum Limited
Sylvania Platinum is a lower-cost producer of platinum group
metals (PGM) (platinum, palladium and rhodium) with operations
located in South Africa. The Sylvania Dump Operations (SDO)
comprises six chrome beneficiation and PGM processing plants
focusing on the retreatment of PGM-rich chrome tailings materials
from mines in the Bushveld Igneous Complex. The SDO is the largest
PGM producer from chrome tailings re-treatment in the industry. The
Group also holds mining rights for PGM projects in the Northern
Limb of the Bushveld Complex.
For more information visit https://www.sylvaniaplatinum.com/
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Jaco Prinsloo .
ANNEXURE
GLOSSARY OF TERMS FY2023
The following definitions apply throughout the period:
3E ounces include the precious metal elements Platinum, Palladium
3E PGMs and Gold
4E ounces include the precious metal elements Platinum, Palladium,
4E PGMs Rhodium and Gold
--------------------------------------------------------------------
6E ounces include the 4E elements plus additional Iridium
6E PGMs and Ruthenium
--------------------------------------------------------------------
AGM Annual General Meeting
--------------------------------------------------------------------
AIM Alternative Investment Market of the London Stock Exchange
--------------------------------------------------------------------
All-in sustaining Production costs plus all costs relating to sustaining current
cost production and sustaining capital expenditure.
--------------------------------------------------------------------
All-in sustaining cost plus non-sustaining and expansion
All-in cost capital expenditure
--------------------------------------------------------------------
BCM Bank cubic metres
--------------------------------------------------------------------
CLOs Community Liaison Officers
--------------------------------------------------------------------
Fresh chrome tails from current operating host mines processing
Current arisings operations
--------------------------------------------------------------------
DMRE Department of Mineral Resources and Energy
--------------------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and amortisation
--------------------------------------------------------------------
EA Environmental Authorisation
--------------------------------------------------------------------
EAP Employee Assistance Program
--------------------------------------------------------------------
EEFs Employment Engagement Forums
--------------------------------------------------------------------
EDEP Employee Dividend Entitlement Programme
--------------------------------------------------------------------
ESG Environment, social and governance
--------------------------------------------------------------------
EIA Environmental Impact Assessment
--------------------------------------------------------------------
EIR Effective interest rate
--------------------------------------------------------------------
EMPR Environmental Management Programme Report
--------------------------------------------------------------------
ESG Environment, Social and Governance
--------------------------------------------------------------------
GBP Pounds Sterling
--------------------------------------------------------------------
GHG Greenhouse gases
--------------------------------------------------------------------
GISTM Global Industry Standard on Tailings Management
--------------------------------------------------------------------
GRI Global Reporting Initiative
--------------------------------------------------------------------
JORC Joint Ore Reserves Committee
--------------------------------------------------------------------
IASB International Accounting Standards Board
--------------------------------------------------------------------
ICE Internal combustion engine
--------------------------------------------------------------------
IFRIC International Financial Reporting Interpretation Committee
--------------------------------------------------------------------
IFRS International Financial Reporting Standards
--------------------------------------------------------------------
Phoenix Platinum Mining Proprietary Limited, renamed Sylvania
Lesedi Lesedi
--------------------------------------------------------------------
LSE London Stock Exchange
--------------------------------------------------------------------
LTI Lost-time injury
--------------------------------------------------------------------
LTIFR Lost-time injury frequency rate
--------------------------------------------------------------------
MF2 Milling and flotation technology
--------------------------------------------------------------------
MPRDA Mineral and Petroleum Resources Development Act
--------------------------------------------------------------------
MRA Mining Right Application
--------------------------------------------------------------------
MRE Mineral Resource Estimate
--------------------------------------------------------------------
Mt Million Tonnes
--------------------------------------------------------------------
NWA National Water Act 36 of 1998
--------------------------------------------------------------------
Platinum group metals comprising mainly platinum, palladium,
PGM rhodium and gold
--------------------------------------------------------------------
PAR Pan African Resources Plc
--------------------------------------------------------------------
PDMR Person displaying management responsibility
--------------------------------------------------------------------
PEA Preliminary Economic Assessment
--------------------------------------------------------------------
PFS Preliminary Feasibility Study
--------------------------------------------------------------------
Pipeline ounces 6E ounces delivered but not invoiced
--------------------------------------------------------------------
Revenue recognised for ounces delivered, but not yet invoiced
Pipeline revenue based on contractual timelines
--------------------------------------------------------------------
Pipeline sales Adjustments to pipeline revenues based on the basket price
adjustment for the period between delivery and invoicing
--------------------------------------------------------------------
Project Echo Secondary PGM Milling and Flotation (MF2) program announced
in FY2017 to design and install additional new fine grinding
mills and flotation circuits at Millsell, Doornbosch, Tweefontein,
Mooinooi and Lesedi.
--------------------------------------------------------------------
Revenue (by products) Revenue earned on Ruthenium, Iridium, Nickel and Copper
--------------------------------------------------------------------
ROM Run of mine
--------------------------------------------------------------------
SDO Sylvania dump operations
--------------------------------------------------------------------
SLP Social and Labour Plan
--------------------------------------------------------------------
Sylvania Sylvania Platinum Limited, a company incorporated in Bermuda
--------------------------------------------------------------------
tCO2e Tons of carbon dioxide equivalent
--------------------------------------------------------------------
TRIFR Total recordable injury frequency rate
--------------------------------------------------------------------
TSF Tailings storage facility
--------------------------------------------------------------------
UNSDGs United Nations Sustainability Development Goals
--------------------------------------------------------------------
USD United States Dollar
--------------------------------------------------------------------
WULA Water Use Licence Application
--------------------------------------------------------------------
UK United Kingdom of Great Britain and Northern Ireland
--------------------------------------------------------------------
ZAR South African Rand
--------------------------------------------------------------------
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ACSLRMFTMTMMMBJ
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September 07, 2023 02:04 ET (06:04 GMT)
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