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RNS Number : 4459N
Sylvania Platinum Limited
26 October 2016
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
First Quarter Report to 30 September 2016
"Another record quarterly production of 17,257 ounces."
26 October 2016
Sylvania Platinum Limited, the low cost Platinum Group Metal
("PGM") processor and developer, today announces its results for
the quarter ended 30 September 2016 ("Q1" or the "quarter") from
its PGM production and development operations in the Bushveld
region of South Africa.
HIGHLIGHTS
-- SDO achieved a new production record of 17,257 ounces for the quarter, representing a 6% increase over the
previous quarter.
-- Gross basket price increased 9% to $937/oz (Q4: $859/oz).
-- SDO operating cash cost down 5% in Rand terms to R5,745/oz ($408/oz) (Q4: R6,070/oz ($404/oz)).
-- SDO capital expenditure down 32% quarter-on-quarter to $0.21 million (Q4: $0.30 million).
-- SDO gross cash margin up 24% to 46% (Q4: 37%).
-- Group cash balance of $11.1 million, a $4.4 million increase on the previous quarter's $6.7 million.
-- Group EBITDA up 112% to $5.5 million (Q4: $2.6 million).
SYLVANIA OVERVIEW
The Sylvania Dump Operations ("SDO") has again achieved record
production with the highest quarterly production in the history of
the Company, producing 17,257 ounces for the quarter. Improved PGM
recovery efficiencies for the quarter contributed towards higher
PGM production despite the PGM feed tons and grades being slightly
lower than the previous quarter. With the solid performance during
the first quarter of the year, the Company is confident of
achieving the 60,000 ounce guidance for the current financial
year
The cash costs for the SDO in Rand terms have decreased by 5%
from R6,070/oz to R5,745/oz, due to a combination of higher PGM
ounce production and disciplined operating cost control, but
increased by 1% in US dollar terms from $404/oz to $408/oz due to a
stronger R/$ exchange rate. Revenue increased 15% in Rand terms to
R182.7 million (Q4: R158.7 million) and increased by 23% in US
dollar terms to $13.0 million (Q4: $10.6 million) aided by higher
production and an improved basket price. The gross basket price
increased 9% to $937/oz from $859/oz for the previous quarter.
The Group cash balance at 30 September 2016 was $11.1 million, a
$4.4 million increase on the previous quarter's $6.7 million. Cash
generated from operations before working capital movements was $5.6
million with net changes in working capital amounting to a
reduction of $1.4 million, $0.2 million spent on the
stay-in-business capital for the SDO plants, $0.5 million net
inflow after the review of the underlying investment for the
rehabilitation insurance guarantee and $0.5 million spent on share
buy backs and the impact of exchange rate fluctuations on cash held
at the quarter end was $0.4 million.
Commenting on the quarter, Sylvania's CEO Terry McConnachie
said:
"Another sterling effort from our production teams. I am proud
of our ability to once again set a quarterly production record.
This is testament to commitment, work ethic and strong loyalty to
the Company. Our operating cash costs in Rand terms are down again
and the gross basket price is beginning to show signs of life and
as a result, we have seen a healthy increase in revenue."
GROUP PERFORMANCE
Unaudited - Group Unit % Change
September June 2016
2016 Quarter
Quarter
----------------------- ------ ----------- ----------- ---------
Financials
----------------------- ------ ----------- ----------- ---------
Revenue $'000 12,965 10,566 23%
----------------------- ------ ----------- ----------- ---------
Capital Expenditure[1] $'000 305 242 26%
----------------------- ------ ----------- ----------- ---------
Ave R/$ rate R/$ 14.09 15.02 -6%
----------------------- ------ ----------- ----------- ---------
EBITDA[2] $'000 5,538 2,609 112%
----------------------- ------ ----------- ----------- ---------
Production
----------------------- ------ ----------- ----------- ---------
PGM Plant Feed T 283,964 292,577 -3%
----------------------- ------ ----------- ----------- ---------
Total 3E and Au Oz 17,257 16,219 6%
----------------------- ------ ----------- ----------- ---------
Group Cash Cost[3]
----------------------- ------ ----------- ----------- ---------
Per 3E & Au oz $/oz 431 487 -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, but there was unfortunately one Lost-Time
Injury ("LTI") at the Mooinooi operation where a contractor
employee suffered a laceration to his wrist which is disappointing
given that the Company has been LTI free for the past financial
year. On the positive side, the Millsell operation achieved two
years LTI free, while Steelpoort remains LTI free for more than
eight years and Tweefontein and Doornbosch both being LTI free for
more than four years.
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 aggregate production for the SDO was 17,257 PGM ounces for
the period, a 6% increase on the previous quarter's performance
(Q4: 16,219 ounces) and a new quarterly record for the Company.
Higher PGM recovery efficiencies for the quarter contributed
towards higher PGM ounces while the PGM feed tons and grades were
slightly lower than the previous quarter. Doornbosch and
Tweefontein achieved higher PGM recoveries as a result of improved
flotation stability and mass pull strategy, while Mooinooi and
Lannex achieved higher recovery efficiencies due to improved
residence times associated with lower PGM feed tons for the
quarter. The PGM feed tons were slightly lower than the previous
quarter due to difficulties experienced with the hydro-mining at
Lannex and lower plant feed stability at Mooinooi, both of which
have subsequently been resolved.
SDO cash cost of production of $408/oz (R5,745/oz) was slightly
higher in US dollar terms than the $404/oz (R6,070/oz) recorded in
the previous quarter due to a stronger R/$ exchange rate, however
in Rand terms costs were 5% lower.
Operational and Financial Summary
Unaudited - SDO Unit September June 2016 +- % 3 months
2016 Quarter Quarter to September
Quarter on Quarter 2016
---------------------- ----- --------- ---------- ------------ --------------
Revenue
---------------------- ----- --------- ---------- ------------ --------------
Revenue $'000 12,965 10,566 23% 12,965
---------------------- ----- --------- ---------- ------------ --------------
Revenue R'000 182,740 158,655 15% 182,740
---------------------- ----- --------- ---------- ------------ --------------
Gross Basket Price[1] $/oz 937 859 9% 937
---------------------- ----- --------- ---------- ------------ --------------
Gross Cash Margin
- SDO % 46% 37% 24% 46%
---------------------- ----- --------- ---------- ------------ --------------
Capital Expenditure $'000 205 303 -32% 205
---------------------- ----- --------- ---------- ------------ --------------
Capital Expenditure R'000 2,896 4,556 -36% 2,896
---------------------- ----- --------- ---------- ------------ --------------
Ave R/US$ rate[2] R/$ 14.09 15.02 -6% 14.09
---------------------- ----- --------- ---------- ------------ --------------
EBITDA $'000 5,931 3,993 49% 5,931
---------------------- ----- --------- ---------- ------------ --------------
EBITDA R'000 83,589 59,959 39% 83,589
---------------------- ----- --------- ---------- ------------ --------------
SDO Cash Cost[3]
---------------------- ----- --------- ---------- ------------ --------------
Per PGM Feed ton $/t 25 22 14% 25
---------------------- ----- --------- ---------- ------------ --------------
Per PGM Feed ton R/t 349 336 4% 349
---------------------- ----- --------- ---------- ------------ --------------
Per 3E & Au oz $/oz 408 404 1% 408
---------------------- ----- --------- ---------- ------------ --------------
Per 3E & Au oz R/oz 5,745 6,070 -5% 5,745
---------------------- ----- --------- ---------- ------------ --------------
Production
---------------------- ----- --------- ---------- ------------ --------------
Plant Feed T 517,552 521,598 -1% 517,552
---------------------- ----- --------- ---------- ------------ --------------
Feed Head Grade g/t 2.40 2.68 -10% 2.40
---------------------- ----- --------- ---------- ------------ --------------
PGM Plant Feed
Tons T 283,964 292,577 -3% 283,964
---------------------- ----- --------- ---------- ------------ --------------
PGM Plant Grade g/t 3.99 4.20 -5% 3.99
---------------------- ----- --------- ---------- ------------ --------------
PGM Plant Recovery % 47.3% 41.0% 15% 47.3%
---------------------- ----- --------- ---------- ------------ --------------
Total 3E and Au Oz 17,257 16,219 6% 17,257
---------------------- ----- --------- ---------- ------------ --------------
(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
Following the submission of an Appeal on 3 June 2016 against the
decision of the Limpopo Department of Economic Development,
Environment and Tourism not to grant Environmental Authorisation
("EA"), Sylvania also submitted an Answering Statement on 12 August
2016 in response to comments received from Interested and Affected
Parties. The Company now awaits a decision by the Member of the
Executive Council for Economic Development, Environment and Tourism
whether to grant the EA for the project. Any update will be
reported as soon as one is received.
Grasvally Chrome Exploration
The Department of Mineral Resources has granted an amendment to
the existing prospecting right to include the processing of the old
waste rock dumps.
The Department of Water and Sanitation visited the site and was
provided with an update and status report of prospecting, the
development plan and the risks associated with delaying the
application. The application is now in its final stages and it is
hoped that the issuing of the Water Use License for processing the
waste rock dumps will be issued soon.
The Company continues to await the outcome of its Mining Right
Application.
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
registered in the Mining Titles Office and the Company remains
hopeful that a Mining Right for PGM's will be granted shortly.
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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