TIDMSLP
RNS Number : 8515X
Sylvania Platinum Limited
28 April 2023
_____________________________________________________________________________________________________________________________
28 April 2023
Sylvania Platinum Limited
("Sylvania", the "Company" or the "Group")
Third Quarter Report to 31 March 2023
Sylvania (AIM: SLP), the platinum group metals ("PGM") producer
and developer with assets in South Africa, announces its results
for the quarter ended 31 March 2023 ("Q3" or the "quarter"). Unless
otherwise stated, the consolidated financial information contained
in this report is presented in United States Dollars ("USD" or
"$").
Highlights
-- Sylvania Dump Operations ("SDO") produced 17,926 4E (22,884 6E) PGM ounces in Q3 (Q2: 19,276 4E (24,630 6E) PGM
ounces);
-- SDO recorded $26.5 million net revenue for the quarter (Q2: $37.1 million);
-- Group EBITDA of $9.8 million (Q2: $20.0 million);
-- Group cash balance of $144.2 million (Q2: $123.9 million);
-- Successful commissioning of Tweefontein MF2 improves metal recoveries; and
-- Optimisation of blending improves results, especially at the Eastern operations.
Outlook
-- FY2023 production guidance increased, targeting 72,000 to 74,000 4E PGM ounces following strong production to
date;
-- Lannex MF2 construction in progress, with commissioning scheduled during HY1 FY2024, which will further improve
PGM recovery efficiencies;
-- The recent relogging and additional sampling data collected at Volspruit will be subject to an updated Mineral
Resource Estimate ("MRE") during Q4 FY2023, which will include a rhodium resource over 100% of the project area;
-- Available data from recently completed La Pucella study and historical exploration are being analysed to develop
an exploration strategy to prove continuity over the entire Aurora strike length;
-- Work on the Hacra project continues towards a MRE, using updated data from the recently completed relogging
program; and
-- The Group maintains strong cash reserves to: allow funding of capital expansion and process optimisation
projects; upgrade the Group's exploration and evaluation assets; and return value to shareholders.
Commenting on the Q3 results, Sylvania's CEO, Jaco Prinsloo
said:
"The SDO delivered 17,926 4E PGM ounces for the quarter, which
was ahead of expectations. Traditionally Q3 is a lower quarter in
terms of production as a result of the slower start-up after the
December break at the host mines and the shorter February month. In
comparison with Q3 FY2022, production increased by 13.2% due to
various interventions at the operations which have assisted in
improving the recovery efficiencies at some of the plants.
"The 21% decrease in the basket price for the quarter,
particularly reflecting the rhodium and palladium prices, impacted
revenues but the Company remains in a strong cashflow and cash
position.
"With the strong production performance for the year to date and
positive results following the post-commissioning optimisation of
the Tweefontein MF2, the Company is pleased to increase the annual
PGM production guidance to between 72,000 and 74,000 4E PGM ounces
for FY2023."
Disclaimer
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.
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.
USD Unit Unaudited Unit ZAR
Q2 FY2023 Q3 FY2023 % Change % Change Q3 FY2023 Q2 FY2023
---------- --------- --------- ---------- ----------
Production
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
645,832 575,973 -11% T Plant Feed T -11% 575,973 645,832
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
1.94 1.92 -1% g/t Feed Head Grade g/t -1% 1.92 1.94
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
341,528 322,366 -6% T PGM Plant Feed Tons T -6% 322,366 341,528
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
3.22 2.98 -7% g/t PGM Plant Feed Grade g/t -7% 2.98 3.22
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
57.78% 55.58% -4% % PGM Plant Recovery(1) % -4% 55.58% 57.78%
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
19,276 17,926 -7% Oz Total 4E PGMs Oz -7% 17,926 19,276
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
24,630 22,884 -7% Oz Total 6E PGMs Oz -7% 22,884 24,630
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
2,432 1,932 -21% $/oz 4E Gross basket price(2) R/oz -20% 34,305 42,859
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Financials(3)
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
33,113 25,034 -24% $'000 Revenue (4E) R'000 -24% 444,488 583,437
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Revenue (by-products
3,587 3,193 -11% $'000 including base metals) R'000 -10% 56,681 63,210
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
357 -1,717 -581% $'000 Sales adjustments R'000 -585% -30,486 6,283
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
37,057 26,510 -28% $'000 Net revenue R'000 -28% 470,683 652,930
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Direct operating
11,382 12,337 8% $'000 costs R'000 9% 219,045 200,542
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Indirect operating
4,208 3,404 -19% $'000 costs R'000 -18% 60,434 74,137
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
General and administrative
788 733 -7% $'000 costs R'000 -6% 13,018 13,887
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
20,005 9,784 -51% $'000 Group EBITDA(5) R'000 -51% 173,764 352,486
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
990 1,581 60% $'000 Net Interest R'000 61% 28,079 17,439
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
13,647 6,112 -55% $'000 Net profit(5) R'000 -55% 108,549 240,468
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
3,621 1,864 -49% $'000 Capital Expenditure R'000 -48% 33,106 63,802
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
123,895 144,182 16% $'000 Cash Balance R'000 22% 2,567,881 2,112,416
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
R/$ Ave R/$ rate R/$ 1% 17.76 17.62
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
R/$ Spot R/$ rate R/$ 4% 17.81 17.05
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Unit Cost/Efficiencies
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
SDO Cash Cost Per
590 688 17% $/oz 4E PGM oz(4) R/oz 17% 12,219 10,404
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
SDO Cash Cost Per
462 539 17% $/oz 6E PGM oz(4) R/oz 18% 9,572 8,142
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Group Cash Cost Per
751 843 12% $/oz 4E PGM oz(4) R/oz 13% 14,972 13,237
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
Group Cash Cost Per
588 660 12% $/oz 6E PGM oz(4) R/oz 13% 11,722 10,360
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
All-in sustaining
867 932 7% $/oz cost (4E) R/oz 8% 16,548 15,279
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
1,010 1,007 0% $/oz All-in cost (4E) R/oz 0% 17,883 17,803
---------- --------- ------ --------------------------- ------ --------- ---------- ----------
The Sylvania cash generating subsidiaries are incorporated in
South Africa with the functional currency of these operations being
ZAR. Revenues from the sale of PGMs are incurred 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, GBP and ZAR.
(1) PGM plant recovery is calculated on the production ounces
that exclude the work-in-progress ounces of approximately 1,500
ounces from December, delivered in January 2023.
(2) The gross basket price in the table is the March 2023 gross
4E basket used for revenue recognition of ounces delivered in Q3
FY2023, before penalties/smelting costs and applying the
contractual payability.
(3) Revenue (6E) for Q3, before adjustments is $28.0 million (6E
prill split is Pt 52%, Pd 17%, Rh 9%, Au 0%, Ru 17%, Ir 5%).
Revenue excludes profit/loss on foreign exchange.
(4) The cash costs include direct operating costs and exclude
indirect costs such as royalty tax and EDEP payments.
(5) The net profit and Group EBITDA excludes the profit on the
sale of Grasvally Chrome Mine (.APPROX.$1.4 million) previously
held as an asset held for sale.
A. OPERATIONAL OVERVIEW
Health, safety and environment
Health, safety and environment remains a focus area on all
operations and the Company is pleased to report that no significant
occupational health or environmental incidents occurred during the
quarter. While Lannex achieved three-years Lost-Time Injury ("LTI")
free during the period and Doornbosch operation remains at 10 years
LTI-free, we unfortunately experienced one LTI at the Mooinooi
operation (ankle sprain), and one LTI at the Lesedi operation (knee
sprain) during March 2023 . Millsell and Tweefontein both remain
LTI-free for more than a year .
Operational performance
The SDO delivered 17,926 4E PGM ounces for the quarter. This is
above target as the third quarter historically yields lower
production as a result of the January ramp up at the host mines,
but still represented a 7% decrease in ounces on the previous
quarter. PGM feed grades and volumes were consequently impacted due
to lower ROM and current arisings material during the period, and
the shorter February month. PGM feed grade and recoveries were 10%
and 8% above the business plan for the quarter while quarter on
quarter performance was lower with PGM flotation plant throughput
decreasing by 6%.
Although the total SDO recovery efficiency is slightly down for
the quarter in line with expectations for blend of feed material
received, the commissioning and optimisation of the Tweefontein MF2
has contributed to an 8% above plan recovery, which will be a
significant contributor going forward. Overall, the SDO operations
performed well and further improvements are expected during the
fourth quarter.
Lesedi experienced increased Eskom load curtailment this quarter
of 95.6hrs, which impacted throughput, stability and performance.
As part of its mitigating measures, the Company is in the process
of procuring back-up power generators for Lesedi and Millsell, and
these should be commissioned during Q1 FY2024. Lannex recoveries
under the revised reagent regime remain above business plan with
further optimisation ongoing.
SDO operating cash costs per 4E PGM ounce increased 17% in both
rand and dollar terms to ZAR12,219/ounce and $688/ounce (Q2:
ZAR10,404/ounce and $590/ounce) respectively. The increase in cash
costs per ounce is principally a result of the lower ounces
produced in the quarter and the 1% depreciation of the average
ZAR:USD exchange rate.
The Group incurred capital expenditure of ZAR33.1 million ($1.9
million), in line with planned capital project schedules. The main
contributors were ZAR11.4 million ($0.6 million) spent on the MF2
project, ZAR8.2 million ($0.5 million) on stay-in-business capital
and tailings dams and ZAR8.9 million ($0.5 million) on
exploration.
Operational focus areas
The successful implementation of the formal planned maintenance
system at Millsell, together with the operational focus on
equipment runtime and stability, has produced improved results at
the plant for the quarter. The roll out of the system at additional
operations is underway.
The Mooinooi operation continues to monitor the ROM grades
received from the host mine which have decreased but remained above
the business plan, and this is an ongoing focus area for the
Company.
Cost control and optimisation continues with positive results
and unit costs well in line with the business plan year to date.
Ongoing improvements remain a focus area on all operations and are
expected to further reduce costs.
Operational opportunities
Optimisation of blending opportunities from the current SDO
surface resources has provided positive results, especially at the
Eastern operations.
Construction of the Lannex MF2 Plant continues and is on target
to commence commissioning during Q1 FY2024, which follows the
successful roll-out and performance of similar MF2s at all other
SDO operations between 2017 and 2023.
Testwork on reagent optimisation is ongoing in collaboration
with suppliers.
B. FINANCIAL OVERVIEW
Financial performance
Revenue (4E) for the quarter decreased by 24% to $25.0 million
(Q2: $33.1 million), impacted by the 21% decrease in the basket
price recorded in March and applied to calculate revenue for ounces
produced and delivered in the quarter but only invoiced in Q4. The
average 4E gross basket price for the quarter was $1,932/ounce
against $2,432/ounce in Q2 with the largest commodity price drop
noted in rhodium and palladium. Net revenue for the quarter, which
includes base metals and by-products and the quarter-on-quarter
sales adjustment, was $26.5 million (Q2: $37.1 million). The
downwards sales adjustment in dollar and rand terms is due to the
reversal of provisional revenue raised in Q2, which was reversed
and re-raised in Q3 at the actual prices in accordance with the
off-take agreements. Net revenue also includes attributable revenue
received for ounces produced from material processed from a
third-party on a trial basis.
Group cash costs per 4E PGM ounce increased by 13% in rand terms
from ZAR13,237/ounce to ZAR14,972/ounce and increased 12% in dollar
terms from $751/ounce in the previous quarter to $843/ounce.
General and administrative costs decreased from $0.79 million to
$0.73 million. These costs are incurred in USD, GBP and ZAR and are
impacted by the exchange rate fluctuations over the reporting
period.
Group EBITDA for the quarter was $9.8 million (Q2: $20.0
million) and net profit was $6.1 million (Q2: $13.6 million), the
decrease was primarily a result of the lower basket price and
higher total group costs (direct and indirect cash and non-cash
costs).
The Group cash balance increased 16% to $144.2 million at the
quarter end (Q2: $123.9 million). Cash generated from operations
before working capital movement was $9.8 million, with net changes
in working capital amounting to $12.9 million, which is mainly due
to the changes in trade debtors. The decrease in the basket price
and lower ounce production during Q3 resulted in a lower trade
debtors balance quarter-on-quarter, as trade debtors arise from the
concentrate delivered in the quarter but paid for in the following
quarter per the off-take agreement.
The Group spent $1.9 million on capital for the quarter compared
to $3.6 million in the previous quarter. Dividend tax of $0.5
million was paid to the authorities on the payment of a dividend
from a subsidiary to the holding company.
The impact of exchange rate fluctuations on cash held at the end
of Q3 FY2023 was $1.4 million loss due to the spot ZAR to USD
exchange rate at 31 March 2023 depreciating by 4%.
C. MINERAL ASSET DEVELOPMENT
The Group owns various mineral asset exploration and development
projects on the Northern Limb of the Bushveld Igneous Complex
located in South Africa, for which it has approved mining rights.
Targeted studies are underway on both the Volspruit and Northern
Limb PGM opportunities to determine how best to optimise the
respective projects. Progress has been made towards unlocking
mineral potential on these projects to generate value for
shareholders.
Volspruit Project
Following the release of the Results and Resource Statement in
October 2022, the revised Scoping Study to include the remaining
42% of the total project area consisting of the South Body is
currently underway. Relogging of the South Body has been completed
and the remaining relogging of the North Body will be completed in
early May. The results from the rhodium sampling will be received
during Q4 FY2023 and will also include iridium and ruthenium to be
evaluated as part of the same study. While the initial Scoping
Study completed on the North Body relied on the validated borehole
database to complete the Study, further relogging was scheduled to
define the geological constraints of the mineralisation. The
relogging and additional sampling data collected will be subject to
an updated Volspruit MRE, which will include rhodium resource over
100% of the project area. The updated MRE will then be subject to a
Preliminary Economic Assessment ("PEA") during Q1 FY2024 as
previously reported.
The permitting requirements under the Mining Right as
communicated in the interim report continues. The Water-Use
Licence, the updating of the Environmental Impact Assessment
("EIA") and the finalisation of the Social and Labour Plan are all
included within these activities.
Far Northern Limb Projects
Continued resource optimisation studies are underway on the
entire strike extent of the newly discovered T-Zone of the Aurora
project. By applying the new geological interpretation, relogging
of the historical boreholes in the possession of the Company has
been completed over 8.4km of the 16.7km of the projects near
surface strike length. It can be reported that of the historical
core, 102 of the 159 drillholes in the Company's possession have
been fully relogged. The relogging will inform the continuity of
mineralised T-Zone and provide inputs for an optimised exploration
strategy. The outcomes of the optimised exploration strategy will
be subject to a preliminary MRE, which will indicate the size of a
potential MRE over the entire strike length of the Aurora project
and determine any infill studies that may be required. A PEA will
only be commissioned once an updated MRE for the combined Aurora
project is available.
Progress towards declaring a maiden Mineral Resource on the
Hacra project continues, and the relogging of both the Hacra North
underground and the Hacra South near surface historical core,
implementing the new geological interpretation, has been
completed.
D. CORPORATE ACTIVITIES
Notification of Transaction by PDMR
The Company announced on 31 March 2023 that Eileen Carr,
Non-Executive Director sold and subsequently purchased 13,811
ordinary shares of $0.01 each in the Company ("Ordinary Shares")
for her Self-Invested Pension Plan ("SIPP") at 89 pence per
Ordinary Share.
Following the two transactions her shareholding in the Company
remained unchanged at 70,000 Ordinary Shares, representing 0.02% of
the total number of Ordinary Shares with voting rights.
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 / Rachael sylvania@BlytheRay.com
Brooks
CORPORATE INFORMATION
Registered and postal Sylvania Platinum Limited
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
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/
ANNEXURE
GLOSSARY OF TERMS FY2023
The following definitions apply throughout the period:
4E PGM ounces include the precious metal elements Platinum,
4E PGMs Palladium, 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
--------------------------------------------------------------------
Fresh chrome tails from current operating host mines processing
Current risings operations
--------------------------------------------------------------------
DMRE Department of Mineral Resources and Energy
--------------------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and amortisation
--------------------------------------------------------------------
EIA Environmental Impact Assessment
--------------------------------------------------------------------
EIR Effective interest rate
--------------------------------------------------------------------
EMPR Environmental Management Programme Report
--------------------------------------------------------------------
ESG Environment, Social and Governance
--------------------------------------------------------------------
GBP Pounds Sterling
--------------------------------------------------------------------
IFRIC International Financial Reporting Interpretation Committee
--------------------------------------------------------------------
IFRS International Financial Reporting Standards
--------------------------------------------------------------------
JORC Australian Joint Ore Reserves Committee
--------------------------------------------------------------------
LSE London Stock Exchange
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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
--------------------------------------------------------------------
NWA National Water Act 36 of 1998
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Platinum group metals comprising mainly platinum, palladium,
PGM rhodium and gold
--------------------------------------------------------------------
PDMR Person displaying managerial responsibility
--------------------------------------------------------------------
PEA Preliminary Economic Assessment
--------------------------------------------------------------------
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
--------------------------------------------------------------------
PFS Pre-Feasibility Study
--------------------------------------------------------------------
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
--------------------------------------------------------------------
Rh Rhodium
--------------------------------------------------------------------
ROM Run of mine
--------------------------------------------------------------------
SDO Sylvania dump operations
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Sylvania Sylvania Platinum Limited, a company incorporated in Bermuda
--------------------------------------------------------------------
TRIFR Total recordable injury frequency rate
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TSF Tailings storage facility
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UNSDGs United Nations Sustainability Development Goals
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USD United States Dollar
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WULA Water Use Licence Application
--------------------------------------------------------------------
UK United Kingdom of Great Britain and Northern Ireland
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ZAR South African Rand
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END
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