PYX Pyx Resources Limited

PYX Resources Limited / EPIC: PYX / Market: Standard / Sector: Mining

6 August 2024

PYX Resources Limited

("PYX" or the "Company")

Operations Update HY 2024

Positioned for growth with continued demand for Premium Zircon

and operations now optimised

·      Total minerals sands sold during the period rose by 84% to 9.5kt (2023: 5.2Kt)

·      Granted a two-year licence to extract and process up to 94.0kt of minerals per year at Mandiri

·      Granted a three-year licence to extract and process up to 88.8kt of minerals per year at Tisma

·      Commenced ilmenite exports following the award of a modified export licence

·      Successfully connected operations to the local electric grid with expected fuel cost savings of circa. 80% and a reduction in carbon emissions

·      Positioned for growth and positive about the second half of the year, as the Company looks to deliver on its stated strategy; to increase production, reduce costs, and boost operational margins

PYX Resources Ltd (NSX: PYX | LSE: PYX), the world's third largest publicly listed Premium Zircon producer by Zircon resources^[1], is pleased to announce an operational update for the six months ended 30 June 2024 ("HY 2024") ahead of the publication of its interim results for the same period, anticipated to be released on or around 13 September 2024.

SUMMARY OF RESULTS (all unaudited)

It has been a pivotal first half of the year for PYX, but has not been without its challenges. Unusual heavy rain in May and June, coupled with the collapse of a bridge providing access to the mine, impacted operations and contributed in total mineral sands (zircon, rutile and ilmenite) produced decreasing 16% to 5.7kt (2023: 6.8kt) and zircon production decreasing 20% to 4.5kt (2023: 5.7kt).

Encouragingly though, and testament to the quality of the Company's mineral sands assemblage, particularly its premium zircon, the Company has experienced strong client demand for its products which resulted in total mineral sand sales increasing 84% to 9.5kt (2023: 5.2kt).  PYX's client base consists of blue-chip organisations across several industries, geographies and sectors, which helps eliminate risk and ensures continued sales.

During the reporting period, the Company announced that it had received a two-year licence from the Indonesian authorities to produce 94kt per annum ('ktpa') of Premium Zircon, Ilmenite, and Rutile at Mandiri, as opposed to the usual one-year licence. Under the terms of the licence, PYX can export a total of 24kt per year of Premium Zircon with grades of 65.5%, 50,000 Wet Ton ("WE")^*/year of Ilmenite with 45% grades and 20,000 WE/year of Rutile with 90% grades.  In July PYX also announced that it has received a three-year licence to extract and process up to 88.8kt minerals from its Tisma Project ("Tisma") in Central Kalimantan, Indonesia. With a 27% recovery factor, this enables the production of circa 8ktpa of premium zircon of which 6.4ktpa may be exported and 1.6ktpa sold to domestic Indonesian markets. Importantly, these licences allow for over 80% of the minerals produced to be exported, resulting in the Company being able to achieve better prices and higher margins. The Company believes that the granting these two licences is a result of PYX's operational excellence in the region.

Client orders and sales of titanium stockfeed were put on hold during the period while the Company awaited the modification of its rutile and ilmenite export licences. These modifications were required after changes in regulation made by the Industrial and Trade Department for Export Tax Billing in December 2023. On 12 March 2024, the Company announced that it had received the modified licence to export ilmenite, which it had been stockpiling since the changes in regulation and, as announced on 12 March 2024 commenced delivering on orders placed prior to the modification of the licence With a shipment of 1,040 tonnes of ilmenite at a grade of 45% TiO₂ exported to a customer in Zhanjiang, Guangdong Province in the People's Republic of China.

During the period, the Company was proud to receive a Gold Environmental, Social and Governance ("ESG") Excellence Award under the Zircon Industry Association's ("ZIA") industry wide ESG reporting and rating process. The ZIA is the trade association of the world's primary zircon producers and consumers who together account for approximately 80% of global annual production of zircon and zirconia. The Gold ESG Excellence Award is one of the highest awards achievable under the ZIA's ESG reporting and rating process and cements the Company's continued commitment to good ESG and business stewardship practices.

Outlook

The first half of 2024 posed significant operational challenges due to unusual heavy rains in May and June and the collapse of a bridge providing access to the mine. Whilst these issues had a negative impact on the Company's production numbers during HY 24, they are now resolved and a robust second half of 2024 is expected. This is being driven by increased production and sales, especially given the Company's existing ilmenite inventory, which was stockpiled while the Company waited for the modification of its rutile and ilmenite export licences and is now ready for sale.

Commenting on the HY 2024 operational results, Oliver Hasler, Executive Chairman of PYX Resources said:  

"As we look ahead to the second half of 2024, PYX Resources remains committed to laying the foundations for sustainable growth. The recent award of export, extraction and processing licences, along with significant operational improvements, such as our connection to the local electricity grid, are pivotal steps forward. These advancements not only enhance our operational efficiency but also improve our margins and will, ultimately, lead to greater profitability. We are committed to driving our strategic initiatives to unlock the full potential of our assets and deliver long-term value to our stakeholders."

* WE = Wet Ton (the new scale for Titanium based on MoF Department No 23, 2023)

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For more information:

This announcement is authorised for release by Oliver B. Hasler, Chairman and Chief Executive Officer.

About PYX Resources

PYX Resources Limited (NSX: PYX | LSE: PYX) is a producer of premium zircon dual listed on the National Stock Exchange of Australia and on the Main Market of the London Stock Exchange. PYX's key deposits, Mandiri and Tisma, are large-scale, near-surface open pit deposits both located in the alluvium-rich region of Central Kalimantan, Indonesia. PYX, whose Mandiri deposit has been in production since 2015, is the 3rd largest publicly traded producing mineral sands company by zircon resources globally. Determined to mine responsibly and invest in the wider communities where we operate, PYX is committed to fully developing its Mandiri and Tisma deposits, with the vision to consolidate the mineral sands resources in Kalimantan and explore and acquire mineral sands assets in Asia and beyond.