REG - PYX Resources Ltd. - Operations Update Q1 2023

PYX ResourcesAnnouncement

04/05/2023 07:00

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RNS Number : 4033Y  PYX Resources Limited  04 May 2023

 

4 May 2023

 

 

Pyx Resources Limited

("PYX" or the Company")

 

 

Operations Update Q1 2023

Continued Strong Performance in Improving Critical Minerals Markets

 

PYX Resources Ltd (NSX: PYX | LSE: PYX), the world's second-largest publicly
listed zircon producer by zircon resources, is pleased to provide an
operational update for the three months ended 31 March 2023 ("Q1 2023" or "the
period").

 

SUMMARY

                                      Q1 2023  Q1 2022  Variance
 Production
 Zircon Produced                      1.9kt    1.7kt    12%
 Titanium Dioxide Minerals Produced   0.6kt    0.3kt    127%
 Total Produced                       2.5kt    2.0kt    29%

 Sales
 Zircon Sales                         1.3kt    1.8kt    -27%
 Titanium Dioxide Minerals Sold       -        -        -
 Total Sold                           1.3kt    1.8kt    -27%
 Value Per Tonne (USD)                2,031    2,554    -20%

 Inventories
 Zircon Inventory                     0.6kt    0.3kt    +136%
 Titanium Dioxide Minerals Inventory  7.5kt    0.3kt    +2,506%
 Total Inventory                      8.1kt    0.5kt    1,406%

 

During the period, the Company performed strongly with an increase in both
mineral sands and premium zircon production.

 

In Q1 2023, PYX produced 2.5kt of premium zircon, rutile and ilmenite
(together "Titanium Dioxide Minerals"), resulting in a year-on-year production
increase of 29% (Q1 2022: 2.0kt).

 

Premium zircon production in Q1 2023 increased by 12% to 1.9kt (Q1 2022:
1.7kt) with sales decreasing by 27% to 1.3kt (Q1 2022: 1.8kt). The slight
reduction in zircon sales for Q1 2023, when compared to Q1 2022 was a result
of temporary delays in shipping causing the sales to fall into the following
accounting period. Had these sales occurred in Q1 2023 the Company would have
exceeded premium zircon sales when compared to Q1 2022. Accordingly, the
Company ended the period with 604t of premium zircon inventory (Q1 2022:
256t).

 

During the period, the Company expanded its finished goods inventories to
8.1kt, a 1,406% increase on the prior year (Q1 2022: 0.5kt). This included
7.5kt of titanium oxide which the Company will sell once it receives its
export licence from the Indonesian Trade Department, which is expected
imminently.

 

 

Commenting on the Company's achievements in Q1 2023, PYX Resources' Chairman
and Chief Executive Officer, Oliver B. Hasler, said:

 

"PYX is an Indonesian focused company looking to consolidate the minerals
sands market in the region. We are very lucky to work with a professional and
dedicated team and to be operating in a mining-friendly and supportive country
like Indonesia.

 

"We recently made another important step forward on our successful growth path
when we renewed the Tisma tenement licence for a further 10 years, after which
the licence can be extended further.

 

"I would like to take the time to thank our team and the Indonesian government
departments, officials, and stakeholders for the quick decision on the licence
application. Extending the term of the tenement licence where we operate is a
key development in that it enables PYX to continue its critical exploration
and mining activity at a time when the mineral sands market is experiencing
increased demand and consistent growth.

 

"In an improving zircon market, we are forecasting strong production and sales
growth within our operations against a backdrop of improving global demand and
pricing. All these factors give us great confidence for the remainder of the
year ahead.

 

"Once again, I wish to thank our loyal shareholders, trading partners and
hard-working team for maintaining PYX Resources as a world-leading producer of
critical minerals for the world's clean energy future."

Premium Zircon Market

Premium zircon prices are mixed when compared with last year, largely because
of the huge imbalance between supply and demand in 2022 which caused spot
prices into China to drastically increase. Most spot sales are undertaken for
the Chinese market, which slowed down in the second half of 2022 1  (#_ftn1)
and resulted in PYX selling mostly into India, Europe, and the Americas at
international contract prices H2 2022 and Q1 2023.

 

Conversely, international contract prices, set mainly by the major Australian
and South African producers, have increased by 15% year-on-year (1).

 

The Directors see the potential for an increase in premium zircon demand in Q2
2023 and expects a return to stronger sales to China in the second half of
2023, which should help mitigate the risk of Western economies declining.

 

According to Mordor Intelligence, the global zirconium market is anticipated
to register a compound annual growth rate ("CAGR") of 4% between 2023 and
2028, driven by an increase in foundries and refractories, increased nuclear
power plants in the Asia-Pacific region, and the rising demand for surface
coatings. 2  (#_ftn2)

 

Tisma Mineral Sands Project Licence Grant

 

On 23 February 2023, PYX Resources Ltd was pleased to announce it had received
notification that the application by PT. Tisma Global Nusantara's ("PT TGN")
for the renewal of the licence for the Tisma tenement in Indonesia had been
granted for the maximum authorized period of 10 years, after which the licence
can be renewed for additional periods. PYX holds a contractual interest in PT
TGN though an Exclusive Option and Management Agreement.

 

The renewal of the tenement licence allows PT TGN to continue to perform
exploration and mining works in the tenement area.

 

A summary of key provisions of the permit extension include:

•     1.5% Royalty on sales value of exported Zircon;

·    Fixed rent payable to the Government of Indonesia of US$4 per hectare
per annum;

•     Corporate tax of 22% payable to the Government of Indonesia;

·    Land and building taxes of 0.5% of taxable sales value payable to
local government; and

·    Environmental obligations, including reclamation bonding and plans

 

 

PYX Resources also advises that all Performance Rights held by the Chairman
and CEO, Mr Oliver Hasler, have been cancelled in order to reflect a clearer
picture of the financial performance of the Company. A total of 80,000
Performance Rights remain in issue, which are convertible into a maximum of
120,000 shares, subject to the achievement of certain milestones.

 

 

 

*** ENDS ***

 

For more information:

 

 PYX Resources Limited                             T: +61 2 8823 3132

                                                   E: ir@pyxresources.com (mailto:ir@pyxresources.com)
 WH Ireland Limited (Broker)                       T: +44 (0)20 7220 1666

 Harry Ansell / Katy Mitchell / Darshan Patel

 St Brides Partners Ltd (Financial PR)             E: pyx@stbridespartners.co.uk (mailto:pyx@stbridespartners.co.uk)

 Ana Ribeiro / Isabel de Salis / Isabelle Morris

 

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 2nd 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.

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

 

This Announcement contains forward-looking statements and forward-looking
information within the meaning of applicable Australian and UK securities
laws, which are based on expectations, estimates and projections as of the
date of this Announcement.

 

This forward-looking information includes, or may be based upon, without
limitation, estimates, forecasts and statements as to management's
expectations with respect to, among other things, the timing and amount of
funding required to execute the Company's exploration, development and
business plans, capital and exploration expenditures, the effect on the
Company of any changes to existing legislation or policy, government
regulation of mining operations, the length of time required to obtain
permits, certifications and approvals, the success of exploration, development
and mining activities, the geology of the Company's properties, environmental
risks, the availability of labour, the focus of the Company in the future,
demand and market outlook for precious metals and the prices thereof, progress
in development of mineral properties, the Company's ability to raise funding
privately or on a public market in the future, the Company's future growth,
results of operations, performance, and business prospects and opportunities.
Wherever possible, words such as "anticipate", "believe", "expect", "intend",
"may" and similar expressions have been used to identify such forward-looking
information.

 

Forward-looking information is based on the opinions and estimates of
management at the date the information is given, and on information available
to management at such time. Forward looking information involves significant
risks, uncertainties, assumptions, and other factors that could cause actual
results, performance, or achievements to differ materially from the results
discussed or implied in the forward-looking information. These factors,
including, but not limited to, fluctuations in currency markets, fluctuations
in commodity prices, the ability of the Company to access sufficient capital
on favourable terms or at all, changes in national and local government
legislation, taxation, controls, regulations, political or economic
developments in Indonesia and Australia or other countries in which the
Company does business or may carry on business in the future, operational or
technical difficulties in connection with exploration or development
activities, employee relations, the speculative nature of mineral exploration
and development, obtaining necessary licences and permits, diminishing
quantities and grades of mineral reserves, contests over title to properties,
especially title to undeveloped properties, the inherent risks involved in the
exploration and development of mineral properties, the uncertainties involved
in interpreting drill results and other geological data, environmental
hazards, industrial accidents, unusual or unexpected formations, pressures,
cave-ins and flooding, limitations of insurance coverage and the possibility
of project cost overruns or unanticipated costs and expenses, and should be
considered carefully. Many of these uncertainties and contingencies can affect
the Company's actual results and could cause actual results to differ
materially from those expressed or implied in any forward-looking statements
made by, or on behalf of, the Company. Prospective investors should not place
undue reliance on any forward-looking information.

 

Although the forward-looking information contained in this Announcement is
based upon what management believes, or believed at the time, to be reasonable
assumptions, the Company cannot assure prospective purchasers that actual
results will be consistent with such forward-looking information, as there may
be other factors that cause results not to be as anticipated, estimated or
intended, and neither the Company nor any other person assumes responsibility
for the accuracy and completeness of any such forward-looking information. The
Company does not undertake, and assumes no obligation, to update or revise any
such forward-looking statements or forward-looking information contained
herein to reflect new events or circumstances, except as may be required by
law.

 

No stock exchange, regulation services provider, securities commission or
other regulatory authority has approved or disapproved the information
contained in this Announcement.

 

 

 

 1  (#_ftnref1) Asian (https://www.asianmetal.com) Metal
(https://www.asianmetal.com)

 

 2  (#_ftnref2) "Global Zirconium Market - (2023 - 2028)" Mordor Intelligence.

 

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