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Sylvania PlatinumAnnouncement

06/09/2014 20:29

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RNS Number : 1550N
Sylvania Platinum Limited
24 July 2014 
 
Sylvania Platinum Limited 
 
Fourth Quarter Report to 30 June 2014 
 
("Sylvania", "the Company" or "the Group") 
 
AIM (SLP) 
 
24 July 2014 
 
Sylvania Platinum Limited, the low cost Platinum Group Metal ("PGM") processor
and developer, today announces its results for the quarter ended 30 June 2014
("Q4 FY2014" or the "quarter") from its PGM production and development
operations in the Bushveld region of South Africa. 
 
SUMMARY 
 
·      Sylvania Dump Operations ("SDO") PGM ounce production increased 17% to
a record 15,435 ounces (Q3: 13,185 ounces) the fifth consecutive quarter of
continuous growth for the Company's operations 
 
·      Total production for the full year up 22% at a record 53,808 ounces for
the Company (FY2013: 44,095 ounces), modestly exceeding stated production
guidance. 
 
·      Revenue up 16% to $14.2 million (Q3: $12.2 million) 
 
·      EBITDA increased 17% to $4.66 million for the SDO (Q3: $3.98 million) 
 
·      Group cash increased 10% to $5.3 million as at 30 June 2014 (Q3: $4.8
million); this balance after the payment of ZAR20 million (approximately $1.9
million) for the Grasvally prospecting right in the quarter 
 
·      No Lost Time Injuries ("LTI") for the quarter 
 
·      Grasvally Chrome project Section 11 approval received from the
Department of Mineral Resources ("DMR") 
 
SYLVANIA OVERVIEW 
 
The Directors of the Company are proud to announce another record production
quarter with a combined production for all the SDO of 15,435 ounces, a 17%
increase on the previous quarter's 13,185 ounces.  In addition to being the
highest quarterly production to date for Sylvania, this is also the fifth
consecutive quarter of continuous growth for the Group's operations.  The
total annual production for the year ended 30 June 2014 was a record 53,808
ounces, a 22% improvement on the FY2013 production of 44,095 ounces and in
excess of the guidance of 51,000 ounces stated in the Company's Annual Report
for FY2013. The production results can be attributed to increased and more
consistent plant feed tons, improved plant stability, improved plant feed
grades and technical focus on the operations. 
 
Revenue increased 16% in both US Dollar and SA Rand terms during the quarter,
from $12.2 million in the previous quarter to $14.2 million in the current
quarter.  The gross basket price also showed a 4% increase in Q4 FY2014 from
$976/oz to $1,013/oz, which, together with the record production, resulted in
the increased revenue. The cost of production remained largely stable at
R6,674/oz ($634/oz), compared to R6,707/oz ($619/oz) during the previous
quarter, again highlighting the improved plant stability. 
 
The total Group cash balance at 30 June 2014 was $5.3 million.  The Group's
cash balance at the end of the previous quarter was $4.8 million indicating
that the cash balance quarter on quarter has increased by approximately $0.9
million as a result of operating cash inflows of $3.5 million, and outflows
from investment activities of $2.5 million. This includes payments for
exploration assets of $2.3 million which mainly consists of the final payment
of ZAR20 million (approximately $1.9 million) on the registration of the
prospecting right over Grasvally in June 2014.    The weak SA Rand also
impacted the rand denominated cash balances, with $0.4 million loss recorded
for the quarter. 
 
Commenting on the quarterly report Sylvania Platinum CEO Terry McConnachie
praised Jaco Prinsloo and his team for their tremendous efforts in achieving
the production record of 15,435 ounces for the quarter: 
 
"This continuous upward production trend for the last five quarters in a row
is no mean feat when one considers that this record was achieved during a
period of extreme and unprecedented industrial action in the platinum
industry.  The capital expenditure on the SDO has been contained to all-time
lows, and costs, although slightly up, are still amongst the lowest costs per
ounce produced in the industry.  Our stable steady state production, reduced
capital expenditure and controlled costs bode well for the future of the
company." 
 
Summary Sylvania Platinum Performance 
 
 Unaudited - Group  Unit   June 2014Quarter  March 2014Quarter  % Change    
                    
 Financials                                                                 
 Revenue            $'000  14,208            12,201             16%         
 Revenue            R'000  151,706           131,155            16%         
 Ave R/$ rate       R/$    10.68             10.75              -1%         
                                                                            
 Production                                                                 
 Plant Feed Tons    T      318,302           291,999            9%          
 3E and Au          Oz     15,435            13,185             17%         
 
 
A. SYLVANIA DUMP OPERATIONS 
 
Health, safety and environment 
 
There were no Lost Time Injuries ("LTI") or significant health or
environmental incidents at any of the operations during the quarter.  With the
exception of Mooinooi, which had an LTI in the previous quarter, all other
operations have been LTI free for periods ranging from 24 months at
Doornbosch, to over 6 years at Steelpoort.  This is a significant achievement
by industry standards. 
 
The Company remains committed to zero harm and will continue to focus on
health and safety compliance at all operations in order to eliminate safety
deviations and to maintain the high standards of the overall safety, health
and environment culture and physical condition of our operations. 
 
Operational and Financial Summary 
 
 Unaudited - SDO                 Unit   June 2014Quarter  March 2014Quarter  +- %Quarter on Quarter  12 months to June 2014  
 Revenue                                                                                                                     
 Revenue                         R'000  151,706           131,155            16%                     489,840                 
 Revenue                         $'000  14,208            12,201             16%                     46,406                  
 Gross Basket Price              $/oz   1,013             976                4%                      970                     
 Net Basket Price                $/oz   890               887                0%                      868                     
 Gross Cash Margin - SDO         %      31%               33%                -6%                     25%                     
 Capital Expenditure             R'000  2,469             2,375              4%                      13,454                  
 Capital Expenditure             $'000  233               224                4%                      1,272                   
 Ave R/US$ rate from Refineries  R/$    10.68             10.75              -1%                     10.56                   
 EBITDA                          R'000  49,047            42,819             15%                     122,015                 
 EBITDA                          $'000  4,658             3,983              17%                     11,796                  
                                                                                                                             
 
 
 Unaudited - SDO      Unit    June 2014Quarter  March 2014Quarter  +- %Quarter on Quarter  12 months to June 2014  
 SDO Cash Cost                                                                                                     
 Per PGM Feed ton     R/t     324               303                7%                      318                     
 Per PGM Feed ton     US$/t   30                28                 7%                      30                      
 Per 3E & Au oz       R/oz    6,674             6,707              0%                      6,795                   
 Per 3E & Au oz       US$/oz  634               619                2%                      655                     
                                                                                                                   
 Production                                                                                                        
 Plant Feed           T       681,198           619,131            10%                     2,510,029               
 Feed Head Grade      g/t     2.15              2.03               6%                      2.05                    
 PGM Plant Feed Tons  T       318,302           291,999            9%                      1,149,756               
 PGM Plant Grade      g/t     3.86              3.63               6%                      3.65                    
 PGM Plant Recovery   %       39.1%             38.7%              1%                      39.9%                   
 Total 3E and Au      Oz      15,435            13,185             17%                     53,808                  
 
 
  
 
1The functional currency for SDO is SA Rand and the exchange rate shown is the
average over the period indicated. 
 
2Cash 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. 
 
3The net basket price reported is based on the estimated price received from
the smelters.  The actual net basket price is only determined in the invoicing
month which is three months after the delivery month. 
 
Millsell 
 
The Millsell operation produced 2,140 ounces for the quarter, a 21% increase
on the 1,771 ounces in the previous quarter.  The higher production is due to
increased plant throughput tons and improved recovery efficiencies. Millsell
continues to treat current arisings from the host mine's Millsell plant, as
well as the final scrapings from the Waterkloof dump which are expected to be
depleted during the next quarter.  The second pass treatment of the plus one
million ton primary dump will then commence by early 2015. 
 
The cash operating cost of R5,228/oz ($496/oz) is 14% lower in Rand terms (12%
in US Dollar terms) than the R6,086/oz ($561/oz) during the previous quarter,
as a result of  higher PGM ounce production. 
 
Steelpoort 
 
Steelpoort plant produced 2,061 ounces during the current quarter, in line
with the previous quarter's 2,058 ounces.  Steelpoort is processing second
pass treatment material from the old Steelpoort Tailings Dams and the
operation remains stable. 
 
The cash cost per ounce for the quarter was 8% higher in Rand terms (11% in US
Dollar terms) than the previous quarter, totalling R6,033/oz (US$573/oz)
compared to R5,569/oz (US$514/oz) in Q3. 
 
Lannex 
 
The Lannex operation produced 2,171 ounces during the quarter, 15% higher than
the previous quarter's 1,894 ounces.  This is the plant's highest quarterly
production for the year. Increased feed tons, and a significantly improved
recovery efficiency associated with flotation optimisation, contributed
towards the higher ounces.  Lannex is treating a combination of dump material
from the old Lannex Tailings Dam complex and current arisings from the host
mine's Lannex operation. 
 
The cash operating cost for the quarter was R7,356/oz (US$699/oz), 0.2% lower
in Rand and 3% higher in US dollar terms than the previous quarter's R7,374/oz
(US$680/oz).  This is attributable to increased maintenance costs associated
with major mill repairs outweighing the benefit of the higher ounces in terms
of unit cost for the quarter. 
 
Mooinooi Dump Operation 
 
The Mooinooi Dump operation produced 1,932 ounces for the quarter, 7% higher
than the 1,814 ounces of the previous quarter which was primarily due to
increased plant feed tons and plant stability. The Mooinooi Dump plant
continues to treat material from the old Mooinooi dumps and current arisings
from the host mine's Mooinooi plant. 
 
The cash operating cost for the quarter was R8,182/oz (US$777/oz) compared to
R7,726/oz (US$671/oz) in the previous quarter. 
 
Mooinooi ROM Operation 
 
The Mooinooi ROM Plant production of 1,323 ounces in the quarter was a 3%
improvement on the previous quarter's production of 1,286 ounces. Although the
plant feed tons were 12.2% lower than the previous quarter due to significant
downtime associated with repairs and upgrades on the ROM mills, higher
recovery efficiencies assisted to compensate in terms of the ounce
production. 
 
The cash operating cost for the quarter was R13,391/oz (US$1,272/oz), which
was substantially inflated by the abnormal maintenance costs associated with
the repairs and upgrade to the ROM SRR (rubber roller) and Girth Gear Mills
respectively. If the abnormal costs are removed, the normalised cash operating
cost for the quarter would be R9,798/oz (US$931/oz) compared to R8,888/oz
(US$820/oz) for the previous quarter. 
 
Doornbosch 
 
The Doornbosch operation produced 3,390 ounces in the quarter, 53% higher than
the 2,209 ounces produced in the previous quarter.  This is a new quarterly
record for the operation. Significantly improved plant feed tons and higher
plant feed grade contributed towards the higher ounces. The operation is
expected to start treating the lower grade second pass material from the old
Doornbosch Dump during FY2015 as well as current arisings from the host mine's
Doornbosch operation.  The primary metallurgical focus areas remain PGM
concentrate grade and chrome in concentrate in order to reduce smelter
penalties, improving plant recovery efficiency, and to improve plant
throughput rates to optimise flotation capacity. 
 
Total operating cash costs for the quarter was R3,864/oz (US$367/oz), which
was 36% lower in Rand and 34% lower in US Dollar terms than the R6,070/oz
(US$560/oz) for the previous quarter, primarily due to the significant
increase in ounces. 
 
Tweefontein 
 
The Tweefontein operation produced 2,418 ounces in the quarter, which was 12%
higher than the 2,153 ounces in the previous quarter and also a new quarterly
record for this operation. Higher PGM feed tons were the primary contributor
towards the higher ounces. Tweefontein is currently still treating a blend of
MG1-MG4 ROM Fines and tailings material from the host mine's Klarinet Opencast
mine, current arisings from the host mine's Tweefontein operation and old dump
material from the Tweefontein Paddocks. 
 
Total operating cost for the quarter was R6,751/oz (US$641/oz) compared to
R5,921/oz (US$546/oz) in the previous quarter. 
 
B.     EXPLORATION AND OPENCAST MINING PROJECTS 
 
Volspruit Platinum Exploration 
 
The Company still awaits the outcome of the Mining Right Application for the
Volspruit project and, further to communication received from the DMR, the
Company expects this decision to occur in Q1 FY2015. 
 
Grasvally Chrome Exploration 
 
The Company is pleased to announce that registration of the Section 11 Consent
to transfer the Prospecting Right to its subsidiary in accordance with the
Mineral and Petroleum Resources Development Act ("MPRDA") was registered at
the Mining Titles Office on 3 June 2014.   The balance of the purchase price
in the amount of ZAR20 million (approximately $1.9 million) has therefore been
paid in accordance with the terms of the acquisition of the rights, and the
Company has begun with enquiries towards the eventual application for a Mining
Right on the property. 
 
Trenching continued at the Grasvally chromitite project during the quarter and
is nearing completion over the upper chromitite layer in the area south-west
of the main inclined shaft. This layer has now been exposed over some 1,390m
of strike. Additional trenching over 220m is currently being geologically
mapped and many old winzes and ventilation holing's have been exposed.  This,
combined with the results of some 28 vertically inclined percussion holes for
484m, has indicated that the crown pillar in some of the previously mined
areas varies from 6m to 10m in extent, slightly shallower than expected,
however with the high chrome grades and chrome to iron ratios, the results to
date motivates the continuation of exploring this exceptional chrome and
platinum potential on the Grassvally and Zoetveld farms. 
 
C.  CORPORATE ACTIVITIES 
 
Appointment of Jaco Prinsloo to Managing Director Sylvania Metals (Pty)
Limited 
 
Effective 1 April 2014, Jaco Prinsloo, previously Executive Officer
Operations, was appointed as MD of Sylvania Metals (Pty) Ltd.  Having joined
the Company in January 2012, he has shown exceptional leadership skills, which
is evident in the Company's continued improvement in operations.  The Board
believes that Jaco will lead the SDO team in further sustainable growth and
wish him the best of luck in his new role. 
 
Withdrawal of Platmin Matter 
 
The Company, through its legal representatives, received notification on 11
July 2014 that Platmin South Africa (Pty) Ltd ("Platmin"), previously Boynton
Investments (Pty) Ltd, had removed the matter for hearing on 1 August 2014. 
In this matter, Platmin claims co-ownership of the tailings, alternatively of
the PGMs contained in the Lannex Tailings Dam.  This is a similar claim to
that which Platmin has previously brought, with such previous claim being
later withdrawn in its entirety and with Platmin required to pay all costs. 
In that the withdrawal in this instance merely relates to the date the matter
was set to proceed to trial, it appears that Platmin still intends to proceed
at a later date. The Company, having consulted its legal advisers, accordingly
continues to refute these claims and will keep shareholders apprised of any
developments as they arise. 
 
Change of Reporting Format 
 
As of Q1 FY2015 the Company will move away from the current reporting format
per plant towards a combined SDO reporting procedure.  The Company strongly
believes that this will streamline current reporting measures, as well as
formalise focus on driving sustainable growth as a single entity. 
 
CORPORATE INFORMATION 
 
Registered office:        Sylvania Platinum Limited 
 
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 
 
Richard Crawley/Tom Fyson 
 
+44 (0) 20 3100 2000 
 
Communications 
 
Newgate Threadneedle 
 
Graham Herring/Adam Lloyd 
 
+44 (0) 20 7653 9850 
 
This information is provided by RNS
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