Picture of Sylvania Platinum logo

SLP — Sylvania Platinum News Story

0.000.00%
gb flag iconLast trade - 00:00
Basic MaterialsSpeculativeSmall CapContrarian

REG - Sylvania Platinum - Half-Year Report Announcement





 




RNS Number : 1798D
Sylvania Platinum Limited
17 February 2020
 

 

 

 

 

 

 

                             _____________________________________________________________________________________________________________________________

 

17 February 2020

 

Sylvania Platinum Limited

 ("Sylvania", "the Company" or "the Group")

 AIM (SLP)

 

Interim financial results for the six months ended 31 December 2019

 

The Directors are pleased to present the interim financial results for the six months ended 31 December 2019.  Unless otherwise stated, the consolidated financial information contained in this report is presented in USD.

 

 

Highlights

·     SDO delivered 40,003 4E PGM ounces (HY1 FY2019: 34,045 4E PGM ounces);

·     Revenue generated for the period was $59.0 million, net of pipeline sales adjustments, an 84% improvement on HY1 FY2019 ($32.1 million);

·     Group EBITDA rose 197% to $36.7 million (HY1 FY2019: $12.3 million);

·     Net profit up 244% to $23.9 million (HY1 FY2019: $7.0 million);

·     Cash balance of $33.8 million (HY1 FY2019: $20.2 million);

·     Dividend paid of $0.01 (0.78 pence) per share;

·   Bought back 3,000,000 shares from the market, as well as 1,175,848 shares from employees under the Share Buyback Programme, to be held in Treasury;

·     Retirement of Terry McConnachie effective from 29 February 2020;

·     Appointment of Jaco Prinsloo as MD and CEO effective from 1 March 2020; and

·     Appointment of Lewanne Carminati as FD and CFO effective from 1 March 2020.

 

Challenges

·      Power utility infrastructure and supply issues resulting in distribution interruptions and instability continue to present challenges to existing operations and the execution of our expansion processes;

·     Intermittent rainfall and water shortages remain a key focus of the Group with mitigatory measures continuing to be explored to assist in the reduction of overall water losses in tailings; and

·     Potential retrenchments at some of the host mines due to the depressed chrome market, has necessitated the review of the Group's plant feed strategy.

 

Opportunities

·     Current PGM basket price is contributing to higher than planned profits and cash balance;

·  Post-commissioning evaluation of PGM grade and recovery optimisation projects, incorporating proprietary modifications at Millsell, Doornbosch and Tweefontein, identified an opportunity to roll this circuit modification out to the Mooinooi and Lannex plants in order to improve the upgrading and recovery of PGMs;

·     The Group remains debt free and continues to generate sufficient cash reserves to fund capital expansion projects;

·      Progressive research and development of the new chrome/coal pelletising joint operation project; and

·     Proposed share buyback of up to 12 million shares including the relaunch of the certificated non-UK Shareholders buyback programme.

 

 

Commenting on the period, Sylvania's CEO Terry McConnachie said:

 

"I am pleased to present the half-year results to our shareholders and commend our management and operations teams for the record HY1 performance they have achieved, despite the period being known for its challenges experienced due to disruptions relating to the holiday period shut down as well as the additional issues relating to power and water supply constraints. It is evident that the corrective action and implementation of various improvement measures to address challenges experienced during the previous financial year are now showing results and management and the Board remain confident that the operations should achieve the previously announced guidance for production of 74,000 to 76,000 4E PGM ounces.  Whilst the results for HY1 are excellent, the Board is mindful of the potential challenges ahead and have therefore decided not to increase guidance until further clarity is obtained. 

 

After more than 46 years of working in the mining and beneficiation of minerals industry, and 14 years with Sylvania, I have decided to step down from the Board and as Chief Executive effective 29 February 2020. I am pleased to announce that Jaco Prinsloo will take on the role of MD and CEO, while Lewanne Carminati will be appointed as FD and CFO.

 

It has been my intention to retire for some time and with Sylvania performing at an all-time high, I feel it is an opportune time to hand over the reins of a group that is in a sound shape, strategically, financially and operationally."

 

Commenting on Terry McConnachie's retirement, Chairman, Stuart Murray, said:

 

"Terry's contribution to Sylvania over the years has been immense, whilst riding out one of the longest and most difficult downturns in the PGM industry. With his hands-on and entrepreneurial leadership style, Sylvania has grown into one of the world's lowest-cost platinum group metal producers.  On behalf of the Board, I wish to thank Terry for this legacy. 

 

Although Terry leaves the company in excellent shape and in good hands, I am nevertheless pleased to advise that Sylvania will continue to have access to Terry's counsel and expertise, as he will assist in an advisory capacity for a minimum 12-month period. This will provide continuity for Sylvania and contribute to the further development of the new chrome/coal pelletising joint operation project that was highlighted in my Chairman's letter in the annual report for FY2019."

 

 

USD

Unit

Unaudited

Unit

 ZAR

HY1 2019

HY1 2020

% Change

% Change

HY1 2020

 HY1 2019

 

 

 

 

Production

 

 

 

 

1,195,906

1,348,769

13%

T

Plant Feed

T

13%

1,348,769

1,195,906

2.36

         2.28

-3%

g/t

Feed Head Grade

g/t

-3%

         2.28

2.36

607,018

   615,980

1%

T

PGM Plant Feed Tons

T

1%

615,980

607,018

3.66

        3.54

-3%

g/t

PGM Plant Feed Grade

g/t

-3%

         3.54

3.66

47.65%

57.14%

20%

%

PGM Plant Recovery

%

20%

   57.14%

47.65%

34,045

    40,003

18%

Oz

Total 4E PGMs

Oz

18%

     40,003

34,045

45,727

    53,062

16%

Oz

Total 6E PGMs

Oz

16%

   53,062

45,727

 

 

 

 

 

 

 

 

 

1,201

      1,830

52%

$/oz

Average gross basket price

R/oz

54%

    26,336

17,134

 

 

 

 

 

 

 

 

 

 

 

 

 

Financials

 

 

 

 

26,516

    50,960

92%

$'000

Revenue (4E)

R'000

99%

   748,964

376,149

3,020

       3,376

12%

$'000

Revenue (by products)

R'000

16%

     49,618

42,843

2,557

      4,697

84%

$'000

Sales adjustments

R'000

90%

     69,027

36,266

32,092

     59,032

84%

$'000

Revenue

R'000

91%

 867,609

455,258

 

 

 

 

 

 

 

 

 

18,738

    21,340

14%

$'000

Operating costs

R'000

18%

   313,639

265,891

1,054

      1,155

10%

$'000

General and administrative costs

R'000

13%

    16,976

14,957

12,323

    36,650

197%

$'000

Group EBITDA

R'000

208%

   538,656

174,859

240

          444

85%

$'000

Net Interest

R'000

92%

      6,530

3,403

2,367

      9,752

312%

$'000

Taxation

R'000

327%

  143,322

33,594

3,241

     3,434

6%

$'000

Depreciation and amortisation

R'000

10%

    50,475

45,988

6,954

     23,909

244%

$'000

Net profit

R'000

256%

   351,388

98,679

 

 

 

 

 

 

 

 

 

3,855

     3,110

-19%

$'000

Capital Expenditure

R'000

-16%

     45,710

54,696

-

-

-

R/$

Ave R/$ rate

R/$

4%

      14.70

14.19

-

-

-

R/$

Spot R/$ rate

R/$

-3%

14.04

14.40

 

 

 

 

 

 

 

 

 

20,220

     33,817

67%

$'000

Cash Balance

R'000

73%

   497,018

286,928

 

 

 

 

 

 

 

 

 

 

 

 

 

Unit Cost/Efficiencies

 

 

 

 

550

         530

-4%

$/oz

SDO Cash Cost Per 4E PGM oz

R/oz

0%

       7,795

         7,805

410

         400

-2%

$/oz

SDO Cash Cost Per 6E PGM oz

R/oz

1%

       5,876

         5,814

577

         554

-4%

$/oz

Group Cash Cost Per 4E PGM oz

R/oz

-1%

       8,140

         8,194

430

        418

-3%

$/oz

Group Cash Cost Per 6E PGM oz

R/oz

1%

       6,137

         6,100

590

         569

-4%

$/oz

All-in sustaining cost (4E)

R/oz

0%

      8,356

         8,369

692

         629

-9%

$/oz

All-in cost (4E)

R/oz

-6%

      9,242

        9,819

 

 

 

 

 

 

 

 

 

 

The Sylvania cash generating subsidiaries are incorporated in South Africa with the functional currency of these operations being South African Rand ("ZAR"). Revenues from the sale of PGMs are incurred in United States Dollars ("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, Great British Pounds ("GBP") and ZAR. 

 

For the six months under review, the average ZAR:USD exchange rate was ZAR14.70:$1 and the closing exchange rate was ZAR14.04:$1.

 

A. OPERATIONAL OVERVIEW

 

Health, safety and environment

There were no significant occupational health or environmental incidents during the period, but in terms of safety, the Sylvania Dump Operations ("SDO") experienced one lost-time injury ("LTI") where an operator suffered a leg injury at Lesedi, resulting in the operation losing its record of being LTI-free for more than eight years. 

 

Safety records at most other operations remain solid.  Tweefontein and Doornbosch both remain LTI-free for more than seven years, while Millsell and Lannex are LTI-free for five years.

 

The Group continues to focus on health, safety and environmental compliance, and through the collaborative efforts of management and all employees across the operations, we strive to maintain high safety standards and plant conditions.  A new safety campaign launched in December 2019 at both the Eastern and Western operations has further assisted in enhancing the culture of a safe working environment and will continue to do so in the future.

 

Operational performance

The SDO delivered 40,003 ounces for the period, a new half-year record production for the Company and an 18% increase on the 34,045 ounces for the comparative period in the prior year. 

 

PGM plant feed tons remained stable in comparison to HY1 FY2019 however PGM plant feed grade decreased 3%.  Fortunately, PGM plant recovery increased 20%, resulting in the higher ounce production. 

 

The significant improvement in the PGM recovery efficiency can be attributed to a combination of process improvements that included the optimisation of the Project Echo MF2 modules commissioned to date, especially the Mooinooi MF2 circuit that was commissioned during Q4 FY2019.  Improved process efficiencies following the commissioning of the new milling and chrome beneficiation circuit, and higher flotation mass pull philosophy at some of the operations also improved recoveries.  Steady-state PGM recovery efficiency is planned at approximately 52% to 53% 4E going forward based on current circuit configurations, ore feed blend, and current mass pull philosophy to optimise concentrate quality and payability.

 

Cash costs per ounce for the SDO decreased marginally in ZAR terms and 4% in USD terms, which is attributable to higher PGM ounce production and maintaining tight costs controls and planning at the operations. 

 

Operational focus areas

Although the half-year on half-year PGM production improved 18%, the production was not without its challenges particularly relating to water constraints and power supply challenges in South Africa. 

 

Water supply constraints to operations has become an increased focus for the Company despite some reprieve experienced during December 2019 with intermittent rainfall.  Tweefontein and Lesedi operations are most affected.  Additional trial boreholes were drilled at Lesedi during the first quarter, in consultation with water and environmental experts, which proved a successful intervention to assist the reduction of overall water losses in tailings.  Management has therefore taken the decision to implement similar measures at Tweefontein during the next period to assist in alleviating production measures associated with any shortage of water in the future. 

 

A further area of focus for the Group is the impact of load-shedding.  Power cuts due to maintenance and power interruptions associated with frequent trips from the national power utility provider have led to downtime at the operations and consequential chokes in the processing plants.  The Group continues to investigate and evaluate alternative long-term solutions to help mitigate this impact.

 

Recent communication of potential retrenchments at some of our host mines due to the depressed chrome market has necessitated the review of the Group's feed strategy in terms of alternative feed sources to compensate for the potential loss of any current arisings or Run of Mine ("RoM") material to plants.  The host mine is still in the 90-day consultation period with their unions and therefore the exact impact on host mines will only be confirmed in due course.  The flexibility between current arisings and dump material on operations will enable effective management of the potential change in ratio of feed sources to minimise or prevent the potential impact of the host mines downsizing.

 

Management continues to focus on improving communication and to engage with mandated and recognised forums from neighbouring communities in order to identify potential commercial opportunities and to manage expectations regarding employment and procurement spend.  The relationship with these forums is critical, especially when assistance is needed to manage community members that threaten to interrupt operations, as various neighbouring mines have experienced. 

 

Capital Projects 

Management and operations teams undertook post-commissioning evaluation of PGM grade and recovery optimisation projects, incorporating proprietary modifications at Millsell, Doornbosch and Tweefontein, and identified an opportunity to roll this circuit modification out to the Mooinooi and Lannex plants in order to improve the upgrading and recovery of PGMs.

 

The Project Echo MF2 module at Tweefontein is still delayed due to power constraints on the national power utility's electricity supply infrastructure to the Tweefontein mining complex.  An infrastructure upgrade by the national power utility to ensure stable and reliable supply to both the host mine and Sylvania's operation has commenced and is currently in progress however, based on the latest update from the utility in terms of their scheduled completion, it is now envisaged that Tweefontein's MF2 module will only be commissioned towards the end of 2021.

 

In order to mitigate the further delay at Tweefontein and based on resources and potential at Lesedi, investigations are currently in progress to evaluate the potential of a new MF2 circuit at Lesedi that could be executed before Tweefontein's power upgrade has been addressed.

 

Commissioning of the new Lannex mill, as part of the Lannex plant life-extension project, initiated in 2019, is scheduled for HY2 FY2020.  This will enable the plant to improve processing efficiencies and profitability based on the current feed sources and further enable the plant to accommodate alternative coarser feed sources, such as RoM fines from underground or open cast operations, which will contribute to the extension of the life of this operation.

 

The progressive research and development of the new chrome/coal pelletising joint operation project is advancing with the view to adding value to beneficiated chrome fines fed to smelters. The upside for both Sylvania and the host mines are not yet fully quantified but could be substantial.

 

Outlook

The corrective action and implementation of various improvement measures to address challenges experienced during the previous financial year are now showing results.  Management and the Board remain confident that the operations should achieve the previously announced guidance for production of 74,000 to 76,000 ounces.  Whilst the results for HY1 are excellent, the Board is mindful of the potential challenges ahead and have therefore decided not to increase guidance until further clarity is obtained. 

 

 

B. FINANCIAL OVERVIEW

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the half year ended 31 December 2019

 

31 December 2019

31 December 2018

 

Note

$

$

 

 

 

 

Revenue

1

59,032,353

32,092,210

Cost of sales

 

(24,702,004)

(21,958,523)

Gross profit

 

34,330,349

10,133,687

 

 

 

 

Other income

 

34,916

34,256

Other expenses

2

(1,149,341)

(1,086,204)*

Operating profit before net finance income and income tax expense

 

33,215,924

9,081,739

 

 

 

 

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the half year ended 31 December 2019

 

31 December 2019

31 December 2018

 

Note

$

$

 

 

 

 

Finance income

 

697,509

423,423

Finance costs

 

(253,239)

(191,337)*

Profit before income tax expense

 

33,660,194

9,313,825

 

 

 

 

Income tax expense

 

(9,751,668)

(2,367,469)

Net profit for the period

 

23,908,526

6,946,356

 

 

 

 

 

 

Cents

Cents

Profit per share for profit attributable to the ordinary equity holders of the Company:

 

 

 

Basic earnings per share

 

8.42

2.43

Diluted earnings per share

 

8.22

2.41

 

1.                     Revenue is generated from the sale of PGM 6E ounces produced at the six retreatment plants, net of pipeline sales adjustments. 

2.                     Other expenses relate to corporate activities and include consulting fees, audit fees, travel, advisor and PR costs, share registry costs, Directors' fees, share based payments and other smaller administrative costs. 

* Re-classification of joint operation.

 

The Gross basket price for PGMs for the six months to 31 December 2019 increased 52% to $1,830/ounce compared to $1,201/ounce for the period ended 31 December 2018 attributable to the steady increase in both Palladium and Rhodium prices over the reporting period.

 

The Group recorded revenue of $59.0 million for the six months to 31 December 2019, as a result of the higher basket price and higher ounce production.  Revenue from by-products increased by 12% compared to the comparative period in the prior year.

 

The cost of sales is the direct and indirect costs of producing the PGM concentrate and amounted to ZAR313.6 million for the reporting period compared to ZAR265.9 million in the six months to 31 December 2018.  The cost of sales includes ZAR49.4 million depreciation charge on plant and equipment (HY1 FY2019: ZAR46.0 million) with the other main cost contributors being salaries and wages of ZAR118.0 million (HY1 FY2019: ZAR98.1 million), mining costs of ZAR35.6 million (HY1 FY 2019: ZAR27.5 million), reagents and milling costs of ZAR24.6 million (HY1 FY2019: ZAR23.9 million), equipment hire of ZAR10.7 million (HY1 FY2019: ZAR5.1 million), concentrate transport of ZAR11.2 million (HY1 FY2019: ZAR8.3 million) and electricity of ZAR43.2 million (HY1 FY2019: ZAR35.5 million). 

 

Group cash costs decreased marginally in ZAR terms to ZAR8,140/ounce compared to ZAR8,194/ounce in the corresponding period in the prior year, mainly due to the cost per ounce reducing as Project Echo and optimisation project ounces came on stream.  The all-in sustaining cost ("AISC") for the Group was ZAR8,356/ounce and an all-in cost ("AIC") of ZAR9,242/ounce for the period to 31 December 2019.  This compares to the AISC and AIC for 31 December 2018 of ZAR8,369/ounce and ZAR9,819/ounce respectively.

 

General and administrative costs were $1.2 million for the six months to 31 December 2019 compared to $1.1 million for the corresponding period in the prior year.  These costs are incurred in USD, GBP and ZAR and relate mainly to share registry costs, advisory and public relations costs, consulting and legal fees and stock exchange costs. 

 

Interest is earned on surplus cash invested in South Africa at an average interest rate of 7% per annum and interest is paid on instalment sale agreements for the purchase of moveable plant and vehicles.

 

Income tax is paid in ZAR on taxable profits generated at the South African operations at the corporate income tax rate of 28%.  Income tax for the six months to 31 December 2019 was ZAR146.2 million compared to ZAR36.0 million for 31 December 2018.  Deferred tax movements for the Group relate mainly to unredeemed capital expenditure and provisions.

 

  

CONSOLIDATED STATEMENT OF CASH FLOWS

For the half year ended 31 December 2019

 

Note

31 December 2019

31 December 2018

 

 

 $

 $

Net cash inflow from operating activities

3

19,774,892

11,925,688

 

 

 

 

Net cash outflow from investing activities

4

(3,217,914)

(3,439,432)

 

 

 

 

Net cash outflow from financing activities

5

(5,133,572)

(1,476,214)

 

 

 

Net increase in cash and cash equivalents

 

11,423,406

7,010,042

 

 

 

 

Effect of exchange fluctuations on cash held

 

596,652

(806,024)

 

 

 

 

Cash and cash equivalents beginning of reporting period

 

21,797,141

14,016,407

 

 

 

 

Cash and cash equivalents, end of reporting period

    

33,817,199

20,220,425

 

3.                     Net cash inflow from operating activities includes a net operating cash inflow of $25,980,789, net finance income of $634,258 and taxation paid of $6,840,155.

4.                     Net cash outflow from investing activities includes payments for property, plant and equipment of $2,993,020, exploration and evaluation assets of $117,119, loan to joint operation $107,843 and cash inflow of $68 from proceeds on disposal of property, plant and equipment.

5.                     The net cash outflow from financing activities consists of the repayment of borrowings of $114,439, payments for share transactions of $2,165,492 and dividends declared and paid of $2,853,641.

 

Cash is held in USD and ZAR.  As at 31 December 2019, the Company's cash and cash equivalents balance was $33.8 million.  Cash generated from operations was $19.8 million for the reporting period, which includes an outflow of $10.9 million for working capital changes due to an increase in debtors, resulting from the timing between ounce delivery and invoicing of four months, and $6.8 million paid in provisional income tax.  The Company spent $3.0 million on capital expenditure comprising of $1.7 million on specific optimisation projects and $1.3 million on stay in business capital. In November 2019, $2.9 million was paid to shareholders as a dividend and $2.2 million was spent on share buybacks.  With the strengthening of the ZAR against the USD the reported cash balance increased from the last reporting date of 30 June 2019 by $0.6 million due to exchange rate fluctuations. It should be noted that the Group holds a large portion of cash in ZAR and a strengthening ZAR:USD exchange rate will have a favourable impact on the Group cash balance, but a weakening of the ZAR against the USD will have the opposite impact.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

31 December 2019

30 June 2019

 

Note

$

$

Assets

 

 

 

Non-current assets

 

 

 

 

 

 

 

Other financial assets

6

634,713

556,895

Exploration and evaluation assets

 

53,502,709

53,405,798

Property, plant and equipment

 

37,849,839

37,676,939

Deferred tax asset

 

1,734,022

1,813,237

Total non-current assets

 

93,721,283

93,452,869

 

 

 

 

 

 

 

 

Current assets

 

 

 

Cash and cash equivalents

7

33,817,199

21,797,141

Trade and other receivables

8

13,827,764

7,799,312

Contract assets

9

28,419,656

23,275,665

Inventories

10

2,928,274

1,827,399

Current tax asset

 

3,753

279,620

Assets held for sale

 

4,247,981

4,163,292

Total current assets

 

83,244,627

59,142,429

Total assets

 

176,965,910

152,595,298

 

 

 

 

 

Equity and liabilities

 

 

 

Shareholders' equity

 

 

 

Issued capital

11

2,897,248

2,897,248

Reserves

12

66,253,293

66,718,821

Retained earnings

 

78,997,050

57,946,509

Total equity

 

148,147,591

127,562,578

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

31 December 2019

30 June 2019

 

Note

$

$

Non-current liabilities

 

 

 

Borrowings

13

437,492

184,390

Provisions

14

3,399,772

3,481,232

Deferred tax liability

 

14,216,353

14,461,024

Total non-current liabilities

 

18,053,617

18,126,646

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

 

7,605,435

6,715,787

Interest-bearing loans and borrowings

13

178,587

187,980

Current tax liability

 

2,978,949

980

Liabilities directly associated with assets held for sale

 

1,731

1,327

Total current liabilities

 

10,764,702

6,906,074

Total liabilities

 

28,818,319

25,032,720

Total liabilities and shareholders' equity

 

176,965,910

152,595,298

         

 

6.                     Other financial assets mainly consist of the loan receivable granted to TS Consortium from Sylvania South Africa (Pty) Ltd, a South African subsidiary of the Group. TS Consortium is a joint operation research and development project.  Sylvania South Africa (Pty) Ltd has a 50% interest in the joint operation.

7.                     The majority of the cash and cash equivalents are held ZAR and USD.  ZAR denominated balances make up $24,317,039 (ZAR 341,373,232) of the total cash and cash equivalents balance.

8.                     Trade and other receivables consist mainly of amounts invoiced for the sale of PGMs.  Refer to note 9.

9.                     As per IFRS 15 contract assets are separated from trade receivables.

10.                   Inventory held is spares and consumables for the SDO and PGM's produced but not yet delivered.

11.                   The total number of issued ordinary shares at 31 December 2019 is 289,724,772 Ordinary Shares of US$0.01 each (including 7,110,483 shares held in treasury), 4,175,848 shares were bought back and 1,275,000 shares were issued.

12.                   Reserves include the share premium, foreign currency translation reserve, which is used to record exchange differences arising from the translation of financial statements of foreign controlled entities, share-based payments reserve, treasury share reserve, the non-controlling interests reserve and the equity reserve.

13.                   Interest bearing loans and borrowings are secured instalment sale agreements over various motor vehicles and plant and equipment as well as the right-of-use lease liability as per the adoption of IFRS 16 on 1 July 2019.

14.                   Provision is made for the present value of closure, restoration and environmental rehabilitation costs in the financial period when the related environmental disturbance occurs.

 

C. Mineral Asset Development and opencast mining projects

 

The Group assesses the value of its mineral asset development projects on a regular and consistent basis, but at this stage there is no scope for immediate and significant further capital investment into these projects. The Group continues to evaluate and update the models on the projects and once consensus is reached that the PGM price windfall is here to stay; Sylvania will reassess the viability of implementing and developing the projects in accordance with the Group's investment criteria for risk and opportunity. All of these mineral asset development projects are currently still considered to be viable and could also help to diversify the Group's business activities in the near to medium term.

 

Grasvally Chrome Project

Currently, there is very little additional information  to report on the conditional cash sale of Grasvally Chrome Mine (Pty) Ltd ("Grasvally") to Forward Africa Mining (Pty) Ltd ("FAM") - the parties are still within the eight-month period from the date of acceptance of the offer to fulfill the standard conditions precedent. The Company will continue to keep shareholders updated on developments.

 

 

D. CORPORATE ACTIVITIES

 

Dividend Approval and Payment

The Board declared a final dividend $0.01 (0.78 pence) per ordinary share on 2 September 2019 with a record date of 18 October 2019.  Dividends were converted to GBP at the exchange rate on 18 October 2019 and were paid on 29 November 2019.  The dividend policy can be found on the Company website.

 

Share Buybacks and Cancellation of Shares

During the period, the Company bought back 3,000,000 shares from the market as well as 1,175,848 shares from employees under the Share Buyback Programme, all to be held in Treasury.

 

275,000 shares were issued to the directors of the Company and 1,000,000 shares were issued to a former director following the exercise of share options under the Company's Share Option Plan ("the Plan").  The Plan was cancelled in December 2017 and there are no further options outstanding under the Plan. 

 

Accordingly, at the end of the period, the Company's issued share capital is 289,724,772 Ordinary Shares, of which a total of 7,110,483 are held in Treasury.  The total number of Ordinary Shares with voting rights is 282,614,289.

 

Proposed Share Buy Back

The Company announces that it intends to acquire up to 12 million Ordinary Shares under the terms and authority of the Company's Bye Laws.

 

Terry McConnachie has granted the Company a right of first refusal to acquire up to 5,215,000 of the ordinary shares in the Company he currently holds at the 30-Day value weighted average price ("VWAP") as at the close of day on 30 March 2020. 

 

Further to the right of first refusal over Terry's shares the Company has instructed Liberum Capital Limited to acquire up to 4,785,000 Ordinary Shares in the market.

 

Given the limited liquidity in the ordinary shares, the Company may not be able to benefit from the exemption laid down in Article 5(1) of Regulation (EU) No 596/2014, whereby the Company would not purchase shares at a price higher than the higher of the price of the last independent trade and the highest current independent purchase bid on the trading venue where the purchase is carried out. Furthermore, a buyback of ordinary shares on any trading day is likely to represent a significant proportion, or possibly all, of the daily trading volume in the ordinary shares on the London Stock Exchange (and is likely to exceed the 25% limit of the average daily trading volume as laid down in Article 5(1) of Regulation (EU) No 596/2014).

 

There is no guarantee that the share buyback will be implemented in full or that any repurchases will be made.

 

Both share buybacks will be effective from the date of this announcement and will expire on 31 March 2020. 

 

The Board also intends to relaunch the share buyback programme for all certificated non-UK shareholders who hold 175,000 shares or less in the Company. 

 

The maximum number of shares that may be purchased pursuant to these programmes is 12 million shares, which represents approximately 4.1% of the Company's issued share capital. The share buyback will be funded from the Company's current cash balances. It is intended that approximately 7 million of the Ordinary Shares acquired under the Share Buyback Programmes will be allocated to a new Group employee share trust for South African operational and support employees and the balance will be cancelled.

 

Directorship Change

The Sylvania Board are pleased to advise of the appointment of Jaco Prinsloo as Managing Director ("MD") and Chief Executive Officer ("CEO") of the Company with effect from 1 March 2020 and Lewanne Carminati as the Finance Director ("FD") and Chief Finance Officer ("CFO"). 

 

Jaco Prinsloo's appointment follows the retirement of Terry McConnachie, effective 29 February 2020.  Terry was appointed as MD and CEO in 2006, and is credited with Sylvania's development and growth. 

 

Jaco Prinsloo (B.Eng Metallurgy; PDBA; MBA) has served in senior positions at Sylvania since 2012, and, most recently, as MD of the South African operations, reporting to the CEO, Terry.  Jaco has been exposed to various operational and technical aspects of the mining sector in South Africa, and has experience in both the precious and base metals sectors.  Prior to joining Sylvania, Jaco was principal metallurgist at Anglo American for Anglo Operations Limited, having served at Anglo American Platinum Limited between 2002 and 2010 in various senior metallurgical positions across the group.

 

Lewanne Carminati (B.Com Hons; CA (SA); Certificate in Mining Tax) joined Sylvania in 2009 and in 2011 was appointed as Executive Officer: Finance for the South African operations.  Lewanne has gained substantial and diverse experience in the various aspects of financial management at a senior level, with a particular focus on compliance, governance and financial reporting, including investor relations whilst also taking a leadership role in corporate finance transactions.

 

CORPORATE INFORMATION

 

Registered and postal address:

Sylvania Platinum Limited

 

Clarendon House

 

2 Church Street

 

Hamilton HM 11

 

Bermuda

 

 

SA Operations 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 / Ed Phillips

 

 

 

Communications

 

Alma PR Limited

+44 (0) 20 3405 0208

Josh Royston / Helena Bogle

 

 

This announcement is released by Sylvania Platinum Limited and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

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 Terence McConnachie.

 

 

ANNEXURE

 

GLOSSARY OF TERMS FY2020

The following definitions apply throughout the period:

4E PGMs

4E PGM ounces include the precious metal elements Platinum, Palladium, Rhodium and Gold

 

6E PGMs

6E ounces include the 4E elements plus additional Iridium and Ruthenium

 

AGM

Annual General Meeting

 

AIM

Alternative Investment Market of the London Stock Exchange

 

All-in sustaining cost

Production costs plus all costs relating to sustaining current production and sustaining capital expenditure.

 

All-in cost

All-in sustaining cost plus non-sustaining and expansion capital expenditure

 

AMCU

Association of Mineworkers and Construction Union

 

ASX

Australian Securities Exchange

 

Bonus Shares

Sylvania Platinum Limited Bonus Share Award Plan

 

CEO

Chief Executive Officer

 

CFO

Chief Financial Officer

 

CGU

Cash generating unit

 

Current risings

Fresh chrome tails from current operating host mines processing operations

 

DMR

Department of Mineral Resources and Energy

 

EBITDA

Earnings before interest, tax, depreciation and amortisation

 

EA

Environmental Authorisation

 

EIA

Environmental Impact Assessment

 

EIR

Effective interest rate

 

EMPR

Environmental Management Programme Report

 

FAM

Forward Africa Mining (Pty) Ltd

 

FD

Financial Director

 

GBP

Great British Pound

 

IASB

International Accounting Standards Board

 

IFRIC

International Financial Reporting Interpretation Committee

 

IFRS

International Financial Reporting Standards

 

I&APs

Interested and Affected Parties

 

Ironveld

Ironveld Plc

 

IRR

Internal Rate of Return

 

JV

Joint venture

 

LEDET

Limpopo Department of Economic Development, Environment and Tourism

 

Lesedi

Phoenix Platinum Mining Proprietary Limited, renamed Sylvania Lesedi

 

LSE

London Stock Exchange

 

LTI

Lost time injury

 

MAR

Market Abuse Regulations (EU) 596/2014

 

MD

Managing Director

 

MF2

Milling and flotation technology

 

MPRDA

Mineral and Petroleum Resources Development Act

 

MRA

Mining Right Application

 

MTO

Mining Titles Office

 

NOMR

New Order Mining Right

 

NWA

National Water Act 36 of 1998

 

Option Plan

Sylvania Platinum Limited Share Option Plan

 

PGM

Platinum group metals comprising mainly platinum, palladium, rhodium and gold

 

PAR

Pan African Resources Plc

 

Phoenix

Phoenix Platinum Mining Proprietary Limited, renamed Sylvania Lesedi

 

Pipeline ounces

6E ounces delivered but not invoiced

 

Pipeline revenue

Revenue recognised for ounces delivered, but not yet invoiced based on contractual timelines

 

Pipeline sales adjustment

Adjustments to pipeline revenues based on the basket price for the period between delivery and invoicing

 

Programme

Sylvania Platinum Share Buyback Programme

 

Project Echo

Secondary PGM Milling and Flotation (MF2) program announced in FY2017 to design and install additional new additional fine grinding mills and flotation circuits at Millsell, Doornbosch, Tweefontein and Mooinooi.

 

Revenue (by products)

Revenue earned on Ruthenium, Iridium, Nickel and Copper

 

RoM

Run of mine

 

Samancor

Samancor Chrome Limited

 

SDO

Sylvania dump operations

 

Shares

Common shares

 

Sylvania

Sylvania Platinum Limited, a company incorporated in Bermuda

 

USD

United States Dollar

 

WULA

Water Use Licence Application

 

UK

United Kingdom of Great Britain and Northern Ireland

 

ZAR

South African Rand

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR KZGMZVNZGGZG

Recent news on Sylvania Platinum

See all news