TIDMSLP
RNS Number : 3642X
Sylvania Platinum Limited
29 April 2019
_____________________________________________________________________________________________________________________________
29 April 2019
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
Third Quarter Report to 31 March 2019
The Directors are pleased to present the results for the quarter
ended 31 March 2019 ("Q3" or the "quarter"). Unless otherwise
stated, the consolidated financial information contained in this
report is presented in USD.
Achievements
-- 16,256 4E PGM ounces produced in Q3;
-- SDO PGM plant recoveries improved 3% to 48%;
-- Gross basket price increased 15% to $1,383/ounce quarter-on-quarter;
-- Net revenue increased 23% to $18.3 million;
-- Group EBITDA improved 55% to $8.2 million in Q3;
-- Group net profit up 33% to $5.0 million for the quarter; and
-- Cash balance increased 17% from $20.2 million to $23.7 million.
Challenges
-- The water supply to Lesedi operation improved during Q3, but
intermittent shortages still continued to disrupt production during
the period;
-- Power outages and loadshedding at various SDO operations
resulted in unplanned downtimes; and
-- Temporary disruption in higher grade current arisings from
host mine at Doornbosch impacted on grade delivered to PGM
plant.
Opportunities
-- Mooinooi Project Echo MF2 module commissioned earlier than planned;
-- Additional new water boreholes, an additional storage dam and
water supply line were commissioned at Lesedi during March and
early April 2019 to improve running time going forward;
-- Doornbosch to commence a new million-ton tailings dam during
Q4 and current arisings from Doornbosch host mine expected to
return to normal after repairs and improvements to their
circuits;
-- Lesedi spiral section is progressing well and on track for
commissioning late Q4 FY2019; and
-- Company continues to generate free cash.
Commenting on the Q3 results, Sylvania's CEO Terry McConnachie
said:
"I am pleased to report that after a challenging Q2, the SDO
performed significantly better and delivered 16,256 ounces in Q3.
With the increase in production and gross basket price, as well as
the decrease in cash costs, the Company has once again generated
positive cash flows enabling us to continue to internally fund our
Project Echo and expansion projects and still grow our cash in the
bank.
We are forecasting 21,800 ounces for Q4, up marginally on the Q4
FY2018, provided there are no unforeseen disruptions. We are
revising our production guidance to 72,000 ounces for FY2019, which
would mean record production being attained in Q4. With Mooinooi
MF2 now added, grade improvement at Doornbosch and more consistent
production at Lesedi, this should be achievable."
USD Unit Unaudited Unit ZAR
Q2 FY2019 Q3 FY2019 % Change % Change Q3 FY2019 Q2 FY2019
---------- --------- --------- ---------- ----------
Production
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
560,855 527,693 -6% T Plant Feed T -6% 527,693 560,855
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
2.21 2.40 9% g/t Feed Head Grade g/t 9% 2.40 2.21
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
278,891 297,489 7% T PGM Plant Feed Tons T 7% 297,489 278,891
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
3.56 3.54 -1% g/t PGM Plant Feed Grade g/t -1% 3.54 3.56
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
46.75% 48.00% 3% % PGM Plant Recovery % 3% 48.00% 46.75%
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
14,907 16,256 9% Oz Total 4E PGMs Oz 9% 16,256 14,907
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
20,003 22,224 11% Oz Total 6E PGMs Oz 11% 22,224 20,003
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
Average gross basket
1,204 1,383 15% $/oz price R/oz 16% 19,868 17,146
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
Financials
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
12,301 15,739 28% $'000 Revenue (4E) R'000 25% 219,425 176,122
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
1,388 1,726 24% $'000 Revenue (by products) R'000 21% 24,061 19,874
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
1,188 882 -26% $'000 Sales adjustments R'000 -28% 12,295 17,005
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
14,877 18,347 23% $'000 Net revenue R'000 20% 255,781 213,001
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
9,016 9,774 8% $'000 Operating costs R'000 6% 136,262 129,106
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
585 434 -26% $'000 General & administration R'000 -28% 6,052 8,376
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
5,269 8,172 55% $'000 Group EBITDA R'000 51% 113,933 75,451
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
194 260 34% $'000 Net Interest R'000 30% 3,629 2,781
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
3,742 4,960 33% $'000 Net profit R'000 29% 69,145 53,584
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
2,626 2,119 -19% $'000 Capital Expenditure R'000 -21% 29,548 37,605
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
20,220 23,725 17% $'000 Cash Balance R'000 14% 330,753 289,556
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
R/$ Ave R/$ rate R/$ -3% 13.94 14.32
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
Unit Cost/Efficiencies
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
SDO Cash Cost Per
606 599 -1% $/oz 4E PGM oz R/oz -4% 8,353 8,672
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
SDO Cash Cost Per
451 438 -3% $/oz 6E PGM oz R/oz -5% 6,110 6,463
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
Group Cash Cost
635 624 -2% $/oz Per 4E PGM oz R/oz -4% 8,699 9,094
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
Group Cash Cost
473 456 -4% $/oz Per 6E PGM oz R/oz -6% 6,363 6,777
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
All-in sustaining
657 644 -2% $/oz cost (4E) R/oz -4% 8,981 9,402
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
821 756 -8% $/oz All-in cost (4E) R/oz -10% 10,536 11,757
---------- --------- ------ ------------------------- ------ --------- ---------- ----------
1 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.
A. OPERATIONAL OVERVIEW
Health, safety and environment
The SDO operations performed well during the quarter without any
safety, health or environmental incidents during the period. Lannex
achieved the milestone of four years without a Lost Time Injury
("LTI") during January 2019. Lesedi remains LTI-free for more than
seven years, Tweefontein and Doornbosch plants remain more than six
years LTI-free, while Millsell remains more than four years
LTI-free.
Operational performance
The SDO delivered 16,256 ounces for the quarter, a 9% increase
on Q2's 14,907 ounces. The increased production was due to a
combination of a 7% improvement in PGM feed tons and 3% improvement
in recovery efficiencies, while the PGM feed grade was similar to
the previous period.
The total SDO cash costs for the period decreased 4% in ZAR
terms to ZAR 8,353/ounce and decreased 1% in USD terms to
$599/ounce. The capital expenditure was ZAR 29.5 million for the
quarter, a 21% decrease quarter-on-quarter and is aligned with the
planned and forecast Project Echo roll-out and project
schedule.
Operational focus areas
The abnormal drought conditions continued to impact water
availability and supply to the Western operations, particularly
Lesedi. Measures to mitigate the impact, such as additional
boreholes and water transfer from neighbouring operations have
helped improve supply, but Lesedi still experienced significant
downtime during the quarter. The final upgrades to the water supply
system were completed during the final week of March 2019 and the
plant has since been running well with limited downtime.
Management continued to focus on the Doornbosch re-mining
operation at the current dump, which is at the end of its life.
This improved PGM feed tons but the significantly lower than
planned current arisings feed from the host mine still impacted
negatively on the PGM feed grade during the quarter. The overall
chrome mining and treatment rate of the host mine did not
deteriorate, but the specific ratio of current arisings to other
products reduced, which lead management to investigate and
implement process improvements at the host mine operation. As a
result, since late March, current arisings tons and PGM feed grades
have been improving.
Optimisation of the enhanced process circuit modifications that
utilise improved fine screening technology needed for more
efficient upgrading of PGMs at Doornbosch, Millsell and
Tweefontein, was commissioned during the previous quarter and will
also help improve PGM feed grades and ounce production.
Operational opportunities
The Mooinooi MF2 module, which is part of Project Echo, was
commissioned earlier than planned during the last week of March
2019. It is currently being optimised and is expected to boost PGM
ounces in Q4 and beyond.
The construction of the Lesedi chrome plant project, comprising
of the dismantling and relocation of the redundant Steelpoort
chrome circuit, is progressing well and is on track to be completed
in the second half of the calendar year. This will enable chrome
removal at Lesedi's PGM plant, in line with the standard SDO
operating model employed at the Group's existing operations, and
will contribute towards higher PGM feed grades and ounce production
at the operation.
B. FINANCIAL OVERVIEW
Financial performance
The higher basket price, coupled with the increase in ounce
production, were the main contributors to the increase in net
revenue of 23% from $14.9 million to $18.3 million for the quarter.
The gross basket price improved 15% to $1,383/oz quarter-on-quarter
as a result of the continued upward trend of Palladium and
Rhodium.
The total operating costs increased 6% in ZAR terms (the SDO
functional currency) to ZAR 136.3 million, compared to the ZAR
129.1 million in Q2. This is due mainly to the increase in
electricity costs following a rebate received from the host mine in
the previous quarter and planned transport costs in the East to
transport dump material to the Lannex operation. General and
administrative costs are incurred in USD, GBP and ZAR. These costs
decreased 26% quarter-on-quarter from $0.6 million to $0.4
million.
Group cash costs decreased from ZAR 9,094/oz to ZAR 8,699/oz due
to higher ounce production and in dollar terms the Group cash costs
decreased 2% from $635/oz to $624/oz.
The all-in sustaining cost ("AISC") and all-in cost ("AIC") also
decreased as a result of the decrease in capital expenditure and
higher ounce production in Q3. The Group AISC decreased 4% to ZAR
8,981/ounce against Q2's ZAR 9,402/ounce and the AIC decreased 10%
to ZAR 10,536/ounce from ZAR 11,757/ounce recorded in Q2. In dollar
terms the Group AISC decreased 2% from $657/ounce to $644/ounce and
the Group AIC decreased 8% to $756/ounce from $821/ounce.
The EBITDA increased 55% from $5.3 million to $8.2 million for
Q3. The increase can be attributed to the higher ounce production
as well as the higher basket price.
The Group cash balance at 31 March 2019 was $23.7 million
(including guarantees), a $3.5 million increase on the previous
quarter's cash balance of $20.2 million. Cash generated from
operations before working capital movements was $8.2 million with
net changes in working capital amounting to a decrease of $2.6
million due mainly to the increase in trade debtors which have a
four-month payment pipeline. An amount of $2.1 million was spent on
capital and the impact of exchange rate fluctuations on cash held
at the quarter end was an increase of $0.01 million.
The Company remains committed to funding all planned capital
projects and expansion from internal cash reserves.
C. MINERAL ASSET DEVELOPMENT AND OPENCAST MINING PROJECTS
The Company has continued to upgrade the value of its mineral
asset development activities during the quarter, so as to be able
to continue to defend title. However, until an improvement in
market conditions occurs, this will result in very limited
spend.
Grasvally Chrome Project
The execution and registration of the Mining Right has now been
completed. The process of rehabilitation of the surface dumps on
the mine continues, with Grasvally Chrome Mine completing the final
stages of compliance with the Mining Health and Safety Act before
rehabilitation operations commence.
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
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 / Chris Britton
Communications
Alma PR Limited +44 (0) 7580 216 203
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 FY2019
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
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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 capital
All-in cost expenditure
---------------------------------------------------------------------
ASX Australian Securities Exchange
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Fresh chrome tails from current operating host mines processing
Current risings operations
---------------------------------------------------------------------
DMR Department of Mineral Resources
---------------------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and amortisation
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EA Environmental Authorisation
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EIA Environmental Impact Assessment
---------------------------------------------------------------------
EIR Effective interest rate
---------------------------------------------------------------------
EMPR Environmental Management Programme Report
---------------------------------------------------------------------
GBP Great British Pound
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IASB International Accounting Standards Board
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IFRIC International Financial Reporting Interpretation Committee
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IFRS International Financial Reporting Standards
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I&APs Interested and Affected Parties
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Phoenix Platinum Mining Proprietary Limited, renamed Sylvania
Lesedi Lesedi
---------------------------------------------------------------------
LSE London Stock Exchange
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LTI Lost time injury
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MF2 Milling and flotation technology
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MPRDA Mineral and Petroleum Resources Development Act
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MRA Mining Right Application
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MTO Mining Titles Office
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NOMR New Order Mining Right
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NWA National Water Act 36 of 1998
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Option Plan Sylvania Platinum Limited Share Option Plan
---------------------------------------------------------------------
Platinum group metals comprising mainly platinum, palladium,
PGM rhodium and gold
---------------------------------------------------------------------
PAR Pan African Resources Plc
---------------------------------------------------------------------
Phoenix Platinum Mining Proprietary Limited, renamed Sylvania
Phoenix Lesedi
---------------------------------------------------------------------
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
---------------------------------------------------------------------
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
---------------------------------------------------------------------
SDO Sylvania dump operations
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Shares Common shares
---------------------------------------------------------------------
Sylvania Sylvania Platinum Limited, a company incorporated in Bermuda
---------------------------------------------------------------------
USD United States Dollar
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WIP Work in progress
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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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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
QRTGUGDSLDDBGCC
(END) Dow Jones Newswires
April 29, 2019 02:02 ET (06:02 GMT)
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