TIDMSLP
RNS Number : 8447K
Sylvania Platinum Limited
02 September 2019
_____________________________________________________________________________________________________________________________
2 September 2019
Sylvania Platinum Limited
("Sylvania", "the Company" or "The Group")
AIM (SLP)
Year-End Report to 30 June 2019
The Directors are pleased to present the results for the
financial year ended 30 June 2019 ("FY2019"). Unless otherwise
stated, the consolidated financial information contained in this
report is presented in US Dollars ("USD").
Achievements
-- Sylvania Dump Operations ("SDO") delivered 72,090 4E PGM
ounces for the year - the sixth consecutive year of record
production;
-- Net Revenue up 12% to $70.5 million (FY2018: $62.8 million);
-- Group EBITDA improved by 36% on FY2018 to $30.2 million;
-- Group net profit of $18.2 million, a 66% improvement compared to the previous period;
-- Basic earnings per share ("EPS") improved 66% to 6.37 US
cents per share from 3.83 US cents per share in FY2018;
-- Cash dividend of 1.00 US cent per share recommended by the
Board of Directors, more than double that of FY2018;
-- Positive Group cash balance of $21.8 million with no debt and no pipeline financing;
-- Mooinooi Project Echo MF2 module successfully commissioned during the year;
-- Relocation of the redundant Steelpoort chrome circuit to
Lesedi completed and commissioning of this section started in June
2019;
-- Improved PGM fines classification circuits were commissioned
at Millsell, Doornbosch and Tweefontein operations during H1 which
assisted in obtaining a higher PGM ounce profile;
-- The Company purchased a total of 645,293 Ordinary $0.01 Shares during the year;
-- 1,408,889 Ordinary $0.01 Shares cancelled in FY2019; and
-- Conditional cash offer to purchase Grasvally Chrome Mine
(Pty) Ltd ("Grasvally") received post-period end from Forward
Africa Mining (Pty) Ltd ("FAM") for ZAR115.0 million, subject to
the fulfilment of conditions precedent.
Challenges
-- Utility infrastructure and supply of power continues to
present challenges to existing operations and the execution of
expansion projects;
-- Abnormal summer heat and drought conditions resulted in water
shortages, particularly at Lesedi where there is no current
arisings feed source or tails slurry from a host mine;
-- Fluctuations in the average gross basket price and exchange
rates impact the earnings and profitability of the Group and are
continually monitored; and
-- Lower percentage of fresh current arisings feed was received
from the host mines in H1 at both Tweefontein and Millsell, related
to underground incidents external to Sylvania's operations.
Opportunities
-- The Company remains debt free with a positive cash balance
which allows the Company to fund capital expansion projects with
existing cash resources;
-- Additional new water boreholes, an additional storage dam and
water supply line commissioned at Lesedi to mitigate impact on
operations and minimise disruptions; and
-- An optimised re-mining strategy, utilising a hybrid
mechanical hydro-mining approach has been developed and was
rolled-out in order to enable more efficient blending, grade
control and feed stability.
Commenting on the Year-End results, Sylvania's CEO Terry
McConnachie said:
"I am pleased to report on a year of highs and lows, but one in
which we achieved both revenue and profit growth. In Q1 FY2019, the
SDO achieved the second highest quarterly production in the history
of the Company, following Q4 FY2018's record quarterly
production.
Unfortunately, due to matters outside of our control that put
pressure on operations during Q2 and Q3, the Board and Management
thought it prudent to revise annual guidance to 72,000 ounces for
the year in the Q3 announcement, which still required record
quarterly production in Q4. The operations teams took this
challenge on board and I am pleased to announce that the operations
achieved a new production record for both Q4 and annual ounces.
We are beginning to see the results from the MF2 modules at
Millsell, Doornbosch and Mooinooi, as well as other optimisation
projects rolled out during the year and as a result of these
initiatives, I am optimistic as we embark on FY2020 that the
Company will continue to prosper.
Having taken the working capital requirements and any other
applicable factors into account, I am pleased to confirm our
Chairman's statement that the Board has recommended that the
Company pay a dividend of 1.00 US cent per Ordinary Share. This is
more than double that of the previous year's dividend paid out to
shareholders in November 2018.
I look forward to finalising the profitable cash sale of the
Grasvally deposit and we are excited as to what FY2020 has in
store.
Our production guidance for the new financial year is 74,000 to
76,000 ounces."
USD Unit Unaudited Unit ZAR
FY2018 FY2019 % Change % Change FY2019 FY2018
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Production
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
2,302,560 2,328,352 1% T Plant Feed T 1% 2,328,352 2,302,560
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
2.47 2.43 -2% g/t Feed Head Grade g/t -2% 2.43 2.47
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
PGM Plant Feed
1,241,825 1,232,142 -1% T Tons T -1% 1,232,142 1,241,825
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
PGM Plant Feed
3.63 3.68 1% g/t Grade g/t 1% 3.68 3.63
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
48.10% 49.44% 3% % PGM Plant Recovery % 3% 49.44% 48.10%
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
71,026 72,090 1.5% Oz Total 4E PGMs Oz 1.5% 72,090 71,026
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
94,303 97,158 3% Oz Total 6E PGMs Oz 3% 97,158 94,303
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Average gross
1,135 1,277 13% $/oz basket price R/oz 25% 18,177 14,552
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Financials
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
52,275 60,522 16% $'000 Revenue (4E) R'000 28% 859,042 670,370
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Revenue (by
5,524 6,530 18% $'000 products) R'000 31% 92,679 70,835
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
4,970 3,486 -30% $'000 Sales adjustments R'000 -22% 49,485 63,734
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
62,769 70,538 12% $'000 Net revenue R'000 24% 1,001,206 804,939
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
38,627 38,362 -1% $'000 Operating costs R'000 10% 544,361 495,354
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
General and
administrative
2,036 2,003 -2% $'000 costs R'000 9% 28,424 26,107
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
22,206 30,242 36% $'000 Group EBITDA R'000 51% 429,135 284,768
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
584 694 19% $'000 Net Interest R'000 31% 9,848 7,494
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
5,112 6,191 21% $'000 Taxation R'000 34% 87,850 65,553
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Depreciation and
6,637 6,542 -1% $'000 amortisation R'000 9% 92,825 85,111
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
10,989 18,203 66% $'000 Net profit R'000 83% 258,308 140,921
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
7,912 8,295 5% $'000 Capital Expenditure R'000 16% 117,708 101,462
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
R/$ Ave R/$ rate R/$ 11% 14.19 12.82
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
14,016(2) 21,797 56% $'000 Cash Balance R'000 60% 309,301 192,716
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Unit
Cost/Efficiencies
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
SDO Cash Cost
543 532 -2% $/oz Per 4E PGM oz R/oz 8% 7,548 6,969
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
SDO Cash Cost
409 395 -3% $/oz Per 6E PGM oz R/oz 7% 5,600 5,249
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Group Cash Cost
567 556 -2% $/oz Per 4E PGM oz R/oz 8% 7,885 7,274
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
Group Cash Cost
427 412 -4% $/oz Per 6E PGM oz R/oz 7% 5,851 5,478
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
All-in sustaining
565 578 2% $/oz cost (4E) R/oz 13% 8,201 7,245
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
655 672 3% $/oz All-in cost (4E) R/oz 13% 9,534 8,406
---------- --------- ------ -------------------- ------------ ----------- ---------- -------------
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.
2 Excludes the re-classification of joint operation cash of $9,322.
A. OPERATIONAL OVERVIEW
Health, safety and environment
The Company is focused 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 a safe working environment at all operations.
The combined efforts of Management and employees have resulted in a
good safety performance, with no significant health or
environmental incidents during the year.
The Lesedi operation achieved eight years lost time injury
("LTI")-free during the final quarter of the financial year while
Tweefontein and Doornbosch remain LTI-free for seven years. Lannex
and Millsell are LTI-free for more than four years, but Mooinooi
unfortunately had one LTI in June 2019 when an artisan suffered a
laceration on his upper leg, caused by the sharp edge of a
structure, during a lifting operation.
Throughout the year, the iron ore industry in Brazil experienced
some major tailings-dam related incidents. As a result, the Company
reviewed its own safety procedures relating to tailings-dam
management during the period. Besides existing reviews and
monitoring and control measures that are already in place, Sylvania
has implemented additional independent audits and review processes
to evaluate legal compliance and operational preparedness in terms
of some specific tailings dam related emergencies, and the Group
will continue to assess its safety procedures moving forward.
Due to the additional tailings-dam safety measures, as well as
the increasing environmental legislative requirements, the capital
requirement for new tailings dam facilities has been impacted and
remains a significant area of focus for the Company.
In terms of the social environment, mining companies continue to
deal with increasing community expectations and demands in terms of
procurement opportunities and access to ore and dump resources.
This is often associated with threats of violence and intimidation
at operations, and the Company will continue to engage with the
relevant authorities in order to minimise this.
Operational performance
For the sixth consecutive year, the SDO delivered record
production of 72,090 ounces in the 2019 financial year, including
record quarterly production of 21,789 ounces in the fourth quarter.
The SDO thus met the revised guidance, as communicated in Q3
FY2019, of 72,000 ounces for the financial year.
The increase in annual production for FY2019 can be attributed
to a 3% increase in PGM plant recovery with PGM tons treated
marginally lower and PGM feed grade remaining fairly stable
year-on-year. The improvement in PGM recovery efficiencies is due
to a combination of the contribution from MF2 plants at Millsell
and Doornbosch for the full year, compared to only six months in
FY2018, as well as process improvements at Tweefontein. Although
the feed head grade decreased marginally by 2% in comparison to the
previous financial year, due to the erratic grade during the
re-mining of the Doornbosch tailings dump, which reached its end of
life, as well as the receipt of lower current arisings than
expected from the host mine, the PGM feed grade was marginally
higher after being upgraded during classification. In order to
mitigate lower front-end feed grades, Doornbosch began mining the
new million-ton tailings dam during Q4 and current arisings from
the host mine improved after repairs and improvements to their
circuits. Management also initiated the implementation of an
optimised re-mining strategy, which utilises a hybrid
mechanical-hydromining approach, deviating slightly from a pure
hydromining approach, albeit at a similar cost.
The SDO cash cost increased by 8% in South African Rand terms
("ZAR") (the functional currency) from ZAR6,969/ounce to
ZAR7,548/ounce while the USD cash cost decreased marginally to
$532/ounce against $543/ounce in FY2018. The increase in ZAR terms
was primarily driven by above-inflation electricity rate increases,
negotiated operational labour wage increases, and higher re-mining
costs associated with the final dump floor-cleaning and re-mining
challenges at Doornbosch during the year.
Operational focus areas and opportunities
Utility infrastructure and supply of power continued to present
challenges to the operations and execution of expansion projects
throughout the year. As communicated in FY2018, delays in the
roll-out of the Project Echo MF2 at Tweefontein, due to power
constraints, were counteracted by fast-tracking the module at
Mooinooi. The Mooinooi Project Echo MF2 module was commissioned
earlier than planned, at the end of Q3, which assisted in boosting
PGM feed grades and ounces. It is expected to improve even more as
the module is optimised.
Unfortunately, operations on the West were also hindered due to
abnormal summer heat and drought conditions, which resulted in
water shortages at some plants. Lesedi, in particular, where there
is no current arisings feed source or tails slurry from a host
mine, at present, was severely impacted. The plant could therefore
only treat 52% of its planned treatment tonnage during Q2. To
alleviate the impact further, boreholes were drilled and a water
transfer scheme was implemented from neighbouring operations, which
have helped to improve supply during H2. Additional boreholes are
being drilled in consultation with water and environmental experts,
and process options continue to be explored to minimise water
consumption, which could assist to mitigate any future impact on
availability that the operations may face moving forward.
The relocation of our redundant Steelpoort chrome circuit to
Lesedi, identified during FY2018 as an opportunity to improve
chrome removal ahead of flotation, which will enable higher PGM
feed, analogous to the standard Sylvania SDO operating model, was
completed and commissioning of this new section started in June
2019. It will further contribute to higher PGM feed grades and
ounce production in the coming financial year.
Project Echo is still progressing well with the Millsell and
Doornbosch MF2 modules in operation since early 2018 and together
with Mooinooi MF2 commissioned at the end of Q3 FY2019, is
beginning to reap results. Tweefontein MF2 is the next module to be
executed but construction is dependent on completion of an
infrastructure upgrade by the national power utility to ensure
stable and reliable power supply to the host mine and Sylvania's
operation. The upgrade by the power utility has begun and is
expected to commission by FY2020.
Projects like the chrome circuit at Lesedi, the improved PGM
fines classification circuits that were implemented at Millsell,
Doornbosch and Tweefontein during H1 FY2019, to enable more
efficient upgrading of PGMs by utilising enhanced fine screening
technology, and Project Echo are all enabling the Sylvania SDO to
maintain a stable production profile going forward.
B. FINANCIAL OVERVIEW
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June
2019 2018
Note $ $
Revenue 1 70,537,993 62,768,561
Cost of sales (44,854,637) (45,256,978)
Gross profit 25,683,356 17,511,583
Other income 68,788 60,486
Other expenses 2 (2,051,628) (2,055,788)
Operating profit before net finance
income and income tax expense 23,700,516 15,516,281
Finance income 1,018,607 878,191
Finance costs (324,628) (293,792)
Profit before income tax expense 24,394,495 16,100,680
Income tax expense (6,191,004) (5,111,783)
Net profit for the year 18,203,491 10,988,897
============= =============
1. Revenue is generated from the sale of PGM 6E ounces produced
at the six retreatment plants (including Sylvania Lesedi), net of
pipeline sales adjustments.
2. Other expenses relate to corporate activities and include PR
and advisory costs ($0.1million), travel ($0.2million), share
registry costs ($0.05million), Director's fees ($0.4million), share
based payments ($0.3million) and other smaller administrative
costs.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June
2019 2018
Note $ $
Net cash inflow from operating activities 3 17,365,670 15,044,774
Net cash outflow from investing activities 4 (7,998,158) (13,700,731)*
Net cash outflow from financing activities 5 (1,557,534) (1,564,849)
------------------------------------------- --------------
Net (decrease)/increase in cash and
cash equivalents 7,809,978 (220,806)
Effect of foreign exchange fluctuations
on cash held (38,566) (1,074,582)
Cash and cash equivalents, beginning
of year 14,025,729 15,321,117
Cash and cash equivalents, end of year 21,797,141 14,025,729
------------------------------------------- --------------
* Re-classification
3. Net cash inflow from operating activities includes a net
operating cash inflow of $24,578,890, net finance income of
$879,633 and taxation paid of $8,092,852;
4. Net cash outflow from investing activities includes payments
for property, plant and equipment of $8,040,462, exploration and
evaluation assets of $253,430 and loan to joint operation $360,607.
An amount of $629,452 was withdrawn from the investment relating to
the rehabilitation guarantees and was transferred to an insurance
facility for these guarantees.
5. The net cash outflow from financing activities consists of
the repayment of borrowings of $147,674 payments for share
transactions of $119,606 and payment of dividends $1,290,254.
The Group generates revenues in USD and incurs costs in ZAR, USD
and GBP. The average USD:ZAR exchange rate was ZAR14.19:$1 against
the ZAR12.82:$1 recorded in the previous period, and the spot was
ZAR14.12:$1 at 30 June 2019.
The average gross basket price for PGMs in the financial year
was $1,277/ounce - a 13% increase on the previous year's
$1,135/ounce. The improvement in the basket price, assisted by the
record ounce production, resulted in a 12% increase in net revenue
from the previous year (FY2019: $70.5 million; FY2018: $62.8
million).
Revenue on 4E ounces delivered increased by 16% in dollar terms
to $60.5 million year-on-year. Revenue from by-products added $6.5
million to the total revenue for the year.
Revenue split 30 June 2019 30 June 2018
$'000 $'000
Revenue on sales (4E)(1) 60,522 52,275
Revenue (by products)(2) 6,530 5,524
Sales adjustments(3) 3,486 4,970
------------- -------------
Net revenue 70,538 62,769
------------- -------------
(1) Sales revenue from Platinum, Palladium, Rhodium and Gold
(2) Sales revenue from other metals in the concentrate produced
of Ruthenium, Iridium, Nickel and Copper
(3) Adjustments to revenue recognised for movements in the PGM
price and exchange rate on ounces delivered but not yet invoiced as
contractually agreed(.)
Note: The above table is rounded to the nearest thousand.
Group cash costs decreased marginally by 2% year-on-year from
$567/ounce (ZAR7,274/ounce) to $556/ounce (ZAR7,885/ounce).
Operating costs increased 10% in ZAR (the functional currency) from
ZAR495.4 million to ZAR 544.4 million. The increase in salaries and
wages at the operations, annual electricity escalations and the
inclusion of the Lesedi operation at a higher operating cost for a
full 12 months, as well as higher re-mining costs associated with
the final dump floor-cleaning and re-mining challenges at
Doornbosch during the year were the main contributors to the
increased operating costs. General and administrative costs are
incurred in USD, GBP and ZAR and are impacted by exchange rate
fluctuations over the reporting period. These costs decreased 2%
year-on-year in the reporting currency.
All-in sustaining costs ("AISC") increased by 2% to $578/ounce
(ZAR8,201/ounce) from $565/ounce (ZAR7,245/ounce) as a result of
the increase in operational costs, and All-in costs ("AIC") of 4E
increased by 3% to $672/ounce (ZAR9,534/ounce) from $655/ounce
(ZAR8,406/ounce) recorded in the previous period, due to the
increase in capital spend.
Group EBITDA improved 36% year-on-year to $30.2 million. The
taxation expense for the year was $6.2 million, (as per the
statement of profit or loss and other comprehensive income and
includes deferred taxation movements) and depreciation of $6.5
million.
The Group net profit for the year was $18.2 million, a 66%
improvement on the previous year. This is the fifth consecutive
year of profit appreciation.
Basic earnings per share ("EPS") improved 66% to 6.37 US cents
per share from 3.83 US cents per share in FY2018;
Capital expenditure was incurred in ZAR and was mainly spent on
the Mooinooi Project Echo MF2 module and the Lesedi Chrome Section.
The balance of the capital spend was on stay-in-business and
optimisation projects. The total spend for the year was ZAR117.7
million (FY2018: ZAR101.5 million). To date, Project Echo has
incurred ZAR139.3 million of the ZAR175.0 million budget.
Cash generated from operations before working capital movements
was $29.9 million with net changes in working capital resulting in
a reduction of $5.3 million. Net finance income amounted to $0.9
million and $8.1 million was paid in income taxes during the
year.
Major spend items included $0.3 million on exploration
activities (FY2018: $0.4 million), $8.0 million on capital projects
and stay-in-business capital for the SDO plants (FY2018: $7.6
million).
At corporate level, $1.3 million was paid out in dividends. An
amount of $0.6 million was withdrawn from the investment relating
to the rehabilitation guarantees, and was transferred to an
insurance facility for these guarantees.
The impact of exchange rate fluctuations on cash held at year
end was a $0.04 million loss (FY2018: $1.1 million loss).
The Company remains debt-free with a cash balance of $21.8
million, allowing for continued funding of Project Echo and capital
projects.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June
2019 2018
Note $ $
Assets
Non-current assets
Other financial assets 6 556,895 1,052,267*
Exploration and evaluation assets 53,405,798 57,397,256
Property, plant and equipment 7 37,676,939 36,576,993*
Deferred tax asset 11 1,813,237 -
Total non-current assets 93,452,869 95,026,516
------------ ------------
Current assets
Cash and cash equivalents 8 21,797,141 14,025,729*
Trade and other receivables 9 7,799,312 25,433,124*
Contract assets 10 23,275,665 -
Inventories 11 1,827,399 1,488,382
Current tax receivable 279,620 14,741
Assets held for sale 16 4,163,292 -
Total current assets 59,142,429 40,961,976
------------ ------------
Total assets 152,595,298 135,988,492
------------ ------------
Equity and liabilities
Shareholders' equity
Issued capital 12 2,897,248 2,911,337
Reserves 13 66,673,016 68,053,385
Retained earnings 57,992,314 41,025,586
------------ ------------
Total equity 127,562,578 111,990,308
------------ ------------
Non-current liabilities
Borrowings 14 184,390 173,895
Provisions 15 3,481,232 3,685,257
Deferred tax liability 14,461,024 14,326,214
Total non-current liabilities 18,126,646 18,185,366
------------ ------------
Current liabilities
Trade and other payables 6,715,787 5,679,045*
Interest bearing loans and borrowings 14 187,980 132,700
Current tax liability 980 1,073
Liabilities directly associated with
assets held for sale 1,327 -
Total current liabilities 6,906,074 5,812,818
------------ ------------
Total liabilities 25,032,720 23,998,184
------------ ------------
Total liabilities and shareholders'
equity 152,595,298 135,988,492
------------ ------------
*Re-classification
6. Other financial assets of $556,895 consist of the loan
receivable granted to TS Consortium from Sylvania South Africa
(Pty) Ltd, a South African subsidiary of the Group.
7. Third project Echo module completed at cost of ZAR42.2
million, Lesedi chrome beneficiation circuit completed at cost of
ZAR20.9.
8. The majority of the cash and cash equivalents are held in
South Africa and ZAR denominated balances make up $14,723,453
(ZAR207,864,427) of the total cash and cash equivalents
balance.
9. Trade and other receivables consist mainly of amounts
receivable for the sale of PGMs.
10. Contract assets as per adoption of IFRS 15 from 1 July
2018.
11. Inventory held is stores and consumables for the SDO.
12. The total number of issued ordinary shares at 30 June is
289,724,772 Ordinary Shares of US$0.01 each (including 4,209,635
shares held in treasury). A total of 1,408,889 shares were
cancelled during the period.
13. Reserves include the share premium reserve, 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, reserve for own
shares, the non-controlling interests reserve and the equity
reserve.
14. Interest bearing loans and borrowings are secured instalment
sale agreements over various motor vehicles and plant and
equipment.
15. Provision is made for the present value of closure,
restoration and environmental rehabilitation costs in the financial
period when the related environmental disturbance occurs
16. Grasvally Chrome Mine (Pty) Ltd assets held for sale.
C. MINERAL ASSET DEVELOPMENT AND OPENCAST MINING PROJECTS
The Company has continued to maintain the value of its mineral
asset development activities during the year to be able to defend
title. However, until market conditions improve, this will result
in very limited spend.
Volspruit Platinum Exploration
The Department of Mineral Resources has still not communicated
any progress in the appeal lodged by interested and affected
parties in June 2017 against the decision to grant a mining right
application to the Company. The Member of the Executive Council for
Economic Development, Environment and Tourism has also not
communicated any further response about the appeal against the
decision to refuse the Company's application for an environmental
authorisation. The Company's environmental consultants are
following up regularly on this outstanding matter.
Grasvally Chrome Exploration
Following the appointment of a consulting company to assist with
the sale of Grasvally, the Board is pleased to advise that a
conditional cash offer from Forward Africa Mining (Pty) Ltd ("FAM")
to acquire 100% of the shares in and claims against Grasvally
Chrome Mine (Pty) Ltd for a total consideration of ZAR115.0
million, settled in cash or other immediately available funds has
been received. FAM will have eight months from the date of
acceptance of the offer to fulfil standard conditions precedent and
the Company will keep shareholders apprised of these
developments.
In the FY2018 Annual Report, the Company announced that the
mining right for the project had been granted post- period end.
Execution and registration of the right was concluded during H1
FY2019.
Northern Limb Projects
There has been no further development of this project during the
last financial year, apart from that which is necessary to maintain
compliance with the mining right and to defend title.
D. CORPORATE ACTIVITIES
Dividend Approval and Payment
During the first quarter, the Company announced that the
Directors of Sylvania recommended the payment of a maiden cash
dividend of 0.45 US cents (0.35 pence) per Ordinary Share of $0.01
in the Company, which was approved by the shareholders at the
Company's Annual General Meeting held in November 2018. The
dividend was paid on 30 November 2018.
The Board has furthermore recommended the payment of a cash
dividend for FY2019 of 1.00 US cents (0.78 pence) per Ordinary
Share, payable in November 2019.
Share Buybacks and Cancellation of Shares
One of the Company's strategic goals is to return capital to
shareholders and continue to review opportunities to do so, as and
when they arise.
At the conclusion of the Share Buyback Programme ("the
Programme") that ran during the last financial year to 24 August
2018, the Company purchased a total of 2,407,481 $0.01 Ordinary
Shares from small non-UK based shareholders at a price of A$0.1619
per Ordinary Share, representing 57% of the shares on offer under
the Programme.
At the close of FY2018, shares in the Company were valued at
16.25 pence per Ordinary Share and at the close of FY2019, this
appreciated 86% to 30.25 pence per Ordinary Share.
Subsequent to the conclusion of the Programme, the Company
cancelled 892,257 Ordinary Shares remaining at the end of the
Programme, as well as a further adjustment to shares held in
treasury of 120,000 Ordinary Shares.
As announced during H1 FY2019, the Company also agreed to buy
back 516,632 shares, held by a person discharging managerial
responsibilities ("PDMR"), as defined by the Market Abuse
Regulation ("MAR"), at 16.00 pence per Ordinary Share and these
shares were cancelled immediately.
The Company announced in Q4 FY2019 that it proposed to acquire
2,100,000 Ordinary Shares, representing 0.7% of the Company's
issued share capital, as part of a once-off buyback under the terms
and authority of the Company's Bye Laws. This buyback offer was not
taken up.
The Board has made a decision that in order to fulfil the
current shortfall in shares held in treasury to cover the bonus
share awards of 4.2 million shares, which vest over the next five
years, an offer to acquire 30% of all shares held by employees,
excluding Directors, will be made at the 30-Day VWAP. This would
equate to approximately 1.1 million shares should all employees
holding shares take up the offer. A further 3.1 million shares will
be sought in the market.
At 30 June 2019, the Company's issued share capital is
289,724,772 Ordinary Shares of which a total of 4,209,635 Ordinary
Shares are held in treasury. The total number of Ordinary Shares
with voting rights in Sylvania is 285,515,137.
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 / Ed Phillips
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
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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.
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All-in sustaining cost plus non-sustaining and expansion
All-in cost capital expenditure
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Bonus Shares Sylvania Platinum Limited Bonus Share Award Plan
---------------------------------------------------------------------
CGU Cash generating unit
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Fresh chrome tails from current operating host mines processing
Current risings operations
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DMR Department of Mineral Resources
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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
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EMPR Environmental Management Programme Report
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FAM Forward Africa Mining (Pty) Ltd
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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
---------------------------------------------------------------------
I&APs Interested and Affected Parties
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IRR Internal Rate of Return
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JV Joint venture
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Limpopo Department of Economic Development, Environment and
LEDET Tourism
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Phoenix Platinum Mining Proprietary Limited, renamed Sylvania
Lesedi Lesedi
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LSE London Stock Exchange
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LTI Lost time injury
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MAR Market Abuse Regulation (EU) 596/2014
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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
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Persons displaying managerial responsibilities as defined
PDMR by the Market Abuse Regulation
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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.
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Revenue (by products) Revenue earned on Ruthenium, Iridium, Nickel and Copper
---------------------------------------------------------------------
RoM Run of mine
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SDO Sylvania dump operations
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Shares Common shares
---------------------------------------------------------------------
Sylvania Sylvania Platinum Limited, a company incorporated in Bermuda
---------------------------------------------------------------------
TS Consortium Tizer Sylvania Consortium
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USD United States Dollar
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VWAP Volume-weighted average price
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WIP Work in progress
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WULA Water Use Licence Application
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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
FR UUVVRKBAKRRR
(END) Dow Jones Newswires
September 02, 2019 02:02 ET (06:02 GMT)
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