TIDMSLP
RNS Number : 7552W
Sylvania Platinum Limited
14 February 2017
14 February 2017
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
Interim financial results for the period ended 31 December
2016
Excellent Operational Performance, guidance raised to between
63,000 to 65,000 ounces for FY2017
The Directors are pleased to present the interim financial
results for the period ended 31 December 2016. Unless otherwise
stated, the consolidated financial information contained in this
report is presented in US Dollars.
Financial highlights
-- Group EBITDA has increased to $9.22 million from $3.61
million in H1 FY2016 (H2 FY2016: $7.19 million);
-- Net profit increased to $4.52 million from $0.28 million in
H1 FY2016 (H2 FY2016: $3.21 million);
-- Revenue has increased 32% to $24.55 million from $18.53
million in H1 FY2016 (H2 FY2016: $20.66 million);
-- General and Administration costs are down 27% to $0.88
million from $1.20 million in H1 FY2016 (down 17% from $1.06
million H2 FY2016);
-- Group cash balance increased to $12.68 million under-pinning
the forth-coming capital expenditure for Project ECHO;
-- Business remains cash generative after tax and capital expenditure;
-- Company remains debt free.
Operations highlights
-- SDO production for the period totalled 35,819 ounces, (H1
FY2016: 29,519 ounces; H2 FY2016: 31,124 ounces);
-- Group cash costs decreased 16% to $425/ounce
period-over-period (H1 FY2016: $508/ounce; H2 FY2016:
$432/ounce);
-- Project ECHO commences and aims to deliver a further 10 years of sustainable production;
-- Steelpoort operation achieved the significant milestone of
nine years Lost Time Injury ("LTI") free during the period.
Commenting on the period, Sylvania's CEO Terry McConnachie
said:
"I am once again delighted to report another excellent period in
which we exceeded operational expectations and delivered two
consecutive quarterly production records.
A consistent focus on our strategic objectives of improving
operational stability and ounce production, disciplined cost
control, and good progress in executing Project ECHO, has delivered
robust results, despite a backdrop of depressed commodity prices
and challenging macro industry conditions. Group revenue increased
32% to $24.55 million while unit costs decreased 16% to $425/ounce.
This is to the credit of our employees whose commitment and
dedication is key to reaching our goals.
As previously announced, the first phase of Project ECHO
commenced during the period which will lead to several more years
of sustainable production, and we look forward to the remainder of
the year with confidence."
SYLVANIA REVIEW
The main operational focus during the six months to 31 December
2016 was on maintaining and improving production stability and
ounce production, disciplined operational cost control, and
executing strategic capital projects aimed at lower production unit
costs and sustaining the current production profiles into the
future. The Board is pleased with the results delivered against
these strategic objectives, with the first two quarters of the
financial year having marked successive Company records in terms of
quarterly production. This is particularly pleasing in the light of
subdued commodity prices and challenging macro industry conditions
that characterised the period. The SDO produced 35,819 ounces for
the six months to 31 December 2016 up 21% from the 29,519 ounces in
the six months to 31 December 2015 and a 15% increase from the
31,124 ounces in the six months to 30 June 2016.
The Group Earnings before Interest, Tax, Depreciation and
Amortisation ("EBITDA") for the reporting period was $9.22 million
compared to $3.61 million for the corresponding period to 31
December 2015, and up 28% from $7.19 million in H2 FY2016. The H1
FY2017 gross basket price was very close to that realised in H2
FY2016, but increased 7% from $829/ounce in H1 FY2016 to
$883/ounce. Revenue has increased 32% to $24.55 million from $18.53
million recorded in the prior year, due mainly to the increase in
the basket price and increased ounces. SDO cash costs are
furthermore 14% lower than H1 FY2016 at $405/ounce from $471/ounce
but increased marginally by 1% from the $402/ounce for H2
FY2016.
General and Administration costs are down 27% to $0.88 million
from $1.20 million in H1 FY2016 and down 17% from $1.06 million in
H2 FY2016. SDO capital expenditure increased 17% year-on-year to
$0.84 million from $0.72 million due to the first phase of Project
ECHO that commenced during the period. Group cash costs decreased
16% to $425/ounce in comparison to the $508/ounce for the same
period in FY2016 and a 2% decrease from $432/ounce for the six
months to 30 June 2016.
As at 31 December 2016, the Company's cash and cash equivalents
amounted to $12.68 million. The Group cash balance increased by
$5.98 million (89%) from $6.70 million at 30 June 2016 and 148%
from $5.11 million at 31 December 2015. Cash generated from
operations was $5.88 million for the reporting period, which
includes an outflow of $2.70 million for working capital changes
and $1.07 million paid for income tax. The Company spent $0.48
million on share buy backs to fill the final requirements of the
Share Option Plan, and $0.81 on capital expenditure. A net amount
of $0.48 million was received after the review of the underlying
investment for the rehabilitation insurance guarantee, and $0.57
million was received from Ironveld Holdings in terms of the revised
facility agreement. With the majority of the cash generated and
held in South African Rand, the appreciation of the Rand against
the USD also had an impact on the cash balance since 30 June 2016
($0.50 million).
A. SYLVANIA DUMP OPERATIONS
Health, safety and environment
The SDO again had a good safety performance for the six months
ended 31 December 2016, with Steelpoort operation achieving nine
years LTI free, and Tweefontein, Doornbosch and Millsell remaining
LTI free for more than four, three and two years respectively. The
Mooinooi operation unfortunately recorded one LTI during the
period. The Company recorded no significant health or environmental
incidents during the period.
The Company continues to focus on health, safety and
environmental compliance as a key priority, and through the
collaborative efforts of management and all employees across the
operations, we are able to maintain high safety standards and plant
conditions at the respective operations.
Operations
During the past two quarters of the financial year the Company
has achieved successive Company records, and as a result, the
combined PGM production for the operations for the six months ended
31 December 2016 of 35,819 ounces, is a 15% increase from the
31,124 ounces in the six months to 30 June 2016, and a 21% increase
on the 29,519 ounces during H1 FY2016.
The operations performed exceptionally well during the past six
months, with Lannex, Mooinooi and Tweefontein achieving the best
quarterly PGM ounce production figures in the history of the
operations during the period, to contribute toward the new
half-year production record.
The higher PGM ounces during the period can be attributed
primarily to higher PGM recoveries, while the PGM plant feed tons
and feed grades were only marginally higher than both the previous
period (H2 FY2016) and the corresponding first six months of FY2016
(H1 FY2016). The higher PGM recovery efficiency was due to a
combination of improved plant stability at Steelpoort and Lannex
and floatation and mass pull optimisation at Doornbosch,
Tweefontein and Mooinooi operations during the period, as well as
higher recovery efficiencies at Mooinooi associated with improved
flotation residence times due to lower PGM feed tons during the
first quarter of FY2017.
Based on solid year to date performance and the outlook for the
remainder of the year, the SDO expects to exceed the previously
stated guidance of 60,000 ounces by approximately 3,000 to 5,000
ounces.
SDO cash costs are down 14% for the reporting period to
$405/ounce from $471/ounce in the corresponding period to 31
December 2015 (H2 FY2016: $402/ounce), primarily due to a
combination of higher PGM ounce production, lower operating cost
expenditure and a higher ZAR/US$ exchange rate during the
period.
Project ECHO
Project ECHO, the secondary milling and flotation program which
was announced by the company during August 2016, has commenced
during the past six months and the company is on track to deliver
on the PGM ounce profile as communicated. This secondary milling
and flotation technology (MF2) roll-out will lead to improved PGM
recovery efficiencies, lower PGM production unit costs, increased
cash generation, and enable the SDO to extend its profitable
operating life together with sustaining its production profile of
about 55,000 ounces to 60,000 ounces going forward.
B. EXPLORATION AND OPENCAST MINING PROJECTS
Volspruit Platinum Exploration
As reported in the Annual Report of FY2016, the Company
submitted an appeal in the fourth quarter of the previous financial
year to set aside the decision of the Limpopo Department of
Economic Development, Environment and Tourism ("LEDET") to refuse
the Company's application for Environmental Authorisation ("EA")
for the Volspruit Platinum project. Sylvania continues to await a
decision by the Member of the Executive Council for Economic
Development, Environment and Tourism in this regard and will keep
shareholders apprised of any developments.
The Mining Right Application ("MRA") to mine PGMs is furthermore
still pending and it is believed that a decision by the Department
of Mineral Resources ("DMR") will only become available upon
finalisation of the EA Appeal process.
Once a decision is given on the EA Appeal and the awaited MRA,
the Company will need to commence detail design of civil
infrastructure as called for in the National Water Act and commence
with its Integrated Waste and Water Use License Application
("IWWULA") for this project.
Grasvally Chrome Exploration
The Company continues to await the MRA to mine chrome at the
Grasvally project, however the DMR granted an amendment to the
existing prospecting right to include the processing of the old
waste rock dumps during the first quarter of the financial year.
The IWWULA for processing the waste rock dumps applied for in the
fourth quarter of the previous financial year continues to be
awaited and the Company remains positive this will be finalised
shortly.
Sylvania was pleased to receive word that the EA for the project
had been approved during the reporting period. An appeal by
Interested and Affected Parties ("I&AP's) was however received
in January 2017 and together with the consultants, the Company is
preparing a response to be submitted shortly.
Harriet's Wish, Aurora and Cracouw Exploration
The notarial cession of the right to mine iron ore, vanadium and
heavy minerals in favour of a subsidiary of Ironveld Plc was
registered in the Mining Titles Office during the reporting
period.
C. CORPORATE ACTIVITIES
Shares held in Treasury
As announced during the first half of the financial year, the
Company has repurchased a number of Ordinary Shares in Sylvania
Platinum Limited in a total of five transactions. The shares were
repurchased and held in treasury as follows:
Pence per Ordinary Share Par Value
Date Number of Shares
------------------ ------------------- ------------------------- ---------
1 September 2016 830,000 7.5563 US$0.01
------------------ ------------------- ------------------------- ---------
2 September 2016 409,300 7.8774 US$0.01
------------------ ------------------- ------------------------- ---------
9 September 2016 1,260,700 8.4960 US$0.01
------------------ ------------------- ------------------------- ---------
13 September 2016 1,635,000 8.7761 US$0.01
------------------ ------------------- ------------------------- ---------
28 December 2016 600,000 7.6705 US$0.01
------------------ ------------------- ------------------------- ---------
The purchase of shares was motivated by the need to fulfil the
Sylvania Platinum Limited Share Option Plan ("the Plan") as
approved at the Annual General Meeting on 29 December 2011 to avoid
dilution of existing Shareholders investments. At the AGM 10% of
issued Share Capital was approved to be issued as Share Options.
The Company however disclosed that it did not intend to issue more
than 5% of issued Share Capital, based on the number of Ordinary
Shares in issue at the time of the AGM held on 29 December 2011.
The full 5% has been granted and the Board does not intend to issue
any further Options under the Plan.
Following these transactions, the Company's issued share capital
is 297,981,896 Ordinary Shares of which a total of 8,105,887
Ordinary Shares are held in treasury. The total number of Ordinary
Shares with voting rights in Sylvania is thus 289,876,009 Ordinary
Shares.
FINANCIALS
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 December 2016
31 December 31 December
2016 2015
Note $ $
Revenue 1 24,550,903 18,532,296
Cost of sales 2 (17,276,120) (16,763,400)
Gross profit 7,274,783 1,768,896
Other income 18,171 8,652
Foreign exchange gain 330 210,622
Impairment of exploration
and evaluation assets - (8,794)
General and administrative
costs 3 (876,851) (1,194,172)
Finance income 375,620 139,924
Finance costs (129,945) (107,893)
------------- -------------
Profit before income tax
expense 6,662,108 817,235
Income tax expense (2,141,151) (536,213)
------------- -------------
Net profit for the period 4,520,957 281,022
------------- -------------
Cents Cents
------ ------
Profit per share attributable
to the ordinary equity holders
of the Company:
Basic earnings per share 1.56 0.10
Diluted earnings per share 1.52 0.09
1. The revenue for the six months to 31 December 2016 has
increased 32% on the comparative prior period due to a slight
increase in the gross basket price and increased ounces
produced.
2. Cost of production (including indirect and general and
administration and non-cash items) increased by 3%.
3. General and administration costs have decreased by 27%. These
costs include those required to ensure regulatory compliance,
further new and existing business development as well as legal, tax
and financial advisory.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2016
31 December 31 December
2016 2015
$ $
Net cash inflow/(outflow)
from operating activities 4 5,881,593 (317,161)
Net cash inflow/(outflow)
from investing activities 5 232,637 (1,008,397)
Net cash outflow from financing
activities 6 (648,456) (969,355)
------------ ------------
Net increase/(decrease) in
cash and cash equivalents 5,465,774 (2,294,913)
Cash and cash equivalents
at the beginning of reporting
period 6,707,022 8,416,342
Effect of exchange fluctuations
on cash held 502,508 (1,011,697)
------------ ------------
Cash and cash equivalents
at the end of the reporting
period 12,675,304 5,109,732
------------ ------------
4. Net cash inflow from operating activities includes a net
operating cash inflow of $6,724,312, net finance revenue of
$229,689 and taxation paid of $1,072,408.
5. Net cash inflow from investing activities includes payments
for property, plant and equipment of $692,829, exploration and
evaluation assets of $118,489, a net amount of $475,925 received
after the review of the underlying investment for the
rehabilitation insurance guarantee and $568,030 received from
Ironveld Holdings in terms of the revised facility agreement.
6. The net cash outflow from financing activities consists of
the repayment of instalment sale purchases of $166,230, $23,750
spent on the exercise of share options and bonus shares and the
cost of the purchase of the Company's own shares which have been
placed in treasury of $458,476.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2016
31 December 31 December
2016 2015
Note $ $
ASSETS
Non-current assets
Other financial assets 7 295,077 560,377
Exploration and evaluation
assets 8 54,949,663 54,281,364
Property, plant and equipment 9 30,374,574 30,372,479
------------ ------------
Total non-current assets 85,619,314 85,214,220
------------ ------------
Current assets
Cash and cash equivalents 12,675,304 5,109,732
Trade and other receivables 10 17,711,663 12,486,795
Other financial assets 11 973,065 1,470,820
Inventories 12 1,792,219 782,489
Current tax asset 1,467 -
Total current assets 33,153,718 19,849,836
------------ ------------
Total assets 118,773,032 105,064,056
------------ ------------
EQUITY AND LIABILITIES
Shareholders' equity
Issued capital 2,979,819 2,979,819
Reserves 68,625,951 64,433,422
Retained profits 25,685,082 17,711,612
------------ ------------
Total equity 97,290,852 85,124,853
------------ ------------
Non-current liabilities
Interest-bearing loans
and borrowings 13 246,395 117,158
Provisions 14 3,262,406 2,394,046
Deferred tax liability 12,144,644 12,087,951
------------ ------------
Total non-current liabilities 15,653,445 14,599,155
------------ ------------
Current liabilities
Trade and other payables 4,134,530 4,899,758
Interest-bearing loans
and borrowings 13 174,799 208,673
Current tax liability 1,519,406 231,617
------------ ------------
Total current liabilities 5,828,735 5,340,048
------------ ------------
Total liabilities 21,482,180 19,939,203
------------ ------------
Total liabilities and
shareholders' equity 118,773,032 105,064,056
------------ ------------
7. Rehabilitation guarantee investment.
8. Includes exploration and evaluation costs of Volspruit,
Grasvally and all other Northern Limb exploration projects.
9. Comprises mainly of the SDO plants and the properties previously acquired.
10. The trade and other receivables is mainly debtors receivable on concentrate sales.
11. Loan to Ironveld Holdings (Pty) Ltd.
12. Inventory held is finished goods in transit, consumables and spares for the SDO.
13. Interest bearing loans and borrowings are secured over
various motor vehicles, plant and equipment and computer
equipment.
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.
The financial information contained in this announcement does
not comprise full consolidated interim financial report. The full
consolidated interim report can be viewed on the Company's website,
www.sylvaniaplatinum.com.
The consolidated interim financial report has been prepared on a
historical cost basis, except for available-for-sale investments,
embedded derivatives, and investments carried at fair value through
profit or loss, which have been measured at fair value.
CORPORATE INFORMATION
Registered Sylvania Platinum Limited
office:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Postal address: PO Box 976
Florida Hills, 1716
South Africa
Sylvania Website: www.sylvaniaplatinum.com
CONTACT DETAILS
For further information,
please contact:
Terence McConnachie (Chief
Executive Officer) +44 777 533 7175
Nominated Advisor and Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Neil
Elliot
Communications
Alma PR Limited +44 (0) 77 8090 1979
Josh Royston / Hilary Buchanan
/ Helena Bogle
This information is provided by RNS
The company news service from the London Stock Exchange
END
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