TIDMSLP
RNS Number : 5387M
Sylvania Platinum Limited
31 July 2017
Sylvania Platinum Limited
("Sylvania", "the Company" or "the Group")
AIM (SLP)
"Sylvania acquires Phoenix Platinum for R89 million"
31 July 2017
Sylvania Platinum Limited, the low cost Platinum Group Metal
("PGM") processor and developer, today announces that the Company
has entered into a conditional agreement with Pan African Resources
Plc ("PAR") (the "Agreement") to acquire 100% of the shares in and
claims against Phoenix Platinum Mining Proprietary Limited
("Phoenix") for a purchase price of R89 million ($6.6 million),
(the "Acquisition"), settled in cash.
HIGHLIGHTS
-- Phoenix is a PGM dump operation with an operational PGM
concentrator plant and approximately 2.4mt of tailings dump
resources of a similar grade and recovery potential as Sylvania's
neighbouring Mooinooi dump operation.
-- Phoenix to be acquired for a cash consideration of R89
million, to be funded from existing cash resources.
-- Due to the close proximity of Phoenix to Sylvania's existing
operations and similar process and business model, certain
synergies are expected to be achieved by the combined operations.
This acquisition together with Project Echo is expected to
contribute to Sylvania's growth potential over the coming years and
to reduce costs.
Commenting on the transaction, Sylvania's CEO Terry McConnachie
said:
"The Phoenix project is a significant acquisition for Sylvania
as we look for growth opportunities. Phoenix is a PGM dump
operation with potential synergies with our existing operations
which will assist us in increasing our production and earnings
profile going forward. The geographical location of this asset will
allow us to effectively utilise our existing infrastructure and
management team to enhance this business. We look forward to
bringing the Phoenix asset into the Sylvania portfolio."
BACKGROUND ON PHOENIX
Phoenix was acquired by PAR in 2009. The Phoenix operation
consists of a 30,000tpm Chrome Tailings Retreatment Plant ("CTRP")
which was commissioned in November 2011 and reached full production
in May 2012. The Phoenix CTRP is located in the North West Province
near to the Company's Millsell and Mooinooi complexes.
Phoenix currently recovers PGM's from chrome tailings dumps and
dams through Mineral Rights Agreements pertaining to the Kroondal
and Elandskraal tailings dumps, and Buffelsfontein Tailings Dams
and potential future current arisings at the Lesedi Mine, recently
acquired by Samancor Chrome. As part of the acquisition, Sylvania
will acquire an independent property for tailings disposal with
associated regulatory approvals.
Phoenix currently has Chrome dump reserves of approximately
2.4mt, containing 2.5g/t 4E PGE's and is estimated to sustain
current production levels for approximately eight to nine
years.
During the previous published reporting period for the six
months to 31 December 2016, Phoenix produced 762oz of PGM's per
month, generating $0.5m revenue per month, at a cash operating cost
of approximately $643/oz. Sylvania's Board and management believe
that based on synergies and experience from Sylvania's current
operations there is an opportunity to reduce the operating costs
and improve production output.
The information in the table below is extracted from the PAR
Interim results for the six months ended 31 December 2016 and
Annual Results for the year ended 30 June 2016:
31 December 30 June 2016
2016
$'million $'million
------------- --------------- --------------
GBP:USD GBP1: $1.23016 GBP1: $1.33949
------------- --------------- --------------
Revenue 2.9 4.7
------------- --------------- --------------
Loss before
tax (0.28) (0.7)
------------- --------------- --------------
Net assets 13.2 12.2
------------- --------------- --------------
As at 30 June 2016, Phoenix had a SAMREC compliant resources and
reserves as set out below:
Category Tonnes Grade Tonnes Moz
(millions) (g/t)
------------- ----------- ------------ ------- ------- ----
Mineral Measured 1.4 2.43 3.4 0.1
Resource(*) Indicated 1.3 2.65 3.4 0.1
Inferred 3.5 3.65 12.6 0.4
------------------------- ------------ ------- ------- ----
Total 6.2 3.16 19.4 0.6
------------------------- ------------ ------- ------- ----
Category Tonnes Grade Tonnes Moz
(millions) (g/t)
------------- ---------- ------------ ------- ------- ----
Mineral Proved 1.4 2.43 3.4 0.1
Reserves(*) Probable 1.3 2.65 3.4 0.1
Total 2.7 2.54 6.8 0.2
------------------------ ------------ ------- ------- ----
(*) The above tables are as published in the PAR Mineral
Resources and Reserves report for the year ended 30 June 2016.
TERMS OF THE ACQUISITION
Under the terms of the Agreement, the purchase price of R89
million ($ 6.6 million) is to be settled in cash on the Effective
date. The consideration will be funded from existing cash
resources.
The Agreement is subject to the following conditions
precedent:
-- The completion of an internal due diligence review of
Phoenix's operations and taxation compliance by an independent
third party;
-- Approval of the Competitions Authorities in accordance with
South African competition legislation;
-- the requisite consent or approval of Samancor Chrome and TC
Smelters, on whose mining premises the plant and part of the dumps
are situated, has been obtained in writing for the implementation
of the Sale ; and
-- the consent of PAR's Lenders.
The Parties shall use all of their commercially reasonable
endeavours to procure the fulfilment of the relevant Conditions
Precedent as soon as reasonably possible after the Signature Date
and shall, to the extent that such Conditions Precedent have been
fulfilled, prior to the expiry of the relevant date and time
periods set out therein, furnish to the other Parties all documents
evidencing the fulfilment of such Conditions Precedent.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
CORPORATE INFORMATION
Registered and Sylvania Platinum Limited
postal 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 / Neil
Elliot
Communications
Alma PR Limited +44 (0) 77 8090 1979
Josh Royston / Helena Bogle
/ Hilary Buchanan
ABOUT SYLVANIA PLATINUM
Sylvania Platinum Limited (AIM:SLP) is a rapidly expanding
producer of the platinum group metals ("PGMs") platinum, palladium
and rhodium, with two distinct lines of business: the re-treatment
of PGM-rich chrome tailings material from mines in the region and
processing methods for low-cost PGM extraction. All of the Group's
assets are situated in various locations across South Africa's
Bushveld Igneous Complex ("BIC"), which is the world's richest
source of PGMs.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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