TIDMSLP
RNS Number : 8612P
Sylvania Platinum Limited
22 February 2021
_____________________________________________________________________________________________________________________________
22 February 2021
Sylvania Platinum Limited
("Sylvania", the "Company" or the "Group")
Interim financial results for the six months ended 31 December
2020
Sylvania (AIM: SLP) is pleased to announce the results for the
six months ended 31 December 2020. Unless otherwise stated, the
consolidated financial information contained in this report is
presented in United States Dollars ("USD").
Achievements
-- Sylvania Dump Operations ("SDO") delivered 36,335 4E PGM
ounces (HY1 FY2020: 40,003 4E PGM ounces). Good production
performance despite lower volumes of fresh arisings and lower PGM
feed grades associated with the scale-down at some host mine
operations;
-- Revenue generated for the period increased 44% to $85.2
million, net of pipeline sales adjustments (HY1 FY2020: $59.0
million), benefitting from the strengthening average gross PGM
basket price in HY1 FY2021 of $3,184/oz (HY1 FY2020:
$1,830/oz);
-- Group EBITDA increased 58% to $58.0 million (HY1 FY2020: $36.7 million);
-- Net profit increased 70% to $40.5 million (HY1 FY2020: $23.9 million);
-- Cash balance at 31 December 2020 of $67.1 million (HY1 FY2020: $33.8 million);
-- Bought back 375,652 shares under the Share Buyback Programme,
as well as 1,448,075 shares from employees, all transferred to
Treasury;
-- 690,000 ordinary shares held in Treasury to be cancelled;
-- Final dividend of 1.6 pence per ordinary share for FY2020
paid in December 2020 (FY2019: 0.78 pence); and
-- Additional Windfall Dividend of 3.75 pence per ordinary share
declared by the Board, to be paid in April 2021.
Challenges
-- T he effects of the global COVID-19 pandemic on employees and
operations remained a key focus for the period and although there
were no associated production losses during the period, management
continues to follow Government guidelines to ensure the safety of
employees and protect production against any future impact;
-- As anticipated, the scale-down of certain operations within
the host mines has continued to affect the SDO PGM ounce production
profile at the Western operations, but improved plant feed rates
and stable production assisted in mitigating against any related
impact; and
-- Operations experienced intermittent power outages associated
with a combination of breakdowns and vandalism of power supply
infrastructure of the national power utility.
Opportunities
-- Lannex mill and spiral upgrade in operation after
commissioning in Q1 and circuit optimisation will continue as ROM
feeds stabilise during Q3 to improve processing efficiencies and
profitability;
-- The MF2 expansion project at Lesedi to improve PGM recovery
efficiency and ounce production has commenced and is anticipated to
commission during HY1 FY2022;
-- R&D efforts identified potential that would enable the
Company to re-treat low PGM grade tailings resources at selected
sites that would otherwise have been sterilised, thereby extending
the operational life of these operations; and
-- The Group remains debt free and continues to generate
sufficient cash reserves to fund capital expansion projects.
Commenting on the period, Sylvania's CEO Jaco Prinsloo said:
"The SDO has achieved a solid 36,335 ounces of PGM production in
the period despite facing an adverse set of circumstances. The
production teams are to be commended for their resilience as they
successfully navigated through the second wave of COVID-19 in South
Africa. Whilst production wasn't directly affected, there was a
greater impact on employees as well as challenges relating to
lower-grade feed sources being processed.
As disclosed in the Chairman's Letter in the FY2020 Annual
Report, the Board committed to pay a Windfall Dividend on the
difference in Rhodium and Palladium prices received versus the 2020
calendar year consensus, net of smelting charges and taxes, if the
prices remained favourable. I am pleased to report that the Board
has approved a Windfall Dividend of 3.75 pence per ordinary share
payable in early April 2021.
The implementation of our process optimisation initiatives, such
as the Project Echo modules and improved fines classification
technology, have contributed to these solid results and the Company
is confident in achieving its target of 70,000 PGM ounces for the
financial year."
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse regulation (EU) no.596/2014 as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019.
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 Jaco Prinsloo .
USD Unit Unaudited Unit ZAR
HY1 2020 HY1 % Change % Change HY1 2021 HY1 2020
2021
---------- --------- --------- ---------- -------------
Production
1,348,769 1,421,445 5% T Plant Feed T 5% 1,421,445 1,348,769
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
2.28 1.93 -15% g/t Feed Head Grade g/t -15% 1.93 2.28
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
615,980 632,079 3% T PGM Plant Feed Tons T 3% 632,079 615,980
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
3.54 3.20 -10% g/t PGM Plant Feed Grade g/t -10% 3.20 3.54
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
57.14% 55.66% -3% % PGM Plant Recovery % -3% 55.66% 57.14%
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
40,003 36,335 -9% Oz Total 4E PGMs Oz -9% 36,335 40,003
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
53,062 49,244 -7% Oz Total 6E PGMs Oz -7% 49,244 53,062
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Average gross basket
1,830 3,184 74% $/oz price R/oz 83% 48,296 26,336
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Financials
50,960 77,545 52% $'000 Revenue (4E) R'000 68% 1,257,824 748,964
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Revenue (by-products
3,375 3,341 -1% $'000 and base metals) R'000 9% 54,194 49,618
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
4,697 4,318 -8% $'000 Sales adjustments R'000 1% 70,050 69,027
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
59,032 85,204 44% $'000 Revenue R'000 59% 1,382,068 867,609
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
21,340 26,156 23% $'000 Operating costs R'000 35% 424,261 313,639
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
General and
administrative
1,155 1,119 -3% $'000 costs R'000 7% 18,154 16,976
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
36,650 58,026 58% $'000 Group EBITDA R'000 75% 941,223 538,656
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
444 574 29% $'000 Net Interest R'000 43% 9,316 6,530
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
9,752 16,864 73% $'000 Taxation R'000 91% 273,540 143,322
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Depreciation and
3,434 1,203 -65% $'000 amortisation R'000 -61% 19,514 50,475
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
23,909 40,534 70% $'000 Net profit R'000 87% 657,485 351,388
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
3,110 2,488 -20% $'000 Capital Expenditure R'000 -12% 40,350 45,710
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
33,817 67,095 98% $'000 Cash Balance R'000 108% 986,406 474,791
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
- - - R/$ Ave R/$ rate R/$ 10% 16.22 14.70
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
- - - R/$ Spot R/$ rate R/$ 5% 14.70 14.04
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Unit Cost/Efficiencies
SDO Cash Cost per
530 710 34% $/oz 4E PGM oz R/oz 48% 11,511 7,795
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
SDO Cash Cost per
400 524 31% $/oz 6E PGM oz R/oz 45% 8,494 5,876
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Group Cash Cost Per
554 739 33% $/oz 4E PGM oz R/oz 47% 11,984 8,140
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
Group Cash Cost Per
418 545 30% $/oz 6E PGM oz R/oz 44% 8,843 6,137
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
All-in sustaining
569 751 32% $/oz cost (4E) R/oz 46% 12,188 8,356
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
629 801 27% $/oz All-in cost (4E) R/oz 41% 12,988 9,242
---------- --------- ------ ------------------------ ------ --------- ---------- -------------
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
received 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,
Pounds Sterling ("GBP") and ZAR.
For the six months under review, the average ZAR:USD exchange
rate was ZAR16.22:$1 and the closing exchange rate was
ZAR14.70:$1.
A. OPERATIONAL OVERVIEW
Health, safety and environment
During the period there were no significant occupational health
or environmental incidents reported. In regards to safety, the SDO
experienced one lost-time injury ("LTI") at Millsell where an
employee suffered an injury to his ribs in a vehicle related
incident while offloading a telehandler. Safety records at
Tweefontein and Doornbosch both remain LTI-free for
eight-and-a-half years whilst Lesedi achieved one-year LTI-free
during Q2.
Impact of COVID-19 and the South African Government imposed
Lockdown
The SDO recommenced operations in Q4 FY2020 following almost
six-weeks of the South African Government imposed hard-lockdown
where all mining operations were placed on care and maintenance.
Operations were accordingly scaled up during HY2 FY2020 and
stabilised during Q1 of the reporting period, with the Company
having implemented various initiatives to safeguard employees from
the effects of COVID-19.
A resurgence of the virus in South Africa occurred during Q2
which presented new challenges. Although no disruptions to
operations were experienced, some employees were impacted. After
not having any infections during August to November 2020, the
Company reported 4 positive cases during December 2020 and 21 new
cases during January 2021. Thankfully, at the time of this report,
most employees who recorded active cases of the virus had recovered
and returned to work, with the total number of reported cases
within the Company since March 2020 to date standing at 39.
With a revised level-3 lockdown imposed on 1 February 2021, the
Group continues to monitor the situation closely and has
implemented further measures to ensure the health and safety of
employees, as well as limit any impact on production. Access to
sites has been restricted to employees and essential services
required to sustain operational performance, and employees continue
to work from home where possible.
Operational performance
The SDO achieved 36,335 ounces for the first half of the 2021
financial year. Half-year on half-year PGM production decreased 9%,
predominantly as a result of lower volumes of fresh ROM and current
arisings material and lower PGM feed grades associated with the
scale-down at some host mine operations since March 2020. This
decrease is in line with the anticipated impact on production of
10% to 15% as announced previously.
PGM plant feed tons increased 3% in comparison to HY1 FY2020,
however PGM plant feed grade decreased 10% and PGM plant recovery
decreased 3% as a result of more oxidised and lower grade material
currently being treated. Although there have been some signs of a
recovery in the chrome market during recent months, the scaled-down
operations at selected host mines are expected to continue to
impact on PGM production for the next 6 to 12 months and operations
will continue to focus on plant throughput stability and
efficiencies to mitigate this impact.
Cash costs per ounce for the SDO increased 48% in ZAR terms from
ZAR7,795/oz to ZAR11,511/oz and 34% in USD terms from $530/oz to
$710/oz. The increase is partially attributable to the decrease in
PGM ounce production and the increase in the mineral royalty tax
rate from 0.5% to 7%. The increase in the mineral royalty tax cost
is a result of the SDO having fully utilised its capital allowances
at 30 June 2020, which previously reduced the tax rate applied, and
the increase in revenue due to the significantly higher basket
price. The rate is capped at 7% and in the absence of any future
large capital spend, is set to remain at this rate going forward.
Salaries and wages; consulting fees incurred for permitting; higher
mining costs related to the increase in dump re-mining tons and the
cost to mitigate the impact of lower ROM and current arisings tons
that were delivered directly to the plants by the host mine; higher
electricity costs and an increase in consumables also contributed
to the higher cash cost.
Operational focus areas
Optimisation of flotation performance and recovery efficiencies
remain a focus area, especially at the Western operations, where
lower-grade and more oxidised open cast ROM material is currently
being treated as a result of the previously announced scale-down at
the host mines.
Although power disruptions or production losses related to
load-shedding by the national power utility were less frequent
during the reporting period, there has been a significant increase
in vandalism and theft of copper cables at various sub-stations of
the utility, particularly at Western operations during Q2, that
affected power supply and production which has resulted in
approximately 2% downtime in the reporting period. During the past
year the Company has been investigating alternative power supply
options based on the specific needs and requirements of the
respective operations and we are currently evaluating the results.
Initial indications are that green energy solutions could range in
cost to between $3.0 million and $5.0 million per operation,
depending on the plant size and existing infrastructure.
Evaluations are underway which take the capital requirements,
running costs and expected life of mine metrics to assess the
merits of both potential green-energy solutions and more
conventional systems in order to optimise value add to the
operations.
There have been continued improvements in the water supply
issues at Tweefontein following the completion of the boreholes, as
announced in the Company's HY1 FY2020 report. Although not
significantly impacting production during the reporting period,
planning continues to establish a dedicated water supply to the
Lesedi operation.
Capital Projects
The new Lannex mill and spiral upgrade is in operation after
being commissioned during the reporting period and circuit
optimisation is ongoing. This project will enable the plant to
improve processing efficiencies and profitability based on the
current feed sources that include the ROM fines from open cast
operations.
The Mooinooi chrome proprietary processing modifications and
optimisation project to improve fines classification and fine
chrome recovery efficiency is on track and expected to be
commissioned during HY2 FY2021, which will contribute towards
improving PGM feed grades and ounces at the plant.
The proposed MF2 expansion at Lesedi, similar to existing
Project Echo modules rolled out between 2016 and 2020, was
fast-tracked in order to mitigate the delayed Tweefontein module
due to power constraints, and is scheduled to be commissioned
towards the end of HY1 FY2022. The construction of the new
secondary milling and flotation module will improve the upgrading
and recovery of PGMs.
Following promising results from the Company's specific fine
chrome recovery research and test work initiated in HY1 FY2020, a
circuit configuration and technology has been identified to enable
the economic recovery of fine chrome from some existing dumps,
which has historically been uneconomical to recover. This latest
development could enable the Company to re-treat low PGM grade
tailings resources that would otherwise have been sterilised
thereby extending the operational life of PGM operations at
selected sites. This would also add value to the host mines through
increased chrome recovery and production and the Company is
currently engaging with the host mine in relation to this.
Outlook
Management and the Board remain confident that the operations
should achieve the previously announced target for production of
70,000 ounces for FY2021. However, the Board is mindful of the
potential challenges ahead and will continue to monitor the impact
of COVID-19 and the reduced feed from the host mines.
B. FINANCIAL OVERVIEW
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS
For the half year ended 31 December 31 December 31 December
2020 2020 2019
Note $ $
Revenue 1 85,204,446 59,032,353
Cost of sales (24,709,262) (24,579,603)
Royalties tax (2,595,982) (122,401)
Gross profit 57,899,202 34,330,349
Other income 24,716 34,916
Other expenses 2 (1,100,567) (1,149,341)
Operating profit before net finance
income and income tax expense 56,823,351 33,215,924
Finance income 888,300 697,509
Finance costs (313,996) (253,239)
------------- -------------
Profit before income tax expense 57,397,655 33,660,194
Income tax expense 3 (16,863,716) (9,751,668)
Net profit for the period 40,533,939 23,908,526
============= =============
Cents Cents
Profit per share for profit attributable
to the ordinary equity holders of the
Company:
Basic earnings per share 14.90 8.42
Diluted earnings per share 14.56 8.22
1. Revenue is generated from the sale of PGM 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.
3. Income tax expense include current tax, deferred tax and
dividend withholding tax.
The average gross basket price for the six months to 31 December
2020 was $3,184/oz compared to $1,830/oz for the six months ended
31 December 2019. The Group recorded revenue of $85.2 million for
the six months to 31 December 2020, a 44% increase half-year on
half-year, as a result of the higher basket price. The increase of
Palladium and Rhodium had the largest impact on the basket
price.
The operational cost of sales is incurred in ZAR and represents
the direct and indirect costs of producing the PGM concentrate and
amounted to ZAR424.3 million for the reporting period compared to
ZAR313.6 million in the six months to 31 December 2019. The main
cost contributors being salaries and wages of ZAR135.0 million (HY1
FY2020: ZAR118.0 million), mining costs of ZAR44.3 million (HY1
FY2020: ZAR35.6 million), reagents and milling costs of ZAR31.0
million (HY1 FY2020: ZAR24.6 million), electricity of ZAR49.5
million (HY1 FY2020: ZAR43.2 million) and royalty tax of ZAR42.1
million (HY1 FY2020: ZAR1.8 million). The significant increase in
mineral royalty tax is as a result of the increase in rate from
0.5% to 7%. The increase in the mineral royalty tax cost is a
result of the SDO having fully utilised its capital allowances at
30 June 2020, which previously reduced the tax rate applied, and
the increase in revenue due to the significantly higher basket
price. The rate is capped at 7% and in the absence of any future
large capital spend, is set to remain at this rate going
forward.
Cash costs per ounce for the Group were ZAR11,984/oz compared to
ZAR8,140/oz in the previous corresponding period. The all-in
sustaining cost ("AISC") for the Group amounted to ZAR12,188/oz and
an all-in cost ("AIC") of ZAR12,988/oz for the period to 31
December 2020. This compares to the AISC and AIC for 31 December
2019 of ZAR8,356/oz and ZAR9,242/oz respectively.
General and administrative costs were $1.1 million for the six
months to 31 December 2020 compared to $1.2 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 4% per annum. Interest is paid on
instalment sale agreements for the purchase of movable plant and
vehicles.
Income tax is paid in ZAR on taxable profits generated at the
South African operations at a rate of 28%. Income tax charged for
the six months to 31 December 2020 is ZAR273.5 million compared to
ZAR143.3 million for the six months to 31 December 2019 due to the
increase in revenue. 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 31 December 31 December
2020 Note 2020 2019
$ $
Net cash inflow from operating activities 4 12,327,520 19,774,892
Net cash outflow from investing activities 5 (2,593,164) (3,217,914)
Net cash outflow from financing activities 6 (7,332,565) (5,133,572)
------------ ------------
Net increase in cash and cash equivalents 2,401,791 11,423,406
Effect of exchange fluctuations on
cash held 8,816,921 596,652
Cash and cash equivalents beginning
of reporting period 55,876,612 21,797,141
Cash and cash equivalents, end of
reporting period 67,095,324 33,817,199
------------ ------------
4. Net cash inflow from operating activities includes a net
operating cash inflow of $26,053,595, net finance income of
$818,380 and taxation paid of $14,544,455.
5. Net cash outflow from investing activities includes payments
for property, plant and equipment of $2,276,262, exploration and
evaluation assets of $211,309, loan to joint operation $109,129 and
cash inflow of $3,536 from proceeds on disposal of property, plant
and equipment.
6. The net cash outflow from financing activities consists of
the repayment of borrowings of $68,346, payment of lease
liabilities of $40,514, payments for share transactions of
$1,364,330 and dividends declared and paid of $5,859,375.
Cash is held in USD and ZAR. As at 31 December 2020, the
Company's cash and cash equivalents balance was $67.1 million. Cash
generated from operations was $12.3 million for the reporting
period, which includes an outflow of $32.4 million for working
capital changes due to an increase in trade receivables as a result
of the increase in the gross basket price and the four-month
payment pipeline in terms of the off-take agreements and $14.5
million paid in provisional income tax. The Company spent $2.5
million on capital expenditure comprising of $0.9 million on
specific optimisation projects, $1.4 million on stay in business
capital and $0.2 million on exploration projects. In December 2020,
$5.9 million was paid to shareholders as a dividend and $1.4
million was spent on share buybacks. With the strengthening of the
ZAR against the USD the reported cash balance increased by $8.8
million from the last reporting date of 30 June 2020. 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 31 December 2020 30 June 2020
POSITION
As at 31 December 2020
Note $ $
Assets
Non-current assets
Other financial assets 7 278,869 226,009
Exploration and evaluation
assets 43,943,342 42,840,775
Property, plant and equipment 36,974,430 30,472,227
----------------- -------------
Total non-current assets 81,196,641 73,539,011
Current assets
Cash and cash equivalents 8 67,095,324 55,876,612
Trade and other receivables 9 67,107,455 27,074,169
Other financial assets 809,082 622,711
Inventories 10 3,574,069 2,166,294
Current tax asset 6,091 1,047
Total current assets 138,592,021 85,740,833
Assets held for sale 4,100,918 3,436,086
Total assets 223,889,580 162,715,930
----------------- -------------
Equity and liabilities
Shareholders' equity
Issued capital 11 2,868,457 2,868,457
Reserves 12 61,321,522 41,594,587
Retained earnings 130,758,571 96,084,007
----------------- -------------
Total equity 194,948,550 140,547,051
----------------- -------------
CONSOLIDATED STATEMENT OF FINANCIAL 31 December 2020 30 June 2020
POSITION
As at 31 December 2020
Continued/
Note $ $
Non-current liabilities
Borrowings 13 160,234 235,576
Provisions 14 4,579,219 3,646,044
Deferred tax liability 10,498,097 9,328,039
----------------- -------------
Total non-current liabilities 15,237,550 13,209,659
----------------- -------------
Current liabilities
Trade and other payables 10,079,755 7,519,728
Borrowings 13 248,077 215,918
Current tax liability 3,373,375 1,199,324
Total current liabilities 13,701,207 8,934,970
Liabilities directly associated
with assets held for sale 2,273 24,250
----------------- -------------
Total liabilities 28,941,030 22,168,879
----------------- -------------
Total liabilities and shareholders'
equity 223,889,580 162,715,930
----------------- -------------
7. 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.
8. The majority of the cash and cash equivalents are held ZAR
and USD. ZAR denominated balances make up $48,315,163
(ZAR710,308,194) of the total cash and cash equivalents
balance.
9. Trade and other receivables consist mainly of amounts receivable for the sale of PGMs.
10. Inventory held is spares and consumables for the SDO.
11. The total number of issued ordinary shares at 31 December
2020 is 286,845,657 Ordinary Shares of US$0.01 each (including
14,237,042 shares held in treasury), 375,652 shares were bought
back through the Share Buyback Programme, 75,000 shares were issued
to non-executive directors and 2,505,000 bonus shares were
exercised.
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.
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
As announced in the Annual Report FY2020, the Group assesses the
value of its mineral asset development projects on a regular and
consistent basis. Various studies have been initiated in order to
determine how best to optimise the respective projects by targeting
more localised higher-grade areas and considering less
capital-intensive infrastructure and processes to unlock value.
Grasvally Chrome Project
The Grasvally Chrome Project remains an asset for sale and the
Option Agreement as negotiated and reported in the Company's Annual
Report FY2020 is still valid. Any change or development in the
status of the sale or any other important aspect of the project
will be communicated without delay to shareholders.
Volspruit Platinum Project
During the period under review, technical consultants were
engaged to evaluate and optimise mine designs, evaluate process
design and update metallurgical performance parameters through
additional test work. The final test work report is expected in the
next quarter and the planning phase towards updating the
Environmental Impact Assessment ("EIA") for the project and to
obtain the Water and Waste Use Licenses is ongoing which
incorporates specialist studies still to be completed.
Northern Limb Projects
The Company employed specialist consultants to assist in
evaluating these resources and to explore the economic potential of
the deposits and studies have identified specific higher-grade
portions along the ore body that could potentially be attractive
for shallow, low-risk open cast extraction and PGM processing. A
concept level mining study to confirm initial findings has begun
and will continue until late 2022. The study will include infill
drilling and additional assaying.
D. CORPORATE ACTIVITIES
Dividend Approval and Payment
The Board declared a final dividend of 1.60 pence per ordinary
share on 7 September 2020 with a record date of 30 October 2020 and
payment date of 4 December 2020.
In addition to the annual dividend paid, the Board recognises
that the Company has enjoyed a significant positive cashflow impact
as a result of the Palladium and Rhodium prices and has approved a
one-off Windfall Dividend of 3.75 pence per ordinary share, payable
on 9 April 2021. Payment of the dividend will be made to
shareholders on the register at the close of business on 5 March
2021 and the ex-dividend date is 4 March 2021.
This Windfall Dividend payment is based on excess cashflow
generated from Palladium and Rhodium prices achieved above
long-term broker consensus prices for these metals for the 2020
calendar year. Actual production achieved, actual prices achieved
and the actual ZAR exchange rate has been taken into account as
well as its share of royalties, corporate tax and dividend
withholding tax. Consideration taken as to the calculation of the
Windfall Dividend has been on an "achieved basis" and is a once-off
consideration.
Transactions in Own Shares
During the period the Company concluded its second Share Buyback
Programme in which it bought back 1,047,599 shares from
certificated non-UK shareholders who held 175,000 shares or fewer
in the Company.
The Non-Executive directors of the Company were awarded 25,000
shares each and a total of 2,505,000 shares were exercised by
various directors and employees which vested from bonus shares
awarded to them in August 2017. All shares awarded came from
Treasury and 1,053,250 of the vested bonus shares which were
repurchased to satisfy the tax liabilities of certain employees and
394,825 shares which were repurchased were placed back into
Treasury.
Accordingly, at the end of the period the Company's issued share
capital was 286,845,657 Ordinary Shares, of which a total of
14,237,042 were held in Treasury. Therefore, the total number of
Ordinary Shares with voting rights was 272,608,615.
Post period end, the Board has approved the cancelation of
690,000 Ordinary Shares held in Treasury. Following the
cancellation, the Company's issued share capital is 286,155,657
Ordinary Shares, of which a total of 13,547,042 Ordinary Shares are
held in Treasury. Therefore, the total number of Ordinary Shares
with voting rights is 272,608,615.
CONTACT DETAILS
For further information, please
contact:
Jaco Prinsloo CEO
Lewanne Carminati CFO +27 11 673 1171
Nominated Adviser and Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Scott Mathieson
/ Ed Phillips
Communications
Alma PR Limited +44 (0) 20 3405 0208
Justine James / Helena Bogle / sylvania@almapr.co.uk
Josh Royston /
Faye Calow
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
About Sylvania Platinum Limited
Sylvania Platinum is a lower-cost producer of platinum group
metals (PGM) (Platinum, Palladium and Rhodium) with operations
located in South Africa. The Sylvania Dump Operations (SDO)
comprises six chrome beneficiation and PGM processing plants
focusing on the retreatment of PGM-rich chrome tailings materials
from mines in the Bushveld Igneous Complex. The SDO is the largest
PGM producer from chrome tailings re-treatment in the industry. The
Group also holds mining rights for PGM projects and a chrome
prospect in the Northern Limb of the Bushveld Complex.
For more information visit https://www.sylvaniaplatinum.com/
ANNEXURE
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
---------------------------------------------------------------------
Adjusted Group Earnings before interest, tax, depreciation and amortisation
EBITDA adjusted for impairments
---------------------------------------------------------------------
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
All-in cost capital expenditure
---------------------------------------------------------------------
Bonus Shares Sylvania Platinum Limited Bonus Share Award Plan
---------------------------------------------------------------------
CGU Cash generating unit
---------------------------------------------------------------------
Fresh chrome tails from current operating host mines processing
Current risings operations
---------------------------------------------------------------------
DMRE 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
---------------------------------------------------------------------
GBP Pounds Sterling
---------------------------------------------------------------------
IASB International Accounting Standards Board
---------------------------------------------------------------------
IFRIC International Financial Reporting Interpretation Committee
---------------------------------------------------------------------
IFRS International Financial Reporting Standards
---------------------------------------------------------------------
I&APs Interested and Affected Parties
---------------------------------------------------------------------
IRR Internal Rate of Return
---------------------------------------------------------------------
JO Joint operation
---------------------------------------------------------------------
LED Local Economic Development
---------------------------------------------------------------------
Limpopo Department of Economic Development, Environment and
LEDET Tourism
---------------------------------------------------------------------
Phoenix Platinum Mining Proprietary Limited, renamed Sylvania
Lesedi Lesedi
---------------------------------------------------------------------
LSE London Stock Exchange
---------------------------------------------------------------------
LTI Lost time injury
---------------------------------------------------------------------
MAR Market Abuse (Amendment) (EU Exit) Regulations 2019
---------------------------------------------------------------------
MF2 Milling and flotation technology
---------------------------------------------------------------------
MPRDA Mineral and Petroleum Resources Development Act
---------------------------------------------------------------------
MRA Mining Right Application
---------------------------------------------------------------------
NWA National Water Act 36 of 1998
---------------------------------------------------------------------
Persons displaying managerial responsibilities as defined
PDMR by the Market Abuse Regulation
---------------------------------------------------------------------
Platinum group metals comprising mainly Platinum, Palladium,
PGM Rhodium and Gold
---------------------------------------------------------------------
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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SLP Social and Labour Plan
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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
---------------------------------------------------------------------
WULA Water Use Licence Application
---------------------------------------------------------------------
UK United Kingdom of Great Britain and Northern Ireland
---------------------------------------------------------------------
ZAR South African Rand
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END
IR GLGDDSUDDGBD
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February 22, 2021 02:00 ET (07:00 GMT)
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