JOHANNESBURG (miningweekly.com) – Low-cost platinum-group metals (PGM) processor Sylvania Platinum produced 53 808 oz of PGMs in the 2014 financial year, beating its forecast of 51 000 oz.

Output for the year also represented a 22% increase on the 44 095 oz produced in the previous financial year.

In the three months ended June 30, the Sylvania Dump Operations (SDO) had achieved its highest quarterly production to date, with output of 15 435 oz being 17% higher than the 13 185 oz produced in the quarter ended March 31.

This was also the fifth consecutive quarter of continuous growth.

Sylvania attributed the higher production to increased and more consistent plant feed tons, improved plant stability, improved plant feed grades and improved technical focus on the operations.

“This continuous upward production trend for the last five quarters in a row is no mean feat when one considers that this record was achieved during a period of extreme and unprecedented industrial action in the platinum industry,” commented Sylvania Platinum CEO Terry McConnachie.

The higher production, along with a 4% quarter-on-quarter increase in the gross PGM basket price to $976/oz for the quarter ended June 30, resulted in a 16% rise in revenue to $14.2-million, compared with the $12.2-million earned in the third quarter.

Further, production costs remained relatively stable at $634/oz for the quarter under review, compared with $619/oz in the previous quarter.

“The capital expenditure on the SDO has been contained to all-time lows, and costs, although slightly up, are still among the lowest costs per ounce produced in the industry.  Our stable steady state production, reduced capital expenditure and controlled costs bode well for the future of the company,” said McConnachie.

Research analysts from Liberum Capital, meanwhile, commented that, at the current operational performance and given an expected increase in the PGM basket price, Sylvania would be “hugely cash generative” in 2015.

“Very low labour intensity of production leads to much lower cost inflation than its peers, as well as less operational disruption. Sylvania also has three times the exposure the majors have to rhodium, whose price is up 37% since December to $1 225/oz.

“We believe it to be the best global PGM play and expect strong share price outperformance in the coming months,” the analysts stated.

OPERATIONAL BREAKDOWN
Sylvania reported that its Millsell operation had produced 2 140 oz of PGMs in the quarter ended June 30, a 21% rise on the 1 771 oz produced in the March quarter.

The Lannex operation achieved a 15% quarter-on-quarter increase in production to 2 171 oz, while output from the Steelpoort plant, at 2 061 oz, was in line with the 2 058 oz produced in the previous quarter.

Output from the Mooinooi Dump Operation increased 7% quarter-on-quarter to 1 932 oz, while the Mooinooi run-of-mine plant produced 1 323 oz for the quarter, a 3% improvement on the 1 286 oz produced in the previous quarter.
 
Sylvania’s Doornbosch operation achieved a 53% rise in output to 3 390 oz for the quarter ended June 30, while the Tweefontein operation increased its output by 12% to 2 418 oz.

EXPLORATION PROJECTS
Meanwhile, Sylvania reported that it expected to receive a decision on its mining right application for the Volspruit project from the Department of Mineral Resources in the first quarter of the 2015 financial year.

The company also noted that a Section 11 consent to transfer the prospecting right for the Grasvally chrome exploration project had been registered with the Mining Titles Office in June.

In December last year, the platinum producer had entered into a R25-million deal to acquire the rights to platinum-group-metals- and chrome-bearing minerals on portions of the Grasvally and Zoetveld farms that were adjacent to its Volspruit project.

“This acquisition potentially adds to the resource base of the Volspruit project and also brings a modest, but attractive, chromite ore production opportunity into consideration for the company,” Sylvania noted at the time.

The first R5-million of the purchase consideration had been paid last year and, now that the transfer of the prospecting right had been completed, Sylvania had settled the balance.

The company has also started with enquiries that would lead to the eventual application for a mining right for the project.