JOHANNESBURG (miningweekly.com) – After what the company describes as an “exceptional” first quarter, production by platinum group metal producer Sylvania Platinum declined to 14 701 oz in the three months ended December 31.
The company had reported a sixth consecutive quarter of continuous growth in the prior quarter, lifting output for the three months ended September 30, to a record 16 639 oz.
The company said in a statement on Friday that the reduced second-quarter showing was owing to the start-up and commissioning of hydromining, as well as the planned holiday shutdown period, which affected the December and January supply of current arisings at its Sylvania Dump Operations (SDO), located along the Bushveld Igneous Complex.
The SDO’s second-quarter output brought production for the year-to-date to 31 341 oz.
Group cash costs, which included corporate general and administration costs, increased 21%, from $570/oz in the first quarter to $691/oz in the three months under review – largely as a result of the transition and commissioning costs of converting all mechanical mining to hydromining operations at the SDO.
Lower ounce production also impacted directly on the cost calculations.
Sylvania reported that the gross basket price had remained “relatively stable”, dropping a “mere” 1% to $893/oz from the $904/oz in the previous quarter.
Despite the quarter-on-quarter fall in output, revenue dropped “only” 11%, from $14.5-million to $12.97-million quarter-on-quarter, owing mainly to the improved concentrate sale terms negotiated during the quarter.
“This, however, is a 32% increase year-on-year, despite a similar gross basket price of $891/oz for the same period during the last financial year,” the company outlined.
Sylvania’s cash balance at the end of the quarter was $7.8-million – $1-million higher than the previous quarter's $6.8-million and a 100% increase year-on-year.
Commenting on the quarter, CEO Terry McConnachie said he was “especially pleased” to see the conversion from the mechanical mining of the dumps to a hydromining process.
“These changes to new production methods invariably have delays, but I want to congratulate our team for effecting these changes with minimum downtime and delay.
“The impact of this change to hydromining, although increasing costs initially, is forecast to reduce mining costs by up to 20% in the future. The company costs for the year to date are, however, well in line with forecast,” he commented.
EXPLORATION, OPENCAST PROJECTS
Updating the market on its developing projects, Sylvania outlined that it continued to await the outcome of a mining right application for the Volspruit platinum exploration project, in Limpopo.
However, the company would start with public participation on the water use licence application in February.
“This will include a presentation on the findings of the extensive testing conducted during the Nylsvley river flood event witnessed in the previous year, as well as the opinions of the independent peer reviewers on these findings,” it noted.
Sylvania had, meanwhile, also started compiling all relevant documentation and sought consultation for the application of a mining right on the nearby Grasvally chrome exploration project.
In the interim, testing and samples removed would be used to further prove the high chrome-to-iron ratios of the orebody.
“A resource model is currently being completed over the southern half of the property and the near-surface resource will be classified into indicated and inferred categories,” Sylvania stated.
Further exploration would consist of a drilling programme in the north of the property for a near-surface resource, and additional drilling would be performed to categorise the deeper underground resource.