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SDO achieves full-year production targets

8th September 2022

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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Aim-listed Sylvania’s Dump Operations (SDO) achieved a solid production performance of 67 053 oz of platinum, palladium, rhodium and gold (4E) platinum group metals (PGMs) for the financial year ended June 30.

This was in line with its production targets and notable given that it was a turbulent year with macroeconomic challenges, CEO Jaco Prinsloo says.

“A key contributor to achieving this result was the stellar performance of the Tweefontein plant, which achieved monthly, quarterly, six-monthly and annual production records during the period.

“Furthermore, and no less stellar, our Doornbosch plant achieved ten-years lost-time-injury-free in June and was awarded the 'Best-in-class Safety Performance' commendation by the Mine Metallurgical Managers Association of South Africa,” Prinsloo acclaims.

“Strong effort was put in by all production teams and the newly commissioned [milling and flotation (MF2)] circuit at Lesedi, as well as the improvement in run-of-mine (RoM) PGMs grade received from the host mine in the last half of the year, assisted the group to deliver ounces in the mid-range of its stated production target,” Prinsloo adds.  

The new Lesedi tailings storage facility was successfully commissioned during March, with optimisation of the Lesedi MF2 plant continuing.

The MF2 expansion at Tweefontein is on track to start commissioning and to start contributing PGM ounces during December.

Following the successful roll-out of MF2 and ultra-fine screening circuits at various operations since 2017, this technology is now also being implemented at Lannex, with commissioning scheduled towards the end of the 2023 calendar year.

For the period, Sylvania achieved net revenue of $151.9-million, group earnings before interest, taxes, depreciation and amortisation of $82.8-million and a net profit of $56.2-million.

It had a positive group cash balance of $121.3-million with no debt and no pipeline financing.

Sylvania bought back 6.6-million shares in the market, equating to $7.1-million and cancelled six-million shares.

The lower PGM feed grades and recovery potential associated with the considerable increase in opencast RoM sources during the period impacted on both PGMs production and operating costs for most of the year.

The effect of high global inflation and economic uncertainty continues to impact the cost of reagents, fuel and transport.

“Clearly, commodity pricing has been more volatile than we have seen for some time, with a 23% decrease in the average basket price received, which impacted our overall financial results for the year. However, looking forward I am optimistic about the uptick displayed in the chrome market.

“The impact of higher global cost inflation is inevitable, and we continue to maintain prudent cash management with disciplined capital allocation and control, as well as production cost control.

“This ensures that the company remains in a position with sufficient cash reserves to cover working capital for the pipeline period, finance capital projects, fund growth and exploration and mitigate any potential future adverse impacts it may face,” Prinsloo outlines.

Sylvania has declared a yearly cash dividend of 8p an ordinary share for the full year. A windfall dividend of 2.25p an ordinary share was declared and paid in April.

“Looking ahead, I am confident that our operations will continue to deliver a strong production performance and, as a consequence, [we] have set an annual production target of 68 000 oz to 70 000 oz [of 4E PGMs] for the year ahead,” informs Prinsloo.

Back-up power supply systems will be implemented at the three most affected operations during the next year to mitigate any potential power supply disruptions associated with either vandalism of power supply infrastructure or potential load-shedding by national power utility Eskom.

Post-period end, all of the conditions precedent for the sale of 100% of the shares in, and claims against Grasvally Chrome Mine, to Forward Africa Mining, have been fulfilled and the sale became unconditional as of July 8.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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