The sale of its iron-ore assets to London-listed Ironveld has contributed to junior miner Sylvania Platinum’s return to profit- ability during the year to June 30.

After posting a net loss of $3.97-million last year, Sylvania last week delivered a net profit after tax of $4.36- million.

The platinum group metals (PGMs) producer achieved basic earnings a share of 1.45c during the year under review, compared with the basic loss a share of 1.32c last year.

Revenue for the year remained flat at $40-million.

“In a difficult market and with tough operating con- ditions, it is pleasing to be able to announce a profit- able year, recognising our results were boosted by the Ironveld transaction,” Sylvania CEO Terry McConnachie said.

Tough market conditions, labour disputes and safety stoppages, as well as power outages and energy avail- ability had hampered the company’s South Africa-based operations.

Group earnings before interest, tax, depreciation and amortisation (Ebitda) fell 8%, from $3.7-million in 2012, to $3.4-million, excluding the Ironveld trans- action, in 2013.

But despite the volatile metal prices and exchange rates and a 16% increase in total operating costs over the last year, the group had maintained a positive Ebitda, McConnachie added.

Sylvania also managed to maintain a cash positive balance sheet with $6.6-million during the year under review – despite recording a significant decline from the $15.7-million reported in 2012 – and gene- rated a net cash inflow from operations of $4-million.

During 2013, the company reported capital expenditure of $10.3-million – a 32% decrease on the $15.1-million spent last year.

Meanwhile, total production for the year was down 3% from 45 735 oz to 44 255 oz, with the company reporting a loss of 1 480 oz owing to labour unrest, which indirectly impacted on its production, and the idling of the chrome tailings retreatment plant.

However, Sylvania said that the final few months of the 2013 financial year saw production recover slightly, with operations producing at a rate of 4 250 oz/m during May and June, while the Mooinooi plant produced over 1 000 oz each month.

Production is expected to reach 51 000 oz, at an estimated group cash cost of $700/oz, during the next year.

But, McConnachie warned that the immediate outlook for the platinum industry appeared less certain than a year ago.

Sylvania chairperson Stuart Murray said that the market had to return to a balance between supply and demand.

“Prices of our principal metals have been falling all year; many administered costs, such as electricity, that cannot be controlled, are rising inexorably, and the platinum industry as a whole – most of it concentrated in South Africa – has still to resolve the problems of labour discord and violence that have marred operational performances virtually across the board, not only in platinum,” he stated.

“Platinum producers cannot continue to rely on investment buying to support PGM prices,” Murray explained, adding that the firm would not call on investors for additional capital.

Sylvania, which had the “industry’s lowest” costs per unit of platinum, narrowed its focus to dump reprocessing and generating cash flows.

“Our strategy involves deferring capital expenditure and project development until there are fundamental and long-term improvements in the platinum industry,” Murray noted.

The planned Tweefontein Phase 2 and the Mooinooi stockpile were mothballed until Sylvania’s cash reserves were strong enough to “weather any future potential industry-wide disruptions”.

Further, work on the northern limb projects, Volspruit and Everest North, had been slowed. However, the necessary work to obtain the mining rights applied for is still under way.

“[The] projects have not been dropped; their development will be reconsidered at a more appropriate time. Sufficient work is continuing to ensure compliance with the terms and conditions of our exploration permits,” Murray assured investors.

The platinum group is currently engaging its partners to examine options of bringing the chrome tailings retreatment plant back into operation.

A “debottlenecking” capital expenditure of R5-million has been approved for the Mooinooi run-of-mine plant, which, along with other completed improvements to the plants in the dump operations, is expected to increase production.

The company also completed the construction of its seventh plant, which it pointed out was paid for in full from internal funds.

Sylvania did not declare a dividend for the year.