Sylvania Platinum revenue falls despite production milestone

25th Oct 2023 09:08

(Sharecast News) - Sylvania Platinum said in a first-quarter update on Wednesday that Sylvania Dump Operations (SDO) achieved a production milestone during the period, delivering 20,173 4E (25,533 6E) platinum group metals (PGM) ounces.

The AIM-traded firm said that performance aligned with its guidance for the quarter and represents a slight increase from the previous quarter, which recorded 19,072 4E (24,383 6E) PGM ounces.

It noted an absence of lost-time injuries (LTIs) throughout the quarter.

While SDO's net revenue for the quarter was $19.7m, that was slightly lower than the previous quarter's $24.4m.

The group's EBITDA for the quarter stood at $2.8m, down from $7.8m in the previous quarter.

Regarding operational improvements, the board said the Lannex MF2 flotation circuit was commissioned, with optimisation efforts underway.

Additionally, the completion and commissioning of the Lannex fine grinding circuit was expected to result in improved recoveries.

Meanwhile, the Thaba Joint Venture project was progressing according to plan, with long-lead time items being ordered and initial construction packages in progress.

Looking ahead, Sylvania anticipated the commissioning of the Lannex fine grinding circuit by the end of the second quarter.

The company said it was focussed on continuous operational performance improvements, including optimising feed sources, throughput, recoveries, and implementing cost-saving initiatives.

Furthermore, an updated mineral resource estimate (MRE) statement for both Volspruit North and South orebodies is currently in review.

In the second half of the 2024 financial year, it said stakeholders could expect the release of a preliminary economic assessment for the entire Volspruit project, along with metallurgical test-work results.

Sylvania Platinum said it remained financially robust, with solid cash reserves that increased by 2% during the quarter.

It said those funds would support expansion and joint venture initiatives, capital for process optimisation, and upgrades to exploration and evaluation assets, all to deliver value to shareholders.

"I am happy with the good start to the new financial year where the SDO achieved 20,173 4E PGM ounces for the quarter," said chief executive officer Jaco Prinsloo.

"This performance was achieved on the back of a solid production effort from all operations, with all plants exceeding production throughput targets, as well as the contribution of the new Lannex flotation MF2 circuit that also added to our performance.

"The 15% lower PGM basket price recorded during the quarter impacted both the 4E revenue as well as the sales adjustment for the quarter."

As a result, Prinsloo noted that revenues and profits were lower than in the fourth quarter of the 2023 financial year, although the company maintained a "strong" cash position.

"On the cost front, SDO cash costs decreased 3% in both rand and dollar terms, benefiting from the higher ounces produced compared with the fourth quarter.

"Operations continue to navigate higher global cost inflation impacts; thus, operating cost focus remains a top priority for management.

"The Thaba joint venture announced during the quarter represents a key milestone in Sylvania's growth strategy and is a significant step forward for Sylvania Metals in expanding our operations and leveraging the group's expertise in the recovery of chrome and PGM concentrates."

Jaco Prinsloo said the orders of long-lead time items and first construction packages were in progress, with civil construction works expected to start in the second quarter of the financial year.

"Additionally, an updated mineral resource estimate statement for both Volspruit North and South orebodies is currently under review.

"The preliminary economic assessment for the Volspruit project, along with the results from the metallurgical test work, is expected during the second half.

"The optimisation of value from the exploration assets remains a key component of Sylvania Platinum's growth strategy and will aid in supporting the company's future value proposition for all stakeholders."

At 0842 BST, shares in Sylvania Platinum were down 5.93% at 77.7p.

Reporting by Josh White for Sharecast.com.