Sylvania dump production down 8% in Q1

JOHANNESBURG (miningweekly.com) – Platinum group metals (PGMs) processor Sylvania Platinum’s Sylvania Dump Operations (SDO) produced 16 589 oz of PGMs in the quarter to September 30 – an 8% decrease on the previous quarter's output of 17 954 oz.

Commenting on the results on Monday, Sylvania CEO Terry McConnachie said the decrease had been expected, and attributed it, in part, to the scheduled closure of the Steelpoort plant in the fourth quarter of the 2017 financial year, ended June 30.

However, production for the 2018 financial year is still expected to meet the forecast of 70 000 oz. 

This excludes any increase in production from the acquisition of Pan African Resources’ Phoenix Platinum Mining subsidiary, for which approval from the South African Competition Commission is pending. This approval is necessary to fulfil the final conditions precedent to the agreement. 

An extension to the 90-day deadline, to November 26, to obtain such consent has been agreed to by Sylvania and Pan African.

Sylvania agreed to acquire Phoenix for R89-million and as a result of the close proximity of Phoenix to Sylvania's existing operations, as well as the similar process and business model, certain synergies are expected to be achieved by the combined operations. 

McConnachie pointed out that the acquisition, together with the commissioning of the Millsell and Doornbosch secondary milling and flotation modules as part of Project Echo in 2018, are expected to increase production in the second half of the 2018 financial year.

FINANCIALS
Cash costs for the SDO in dollar and rand terms increased by 18% and 17%, respectively, from $422/oz in the first quarter of the 2017 financial year to $496/oz in the quarter to September 30.

McConnachie explained that this was primarily a result of the lower PGM output for the quarter. 

Nonetheless, revenue increased by 7% in dollar and rand terms to $14.1-million, from $13.2-million in the previous quarter, and R186.1-million from R174.4-million from the previous quarter. This was primarily owing to a 7% increase in the gross PGM price to $1 028/oz from $963/oz in the previous quarter.

“SDO capital expenditure increased by 15% in line with the project schedule for Project Echo, which is currently in progress and on schedule to ensure a sustainable PGM production profile going forward,” McConnachie highlighted.