Updated scoping study lifts Sylvania's Volspruit pre-tax NPV to R1.2bn

A updated scoping study on Aim-listed platinum group metals (PGM) producer and developer Sylvania Platinum's Volspruit project, located on the southern end of the northern limb of the Bushveld Complex in South Africa, has resulted in an increase in the estimated pre-tax net present value (NPV) to R1.2-billion, compared with the R464-million pre-tax NPV estimated in 2022.

"I am encouraged by the results of the updated scoping study on our Volspruit project. This now benefits from the inclusion of the South orebody and additional rhodium contributions that were excluded from previous studies," says CEO Jaco Prinsloo.

Sylvania in late 2023 commissioned SRK Consulting to undertake the updated scoping study to assess the economic upside resulting from an updated mineral resource statement, including the South body resources and previously unreported PGMs.

The PGM producer plans to enlist the services of a contract miner at Volspruit, with Sylvania to manage the processing plant. Concentrate is to be sold to a third-party offtaker.

The updated scoping study considered a production rate of 150 000 t a month, or 1.8-million tonnes a year, resulting in a 14-year life-of-mine for the 25-million tonnes of ore contained in the North and South bodies.

"Although the additional South body tonnes and rhodium revenue contributed to higher project revenue, the peak capital and all-in operating costs have increased, largely impacted by an improved understanding and updated costs for the processing plant and related infrastructure," Prinsloo points out.

Peak funding is now estimated at R4.3-billion, with a payback period of six years.

Sylvania further notes that it cannot confirm whether the associated metals on the Zoetveld mining right transferred from Grasvally Chrome Mine to Volspruit Mining Company include copper and nickel. However, should this be confirmed in future and included in the mineral resource estimate, the Volspruit project's NPV is expected to increase to R1.5-billion.

The company is also exploring identified areas in which improvements could potentially be made to further improve the economics of the project. A decision to proceed with a prefeasibility study will be made based on the outcomes of this work.

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Meanwhile, Sylvania has also announced an exploration target of 20-million to 22.5-million tonnes, at an estimated platinum, palladium, rhodium and gold (4E) grade of between 2.18 g/t and 3.32 g/t at its Hacra project, which is also located on the northern limb of the Bushveld Complex.

Further exploration work that includes a magnetic survey and further drilling are required to gain improved confidence in the re-interpretation of the mineralised zones and to determine if there is sufficient tonnage and grade if Sylvania wants to declare a maiden resource at the project in future.

“The defining of an exploration target on the Hacra project provides sufficient information for the company to now evaluate various disposal options and we don’t anticipate incurring any significant further exploration or study costs on this particular project, where the mineralisation occurs at depth, compared with shallow occurrences at [the] Volspruit and Aurora [projects].

“At Aurora, where we have already declared attractive results and a mineral resource estimate on a portion of the strike length in 2022, further studies continue with the aim of declaring an updated mineral resource estimate and scoping study to be commissioned for the total Aurora project area," says Prinsloo.

The reinterpretation of historic information on the Aurora project, also located on the northern limb of the Bushveld Complex, has been completed, enabling the definition of a future work programme aimed at increasing knowledge over the
project’s entire strike length with the aim of increasing the resources for the project.