South African platium group metals (PGMs) producer Sylvania Platinum exceeded its production forecast for the 2023 financial year, which had been set at between 72 000 oz and 74 000 oz of platinum, palladium, rhodium and gold (4E) PGMs.
Its Sylvania Dump Operations (SDO) produced 75 469 oz of 4E for the 12 months ended June 30, compared with the 67 053 oz produced in the 2022 financial year.
In a July 27 report to shareholders about the company’s performance for the fourth quarter of the financial year, CEO Jacob Prinsloo said he was pleased with the strong finish to the financial year, with the SDO having delivered 19 072 oz of 4E for the quarter.
That compares with the 17 926 oz of 4E produced in the third quarter of the financial year.
“This performance was achieved on the back of a solid production effort from all the operations, with all plants exceeding production throughput targets, as well as the contribution of the Tweefontein MF2 circuit that also added to our performance,” Prinsloo said in a July 27 release to shareholders.
"The 18% lower PGM basket price received during the quarter impacted both the 4E revenue, as well as the sales adjustment for the quarter.
“Consequently, revenues and profits were lower than in the third quarter, but still resulted in a strong cash position after the payment of taxes, first interim dividends and share buybacks during the period,” he said.
Sylvania reported that SDO cash costs increased by 1% in rand terms but decreased by 4% in dollar terms, benefitting from the higher ounces produced and weaker exchange rate.
Operations are, however, still navigating higher global cost inflation impacts and thus operating cost focus remains a priority for the company.
Meanwhile, commissioning of the Lannex MF2 flotation circuit is expected to start in the first quarter of the 2024 financial year, with the fine grinding circuit to commence towards the end of the second quarter of the same financial year.
A progressive improvement in recoveries is expected at Lannex from the second quarter of the 2024 financial year.
Electricity load curtailment continued to impact the performance of the Lesedi operation during the fourth quarter of the 2023 financial year, contributing to 221 hours downtime during the first two months of the quarter.
The procurement, installation and commissioning of a back-up generator for Lesedi is expected to be completed by the end of the first quarter of the 2024 financial year.
Sylvania’s management continues to focus on optimising feed sources, blending strategy and reagent regimes to further enhance performance.
Run-of-mine grades received from the host mine remain on target and collaboration is ongoing regarding further improvements in this area.
Water consumption at the Lesedi remining operations and the remining operation of Dam 6A at the Mooinooi plant that commenced during the quarter remains a focus area, as does optimal blending to ensure the planned grade profile is achieved.
Focus also remains on final PGMs concentrate quality through optimisation of mass pull, concentrate grade and metal recoveries to contribute positively towards the revenue stream of the group.
Revenue for the June quarter decreased by 13% to $21.8-million, impacted by an 18% decrease in the basket price recorded in June and applied to calculate revenue for ounces produced and delivered in the quarter.
Group earnings before interest, taxes, depreciation and amortisation for the quarter decreased to $7.8-million, from $9.8-million in the third quarter, while net profit decreased to $3.1-million, from $6.1-million in the third quarter, primarily as a result of the lower basket price and higher costs.
PROJECT DEVELOPMENTS
During the 2023 financial year, Sylvania continued work to optimise the reinterpreted mineral resource on the North Body of its Volspruit project. This included a complete relogging programme, metallurgical drilling for recovery test work and sampling for the inclusion of rhodium, ruthenium and iridium.
Further work is being conducted on the South Body resource, which has the potential to increase overall tonnages by up to 40%. All relogging of the existing core over the North and South Body has been completed.
Sylvania expects to complete an updated mineral resource estimate (MRE) in the first quarter of the 2024 financial year, while a preliminary economic assessment of the entire project is expected during the third quarter of the 2024 financial year.
At its Far Northern Limb project, relogging of historical core from the farms La Pucella, Nonnenwerth and Harriets Wish has been completed, confirming the geological reinterpretation along two-thirds of the full strike length of the project area.
Exploration programmes are currently being designed to maximise the potential of the project area.
MRE studies for the Hacra North underground target are under review, while the relogging of the near-surface mineralisation located in the south of the property is being validated and will be subject to ongoing study during the first half of the 2024 financial year.
