TIDMSLP
RNS Number : 5535Q
Sylvania Platinum Limited
21 February 2023
_____________________________________________________________________________________________________________________________
21 February 2023
Sylvania Platinum Limited
("Sylvania", the "Company" or the "Group")
Interim financial results for the six months ended 31 December
2022
Sylvania (AIM: SLP), the platinum group metals ("PGM") producer
and developer with assets in South Africa, is pleased to announce
its results for the six months ended 31 December 2022 ("HY1
FY2023"). Unless otherwise stated, the consolidated financial
information contained in this report is presented in United States
Dollars ("USD" or "$").
Financial Highlights
-- Net revenue generated for the period totalled $79.9 million (HY1 FY2022: $69.1 million);
-- Group EBITDA of $45.6 million (HY1 FY2022: $36.2 million);
-- Net profit of $32.6 million (HY1 FY2022: $24.4 million);
-- Cash balance at 31 December 2022 of $123.9 million (HY1 FY2022: $110.1 million);
-- Bought back 1,085,000 ordinary $0.01 shares ("Ordinary Shares") from employees, all transferred to Treasury;
-- Cancelled 1,155,657 Ordinary Shares held in Treasury;
-- Final dividend of 8p per Ordinary Share for FY2022 paid in December 2022 (FY2021:4p);
-- New Dividend Policy approved by the Board and effective from 1 July 2022; and
-- Interim dividend of 3p per Ordinary Share declared by the Board, to be paid in April 2023.
Operational Highlights
-- Sylvania Dump Operations ("SDO") delivered 38,471 4E PGM ounces (HY1 FY2022: 32,376 4E PGM ounces);
-- ROM grades at Mooinooi have increased significantly contributing to additional ounce production;
-- Construction of the Tweefontein MF2 complete with optimisation to be concluded during Q3;
-- An updated Mineral Resource Estimate ("MRE") and Scoping Study on the Volspruit North Body was reported in
October 2022; and
-- An updated MRE for the La Pucella Target area of the Aurora Project and Exploration results for the Hacra Project
on the Far Northern Limb reported during the period.
ESG Highlights
-- Zero Lost-time Injuries ("LTI") across all SDO;
-- Quarterly Carbon Footprint reporting undertaken for the HY1 FY2023 period;
-- New initiatives relating to improved water management undertaken at the Company's operations during the period
and a Water Balance developed for each plant; and
-- Support for three ongoing internships and eight internal learnerships, plus twelve external bursaries maintained,
and Community Based Employee Training provided to ten employees.
Outlook
-- FY2023 production guidance increased, targeting 70,000 to 72,000 4E PGM ounces following strong production in HY1
FY2023;
-- Lannex MF2 project scheduled for commissioning towards the end of Q4 FY2023;
-- An updated MRE and Scoping Study to combine the Volspruit North and South Body and to include rhodium anticipated
to be completed in Q1 FY2024;
-- Reagent optimisation at all SDO underway to explore improved efficiencies; and
-- The Group remains debt free and continues to generate sufficient cash reserves to fund capital expansion projects,
process optimisation projects, upgrade the Group's exploration and evaluation assets and to return value to
shareholders.
Commenting on the period, Sylvania's CEO Jaco Prinsloo said:
"I am pleased to report that the SDO have achieved 38,471 ounces
of PGM production in the period. The 19% year-on-year increase in
HY1 production is testament to the commitment of both our
operations and management teams to delivering on forecast and
through their continued efforts, particularly in working together
with our host mine, to overcome the difficulties previously faced
with ROM and feed grades at our Western operations.
"A result of the increased ounces produced, is the healthy
Revenue and Net Profit reported, both of which are robust and
provide the Company with sufficient cash reserves to continue to
fund capital and optimisation projects, as well as the advanced
studies undertaken at our exploration projects. It also gives me
great pleasure to announce that the Board has approved a new
Dividend Policy for FY2023 and has declared our first interim
dividend of 3p payable in April. This is a great achievement for
the team considering the 15% drop in the average gross basket price
and a 15% average ZAR/$ depreciation over the period.
"As we advance into the second half of the financial year, I
anticipate continued solid results as the Tweefontein MF2 capital
project is optimised and as we work towards the commissioning of
the Lannex MF2 in the latter part of the period. Additionally, we
expect to provide further clarity on the significant potential at
our exploration projects as we continue our studies and increase
our resources.
"I look forward to keeping shareholders updated on our
progress."
Disclaimer
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse regulation (EU) no.596/2014 as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Jaco Prinsloo.
The Sylvania cash generating subsidiaries are incorporated in
South Africa with the functional currency of these operations being
South African Rand ("ZAR"). Revenues from the sale of PGMs are
received in USD and then converted into ZAR. The Group's reporting
currency is USD as the parent company is incorporated in Bermuda.
Corporate and general and administration costs are incurred in USD,
Pounds Sterling ("GBP") and ZAR.
For the six months under review the average USD:ZAR exchange
rate was ZAR17.32:$1 and the closing exchange rate at 31 December
2022 was ZAR17.05:$1.
USD Unit Unaudited Unit ZAR
HY1 2022 HY1 2023 % Change % Change HY1 2023 HY1 2022
---------- --------- --------- ---------- ----------
Production
1,184,996 1,337,785 13% T Plant Feed T 13% 1,337,785 1,184,996
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1.91 1.92 1% g/t Feed Head Grade g/t 1% 1.92 1.91
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
589,240 690,912 17% T PGM Plant Feed Tons T 17% 690,912 589,240
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
3.17 3.19 1% g/t PGM Plant Feed Grade g/t 1% 3.19 3.17
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
53.93% 56.47% 5% % PGM Plant Recovery % 5% 56.47% 53.93%
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
32,376 38,471 19% Oz Total 4E PGMs Oz 19% 38,471 32,376
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
41,828 48,697 16% Oz Total 6E PGMs Oz 16% 48,697 41,828
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
2,966 2,513 -15% $/oz Average gross basket price(1) R/oz -2% 43,532 44,574
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Financials (2)
65,812 70,923 8% $'000 Revenue (4E) R'000 24% 1,228,715 989,094
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Revenue (by-products including
5,628 7,020 25% $'000 base metals) R'000 44% 121,614 84,585
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
-2,384 1,959 182% $'000 Sales adjustments R'000 195% 33,936 -35,842
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
69,056 79,902 16% $'000 Net Revenue R'000 33% 1,384,265 1,037,837
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
23,838 23,170 -3% $'000 Direct Operating costs R'000 12% 401,418 358,292
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
6.661 8,923 34% $'000 Indirect Operating costs R'000 54% 154,593 100,112
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
General and administrative
1,352 1,503 11% $'000 costs R'000 28% 26,032 20,322
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
36,166 45,639 26% $'000 Group EBITDA(4) R'000 45% 790,467 543,532
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
10,527 13,241 26% $'000 Taxation R'000 45% 229,334 158,214
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1,641 1,967 20% $'000 Depreciation and amortisation R'000 38% 34,068 24,659
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
24,360 32,633 34% $'000 Net profit(4) R'000 54% 565,204 366,108
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
7,414 6,206 -16% $'000 Capital Expenditure R'000 -4% 107,488 111,421
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
110,062 123,895 13% $'000 Cash Balance R'000 20% 2,112,410 1,755,066
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
- - - R/$ Ave R/$ rate R/$ 15% 17.32 15.03
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
- - - R/$ Spot R/$ rate R/$ 7% 17.05 15.95
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Unit Cost/Efficiencies
736 602 -18% $/oz SDO Cash Cost per 4E PGM oz (3) R/oz -6% 10,434 11,067
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
570 476 -16% $/oz SDO Cash Cost per 6E PGM oz (3) R/oz -4% 8,243 8,566
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Group Cash Cost Per 4E PGM oz
881 742 -16% $/oz (3) R/oz -3% 12,851 13,247
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Group Cash Cost Per 6E PGM oz
682 586 -14% $/oz (3) R/oz -1% 10,150 10,254
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1,025 889 -13% $/oz All-in sustaining cost (4E) R/oz 0% 15,398 15,404
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1,216 1,017 -16% $/oz All-in cost (4E) R/oz -4% 17,623 18,273
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
(1) The gross basket price in the table is average gross basket
for the period, used for revenue recognition of ounces delivered
over HY1 FY2023, before penalties/smelting costs and applying the
contractual payability.
(2) Revenue (6E) for HY1 FY2023, before adjustments is $77.5
million (6E prill split is Pt 52%, Pd 18%, Rh 9%, Au 0.2%, Ru 16%,
Ir 5%).
(3) The cash costs include direct operating costs and exclude
royalty tax.
(4) Net profit and Group EBITDA exclude profit from the sale of
Grasvally Chrome Mine (Pty) Ltd previously held as an asset for
sale.
A. OPERATIONAL OVERVIEW
Health, safety and environment
During the period under review there were no significant
occupational health or environmental incidents reported. There were
no LTIs recorded and the Doornbosch operation remains 10 years
LTI-free. The Lesedi operation achieved the milestone of three
years LTI-free during the period and Lannex has exceeded two years
LTI-free. Mooinooi and Tweefontein have each exceeded one-year
LTI-free.
Operational performance
The SDO achieved 38,471 ounces for the first half of the 2023
financial year which was 19% higher than the corresponding period
in the 2022 financial year. The increase in production is primarily
due to improved feed grades, stability and flotation performance at
Mooinooi as well as the newly commissioned Lesedi MF2 plant and
improved recovery efficiencies. A step change improvement in
recovery following the implementation of a new flotation reagent
regime at Lannex also contributed to the increased ounces.
PGM plant feed grade increased by 1% during the period and PGM
plant recovery increased 5% when compared to HY1 FY2022, primarily
related to the increase in and stabilisation of ROM feed from the
host mine at Mooinooi.
Consequently, due to the improved production performance, an
increase to the full year PGM production estimate was announced in
January 2023 with 70,000 to 72,000 ounces now targeted by the
Company for the full year.
SDO cash costs per ounce decreased 18% from $736/ounce to
$602/ounce while the average ZAR:USD exchange rate depreciated
15%.
Operational focus areas
During the period, the SDO developed a new improved planned
maintenance system which was successfully implemented at Millsell.
This is expected to improve plant availabilities and runtime,
resulting in improved process stability and increased efficiencies
and is being rolled out to selected priority operations.
ROM grades at the Mooinooi operation have increased
significantly and the operation continues to focus on communication
with the host mine in relation to the preferred source of ROM and
associated grades in order to sustain these better grades.
Focus remains on the operational aspects of the SDO tailings
facilities by the operations teams, the engineer on record,
relevant expert advisers, and associated service providers.
Reagent optimisation continues at all plants to explore improved
efficiencies and further contribute to an increase in metal
recoveries.
The control of operational costs has been well managed during
the period with continued attention being paid by the SDO.
Capital Projects
Capital spend decreased during the current period compared to
the corresponding period in FY2022 from $7.4 million to $6.2
million during HY1 FY2023, comprising $5.3 million optimisation and
stay-in-business capital, as well as $0.9 million spent on
exploration projects. All capital projects are fully funded from
current cash reserves.
The secondary milling and flotation (MF2) project at Tweefontein
was completed during the period and commissioning commenced during
December 2022. Full optimisation is planned to be reached in the
coming months.
The Lannex MF2 project is under construction and scheduled for
commissioning during early FY2024. The construction of the MF2
module will improve the upgrading and recovery of PGMs at the
plants.
In order to mitigate current power interruptions at Lesedi and
Millsell operations which are most affected by the current Eskom
loadshedding stages, back-up power generation projects have been
initiated and are currently in execution at these operations, with
commissioning of the first system at Lesedi anticipated during the
next four to six months.
Outlook
The first half of the financial year has created a strong
platform for the Company. The Lesedi MF2 plant, improved feed
grades and recovery efficiencies have resulted in increased
production and, subsequently, the increase in the production
guidance for FY2023 to 70,000 to 72,000 4E PGM ounces.
The Lannex MF2 project is scheduled for commissioning towards
the end of the financial year which should see further improvements
to PGM recoveries. Additionally, the Company is continuing to
explore reagent optimisation across all SDO in order to improve
efficiencies.
While not anticipating a more significant impact on operations
than during HY1, the Company acknowledges the risks associated with
the current electricity supply situation in South Africa and
Eskom's loadshedding programme, and hence we maintained a
relatively cautious outlook for the remainder of the year in terms
of our production guidance.
The exploration projects in the Northern Limb hold significant
potential for the Company. In the second half of this year focus
remains on further improving the confidence in and expanding
resources and quantifying the potential benefit from these assets.
An updated Scoping Study is underway at Volspruit which will now
include value from the South Body and rhodium, which were initially
excluded from the North Body Scoping Study, as well as studies
aimed at improving the resources estimate for the Aurora project
and towards declaring a maiden mineral resource estimate for the
Hacra project.
Despite the lower 4E PGM basket price, the Board remains
optimistic on the overall PGM price outlook, whereby palladium and
rhodium are expected to remain in deficit and the demand forecast
is robust with anticipated increased automotive sales. The SDO is
well positioned, with low operating costs and improving PGM
recoveries and ROM grades.
As always, the Company will continue to focus on the parameters
that it is able to control, with specific focus on improving direct
operating costs, maintaining a safe, stable and efficient
production environment, and ensuring disciplined capital allocation
and control.
Sylvania remains committed to its ESG initiatives and will
continue to publish an ESG Report annually.
B. FINANCIAL OVERVIEW
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the half year ended 31 December 2022
31 December 2022 31 December 2021
$ $
Note(s) Reviewed Reviewed
Continuing Operations
Revenue 1 79,901,718 69,055,528
Cost of sales (30,271,919) (29,192,755)
Royalties tax (3,796,403) (3,046,322)
---------------- ----------------
Gross profit 45,833,396 36,816,451
Other income 45,547 38,607
Other expenses 2 (2,202,060) (2,330,331)
---------------- ----------------
Operating profit before net finance income/costs and income tax expense 43,676,883 34,524,727
Finance income 2,359,757 731,855
Finance costs (536,505) (369,302)
---------------- ----------------
Profit before income tax expense from continuing operations 45,500,135 34,887,280
Income tax expense 3 (12,866,977) (10,527,209)
Net profit for the period from continuing operations 32,633,158 24,360,071
Discontinued Operations
Profit after tax for the period from discontinued operations 4 1,351,227 -
---------------- ----------------
Net profit for the period 33,984,385 24,360,071
Other comprehensive loss
Items that are or may be subsequently reclassified to profit and loss:
Foreign operations - foreign currency translation differences (4,977,923) (13,222,604)
---------------- ----------------
Total other comprehensive loss (net of tax) (4,977,923) (13,222,604)
---------------- ----------------
Total comprehensive income for the year 29,006,462 11,137,467
================ ================
Cents Cents
------------------------------------------------------------------------------- ----------- -----
Earnings per share attributable to the ordinary equity holders of the Company:
Basic earnings per share 12.75 8.93
Diluted earnings per share 12.65 8.86
-------------------------------------------------------------------------------- ----------- -----
1. Revenue is generated from the sale of PGM ounces produced at
the six retreatment plants, net of pipeline sales adjustments.
2. Other expenses relate to corporate activities and include
consulting fees, audit fees, travel, advisor and PR costs, share
registry costs, directors' fees, share based payments and other
smaller administrative costs.
3. Income tax expense includes current tax, deferred tax and capital gains tax.
4. Profit on discontinued operations is the profit after tax of
Grasvally Chrome Mine (Pty) Ltd, previously held as an asset held
for sale.
The average gross basket price for PGMs for the six months to 31
December 2022 was $2,513/ounce compared to $2,966/ounce for the
period ended 31 December 2021. The Group recorded net revenue of
$79.9 million for the six months to 31 December 2022, a 16%
increase half-year on half-year, as a result of the higher PGM
ounce production, slightly lower basket price, as well as a
positive sales adjustment for the period.
The operational cost of sales represents the direct and indirect
costs of producing the PGM concentrate and amounted to ZAR556.0
million for the reporting period compared to ZAR458.4 million for
the six months to 31 December 2021. The main cost contributors
being salaries and wages of ZAR170.4 million (HY1 FY2022:
ZAR144.5million), mining costs of ZAR61.1 million (HY1 FY2022:
ZAR53.2 million), reagents and milling costs of ZAR51.1 million
(HY1 FY2022: ZAR33.0 million) and electricity of ZAR64.9 million
(HY1 FY2022: ZAR55.8 million).
Group cash cost per ounce was ZAR12,851/ounce compared to
ZAR13,247/ounce in the previous corresponding period. The all-in
sustaining cost ("AISC") for the Group amounted to ZAR15,398/ounce
and an all-in cost ("AIC") of ZAR17,623/ounce for the period to 31
December 2022. This compares to the AISC and AIC for 31 December
2021 of ZAR15,404/ounce and ZAR18,273/ounce respectively.
General and administrative costs were $1.5 million (ZAR26.0
million) for the six months against $1.4 million (ZAR20.3 million)
for the corresponding period in the prior year. These costs are
incurred in USD, GBP and ZAR and relate mainly to regulatory costs,
insurance, advisory and public relations costs, consulting and
legal fees, directors' fees, computer expenses and travelling
costs.
Interest is earned on surplus cash invested in South Africa at
an average interest rate of 4.35% per annum as well as on the loan
to Forward Africa Mining with regards to the Grasvally Chrome Mine
(Pty) Ltd ("Grasvally") sale at JIBOR + 3%. Interest expense is
accounted for on various lease agreements for example office rental
at rates intrinsic to the relevant lease agreements.
Income tax is paid in ZAR on taxable profits generated at the
South African operations at a rate of 27%. The income tax charge
for the six months to 31 December 2022 was ZAR228.0 million
compared to ZAR136.1 million for the six months to 31 December 2021
due to the increase in profit and the capital gains tax as a result
of the sale of shares with regards to Grasvally. Deferred tax
movements of ZAR6.0 million for the Group relate mainly to
unredeemed capital expenditure and provisions.
CONSOLIDATED STATEMENT OF CASHFLOWS
For the half year ended 31 December 2022
31 December 2022 31 December 2021
$ $
Reviewed Reviewed
Net cash inflow from operating activities 5 37,678,401 31,599,803
Net cash outflow from investing activities 6 (6,554,000) (8,109,477)
Net cash (outflow) from financing activities 7 (26,909,718) (17,178,177)
---------------- ----------------
Net increase in cash and cash equivalents 4,214,683 6,312,149
Effect of exchange fluctuations on cash held (1,601,737) (2,385,646)
Cash and cash equivalents at the beginning of reporting period 121,282,425 106,135,435
Cash and cash equivalents at the end of the reporting period 123,895,371 110,061,938
---------------- ----------------
Note: This is a condensed cashflow statement. Please refer to
the Half Year Interim Financial Statements for more detail.
5. Net cash inflow from operating activities includes a net
operating cash inflow of $43.2 million, net finance income of $2.1
million and taxation paid of $7.7 million.
6. Net cash outflow from investing activities includes payments
for property, plant and equipment of $5.3 million, exploration and
evaluation assets of $0.9 million, and loans to joint operations
and third parties of $0.35 million.
7. The net cash outflow from financing activities includes the
repayment of borrowings of $0.2 million, payments of share
transactions of $1.1 million and payments of dividends to
shareholders of $25.6 million.
Cash is held in USD and ZAR. As at 31 December 2022, the
Company's cash and cash equivalents balance was $123.9 million.
Cash generated from operations before working capital was $46.8
million for the reporting period, with a change in working capital
of $3.6 million mainly due to the movement in trade receivables and
trade payables as a result of the higher ounces produced and an
increase in the cost base. $7.7million was paid in provisional
income tax and the Company spent $6.2 million on capital
expenditure comprising of $5.3 million on specific optimisation and
stay in business projects, and $0.9 million on exploration
projects. In December 2022, $25.6 million was paid to shareholders
as a dividend. The Group holds a portion of cash in ZAR to fund
operational working capital and capital projects. A foreign
exchange loss of $1.6 million was incurred due to the 7%
depreciation of the ZAR against the USD.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2022
31 December 2022 30 June 2022
------- ---------------- ------------
$ $
Note(s) Reviewed Audited
ASSETS
Non-current assets
Exploration and evaluation expenditure 46,647,621 46,087,453
Property, plant and equipment 48,200,777 46,298,978
Other financial assets 8 6,425,154 283,450
Other assets 15,012 -
Total non-current assets 101,288,564 92,669,881
---------------- ------------
Current assets
Cash and cash equivalents 9 123,895,371 121,282,425
Trade and other receivables 10 56,850,687 52,939,589
Other financial assets 8 1,309,622 1,029,205
Inventories 11 5,430,203 4,258,960
Current tax asset - 3,486,226
---------------- ------------
187,485,883 182,996,405
Assets held for sale - 3,771,661
Total current assets 187,485,883 186,768,066
---------------- ------------
Total assets 288,774,447 279,437,947
---------------- ------------
EQUITY AND LIABILITIES
Shareholders' equity
Issued capital 12 2,790,000 2,801,557
Reserves 13 33,091,971 38,663,288
Retained profit/(Accumulated losses) 218,104,153 209,221,487
Total equity 253,986,124 250,686,332
---------------- ------------
Non-current liabilities
Borrowings 14 593,854 35,031
Provisions 15 5,416,237 5,936,804
Deferred tax liability 11,804,808 11,614,765
Total non-current liabilities 17,814,899 17,586,600
---------------- ------------
Current liabilities
Trade and other payables 14,364,861 11,110,196
Current tax liability 2,249,120 -
Borrowings 14 359,443 48,957
---------------- ------------
16,973,424 11,159,153
Liabilities directly associated with the assets classified as held for sale - 5,862
Total current liabilities 16,973,424 11,165,015
---------------- ------------
Total liabilities 34,788,323 28,751,615
---------------- ------------
Total liabilities and shareholder's equity 288,774,447 279,437,947
---------------- ------------
8. Other financial assets mainly consist of:
o A loan granted to TS Consortium by Sylvania South Africa (Pty)
Ltd $362,141 (2022: $348,420). The loan is unsecured, bears
interest at 7% per annum and is repayable on demand.
o A loan granted to Forward Africa Mining by Sylvania Metals
(Pty) Ltd $947,480 (2022: $680,785). The loan is secured over the
Grasvally Plant, bears interest at the Johannesburg Inter-Bank
Offer Rate (JIBOR) + 3%, compounded monthly in arrears.
o A loan granted to Forward Africa Mining by Sylvania Metals
(Pty) Ltd and Sylvania Resources (Pty) Ltd with regards to the sale
of shares and claims agreement in respect of the Grasvally Chrome
Mine (Pty) Ltd sale $6,142,227 (2022: $0 nil). The loan is secured
over the Grasvally plant, bears interest at the Johannesburg
Inter-Bank Offer Rate (JIBOR) + 3%, compounded monthly in arrears.
The loan is repayable in 15 equal instalments commencing at the end
of the quarter following the first anniversary of the effective
date.
o Contribution paid to the host mine for rehabilitation purposes
$282,928 (2022: $283,450). The debtor is ZAR denominated and was
translated at a spot rate of ZAR17.50 (2022: ZAR16.38).
9. Cash and cash equivalents are held in ZAR and USD.
10. Trade and other receivables consist mainly of amounts receivable for the sale of PGMs.
11. Inventory held is spares and consumables for the SDO.
12. The total number of issued ordinary shares at 31 December
2022 is 279,000,000 Ordinary Shares of US$0.01 each (including
12,199,212 shares held in treasury),
13. Reserves include the share premium, foreign currency
translation reserve, which is used to record exchange differences
arising from the translation of financial statements of foreign
controlled entities, share-based payments reserve, treasury share
reserve and the equity reserve.
14. Borrowings relate to the right-of-use liability.
15. Provision is made for the present value of closure,
restoration and environmental rehabilitation costs in the financial
period when the related environmental disturbance occurs.
C. Mineral Asset Development of opencast mining projects
The Group owns various mineral asset exploration and development
projects on the Northern Limb of the Bushveld Igneous Complex
located in South Africa, for which it has approved mining rights.
Targeted studies are underway on both the Volspruit and Northern
Limb PGM opportunities to determine how best to optimise the
respective projects. Significant progress has been made towards
unlocking mineral potential on these projects to generate value for
shareholders.
Volspruit Platinum Opportunity
The release of the Exploration Results and Resource Statement in
October of 2022 included the MRE and Scoping Study for the
Volspruit North Body.
The Volspruit North Body is estimated to include approximately
58% of the total project area and indicated a positive investment
return based on a conservative set of assumptions used at the time.
To further improve the value of the Voslpruit opportunity, a
revised Scoping Study is underway to now include the value from the
South Body and rhodium, which were initially excluded from the
earlier Scoping Study due to further work that was required at the
time in terms of the JORC requirements.
Current studies to include both the rhodium resources and the
South Body resources include the relogging of the South Body
historical core, a drilling programme to acquire the required
samples for rhodium assay from the North Body and additional assay
data which will be subjected to a MRE in the fourth quarter with
the results becoming available in Q1 FY2024. The updated MRE, that
includes 100% of the study area and a rhodium resource will then be
subject to a Preliminary Economic Assessment ("PEA") during Q1
FY2024.
Continued investment and workstream requirements for the
permitting under the Mining Right is underway and application for
the Water-use Licence, the updating of the Environmental Impact
Assessment ("EIA") and the finalisation of the Social and Labour
Plan ("SLP") all included within these activities.
Far Northern Limb Projects
The JORC compliant Mineral Resource over the La Pucella target
area of the Aurora Project was completed in October 2022, with the
exciting new discovery of the T-Zone mineralisation found near
surface along the strike of the study area.
Continued resource optimisation studies are underway to
determine on the Aurora Project area to fully realise the future
value of the asset. Studies will include relogging of historical
core and implementing the new geological interpretation on
additional available strike length, which will determine an
optimised drilling strategy that is planned to start during HY2
FY2023. Based on initial study results and current strategy, a PEA
will only be commissioned once an updated MRE for the combined
Aurora project area is available.
Work is also in progress towards declaring a maiden Inferred MRE
on the Hacra North underground resource and a programme of
relogging of the historical core has commenced on the Hacra South
near-surface resource, with both expected to be completed in HY2
FY2023. The relogged data will be subject to a MRE using the new
geological interpretation as determined on the La Pucella project
and is expected to be completed at the financial year end.
D. CORPORATE ACTIVITIES
Dividend Payment
On 2 December 2022, the Board paid a dividend for FY2022
totalling $25.6 million, equating to 8p per Ordinary Share, to
shareholders on the register on the record date of 28 October
2022.
Dividend Policy
The Board has reviewed the Company's Dividend Policy and
effective 1 July 2022, the New Dividend Policy will be able to pay
out a minimum of 40% of adjusted free cash flow for the financial
year. Where annual dividends are declared, these will be paid in
two tranches with an interim dividend equating to one third of the
forecast full dividend and the final dividend equating to the
remaining unpaid balance of the minimum of 40% of actual adjusted
free cash flow. The payment of dividends remains at the discretion
of the Board.
As a consequence of the new Dividend Policy, the Board has
declared its first interim dividend of 3p per Ordinary Share,
payable on 6 April 2023. Payment of the interim dividend will be
made to shareholders on the register at the close of business on 3
March 2023 and the ex-dividend date is 2 March 2023.
Transactions in Own Shares
1,755,000 Ordinary Shares were exercised by various persons
displaying management responsibilities (PDMRs) and employees which
vested from bonus shares awarded to them in August 2019. 702,300 of
the vested bonus shares were repurchased to satisfy the tax
liabilities of PDMRs and certain employees, and an additional
382,700 shares were bought back from various employees. All shares
awarded came from Treasury.
On 15 December 2022 1,155,657 Ordinary Shares held in Treasury
were cancelled.
Accordingly, at the end of the period the Company's issued share
capital was 279,000,000 Ordinary Shares, of which a total of
12,199,212 Ordinary Shares were held in Treasury, which includes
7,500,000 Ordinary Shares held for the Employee Dividend
Entitlement Plan. Therefore, the total number of Ordinary Shares
with voting rights was 266,800,788.
The Company will continue to evaluate further share buy backs as
the opportunity arises as part of its commitment to returning value
to the shareholders.
E. ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
The Company's approach to ESG reporting is guided by global
frameworks and best practice guidelines including:
-- The Global Reporting Initiative ("GRI") - setting the
standards for best practice in sustainability reporting;
-- The United Nations Sustainable Development Goals ("UNSDGs") -
17 goals to address the global challenges facing the international
community;
-- The United Nations Task Force on Climate-Related Financial
Disclosures ("TCFD") - a framework for improving and increasing
reporting on climate-related financial information; and
-- The Sustainability Accounting Standards Board ("SASB") - SASB
standards identify the ESG issues most applicable to performance in
different industries.
FY2022 saw the Company's first ESG report outlining operational
and non-financial performance. The following update builds on the
initial disclosures as the ESG journey has become embedded
throughout the organisation. Further details on the disclosures can
be found in the Company's Condensed Consolidated Interim Financial
Statements for the half year ended 31 December 2022.
Environment
Energy and Greenhouse Gas Emissions
Quarterly Carbon Footprint reporting was undertaken for the HY1
FY2023 period, measured in metric tonnes of carbon dioxide
equivalent (tCO(2) e) for GHG Protocol Scope 1 and Scope 2
emissions. The Carbon Footprint report for the HY1 FY2023 reporting
period showed a slight increase in Scope 1 emissions while there is
a slight decrease in Scope 2 emissions. However, the GHG emission
intensity, which is a factor of CO(2) per tonnes reprocessed
tailings, is decreasing over time.
In December 2022, the Company procured the services of
specialists who compiled a Baseline TCFD report that aims to
develop recommendations for voluntary climate-related financial
disclosures that are consistent, comparable, reliable, clear, and
efficient, and provide decision-useful information to investors.
Energy Transition and a Carbon Emissions Priority Plan were some of
the main themes covered in the TCFD report.
Water Management
New initiatives relating to improved water management were
undertaken at the Company's operations during the period. A Water
Balance was developed for each plant and will be updated
biannually. An automated, live water balance system is in the
Second Phase of implementation with flow metres installed along the
critical line to increase the accuracy of water flow and use at the
operations. In addition, the Company together with specialists in
the field commenced with investigations into the feasibility to
construct and utilise thickeners that will result in a decrease in
water volume losses on the tailings.
Production rate and Tailings Storage Facilities ("TSF")
Due to the nature of the activities and operations of the
Company in the reworking of mineral waste dumps and redepositing
(or recycling) tailings, the overall impact is considered to have
an inherently positive impact.
In line with the Global Industry Standard on Tailings Management
("GISTM"), in terms of the operations, the condition and management
of the Tweefontein, Lannex, Lesedi and Doornbosch TSFs were
assessed in separate annual reports and the remaining operations
followed in January 2023. The results of the assessments indicated
positive findings.
Sylvania and its appointed consultants recently completed the
first phase of pilot scale TSF slope rehabilitation trials at the
Tweefontein operation. The purpose of the trial is to develop a
method of rehabilitating TSFs on decommissioning, which is
low-cost, environmentally friendly and sustainable. This trial has
delivered results which indicate that this method is also very
suitable for rehabilitation during operation of the TSF, to
minimise the time and cost of end-use closure.
The first phase of on-site trials prepared five seedbeds on two
slopes of the operational TSF using one as a control site with no
treatment while different treatments were applied to the remaining
four seedbeds. A mixture of six indigenous grass seeds were sown on
all seedbeds and on completion of the trials it was found that the
seedbed treated with mulch far outperformed the others. All sites
indicated a remarkable increase in biodiversity through
establishment of insects and other life species.
Further phases of trials will continue to investigate suitable
plant species and collect data about biodiversity augmentation. On
completion of the trials and subsequent reporting, closure plans
can be updated to reflect the organic amendment method for each TSF
site, reducing rehabilitation liability and closure cost and
proposing a rehabilitation method that will establish a protected
biodiversity area on a previously barren and undesirable waste
site.
It is currently estimated that two to three years of aftercare
would be required to establish a sustainable growth cycle for the
seedbeds, and that the growth cycle can be established during the
final operating years of the TSF.
Social
Incident statistics
No LTIs, serious or reportable environmental incidents were
recorded during the period and all operations remain fatality free
since inception. Focused training interventions and other
inspections aimed at trackless mobile machinery and tracking
management, equipment safeguarding, equipment handling, working in
elevated position and slip and fall are being implemented to
continuously improve control effectiveness. Annually the Company
runs a safety awareness campaign during the months of November and
December motivating the importance to drive health and safety
during this period. Topics covered this year included road safety,
alcohol and drug abuse, gender-based violence, and
communication.
Community, customer and stakeholder relationship
During the reporting period, 29 additional people were employed
by the Company, resulting in a total staff compliment of 641 at
December 2022. The percentage of Unionised employees grew from 69%
to 81% at December 2022.
The Company continued its ongoing contributions towards
Corporate Social Investment ("CSI") Projects during the HY1 FY2023
reporting period. These included maintenance work, provision of
supplies, furniture and groceries to various organisations.
Sylvania recognised World Aids Day in December 2022 and supports
an ongoing anti gender-based violence campaign at the
operations.
As South Africa is one of the most biodiverse countries in the
world there is a duty on the stakeholders, such as the mining
industry, to ensure that conservation is promoted, and wildlife is
protected for current and future generations. As such, Sylvania
engaged with non-profit organisations to investigate how to partner
on initiatives such as the Endangered Wildlife Trust ("EWT")
focussing on threatened wildlife species including the illegal
trade of Pangolin scales and Rhino horns as well as partnering on
the revegetation of the tailings dams to create renewed
biodiversity.
Demographics and diversity
Woman in Mining remains a strategic focus point at Sylvania as
noted from a steady growth of female employees during the HY1
FY2023 reporting period. The effectiveness of the current
initiatives and internal controls are reflected through the total
female representation increasing to 22.15% at the end of December
2022, and 14 (48.28%) of the 29 new recruits being female.
Human Capital
In terms of Sylvania's SLP and contribution to community
development and training, Sylvania supports three ongoing
internships and eight internal learnerships. 12 external bursaries
were maintained during the reporting period and Community Based
Employee Training was provided to 10 employees. External training
was provided to over 600 people.
Governance
Regulatory Compliance
No material legal compliance risks or fines were issued for any
aspects linked to governance, tax or other financial management
aspects.
For owned land, various initiatives are being undertaken to
ensure compliance with issued authorisations, permits and licences
linked to all business processes, exploration to rehabilitation and
closure requirements. The permits incorporate binding commitments
and obligations that must be monitored to ensure compliance. This
is crucial, as delays in acquiring permits or failing to comply
with their conditions and commitments can have significant
financial, operational, legal and reputational consequences.
Sylvania's licence to operate relates directly to environmental
permits and authorisations under relevant sections of the:
-- Mineral and Petroleum Resources Development Act 2002 (MPRDA) - mining rights, environmental management programme
reports as well as social and labour plans;
-- National Environmental Management Act 1998 (NEMA), sectorial national legislation and related regulations
including environmental impact assessments linked with the listed activities being performed; and
-- National Water Act 1998 (NWA) - water-use licences.
Economic contribution
The following economic contributions continued during HY1
FY2023:
1. Employee and related payments including:
-- Salaries and wages.
-- Contributions and employees' tax paid.
-- Employee dividend participation scheme.
2. Regulatory payments to South African Revenue Services including:
-- Income tax.
-- Value added tax.
-- Dividend withholding tax.
-- Mineral royalty tax.
Economic Contribution: National and Local Governance:
Indicator Unit HY1 FY2022 HY2 FY2022 HY1 FY2023
Salaries and wages ZAR 112,274,767 114,173,623 165,727,530
------ ------------ ------------ ------------
Contributions and employee tax paid ZAR 49,167,874 67,671,874 69,771,798
------ ------------ ------------ ------------
Employee dividend participation scheme ZAR 10,379,249 - 11,657,520
------ ------------ ------------ ------------
Income tax ZAR 163,263,070 179,289,312 189,643,504
------ ------------ ------------ ------------
Value added tax ZAR 115,923,116 125,187,215 119,333,103
------ ------------ ------------ ------------
Dividend withholding tax ZAR 3,821,053 15,585,526 -
------ ------------ ------------ ------------
Mineral royalty tax ZAR 42,552,299 63,844,707 47,902,038
------ ------------ ------------ ------------
CONTACT DETAILS
For further information, please
contact:
Jaco Prinsloo CEO
Lewanne Carminati CFO +27 11 673 1171
Nominated Adviser and Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Scott Mathieson
/ Kane Collings
Communications
BlytheRay +44 (0) 20 7138 3205
Tim Blythe / Megan Ray / Rachael sylvania@BlytheRay.com
Brooks
CORPORATE INFORMATION
Registered and postal Sylvania Platinum Limited
address:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
SA Operations postal PO Box 976
address:
Florida Hills, 1716
South Africa
Sylvania Website : www.sylvaniaplatinum.com
About Sylvania Platinum Limited
Sylvania Platinum is a lower-cost producer of platinum group
metals (PGM) (platinum, palladium and rhodium) with operations
located in South Africa. The Sylvania Dump Operations (SDO)
comprises six chrome beneficiation and PGM processing plants
focusing on the retreatment of PGM-rich chrome tailings materials
from mines in the Bushveld Igneous Complex. The SDO is the largest
PGM producer from chrome tailings re-treatment in the industry. The
Group also holds mining rights for PGM projects in the Northern
Limb of the Bushveld Complex.
For more information visit https://www.sylvaniaplatinum.com/
ANNEXURE
GLOSSARY OF TERMS FY2023
The following definitions apply throughout the period:
4E PGM ounces include the precious metal elements Platinum,
4E PGMs Palladium, Rhodium and Gold
6E ounces include the 4E elements plus additional Iridium
6E PGMs and Ruthenium
--------------------------------------------------------------------
Adjusted free Free cash flow is the calculated cash flow from operating
cash flow activities less forecast capital expenditure for the reporting
period, adjusted for debt commitments and covenants and committed
future growth/expansion capital
--------------------------------------------------------------------
AGM Annual General Meeting
--------------------------------------------------------------------
AIM Alternative Investment Market of the London Stock Exchange
--------------------------------------------------------------------
All-in sustaining Production costs plus all costs relating to sustaining current
cost production and sustaining capital expenditure.
--------------------------------------------------------------------
All-in sustaining cost plus non-sustaining and expansion
All-in cost capital expenditure
--------------------------------------------------------------------
Fresh chrome tails from current operating host mines processing
Current risings operations
--------------------------------------------------------------------
DMRE Department of Mineral Resources and Energy
--------------------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and amortisation
--------------------------------------------------------------------
EIA Environmental Impact Assessment
--------------------------------------------------------------------
EIR Effective interest rate
--------------------------------------------------------------------
EMPR Environmental Management Programme Report
--------------------------------------------------------------------
ESG Environment, Social and Governance
--------------------------------------------------------------------
GBP Pounds Sterling
--------------------------------------------------------------------
IFRIC International Financial Reporting Interpretation Committee
--------------------------------------------------------------------
IFRS International Financial Reporting Standards
--------------------------------------------------------------------
Johannesburg Inter-Bank Offer Rate from time to time published
JIBOR by the South African Reserve Bank
--------------------------------------------------------------------
JORC Australian Joint Ore Reserves Committee
--------------------------------------------------------------------
LSE London Stock Exchange
--------------------------------------------------------------------
LTI Lost-time injury
--------------------------------------------------------------------
LTIFR Lost-time injury frequency rate
--------------------------------------------------------------------
MF2 Milling and flotation technology
--------------------------------------------------------------------
MPRDA Mineral and Petroleum Resources Development Act
--------------------------------------------------------------------
MRA Mining Right Application
--------------------------------------------------------------------
MRE Mineral Resource Estimate
--------------------------------------------------------------------
NWA National Water Act 36 of 1998
--------------------------------------------------------------------
Platinum group metals comprising mainly platinum, palladium,
PGM rhodium and gold
--------------------------------------------------------------------
PDMR Person displaying managerial responsibility
--------------------------------------------------------------------
PEA Preliminary Economic Assessment
--------------------------------------------------------------------
Pipeline ounces 6E ounces delivered but not invoiced
--------------------------------------------------------------------
Revenue recognised for ounces delivered, but not yet invoiced
Pipeline revenue based on contractual timelines
--------------------------------------------------------------------
Pipeline sales Adjustments to pipeline revenues based on the basket price
adjustment for the period between delivery and invoicing
--------------------------------------------------------------------
PFS Pre-Feasibility Study
--------------------------------------------------------------------
Project Echo Secondary PGM Milling and Flotation (MF2) program announced
in FY2017 to design and install additional new fine grinding
mills and flotation circuits at Millsell, Doornbosch, Tweefontein,
Mooinooi and Lesedi.
--------------------------------------------------------------------
Revenue (by products) Revenue earned on Ruthenium, Iridium, Nickel and Copper
--------------------------------------------------------------------
SLP Social and Labour Plan
--------------------------------------------------------------------
Rh Rhodium
--------------------------------------------------------------------
ROM Run of mine
--------------------------------------------------------------------
SDO Sylvania dump operations
--------------------------------------------------------------------
Sylvania Sylvania Platinum Limited, a company incorporated in Bermuda
--------------------------------------------------------------------
TRIFR Total recordable injury frequency rate
--------------------------------------------------------------------
TSF Tailings storage facility
--------------------------------------------------------------------
UNSDGs United Nations Sustainability Development Goals
--------------------------------------------------------------------
USD United States Dollar
--------------------------------------------------------------------
WULA Water Use Licence Application
--------------------------------------------------------------------
UK United Kingdom of Great Britain and Northern Ireland
--------------------------------------------------------------------
ZAR South African Rand
--------------------------------------------------------------------
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END
IR SELSMFEDSEDE
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February 21, 2023 02:00 ET (07:00 GMT)
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