JOHANNESBURG (miningweekly.com) – Despite significantly lower platinum group metals (PGMs) basket prices during the second quarter of the year, Sylvania Platinum on Thursday posted a double-digit rise in revenue and achieved its lowest operating cost in six years.

The low-cost PGM processor and developer reported a revenue increase of 10% in dollar terms to $9.7-million and 20% in rand terms to R137.4-million, despite an 11% decrease in the gross basket price from $879/oz in the first quarter to $785/oz for the three months to December.

The basket price had fallen from $1 082/oz at the beginning of July 2015.

“The Sylvania Dump Operations (SDO) ... performed incredibly well this quarter . . . All of this was achieved in spite of difficult circumstances,” CEO Terry McConnachie said.

“The precious metals market has also taken a few knocks with the platinum price falling as low as $827/oz in November and palladium to $528/oz in December.”

Further, there was little sign this month of a recovery in metal prices, with McConnachie adding palladium had dropped even lower.

Meanwhile, PGM production at SDO, in the Bushveld region, increased 15% to 15 791 oz for the quarter – the second highest number of ounces produced in any quarter – lifting year-to-date output to 29 519 oz.

Sylvania attributed the boost in production to higher PGM tons treated and an improvement in both plant feed grades and recovery efficiencies for the quarter.

The higher production, in addition to disciplined operating cost controls and a weaker rand to the dollar, had resulted in a 21% decline in cash costs for SDO in dollar terms from $532/oz to $420/oz and a 13% decrease in rand terms from R6 900/oz to R5 971/oz during the quarter under review.

“Cash preservation remains a priority and we will continue to monitor the basket price closely,” McConnachie added.

Group earnings before interest, taxes, depreciation and amortisation improved 83% from $1.2-million to $2.3-million.

“This performance shows that even in depressing times with regard to metal prices, cost control and achieving production targets will allow Sylvania to prosper when the decline in metal prices is reversed,” he said.

As at December 31, the group’s cash balance was $5.1-million, a $1.7-million decrease on the previous quarter's $6.8-million.