Sylvania’s dump operations post another ‘strong’ production quarter
JOHANNESBURG (miningweekly.com) – Low-cost platinum group metals (PGMs) producer Sylvania Platinum’s Sylvania Dump Operations (SDO) is on track to meet, and possibly exceed, full-year guidance of 63 000 oz to 65 000 oz of PGMs.
The SDO delivered 17 096 oz of PGMs in the third quarter, ended March 31.
Although this was 8% lower quarter-on-quarter, the preceding two quarters had delivered record output of a combined 35 819 oz.
“Financial year 2017, thus far, has been an excellent year in terms of production aided by slightly higher PGM feed grades, improved PGM recovery efficiencies and stable PGM feed,” Sylvania said in a statement on Wednesday.
The cash costs for the SDO in rand terms increased by 11% from R5 603/oz in the second quarter to R6 236/oz in the third quarter, as a result of lower PGM ounce production and slightly higher maintenance costs during the period.
The 5% strengthening in the rand against the dollar over the period also contributed to a 17% increase in cash costs in dollar terms, from $402/oz to $471/oz.
Revenue, however, increased by 10% in dollar terms to $12.8-million and by 5% in rand terms to R168.8-million. The higher revenue was, in part, driven by an 8% increase in the PGM basket price to $951/oz in the third quarter, from $881/oz in the second quarter.
Capital expenditure (capex), meanwhile, rose by 134% to $1.6-million in the third quarter, compared with $684 000 in the second quarter, primarily as a result of the roll-out of Project Echo, which is expected to sustain production at 55 000 oz/y to 60 000 oz/y.
The $12-million project will entail moving from single stream milling and flotation circuits at the Millsell, Doornbosch, Tweefontein, Mooinooi Dump and Mooinooi Run-of-Mine operations to primary and secondary milling and flotation circuits over a two to three year period.
Sylvania has already spent $1.4-million on the project, with a further $2.4-million committed.
“Despite the ongoing capex requirements of Project Echo, the group remains cash generative,” commented Sylvania CEO Terry McConnachie.
Cash generated from operations before working capital movements was $4.4-million.
Sylvania ended the quarter with a cash balance of $16.6-million, enabling it to internally fund Project Echo.
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