JOHANNESBURG (miningweekly.com) – Owing to a 10% recovery in the platinum-group metals (PGMs) basket prices in the third quarter ended March 31, low-cost PGMs producer Sylvania Platinum’s revenue increased again, off the back of a double-digit rise in revenue in the previous quarter.

With the recovery of the gross basket price, which stood at $860/oz for the quarter compared with the previous quarter's $785/oz, Sylvania’s revenue increased by 4% in dollar terms to $10.1-million, compared with $9.7-million in the previous quarter. In rand terms, the company’s revenue increase by 16% to R159.7-million, compared with R137.4-million for the three months to December.

Sylvania Platinum’s third-quarter earnings before interest, taxes, depreciation and amortisation (Ebitda) also improved by a significant 63% quarter-on-quarter after a whopping 83% rise in the second quarter, which means the company’s Ebitda jumped from $1.2-million to $3.7-million in the first half of 2016.

In its latest quarterly report, the company upped its stated guidance of 55 000 oz for the current financial year to between 57 000 oz and 58 000 oz, based on year-to-date performance and recent production trends.

Sylvania noted that its Sylvania Dump Operations (SDO) were continuing on a steady production trend, producing 14 905 oz during the quarter and bringing the total production for the financial year to date to 44 424 oz.

The company attributed its positive ounce production for the quarter to higher feed grades and recovery efficiencies, despite PGM feed tons being slightly lower than the previous quarter.

Pleased with the results, Sylvania Platinum CEO Terry McConnachie congratulated the SDO team on their support of the company’s cost-control programme, as well as ongoing operational performance.

“I stated last quarter that cost control and achieving production targets will allow Sylvania to prosper when the decline in metal prices is reversed and we are seeing the fruits of our labour now,” he said.

The cash costs for the SDO in rand terms increased by 6% from R5 971/oz to R6 317/oz, which the company attributed to slightly lower PGM ounces, compared with the previous quarter, but decreased by 5% in US dollar terms from $420/oz to $399/oz for the quarter, owing to the weaker rand against the dollar.

The group cash balance at March 31 was $7.2-million, a $2.1-million increase on the previous quarter's $5.1-million. Cash generated before working capital movements was $3.8-million with net changes in working capital amounting to a reduction of $1.7-million, $0.3-million spent on the stay-in-business capital for the SDO plants and $0.3-million received from Ironveld Holdings as partial repayment of their loan. 

“It's rewarding to see the cash balance grow despite poor prices, even though we continue to spend modestly on new dump investigations and the purchase of shares in the market when the opportunity arises," concluded McConnachie.