JOHANNESBURG (miningweekly.com) - Lower platinum group metal (PGM) grades across its Millsell and Mooinooi dumps during the six months to December 31, have prompted Aim-listed Sylvania Platinum to revise its full-year guidance downwards to between 71 000 oz and 75 000 oz.
A delayed water use licence authorisation by authorities for Millsell resulted in the delayed commissioning of a new tailings dam which impacted negatively on the available dump resource grade and remining strategy, the company said on Monday.
To avoid stopping production at the operation, the current tailings dump being remined had to be abandoned and used as an emergency tailings deposition facility during the three-month delay, which meant that coarser, lower-grade dump resources had to be treated during the interim period, resulting in significantly lower-than-planned ounces at the operation.
A planned delay at its Tweefontein MF2 operation's commissioning in the fourth quarter, owing to power distribution constraints to the mine, also weighed on production.
However, Sylvania remained positive, noting that production would increase to about 78 000 oz from 2019 onwards.
The company reported that the Sylvania dump operations - which includes seven fully operational chrome tailings processing complexes, Millsell, Mooinooi dump and Mooinooi run-of-mine on the western limb of the Bushveld Igneous Complex, and Lannex, Steelpoort, Doornbosch and Tweefontein on the eastern limb - delivered 33 892 PGM ounces for the period, against 35 819 PGM ounces in the prior comparable period, owing in part to the scheduled closure of the Steelpoort operation in June 2017.
Despite this downward trend, the company still reported group earnings before interest, taxes, depreciation and amortisation of $10.3-million, up 12% on the corresponding period in the previous financial year, while net profit improved 19%.
This was as a result of an improved gross basket price of $1 057/oz.
Sylvania CEO Terry McConnachie highlighted that the six months under review had been an "exciting" period, where the management team worked to integrate the newly acquired Lesedi operation and to deliver and commission the first two modules of project Echo at Millsell and Doornbosch.
"Although we were faced with some unique operational challenges that affected our stated production guidance, I am pleased with the operational team's performance and action plans to recover and to ensure future production, cost and profit targets are achieved."
Sylvania further reported strong operational performances at Tweefontein and Doornbosch, with both exceeding treatment tons and recovery targets, combined with the attributable 1 458 oz from Lesedi since the take-over in November 2017, assisted in achieving the 33 892 oz.