JOHANNESBURG (miningweekly.com) – Low-cost platinum group metal (PGM) processor and developer Sylvania Platinum has reported a sixth consecutive quarter of continuous growth, lifting output for the quarter ended September 30 to a record 16 639 oz of PGMs.
This was an 8% improvement on the previous quarter's 15 435 oz, with the cash cost of production at the Sylvania Dump Operations (SDO) down 15%, from $634/oz in the previous quarter, to $540/oz in the three months under review.
Group cash costs, which included corporate, general and administration costs, also fell 16% quarter-on-quarter, from $679/oz, to $570/oz.
“The reduction in cash costs is as a result of continually improving cost controls, a reduction in ore transport and equipment hire, lower maintenance costs compared with the previous quarter as a result of fewer breakdowns, and lower overtime,” the company said in a results statement on Tuesday.
Despite a 12% drop in gross basket price to $895/oz, from $1 013/oz in the previous quarter, largely owing to a recent drop in global demand and the strengthening of the dollar, higher production results contributed to a marginal 2% revenue increase to $14.5-million in the current quarter.
The group cash balance at the end of the quarter was $6.8-million, $1.5-million higher than the previous quarter's $5.3-million.
Cash generated from operations was $3-million, with $800 000 spent on the stay-in-business capital for the SDO plants, $400 000 paid for the SDO rehabilitation insurance guarantee investment and $900 000 spent on exploration assets.
The impact of exchange rate fluctuations on cash held was a decrease of $300 000.
Commenting on the quarterly report, Sylvania Platinum CEO Terry McConnachie said he was pleased with the performance of the production team.
“This is the sixth consecutive quarter with increased production and the first time the SDO operations have produced in excess of 15 500 oz in a quarter. With the resulting increase in turnover and an 18% reduction in group costs, our SDO earnings before interest, taxes, depreciation and amortisation increased 18% in spite of the reduced basket price received.
“Moreover, the increase in group cash reserves to $6.8-million bodes well for our stated objective of the payment of a dividend in the next year, subject to PGM prices and operational performance,” he commented.
Sylvania was, meanwhile, still awaiting the outcome of a mining right application for the Volspruit project, near Mokopane, while it continued with enquiries towards the eventual application for a mining right on the nearby Grasvally chrome exploration project.
It had also applied for permission in terms of Section 20 of the Mineral and Petroleum Resources Development Act to remove and dispose of a bulk sample of the minerals recovered during the course of prospecting activities at Grasvally.
“Based on the high chrome-to-iron ratios found during the initial exploration phase of the project, we believe the testwork to be done on the ore removed by the bulk sample will prove that the chromite is of unusually high quality by South African standards,” said the company.