Aim-listed platinum group metals (PGMs) miner Sylvania’s production decreased by 5% quarter-on-quarter to 17 420 oz in the quarter ended March 31 – the third quarter of its 2021 financial year.

The lower production was, however, in line with the company’s projections for the quarter, which is historically a lower-producing quarter.

With operations in South Africa’s Rustenburg, Polokwane and Phalaborwa regions, the miner’s Sylvania Dump Operations (SDO) recorded $74.2-million of net revenue for the quarter, up from the $43.7-million recorded in the second quarter of the 2021 financial year.

Earnings before interest, taxes, depreciation and amortisation for the period were $58.7-million, up from the $29.1-million of the second quarter, while net profit increased to $41.3-million, from the $20.3-million in the second quarter.

Post period-end, the company paid a one-off windfall dividend of $14.3-million. It also made its first payment to employees under the Employee Dividend Entitlement Plan during the quarter under review.

Sylvania CEO Jaco Prinsloo says the company’s performance in the third quarter was in line with management’s projections and that the group remains on track to produce about 70 000 oz of PGMs for the full financial year.

The miner notes that, although the period post the December shutdown is always associated with a slower ramp-up, run-of-mine (RoM) production at both the Mooinooi and Lannex operations had improved significantly since March.

Sylvania’s PGM feed tonnes and PGM feed grade remained constant quarter-on-quarter, but PGMs recovery efficiency declined by 6%, due to the specific ore mix being treated in the quarter.

The 13% lower plant feed tonnes is a function of about 30% less RoM material received during the period under review. However, to mitigate the lower feed impact and to ensure the PGM feed tonnes remained constant and the PGM plants kept running at capacity, SDO substituted the shortfall in RoM with historical dump material, which typically has a higher percentage of fines.

Further, the 6% decrease in PGM recovery efficiencies from the previous quarter was primarily as a result of the lower percentage of fresh RoM and current arisings received during the period under review.

The group remains debt-free and continues to maintain strong cash reserves that enable for funding of capital expansion and process enhancement projects, the safeguarding of employees during times of uncertainty, upgrading the group’s exploration and evaluation assets and returning value to all stakeholders.

“The group has benefited from a strong PGMs basket price, boosted by the high rhodium price, as well as the recent performance of both iridium and ruthenium which contributed to the record profits for quarter,” Prinsloo says.

CHALLENGES & OPPORTUNITIES

During the period, Sylvania faced several challenges impacting on its operations, including a higher degree of oxidation in some current feed sources, especially at some western limb operations, resulting in lower-than-anticipated PGM recovery efficiencies.

In addition, the miner was also faced with inconsistent supply of RoM material to the Lannex milling plant during the quarter, which resulted in production challenges that impacted both processing efficiencies and operating costs.

In terms of opportunities, Sylvania reports that its Mooinooi chrome proprietary processing modifications and enhancement project was commissioned during the period under review, which is in line with its expected timetable.

Further enhancement work is set to continue in the current quarter.

Sylvania also reports that its Lesedi MF2 project is in the execution phase of development, with construction remaining on track and commissioning estimated to commence towards the end of the second quarter of the 2022 financial year.