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Sylvania increases earnings, progresses Lesedi tailings deposition facility

31st January 2022

By: Donna Slater

Features Deputy Editor and Chief Photographer

     

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Aim-listed platinum group metals (PGMs) miner Sylvania Platinum’s dump operations achieved a 5% quarter-on-quarter increase in production to 16 605 oz of platinum, palladium, rhodium and gold (4E) for the quarter ended December 31 – the second quarter of its 2022 financial year.

A 5% increase in PGMs recovery efficiency, as flotation stability improved during the period, contributed towards the 5% higher PGMs ounce production.

While the plant feed head grades increased marginally compared with the first quarter, the PGMs plant feed grade and PGM plant feed tonnes remained consistent quarter-on-quarter.

Direct operating cash costs per 4E ounce decreased by 6% in rand terms and 10% in dollar terms quarter-on-quarter, to R11.91/oz and $772/oz, respectively; while the average rand:dollar exchange rate depreciated by 5% during the quarter.

During the period, Sylvania incurred capital expenditure of R66-million ($4.3-million), which is aligned with planned capital project schedules and includes the new Lesedi tailings facility, the Doornbosch tailings facility and the roll-out of the Lesedi secondary milling and flotation circuit (MF2).

Sylvania’s revenue increased by 10% during the period under review, to $32.2-million, as a result of the 5% increase in production and the 5% depreciation in the rand:dollar exchange rate, while net revenue (including base metals and by-products), and the quarter-on-quarter sales adjustment increased by 27%.

CEO Jaco Prinsloo says the company’s net revenue increased to $37.9-million, while net profit increased by 80% to $15.5-million, with the PGMs basket price realised from Sylvania’s smelters being $2 892/oz remaining at similar levels as in the first quarter.

Sylvania notes that the average gross basket price for the second quarter was $2 892/oz against the $2 897/oz of the first quarter, but is significantly lower than the $4 576/oz and $4 059/oz prices received in the third and fourth quarters of the 2021 financial year, respectively.

This consequently resulted in a lower-than-originally-planned basket price.

Sylvania’s group cash costs for its 4E basket decreased by 6% in rand value, from R13 674/oz to R12 844/oz, while in dollar terms, it decreased by 11%, from $934/oz in the first quarter to $832/oz in the second quarter.

As such, group earnings before interest, taxes, depreciation and amortisation increased from $13.6-million to $22.3-million, while net profit increased from $8.6-million to $15.5-million as a result of the increase in output.

The group’s cash balance decreased by 17%, from $132.7-million to $110.1-million during the period under review, as a result of the decrease in cash quarter-on-quarter.

The company paid the yearly dividend of $14.6-million, provisional income and royalty taxes of R163.3-million ($10.2-million) and R42.6-million ($2.7-million), respectively, during the period.

The group spent $4.3-million on capital for the second quarter which included the new Lesedi and Doornbosch tailings disposal facilities and the Lesedi MF2 projects.

“Our capital projects remain fully funded from current cash reserves and we are making significant progress in terms of access to additional chrome tailings resources at both the Eastern and Western operations,” Prinsloo says.

OPERATIONS

To safeguard the Lesedi tailings facility, reduce the water level and load, and resume partial production at the operation, Lesedi commenced with hydro-mining of the affected tailings dam facility in the second quarter.

However, owing to the nature of the temporary emergency tailings deposition facility and the difficulty in recovering return water from it, combined with general water shortages in the area, the operation has not been able to ramp up to normal production levels yet. Consequently, Lesedi produced about 1 500 oz less than anticipated for the period.

Nonetheless, the commissioning this month of a new water supply from additionally installed boreholes, will mitigate water shortages, while the operation will remain under pressure until the commissioning of the new tailings deposition facility, which is expected towards the end of the quarter ending March 31, 2022.

Further, low PGM grades in run-of-mine (RoM) material from the host mine at the Mooinooi operation posed a challenge during the period and various sampling campaigns and investigations have been performed during the period, in conjunction with the host mine, to evaluate potential alternative feed sources in an attempt to mitigate the effect on operations.

It is anticipated that RoM feed grades should improve during the second half of this calendar year.

In terms of operational opportunities, Sylvania reports that despite the significant impact of recent global chip shortages on the availability and delivery of some process control units and plant equipment, the Lesedi MF2 at the Western operations is still expected to be commissioned towards the end of March.

In addition, the execution of the Tweefontein MF2 project at the Eastern operations is progressing well and expected to be commissioned later this year.

“The impact of the temporary suspension of the Lesedi operation, together with the subsequent water shortages at our Western operations and the lower-than-planned PGMs feed grade of Mooinooi RoM material is such that we are now targeting estimated PGMs production of 66 000 oz to 68 000 oz for [the 2022 financial year],” says Prinsloo.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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