Platinum group metals (PGMs) producer Sylvania Platinum has increased its production guidance for the 2023 financial year to between 70 000 oz and 72 000 oz of platinum, palladium, rhodium and gold (4E).
This follows a strong production performance at Sylvania's operations in the six months ended December 31, 2022 – the first half of its 2023 financial year.
The Sylvania Dump Operations (SDO) produced 19 276 oz of 4E in the second quarter of the financial year, slightly higher than the 19 194 oz of 4E produced in the first quarter.
"I am pleased with the strong quarterly production . . . achieved by the SDO, delivering higher-than-planned ounces, benefiting from higher PGM feed grades and improved recovery efficiencies at the Lannex and Mooinooi operations.
"Following a good start to the year, with excellent first- and second-quarter production performances, the board has decided to revise the annual production target . . . for the 2023 financial year," says Sylvania CEO Jaco Prinsloo.
Reflecting on the company's performance for the quarter ended December 31, Sylvania reports that overall SDO PGMs recovery increased by 6% and plant feed head grade increased 3% quarter-on-quarter.
PGM ounces were only marginally higher owing to higher concentrate work-in-progress inventory at the end of December 2022, which was delivered in January.
"Lannex in particular achieved a step change improvement in recovery, following the implementation of a new flotation reagent regime, while Mooinooi achieved significantly improved recovery efficiencies due to better-quality run-of-mine (RoM) material received from the host mine during the period," the company points out.
Further, despite South Africa experiencing significant loadshedding – rotational power cuts implemented by national power utility Eskom – production was only impacted to a minor extent at Lesedi and Millsell, which experienced total downtimes of five and two days, respectively.
The SDO posted revenue of $33.1-million for the second quarter of the financial year – a 10% decrease on the $36.1-million reported for the first quarter, as a result of an 8% decrease in the basket price recorded in December and applied to calculate revenue for ounces produced and delivered in the quarter but only invoiced in the third quarter, as well as the impact of the average rand:dollar exchange rate changes.
The average 4E gross basket price for the quarter was $2 432/oz, compared with $2 650/oz in the first quarter.
Group cash costs increased by 5% in rand terms from R12 563/oz in the first quarter to R13 237/oz in the second quarter. It increased by 2% in dollar terms from $737/oz in the first quarter to $751/oz in the second quarter.
Earnings before interest, taxes, depreciation and amortisation for the quarter were $20-million, compared with $26.4-million in the first quarter, while net profit decreased to $13.6-million from $18.6-million in the first quarter. The decrease was primarily a result of the lower basket price and slightly higher costs, Sylvania notes.
Sylvania spent $3.6-million on capital expenditure for the second quarter, compared with $2.6-million in the first quarter.
OPERATIONAL FOCUS AREAS
Sylvania says the successful implementation of the formal planned maintenance system at Millsell is expected to improve plant availabilities and runtime, leading to improved process stability and increased efficiencies. The roll out of the system at selected priority operations is under way.
Further, the Mooinooi operation continues to focus on communication with the host mine in relation to the preferred source of RoM and associated grades. "RoM grades have increased significantly, and continued efforts are being made to sustain this," it says.
At Tweefontein, the MF2 construction is complete and commissioning got under way during December 2022. An improved performance is expected during the current quarter, with a steady increase in recoveries at the operation as the new flotation circuit is optimised.
Sylvania expects the Tweefontein MF2 to reach full optimisation during the third quarter of the 2023 financial year.
The Lannex MF2 project is also under construction and scheduled for commissioning towards the end of the fourth quarter of the current financial year.
Sylvania is also investing in back-up power generation projects for the Lesedi and Millsell operations, with these to be commissioned during the fourth quarter of the financial year.
Further, the company plans to complete an updated mineral resource estimate and scoping study for combining the Volspruit North and South Body and to include rhodium, in the first quarter of the 2024 financial year.