Aim-listed Sylvania Platinum has generated higher earnings and profit for the six months ended December 31, prompting it to declare an interim dividend of 3p a share.
Group earnings before interest, taxes, depreciation and amortisation (Ebitda) totalled $45.6-million, compared with $36.2-million posted for the six months ended December 31, 2021.
Net profit of $32.6-million for the six months under review compares with a net profit of $24.4-million in the prior comparable period.
The company attributes its healthy performance to a 19% increase in production from the Sylvania Dump Operations, in South Africa’s Bushveld Complex, from 32 376 oz of platinum, palladium, rhodium and gold (4E) in the prior half-year to 38 471 oz in the reporting period.
Sylvania reports that run-of-mine grades at the Mooinooi deposit have increased significantly, which helped to boost production numbers in the period.
The company has revised upward its production guidance for the 2023 financial year, targeting between 70 000 oz and 72 000 oz of 4E.
CEO Jaco Prinsloo and CFO Lewanne Carminati say the construction and optimisation of a new flotation circuit at the Tweefontein deposit is on track for conclusion in a few months’ time, as is the Lannex MF2 project, which should both contribute to higher platinum group metals output.
Meanwhile, the Sylvania board in July last year approved a new dividend policy, which specifies a 40% minimum payout ratio of adjusted free cash flow. While the company has been consistently paying dividends for the last six years, Carminati explains that the company needed to change its dividend policy to be less vague and more conducive to forecasting and modelling.
She says some investors were unable to model and forecast dividends and, therefore, invest in the company, which necessitated a relook at the dividend policy.
After having bought back just over 1.08-million ordinary shares from shareholders in the period under review, and paying a final dividend of 8p apiece in December 2022, for the financial year ended June 30, 2022, the company’s cash balance stood at $124-million at the end of December 31, 2022, with no debt.
Moreover, after publishing an updated mineral resources estimate (MRE) and scoping study on the Volspruit North Body in October 2022, Sylvania has embarked on another scoping study focused on the South Body and including significant rhodium resources.
Prinsloo tells Mining Weekly that the uptake of electric vehicles (EVs) has happened slower than expected in the last year, leading to a slower substitution of internal combustion engines and, therefore, the rhodium used in autocatalysis. He says the uptake of EVs has been hampered by battery material shortages globally, which is likely to persist in the foreseeable future, hence the attractiveness to develop the full potential of the Volspruit deposit.
Volspruit also contains platinum, nickel and copper mineralisation. The company aims to complete the South Body scoping study by July/August, which will help to inform a decision on the way forward for the project, either progressing to a prefeasibility or feasibility study, depending on the quality of data gathered.
Volspruit North has a measured and indicated resource of 14.87-million tonnes of platinum and palladium and just under 20-million pounds of copper grading 0.06%.
In turn, the Aurora project, with its La Pucella and Hacra target areas, is showing generous mineralised intersection thickness, with the company focused on a maiden MRE for the Hacra target in particular. The deposit may be considered at a strike extension of the Aurora project, or be mined as a standalone openpit operation.
Commenting on some of the local factors influencing its operations, Prinsloo points out that higher-than-normal rainfall has been recorded throughout the country this year. This would have normally impacted on access to tailings resources; however, Sylvania has long been refining its operations by managing critical stockpile levels, so that production is not impacted by heavy rains.
In terms of power availability, Prinsloo says only one of its operations – Lesedi – has lost 13 days in the period under review owing to load curtailment, which is, in turn, a result of loadshedding. To this end, Sylvania has decided to install backup diesel generators at the site, to run the entire plant.
Prinsloo explains that the company would have preferred to install or procure solar power for the plant; however, power is necessary throughout all hours of the day. Besides, he adds, modern diesel generators often supply cleaner electricity compared to grid power that is fuelled by coal.