TIDMSLP
RNS Number : 7414Y
Sylvania Platinum Limited
08 September 2022
_____________________________________________________________________________________________________________________________
8 September 2022
Sylvania Platinum Limited
("Sylvania", the "Company" or the "Group")
Final Results to 30 June 2022
Sylvania (AIM: SLP) is pleased to announce its final results for
the year ended 30 June 2022. Unless otherwise stated, the
consolidated financial information contained in this report is
presented in United States Dollars ("USD").
Achievements
-- Sylvania Dump Operations ("SDO") achieved target production of 67,053 4E PGM ounces for the year (FY2021: 70,043
4E PGM ounces);
-- Net revenue of $151.9 million (FY2021: $206.1 million);
-- Group EBITDA of $82.8 million (FY2021: $144.9 million);
-- Group net profit of $56.2 million (FY2021: $99.8 million);
-- Windfall dividend of 2.25p per Ordinary Share declared by the Board of Directors and paid in April 2022;
-- Annual cash dividend of 8p per Ordinary Share declared by the Board of Directors (FY2021: 4p per Ordinary Share);
-- Positive Group cash balance of $121.3 million with no debt and no pipeline financing;
-- Bought back 6,590,923 shares in the market at the average price of 85.93p per Ordinary Share, equating to $7.1
million and cancelled 6,000,000 shares;
-- Doornbosch achieved 10-years Lost-Time Injury ("LTI") Free during June 2022 and received the 'Best-in-class
Safety Performance' award by the Mine Metallurgical Managers Association of South Africa;
-- Tweefontein operation achieved record monthly, quarterly, six-monthly and annual PGM production performance; and
-- New Lesedi TSF successfully commissioned during March 2022 with optimisation of the Lesedi MF2 plant continuing.
Challenges
-- The lower PGM feed grades and recovery potential associated with the significant increase in open cast ROM
sources during the period impacted both PGM production and operating costs for most of the year. Feed grades
have improved significantly since Q4 based on collaborative efforts between operations and the host mine at
Mooinooi;
-- The temporary tailings-related suspension of operations at Lesedi during Q1 resulted in operational downtime that
extended into Q2, but since the commissioning of an additional water supply and the newly constructed tailings
dam facility during Q3, the operation was able to return to normal operations; and
-- The effect of high global inflation and economic uncertainty continues to impact the cost of reagents, fuel and
transport.
Opportunities
-- The MF2 expansion at Tweefontein is on track to commence commissioning and to start contributing PGM ounces
during December 2022 ;
-- Following the successful roll-out of MF2 and ultra-fine screening circuits at various operations since 2017, this
technology is now also being implemented at Lannex, with commissioning scheduled towards the end of the 2023
calendar year;
-- Back-up power supply systems will be implemented at the three most affected operations during the next year to
mitigate any potential power supply disruptions associated with either vandalism of power supply infrastructure
or potential loadshedding by the national power utility;
-- As part of the Group's ongoing strategy to identify and secure additional tailings resources to contribute
towards both growth and life of operations, the management team has concluded various studies during the year and
continues to engage with respective host mines on an exclusive basis in order to progress towards successful
collaborations;
-- Preliminary results from the targeted studies commissioned during FY2021 on both the Group's Volspruit and
Northern Limb PGM opportunities are promising;
-- Work together with a 'binding technology' player progressing to co-develop a novel chemical bonding process to
create a chromite ore pellet suitable for ferrochrome ("FeCr") smelters, with the added potential to reduce
smelters' electrical energy consumption per ton of FeCr produced ;
-- Safe, healthy working operations and minimising environmental harm is prioritised, guided by our values to
strengthen and support the communities we operate in, and work, to build a socially inclusive economy for all
stakeholders, shareholders, employees and hosting communities; and
-- The Group continues to maintain strong cash reserves to provide funding for: capital expansion and process
optimisation projects; the safeguarding of employees; upgrading the Group's exploration and evaluation assets;
and returning value to all shareholders.
Post Period End
-- Post-period end, all of the conditions precedent for the sale of 100% of the shares in, and claims against
Grasvally Chrome Mine (Pty) Ltd, to Forward Africa Mining (Pty) Ltd ("FAM") have been fulfilled and the sale
became unconditional as of 8 July 2022.
Commenting on the results, Sylvania's CEO Jaco Prinsloo
said:
"I am pleased with the solid production performance of the SDO
in delivering 67,053 4E PGM ounces for the period, particularly
following the turbulent year and the macroeconomic challenges we
have all experienced. This performance is testament to our teams'
efforts, and I thank and commend all who have contributed to this
achievement.
"A key contributor to achieving this result was the stellar
performance of the Tweefontein plant which achieved monthly,
quarterly, six-monthly and annual production records during the
period. Furthermore, and no less stellar, our Doornbosch plant
achieved ten-years Lost-Time Injury free in June 2022 and was
awarded the 'Best-in-class Safety Performance' commendation by the
Mine Metallurgical Managers Association of South Africa. Strong
effort was put in by all production teams and the newly
commissioned MF2 circuit at Lesedi, as well as the improvement in
ROM PGM grade received from the host mine in the last half of the
year, assisted the Group to deliver ounces in the mid-range of its
stated production target.
"Clearly, commodity pricing has been more volatile than we have
seen for some time, with a 23% decrease in the average basket price
received, which impacted our overall financial results for the
year. However, looking forward I am optimistic about the uptick
displayed in the chrome market.
"The impact of higher global cost inflation is inevitable, and
we continue to maintain prudent cash management with disciplined
capital allocation and control as well as production cost control.
This ensures that the Company remains in a position with sufficient
cash reserves to cover working capital for the pipeline period,
finance capital projects, fund growth and exploration and mitigate
any potential future adverse impacts it may face. I am also pleased
to report that the Board has declared an annual cash dividend of 8p
per Ordinary Share for FY2022
"Looking ahead, I am confident that our operations will continue
to deliver a strong production performance and as a consequence
have set an annual production target of 68,000 to 70,000 ounces for
the year ahead."
The Sylvania cash generating subsidiaries are incorporated in
South Africa with the functional currency of these operations being
South African Rand ("ZAR"). Revenues from the sale of PGMs are
received in USD and then converted into ZAR. The Group's reporting
currency is USD as the parent company is incorporated in Bermuda.
Corporate and general and administration costs are incurred in USD,
Pounds Sterling ("GBP") and ZAR.
For the twelve months under review, the average ZAR:USD exchange
rate was ZAR15.21:$1 and the spot exchange rate was
ZAR16.38:$1.
USD Unit Audited Unit ZAR
FY 20201 FY 2022 % Change % Change FY 2022 FY 2021
---------- --------- --------- ---------- ----------
Production
2,700,685 2,393,355 -11% T Plant Feed T -11% 2,393,355 2,700,685
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1.88 1.96 4% g/t Feed Head Grade g/t 4% 1.96 1.88
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1,272,974 1,221,687 -4% T PGM Plant Feed Tons T -4% 1,221,687 1,272,974
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
3.17 3.21 1% g/t PGM Plant Feed Grade g/t 1% 3.21 3.17
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
53.99% 53.24% -1% % PGM Plant Recovery % -1% 53.24% 53.99%
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
70,043 67,053 -4% Oz Total 4E PGMs Oz -4% 67,053 70,043
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
94,041 85,659 -9% Oz Total 6E PGMs Oz -9% 85,659 94,041
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Average 4E Gross Basket Price
3,762 2,890 -23% $/oz (1) R/oz -20% 43,964 55,245
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Financials (2)
188,293 142,489 -24% $'000 Revenue (4E) R'000 -25% 2,167,753 2,888,758
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Revenue (by-products including
13,253 12,368 -7% $'000 base metals) R'000 -7% 188,154 203,326
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
4,566 -2,912 -164% $'000 Sales Adjustments R'000 -163% -44,299 70,051
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
206,112 151,944 -26% $'000 Net Revenue R'000 -27% 2,311,608 3,162,135
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
44,648 48,039 8% $'000 Direct Operating costs R'000 7% 730,842 684,985
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
15,191 17,426 15% $'000 Indirect Operating costs $'000 14% 265,115 233,050
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
General and Administrative
2,375 2,860 20% $'000 costs R'000 19% 43,510 36,429
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
144,860 82,768 -43% $'000 Group EBITDA $'000 -43% 1,259,195 2,222,416
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1,332 1,254 -6% $'000 Net Interest R'000 -7% 19,078 20,437
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
43,407 24,778 -43% $'000 Taxation R'000 -43% 376,958 665,934
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
2,980 3,092 4% $'000 Depreciation and Amortisation R'000 3% 47,048 45,715
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
99,806 56,151 -44% $'000 Net Profit R'000 -44% 854,252 1,531,204
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
7,519 16,405 118% $'000 Capital Expenditure R'000 116% 249,579 115,356
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
106,135 121,282 14% $'000 Cash Balance R'000 30% 1,986,185 1,524,365
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Ave R/$ rate R/$ -1% 15.21 15.34
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Spot R/$ rate R/$ 14% 16.38 14.36
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Unit Cost/Efficiencies
637 716 12% $/oz SDO Cash Cost per 4E PGM oz (3) R/oz 11% 10,899 9,779
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
475 561 18% $/oz SDO Cash Cost per 6E PGM oz (3) R/oz 17% 8,532 7,284
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Group Cash Cost Per 4E PGM oz
755 897 19% $/oz (3) R/oz 18% 13,643 11,590
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Group Cash Cost Per 6E PGM oz
563 702 25% $/oz (3) R/oz 24% 10,679 8,632
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
907 1,052 16% $/oz All-in Sustaining Cost (4E) R/oz 15% 16,008 13,910
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
981 1,256 28% $/oz All-in Cost (4E) R/oz 27% 19,109 15,052
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
(1) The gross basket price in the table is average gross basket
for the year, used for revenue recognition of ounces delivered over
FY2022, before penalties/smelting costs
and applying the contractual payability.
(2) Revenue (6E) for FY2022, before adjustments is $154.2
million (6E prill split is Pt 51%, Pd 18%, Rh 9%, Au 0.3%, Ru 17%,
Ir 5%).
(3) The cash costs include operating costs and exclude indirect
cost for example royalty tax and EDEP payments.
A. OPERATIONAL OVERVIEW
Health, safety and environment
During the period under review the operations continued to focus
on health, safety and environmental compliance. The Group is proud
to report that there were no significant health or environmental
incidents reported during the year and that the Company remains
fatality-free since inception in 2006.
The Doornbosch operation achieved the significant industry
milestone of ten years Lost-Time Injury ("LTI") free. Both Lesedi
and Lannex have exceeded two-years LTI-free and Tweefontein
achieved a one-year LTI-free milestone during the year.
Unfortunately, Mooinooi and Millsell both recorded one LTI each
when an employee on their plants fractured a finger during
maintenance. The Company continues to target zero harm to employees
and every injury that is recorded is fully investigated and
corrective measures are implemented to prevent any future
reoccurrences.
Through the collaborative efforts of management and all our
employees, we continuously strive to maintain high safety standards
and a safe working environment at all operating sites, with each
plant continuing to operate in accordance with legislated safety
and occupational regulations pertaining to the industry and country
as a whole.
Impact of COVID-19
Although South Africa emerged from a fifth wave of COVID-19
infections in the country during H2 FY2022, the effects on a
national level were far milder than previously experienced. During
the period under review, the Company reported 77 cases of the
virus, with all employees returned to work. Sylvania has reported
142 infections since the start of the pandemic.
During HY2 FY2022, lockdown regulations were eased with the
mandatory wearing of masks and limitations placed on gatherings,
amongst others, being lifted completely during the fourth quarter.
Sylvania continues to encourage responsible behaviour amongst all
employees. The Company continues to support vaccination to limit
the spread of the pandemic although is ever cognisant that this
remains a personal choice.
In acknowledgement of the toll that the pandemic has had on the
mental health and wellbeing of employees and their loved ones, the
Company implemented its Employee Assistance Program ("EAP"). The
EAP is available to all employees and their immediate family
members, as well as those living in the same household. Although
there is a focus on treatment and prevention, the program will
enhance the corporate culture of caring and wellness and enable
continuous management and measurement of reported cases to assist
in identifying areas of concern to implement remedial measures,
thereby monitoring overall wellness risk within the organisation.
Reporting lines are confidential, and each case is treated with
utmost discretion to protect any subject's right to privacy.
Operational performance
The SDO met the mid-range of the Company's stated guidance for
the financial year by delivering an annual production of 67,053 4E
PGM ounces.
PGM Plant Feed Tons were 4% lower than the previous period
despite facing challenges related to lower quality feed sources and
blends received from the host mines at the Western Operations
during the year, as well as the Lesedi tailings dam related
stoppage during HY1 FY2022. PGM feed grades increased slightly by
1% year-on-year while recovery efficiencies decreased by 1%. This
was associated with the more oxidised ROM and current arisings
material treated at the Western Operations, with recovery for the
combined SDO remaining within the anticipated 52% to 54% range.
The SDO cash cost per 4E PGM ounce increased by 11% in ZAR (the
functional currency) from ZAR9,779/ounce to ZAR10,899/ounce while
the USD cash cost increased 12% to $716/ounce against $637/ounce in
the prior year. The increase in costs was primarily driven by
higher electricity costs, reagent price increases during the second
part of the year and an increase in community upliftment
expenditure. The effect of high global inflation and uncertainty
continues to directly impact the cost of reagents, fuel and
transport which also impact operating costs.
Operational focus areas
Engagement with the host mine continued during the year to
address the lower PGM grades in ROM and current arisings sources.
As announced in HY1 FY2022, various initiatives were undertaken to
investigate and evaluate potential alternative feed sources.
Preferred ore sources were identified, and improved ROM feed grades
were observed from April 2022 onwards, increasing considerably
during the fourth quarter particularly at the Mooinooi operation.
The source and quality of material being received from the host
mine will continue to be a focus to ensure production targets are
maintained into the future.
Subsequent to the operational stoppage at the Lesedi operation
announced in our FY2021 Annual Report, various mitigatory measures
were undertaken by the Company to ensure safety at the plant, the
nearby communities and the environment. The anticipated ramp-up to
normal production levels during the second quarter of the 2022
financial year, was hampered by general water shortages in the area
as well as some technical difficulties experienced in recovering
return-water from the emergency tailings deposition facility at
Lesedi. Additional boreholes and the commissioning of a newly
constructed tailings facility allowed for the plant to return to
full operation during HY2 FY2022. Together with optimisation of the
new MF2 plant, improving recovery efficiencies and resultant ounce
production at the plant will remain a focus of management.
The Company experienced localised power supply constraints to
operations during the year as a result of continuing vandalism and
cable theft at substations of the national power utility. This was
also affected by the re-implementation of loadshedding in the
country. Our power mitigation strategies are being implemented at
the most affected operations - as is explained in more detail in
our ESG, Embedding our Strategy, report released alongside the
Company's Annual Report FY2022.
Capital Projects
Capital expenditure for the year increased 118% to $16.4 million
(ZAR249.6 million), in line with the roll-out of planned
projects.
The MF2 expansion at Tweefontein is on track for commissioning
by the end of the 2022 calendar year and is expected to start
contributing PGM ounces from December 2022.
Based on the successful roll-out of MF2 and ultra-fine screening
circuits at various operations since 2017 to improve process and
PGM recovery efficiencies, a project was initiated to implement
this technology at Lannex, with commissioning scheduled towards the
end of the 2023 calendar year.
Approximately ZAR66.5 million ($4.1 million) is budgeted in
FY2023 for necessary expansion of the Company's tailing facilities
to ensure integrity and capacity at the tailings deposition
facilities and to cater for remaining sources that need to be
processed.
The Company has also budgeted to install new emergency backup
power generation capacity at two of its plants in order to reduce
the impact of power interruptions caused by instability of the
national and provincial supply grids. While the Company is fully
committed to reducing its carbon footprint in line with ESG
objectives, standalone emergency backup plants operating fully on
renewable technologies are not currently viable, but these will be
introduced in future where possible to lower diesel consumption and
bolster supply capacity during peak day time running hours.
As part of its commitment to further improve the viability of
its exploration projects at the Volspruit and Northern Limb
projects, and to further unlock economic potential from these owned
assets, the Company anticipates spending approximately ZAR70
million ($4.4 million) during FY2023 to perform further resource
optimisation and exploration drilling as detailed in the mineral
asset and development section, as well as on the required
regulatory Social and Labour Plan ("SLP") spend.
Some years ago, Sylvania partnered with a 'binding technology'
player to co-develop a novel chemical bonding process. The aim was
to create a chromite ore pellet suitable for ferrochrome ("FeCr")
smelters but with the added potential to markedly cut the smelters'
electrical energy consumption per ton of FeCr produced. In exchange
for funding development costs in the venture, Sylvania holds the
licence for any future chrome pellet production in South Africa.
This research and development project is expected to yield positive
results and may enable the Company to diversify into other areas
and commodities.
Outlook
With the newly commissioned Lesedi MF2 in operation, improved
ROM feed grades at the Western Operations, together with the
roll-out of the Tweefontein MF2, the Company is confident that the
operations will continue to deliver a strong production
performance. For that reason, Sylvania will target an annual
production of between 68,000 to 70,000 ounces for the financial
year ahead. Based on current resources and production scheduling
and the planned contribution of improvement projects currently in
execution, PGM production for FY2024 and FY2025 is targeted to
increase.
B. FINANCIAL OVERVIEW
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEARED 30 JUNE 2022
2022 2021
Note(s) $ $
Revenue 1 151,944,273 206,112,444
Cost of sales (61,823,181) (54,767,603)
Royalties tax 2 (6,920,404) (8,276,344)
Gross profit 83,200,688 143,068,497
------------- -------------
Other income 82,132 1,146,710
Other expenses 3 (3,608,140) (2,334,764)
------------- -------------
Operating profit before net finance costs and income tax expense 79,674,680 141,880,443
Finance income 1,711,371 1,705,366
Finance costs (457,363) (373,236)
------------- -------------
Profit before income tax expense 80,928,688 143,212,573
Income tax expense 4 (24,777,844) (43,406,522)
Net profit for the period 56,150,844 99,806,051
------------- -------------
Other comprehensive income/(loss)
Items that are or may be subsequently reclassified to profit and loss:
Foreign operations - foreign currency translation differences (17,747,559) 24,461,386
Total other comprehensive profit/(loss) (net of tax) (17,747,559) 24,461,386
------------- -------------
Total comprehensive income for the year 38,403,285 124,267,437
------------- -------------
Cents Cents
------------------------------------------------------------------------------- ------ ------
Earnings per share attributable to the ordinary equity holders of the Company:
Basic earnings per share 20.62 36.65
Diluted earnings per share 20.40 35.92
-------------------------------------------------------------------------------- ------ ------
1. Revenue is generated from the sale of PGM ounces produced at
the six retreatment plants, net of pipeline sales adjustments,
penalties and smelting charges. Revenue excludes profit/loss on
foreign exchange.
2. Royalty tax is paid at a rate of 7% on attributable Platinum
ounces and decreased from the prior reporting period due to the
lower revenue.
3. Other expenses relate to corporate activities and include
consulting fees, audit fees, insurance, forex profit/(loss) on
revenue, directors' fees, share based payments and other
administrative costs.
4. Income tax expense include current tax, deferred tax and dividend withholding tax.
The average gross basket price for PGMs in the financial year
was $2,890/ounce - a 23% decrease on the previous year's basket
price of $3,762/ounce. The decrease in the overall PGM basket price
was primarily due to a circa 33% decrease in rhodium prices from
record highs recorded during FY2021, and a circa 27% decrease in
palladium prices.
Revenue on 4E ounces delivered decreased by 24% in dollar terms
to $142.5 million year-on-year (FY2021: $188.3 million) with
revenue from base metals and by-products contributing $12.4 million
to the total revenue (FY2021: $13.3 million). Net revenue, after
adjustments for ounces delivered in the prior year but invoiced in
FY2022, decreased 26% on the previous year's $206.1 million to
$151.9 million.
The operational cost of sales is incurred in ZAR and represents
the direct and indirect costs of producing the PGM concentrate and
amounted to ZAR996.0 million for the reporting period compared to
ZAR918.0 million for the period ended 30 June 2021. The main cost
contributors being employee costs of ZAR300.6 million (FY2021:
ZAR277.8 million), reagents and milling costs of ZAR81.1 million
(FY2021: ZAR60.5 million), and electricity costs of ZAR113.4
million (FY2021: ZAR99.5 million). The fuel and transport expense
increased sharply in the second half of the financial year as a
result of the high global inflation and the escalating petrol and
diesel costs. In addition to these the Company paid royalty tax of
ZAR105.3 million (FY2021: ZAR126.9 million). The decrease in
mineral royalty tax is directly related to the decrease in net
revenue and earnings year-on year.
Group cash costs increased by 19% year-on-year from $755/ounce
(ZAR11,590/ounce) to $897/ounce (ZAR13,643/ounce). Direct operating
costs increased 7% in ZAR (the functional currency) from ZAR685.0
million to ZAR730.8 million and indirect operating costs increased
14% from ZAR233.0 million to ZAR265.1 million. The increase in
indirect costs is attributable to the increase in the social
responsibility cost of ZAR12.3 million (FY2021: ZAR3.6
million).
All-in sustaining costs ("AISC") increased by 16% to
$1,052/ounce (ZAR16,008/ounce) from $907/ounce (ZAR13,910/ounce).
Similarly all-in costs ("AIC") of 4E increased by 28% to
$1,256/ounce (ZAR19,109/ounce) from $981/ounce (ZAR15,052/ounce)
recorded in the previous period as a result of the increase in
capital spend on strategic projects and exploration.
General and administrative costs, included in the Group cash
costs, are incurred in USD, GBP and ZAR and are impacted by
exchange rate fluctuations over the reporting period. These costs
increased 20% to $2.9 million in the reporting currency
year-on-year mainly due to the increase in administrative salaries
and wages, legal and consulting fees.
Group EBITDA decreased 43% year-on-year to $82.8 million
(FY2021: $144.9 million). The taxation expense for the year was
$24.8 million (FY2021: $43.4 million) (as per the statement of
profit or loss and other comprehensive income and includes deferred
taxation movements and dividend withholding tax) and depreciation
amounted to $3.1 million.
The Group net profit for the year was $56.2 million (FY2021:
$99.8 million).
Interest is earned on surplus cash invested in South Africa at
an average interest rate of 4% per annum. Interest was paid on
instalment sale agreements for part of the period; however, all
instalment sale agreements were settled during the year under
review.
Income tax paid for the financial year amounted to ZAR342.6
million ($22.5 million) compared to ZAR697.8 million ($45.5
million) for the previous financial year. The decrease is as a
result of decreased taxable profits mainly due to the decrease in
the basket price during the year as well as slightly lower ounce
production. Income tax is paid in ZAR on taxable profits generated
at the South African operations. Dividend withholding tax of $1.3
million (ZAR19.4million) was paid during the year.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2022
2022 2021
Note $ $
Net cash inflow from operating activities 5 69,611,329 68,235,302
Net cash outflow from investing activities 6 (17,168,387) (7,585,842)
Net cash (outflow) / inflow from financing
activities 7 (32,748,480) (21,956,967)
------------ ------------
Net (decrease) / increase in cash and cash
equivalents 19,694,462 38,692,493
Effect of exchange fluctuations on cash held (4,547,472) 11,566,330
Cash and cash equivalents at the beginning
of reporting period 106,135,435 55,876,612
Cash and cash equivalents at the end of the
reporting period 121,282,425 106,135,435
------------ ------------
5. Net cash inflow from operating activities includes net cash
inflow from operations of $91,930,788, net finance income of
$1,512,259 and taxation paid of $23,831,718.
6. Net cash outflow from investing activities includes payments
for property, plant and equipment of $14,494,644, exploration and
evaluation assets of $1,907,396, advances paid to the joint
operation and third-party loan of $773,495 and assets held for sale
$7,148.
7. Net cash outflow from investing activities includes dividend
payments $22,706,078, payment for share transactions $9,865,070 and
the repayment of borrowings and leases $177,332.
The cash balance on 30 June 2022 was $121.3 million (FY2021:
$106.1 million), including $0.8 million in financial guarantees
(FY2021: $0.9 million). Cash generated from operations before
working capital movements was $85.2 million, with net changes in
working capital of $6.7 million mainly due to the movement in trade
receivables of $9.5 million. Net finance income amounted to $1.5
million and $23.8 million was paid in income tax for the period,
including dividend withholding tax of $1.3 million.
At the corporate level, 6.6 million shares were bought back
through the Share Buyback for a cost of $7.1 million which was
announced in Q4. The Company cancelled 6 million Treasury Shares at
the end of June 2022. A further 2.1 million shares were bought back
from employees which includes buybacks for tax purposes during the
period totalling $2.7 million. Dividends of $22.7 million were paid
out and a further $0.7 million was paid through the Employee
Dividend Entitlement Plan ("EDEP").
The impact of exchange rate fluctuations on cash held at year
end was a $4.5 million loss due to the ZAR depreciating against the
USD by 14%.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2022
2022 2021
Note(s) $ $
ASSETS
Non-current assets
Exploration and evaluation expenditure 46,087,453 45,351,817
Property, plant and equipment 46,298,978 39,915,437
Other financial assets 8(a) 283,450 298,864
Total non-current assets 92,669,881 85,566,118
------------ ------------
Current assets
Cash and cash equivalents 9 121,282,425 106,135,435
Trade and other receivables 10 52,939,589 68,612,119
8(b
Other financial assets & c) 1,029,205 885,593
Inventories 11 4,258,960 3,838,147
Current tax asset 3,486,226 4,329,860
------------ ------------
182,996,405 183,801,154
Assets held for sale 3,771,661 4,216,190
------------ ------------
Total current assets 186,768,066 188,017,344
Total assets 279,437,947 273,583,462
------------ ------------
EQUITY AND LIABILITIES
Shareholders' equity
Issued capital 12 2,801,557 2,861,557
Reserves 13 38,663,288 65,314,647
Retained profit/(Accumulated losses) 209,221,487 175,776,721
Total equity 250,686,332 243,952,925
------------ ------------
Non-current liabilities
Borrowings 14 35,031 70,956
Provisions 15 5,936,804 4,539,937
Deferred tax liability 11,614,765 11,154,515
Total non-current liabilities 17,586,600 15,765,408
------------ ------------
Current liabilities
Trade and other payables 11,110,196 13,652,017
Borrowings 14 48,957 212,651
------------ ------------
11,159,153 13,864,668
Liabilities directly associated with the
assets classified as held for sale 5,862 461
Total current liabilities 11,165,015 13,865,129
------------ ------------
Total liabilities 28,751,615 29,630,537
Total liabilities and shareholder's equity 279,437,947 273,583,462
------------ ------------
8. Other financial assets consist of:
a. Contribution paid to the host mine for rehabilitation purposes.
b. A loan receivable granted to TS Consortium from Sylvania
South Africa (Pty) Ltd. Sylvania South Africa (Pty) Ltd interest in
the joint operation increased to 75% during the reporting
period.
c. A loan to Forward Africa Mining Pty (Ltd) secured over the
Grasvally Plant and bearing interest at the Johannesburg inter-Bank
Offer Rate (JIBOR) + 3%.
9. The majority of the cash and cash equivalents are held in ZAR and USD.
10. Trade and other receivables consist mainly of amounts receivable for the sale of PGMs.
11. Inventory held includes spares and consumables for the SDO.
12. The total number of issued ordinary shares at 30 June 2022
is 280,155,657 Ordinary Shares of US$0.01 each (including
14,024,869 shares held in treasury)
13. Reserves include the share premium, foreign currency
translation reserve, which is used to record exchange differences
arising from the translation of financial statements of foreign
controlled entities, share-based payments reserve, treasury share
reserve, the non-controlling interests reserve and the equity
reserve.
14. Interest bearing loans consist of right-of-use lease
liabilities. All instalment sale agreements were settled during the
period of review.
15. Provision is made for the present value of closure,
restoration and environmental rehabilitation costs in the financial
period when the related environmental disturbance occurs.
C. MINERAL ASSET DEVELOPMENT
The Group owns various mineral asset development projects on the
Northern Limb of the Bushveld Igneous Complex located in South
Africa, for which it has approved mining rights. New targeted
studies were commissioned during the 2021 financial year on both
the Volspruit and Northern Limb PGM opportunities to determine how
best to optimise the respective projects. Significant progress has
been made towards unlocking mineral potential on these projects to
generate value for shareholders.
Volspruit Project
Based on the historical resource statements for Volspruit, the
in situ grade of the project was relatively low and as a
consequence, low PGM concentrate grades would have necessitated the
need for very capital-intensive in-house smelting and refining
facilities. This was one of the primary reasons for the relatively
slow progress on this project in earlier years. Based on the
improved metal prices in recent years and an improved focus on
unlocking the potential and further value from existing assets, the
Company initiated a resource optimisation study, with the
assistance of Earthlab Technical Division ("Earthlab") which is a
mining and exploration specialist company. The primary objective is
to improve the ore feed grades for the project to enable the
production of a higher grade, saleable PGM concentrate, eliminating
the need for expensive and complicated downstream processing
infrastructure.
During the past year, Earthlab has reviewed historical
exploration results of the Volspruit North Pit resource (South Pit
resource not optimised yet). A revised geological interpretation
was applied which allows for higher cut-off grades, reducing the
Mineral Resource to a smaller volume, but of a higher quality. Due
to the alternative definition of mineralised zones, estimated as
separate domains, the 3E PGM grade of the Mineral Resource Estimate
increased significantly and has enhanced the economic potential of
the North Pit, especially when combined with the relatively low
waste to reef stripping ratios anticipated.
The specific deliverables of the study include an upgraded
JORC-compliant Mineral Resource Statement and a Scoping Study
Report based on the updated Mineral Resource, which are expected to
be published during Q1 FY2023. Based on preliminary findings we
believe that we would be able to further enhance the value of this
project by proceeding to a Pre-Feasibility Study during the next
financial year to allow for a JORC-compliant Ore Reserve and
increased confidence in the feasibility status of the entire
mineral asset.
The investment for the permitting requirements in support of the
existing Mining Right continues with specialist technical teams
currently working on the authorisations. These authorisations
include the Water Use License for the mining and on-site processing
of the ore, updating of the Environmental Impact Assessment and the
finalisation of the amended SLP which will update the Local
Economic Development ("LED") project that is included in the Mining
Right held by the Company.
Northern Limb Projects
The Company currently holds approved Mining Rights for PGMs and
Base Metals for both the Hacra and Aurora project areas. Similar to
Volspruit, the historical Mineral Resource Estimates for the
respective project areas did not support an acceptable in situ
grade, or the ore feed grade to enable acceptable quality saleable
PGM concentrates, and consequently limited progress was made in
earlier years to develop these projects.
In 2020, the Company together with Earthlab, initiated a
targeted review of the Hacra and Aurora PGM and Base Metal projects
through an infill drilling programme, re-evaluation of existing
drillhole data, and an optimisation study. This initial proof of
concept study was aimed at improving the resource classification
and updating the Mineral Resource Estimate over a specifically
identified target area that represents approximately 10% of the
total strike length held under Mining Rights by the Company.
Further studies on the remaining project areas under the Mining
Right, including a scoping-level mining study evaluating a new
business case for the area is to follow completion of the initial
phase.
The interpretation and modelling of the mineralisation over the
initial target area on the La Pucella property of the Far Northern
Limb will be completed shortly, and the updated Mineral Resource
Estimate is expected to be published at the end of Q1 FY2023.
Based on the preliminary findings we believe that we may be able
to further enhance the value of this project by subjecting this
Mineral Resource to a scoping-level mining study to evaluate a
business case for the La Pucella target area of the Mining Right
during the next year.
In addition, a similar study philosophy is planned for the three
additional target areas on strike, and down to a depth of 200m
below surface during the next financial year, contributing towards
increasing and improving the overall near-surface Mineral Resources
for the Far Northern Limb project.
Grasvally Chrome Project
The Company reported on 11 July 2022 that all the conditions
precedent for the sale of 100% of the shares in, and claims against
Grasvally Chrome Mine (Pty) Ltd, to Forward Africa Mining (Pty) Ltd
("FAM") have been fulfilled and the sale became unconditional on 8
July 2022. As announced in the HY1 FY2022 report, sales proceeds of
ZAR100.0 million ($5.96 million as at 8 July 2022) will be paid in
fifteen equal quarterly instalments.
D. CORPORATE ACTIVITIES
Dividend Approval and Payment
On 6 September 2021, the Board declared a final dividend of 4p
per Ordinary Share, with a record date of 29 October 2021 and
payment date of 3 December 2021.
In addition to the annual dividend paid, the Board declared a
windfall dividend of 2.25p per Ordinary Share for the calendar year
2021. Payment of the windfall dividend was made on 8 April 2022 to
shareholders on the register at the close of business on 4 March
2022.
The Board has now declared the payment of a cash dividend for
FY2022 of 8p per Ordinary Share, payable on 2 December 2022.
Payment of the dividend will be made to shareholders on the
register at the close of business on 28 October 2022 and the
ex-dividend date is 27 October 2022. The declaration of the
dividend was done in accordance with the six metrics of our
dividend policy, namely:
-- Liquidity and forecast cash requirements of the business: the
approximate six-month working capital cycle which needs to be
provided for;
-- Debt: some negative covenants could restrict the payment of
dividends in the event the Company were to secure external
funding;
-- Capital expenditure initiatives: expansion capital required
to grow the business and continue to extend the life of the
SDO;
-- Metal prices and Rand / Dollar exchange rate: fluctuations in
prices can have a major impact on the Company's results, especially
with lengthy payment terms.
-- Legal considerations: Bermudan law permits a company to
declare or pay a dividend provided the liquidity and solvency
requirements are met; and
-- Sustainability: the Company's ability to continue annual dividend payments.
The Board has committed to review the dividend policy in the new
financial year and any changes will be communicated to shareholders
in due course.
Further to the dividends paid to shareholders, in accordance
with the Company's EDEP whereby eligible employees receive an
equivalent dividend paid on shares bought back by the Company in
the market and ring-fenced for the EDEP, a total of ZAR10.4 million
($0.7 million) was paid out under the EDEP during the financial
year.
Transactions in Own Shares
One of the Company's strategic goals is to return capital to
shareholders and to continue to review opportunities to do so, as
and when they arise.
At the commencement of the financial year, shares in the Company
were valued at 120p per Ordinary Share and at the close of FY2022,
the share price had depreciated 27% to 88p per Ordinary Share,
largely influenced by the macroeconomic and geopolitical
environment. Although most of the factors influencing the share
price are outside of the Company's control, management do monitor
it closely and will continue to manage the business in the best way
possible to maximise shareholder value.
Options over 2,385,000 Ordinary Shares were exercised by various
persons displaying management responsibilities ("PDMRs") and
employees which vested from bonus shares awarded to them in August
2018. 1,066,850 of the vested bonus shares were repurchased to
satisfy the tax liabilities of PDMRs and certain employees, and an
additional 806,580 shares were bought back from various employees.
All shares awarded came from Treasury. In addition, the Company
bought back into Treasury a total of 263,724 shares at the 30-day
VWAP of 100.7725p per share from certain employees and a PDMR where
the shares had been awarded to the sellers under the Sylvania
Platinum Award Scheme permitted to be sold back during the
specified periods of March and September.
During H2 FY2022, the Company concluded its third Share Buyback
programme in which it bought back 6,590,923 shares in the market at
the average price of 85.93p per share, equating to $7,119,941.
The Company was notified that three of its Non-Executive
Directors, namely Adrian Reynolds, Simon Scott and Eileen Carr, had
each purchased 20,000 Ordinary Shares in the Company on market.
Consequently, Adrian's and Simon's shareholdings in the Company
total 20,000 Ordinary Shares each and Eileen's shareholding totals
70,000 Ordinary Shares, representing 0.007%, 0.007% and 0.026% of
the Company's total number of Ordinary Shares with voting
rights.
During the financial year, a total of 6,000,000 Ordinary Shares
held in Treasury were cancelled. Following the above transactions,
the Company's issued share capital is 280,155,657 Ordinary Shares,
of which a total of 14,024,869 Ordinary Shares are held in
Treasury. Therefore, the total number of Ordinary Shares with
voting rights is 266,130,788.
Appointment of Directors
Sylvania announced during the financial year that it had
appointed Adrian Reynolds and Simon Scott as Independent,
Non-Executive Directors effective 1 August 2021 and 1 January 2022
respectively. Roger Williams stepped down from his role as
Non-Executive Director effective 31 December 2021 after serving on
the Board of the Company since 2011.
As a result of the Directorate changes, and as part of a Board
succession plan, the following changes in committee roles were
effected: Eileen Carr was appointed Chair of the Audit Committee,
Adrian Reynolds was appointed Chair of the Remuneration Committee
and Simon Scott has become a member of the Audit Committee. Eileen
Carr's role as Assistant Company Secretary is now being carried out
by a member of the Company's in-house legal staff.
E. ENVIRONMENT, SOCIAL AND GOVERNANCE ("ESG")
This year, for the first time, the Company has prepared a
standalone ESG report, Embedding our Strategy, which seeks to
present the Company's operational and non-financial performance to
stakeholders in a meaningful way, illustrating how material issues
are managed. As a value-driven Company, sustainability is
fundamental to the way business is run, and it underpins the
Company's ESG strategy. Sylvania is committed to making a positive
contribution to the lives of its employees, the industry and host
communities.
Sylvania's ESG journey follows a pathway that began with
identifying and activating the drivers of ESG, gathering baseline
information on potential material risks to ensure that future
targets are based on verifiable information and assumptions. The
transition phase included designing an ESG strategy and reporting
framework. Finally, ESG was embedded throughout Sylvania's business
strategy, identifying and including ESG in the Sylvania strategic
risk register. This ensures that mitigation strategies for risks or
opportunities linked to ESG elements are prioritised.
The mining and processing sector is increasingly in the
spotlight in terms of its potential operational hazards and its
impact on the environment, employees and communities. As a mineral
re-processor the Company takes its responsibilities to the planet
and its people as seriously as it does its duties and obligations
to customers and shareholders. Sylvania believes a sustainable
business in the industry is one with a diverse and inclusive
workforce where employees can thrive; and one which acts in a
responsible manner, reducing its impact on the environment and
benefiting the communities in which it operates. The Company's
approach aligns with the ten principles for sustainable development
outlined by the International Council on Mining and Metals
("ICMM"), which integrate with the 17 United Nations Sustainable
Development Goals ("UNSDGs").
This year, from an environmental perspective, the ESG report
focuses on climate action, water security and stewardship as well
as tailings management and rehabilitation. Socially, focus was on
female empowerment, workforce diversity and labour practises,
employee participation and representation, employee safety and
health, training and development, communities, customers and local
stakeholder relationships as well as gender-based violence. In
terms of governance, focus was on process and code of conduct,
sustained resources, growth and diversification, stakeholders and
engagement, as well as economic contribution. Further details are
outlined in the Company's report, ESG: Embedding our Strategy.
CONTACT DETAILS
For further information, please
contact:
Jaco Prinsloo CEO
Lewanne Carminati CFO +27 11 673 1171
Nominated Adviser and Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Scott Mathieson
/ Kane Collings
Communications
Alma PR Limited +44 (0) 20 3405 0205
Justine James / Josh Royston / sylvania@almapr.co.uk
Matthew Young
CORPORATE INFORMATION
Registered and postal Sylvania Platinum Limited
address:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
SA Operations postal PO Box 976
address:
Florida Hills, 1716
South Africa
Sylvania Website : www.sylvaniaplatinum.com
About Sylvania Platinum Limited
Sylvania Platinum is a lower-cost producer of platinum group
metals (PGM) (platinum, palladium and rhodium) with operations
located in South Africa. The Sylvania Dump Operations (SDO)
comprises six chrome beneficiation and PGM processing plants
focusing on the retreatment of PGM-rich chrome tailings materials
from mines in the Bushveld Igneous Complex. The SDO is the largest
PGM producer from chrome tailings re-treatment in the industry. The
Group also holds mining rights for PGM projects in the Northern
Limb of the Bushveld Complex.
For more information visit https://www.sylvaniaplatinum.com/
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse regulation (EU) no.596/2014 as amended by the
Market Abuse (Amendment) (EU Exit) Regulations 2019.
For the purposes of MAR and Article 2 of Commission Implementing
Regulation (EU) 2016/1055, this announcement is being made on
behalf of the Company by Jaco Prinsloo .
ANNEXURE
GLOSSARY OF TERMS FY2022
The following definitions apply throughout the period:
4E PGM ounces include the precious metal elements Platinum,
4E PGMs Palladium, Rhodium and Gold
6E ounces include the 4E elements plus additional Iridium
6E PGMs and Ruthenium
--------------------------------------------------------------------
AGM Annual General Meeting
--------------------------------------------------------------------
AIM Alternative Investment Market of the London Stock Exchange
--------------------------------------------------------------------
All-in sustaining Production costs plus all costs relating to sustaining current
cost production and sustaining capital expenditure.
--------------------------------------------------------------------
All-in sustaining cost plus non-sustaining and expansion
All-in cost capital expenditure
--------------------------------------------------------------------
CLOs Community Liaison Officers
--------------------------------------------------------------------
Fresh chrome tails from current operating host mines processing
Current risings operations
--------------------------------------------------------------------
DMRE Department of Mineral Resources and Energy
--------------------------------------------------------------------
EBITDA Earnings before interest, tax, depreciation and amortisation
--------------------------------------------------------------------
EA Environmental Authorisation
--------------------------------------------------------------------
EAP Employee Assistance Program
--------------------------------------------------------------------
EEFs Employment Engagement Forums
--------------------------------------------------------------------
EDEP Employee Dividend Entitlement Programme
--------------------------------------------------------------------
ESG Environment, social and governance
--------------------------------------------------------------------
EIA Environmental Impact Assessment
--------------------------------------------------------------------
EIR Effective interest rate
--------------------------------------------------------------------
EMPR Environmental Management Programme Report
--------------------------------------------------------------------
ESG Environment, Social and Governance
--------------------------------------------------------------------
GBP Pounds Sterling
--------------------------------------------------------------------
GHG Greenhouse gases
--------------------------------------------------------------------
IASB International Accounting Standards Board
--------------------------------------------------------------------
ICE Internal combustion engine
--------------------------------------------------------------------
IFRIC International Financial Reporting Interpretation Committee
--------------------------------------------------------------------
IFRS International Financial Reporting Standards
--------------------------------------------------------------------
Phoenix Platinum Mining Proprietary Limited, renamed Sylvania
Lesedi Lesedi
--------------------------------------------------------------------
LSE London Stock Exchange
--------------------------------------------------------------------
LTI Lost-time injury
--------------------------------------------------------------------
LTIFR Lost-time injury frequency rate
--------------------------------------------------------------------
MF2 Milling and flotation technology
--------------------------------------------------------------------
MPRDA Mineral and Petroleum Resources Development Act
--------------------------------------------------------------------
MRA Mining Right Application
--------------------------------------------------------------------
NWA National Water Act 36 of 1998
--------------------------------------------------------------------
Platinum group metals comprising mainly platinum, palladium,
PGM rhodium and gold
--------------------------------------------------------------------
PAR Pan African Resources Plc
--------------------------------------------------------------------
PDMR Person displaying management responsibility
--------------------------------------------------------------------
Pipeline ounces 6E ounces delivered but not invoiced
--------------------------------------------------------------------
Revenue recognised for ounces delivered, but not yet invoiced
Pipeline revenue based on contractual timelines
--------------------------------------------------------------------
Pipeline sales Adjustments to pipeline revenues based on the basket price
adjustment for the period between delivery and invoicing
--------------------------------------------------------------------
Project Echo Secondary PGM Milling and Flotation (MF2) program announced
in FY2017 to design and install additional new fine grinding
mills and flotation circuits at Millsell, Doornbosch, Tweefontein,
Mooinooi and Lesedi.
--------------------------------------------------------------------
Revenue (by products) Revenue earned on Ruthenium, Iridium, Nickel and Copper
--------------------------------------------------------------------
ROM Run of mine
--------------------------------------------------------------------
SDO Sylvania dump operations
--------------------------------------------------------------------
Sylvania Sylvania Platinum Limited, a company incorporated in Bermuda
--------------------------------------------------------------------
tCO2e Tons of carbon dioxide equivalent
--------------------------------------------------------------------
TRIFR Total recordable injury frequency rate
--------------------------------------------------------------------
TSF Tailings storage facility
--------------------------------------------------------------------
UNSDGs United Nations Sustainability Development Goals
--------------------------------------------------------------------
USD United States Dollar
--------------------------------------------------------------------
WULA Water Use Licence Application
--------------------------------------------------------------------
UK United Kingdom of Great Britain and Northern Ireland
--------------------------------------------------------------------
ZAR South African Rand
--------------------------------------------------------------------
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END
FR FIFSEAEITIIF
(END) Dow Jones Newswires
September 08, 2022 02:00 ET (06:00 GMT)
Sylvania Platinum (AQSE:SLP.GB)
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