TIDMSLP
RNS Number : 4739O
Sylvania Platinum Limited
21 August 2017
Sylvania Platinum Limited
Results for the year ended 30 June 2017
("Sylvania", "the Company" or "the Group")
AIM (SLP)
21 August 2017
The Directors of the Company are pleased to present the results
for the financial year ended 30 June 2017. Unless otherwise stated,
the consolidated financial information contained in this report is
presented in US Dollars. The complete Annual Report for the
financial year ended 30 June 2017 is available on the Company
website (www.sylvaniaplatinum.com).
Financial snapshot
-- Group revenue increased 28% year-on-year to $50.5 million (FY2016: $39.5 million);
-- EBITDA increased 54% to $20.0 million for the Sylvania Dump
Operations ("SDO") (FY2016: $13.0 million);
-- Group EBITDA improved by 65% to $18.3 million (FY2016 $11.1 million);
-- General and administrative costs are down by 12% from $2.26
million in FY2016 to $2.00 million;
-- Gross profit up by 84% year-on-year from $7.73 million in FY2016 to $14.26 million;
-- Profit after income tax of $8.87 million achieved (FY2016: $3.73 million);
-- Basic earnings per share ("EPS") improved 139% to 3.06 US
cents per share from 1.28 US cents per share in FY2016;
-- Group capital and exploration expenditure increased by 162%
to $4.67 million (FY2016: $1.78 million);
Operations snapshot
-- Fourth consecutive year of record SDO production at steady
state, achieving 70,869 ounces - a 17% increase from the previous
record of 60,643 ounces achieved in FY2016;
-- Group cash cost $453/oz, a 4% decrease year-on-year from $470/oz in FY2016.
SYLVANIA OVERVIEW
The SDO production set an annual Company record for the fourth
consecutive year at steady state by achieving 70,869 ounces. This
is a 17% increase year-on-year from the previous record of 60,643
ounces achieved in FY2016.
The Group cash balance was $15.3 million at 30 June 2017, having
increased by $8.6 million (128%) from $6.7 million in the previous
year. The Group cash balance grew by 20% from $12.7 million
reported at the end of H1 to $15.3 million in H2.
Cash generated from operations before working capital movements
was $18.8 million, with net changes in working capital amounting to
a reduction of $3.1 million and $0.6 million net finance income
received. A total of $4.2 million was paid in tax for the year.
During the year, a net amount of $0.4 million was received from the
insurers after a review of the underlying investment for the
rehabilitation insurance guarantee. $0.7 million was spent on
exploration activities, $3.5 million on stay in business capital
and capital projects for the SDO plants (FY2016: $1.2 million) and
$0.4 million on an investment in a joint venture R&D project. A
part payment of $0.6 million was received from Ironveld Holdings
(Pty) Ltd under the terms of the loan agreement with Ironveld
Plc.(1) The Company spent $0.6 million on share transactions and
the impact of exchange rate fluctuations on cash held at the
year-end was $1.0 million.
The Group achieved a gross profit showing an 84% growth
year-on-year from $7.73 million in FY2016 to $14.26 million.
General and administrative costs are down by 12% from $2.26 million
in FY2016 to $2.00 million this year, with profit after income tax
of $8.87 million - an increase of 138% from $3.73 million in
FY2016. The Company's basic earnings per share ("EPS") improved
significantly from the prior year to 3.06 US cents per share (a
139% improvement). Group capital expenditure increased by 162% to
$4.67 million from $1.78 million in FY2016 primarily as a result of
the roll-out of Project Echo during the year.
(1) The full capital amount of ZAR15.0 million was repaid in
July 2017
Commenting on the annual results, Sylvania Platinum's CEO, Terry
McConnachie, said:
"Four consecutive years of increased ounce production, with
plants at steady state, is commendable and I congratulate our
management team for the excellent production performance in excess
of 70,000 ounces for the year. We managed to improve on our
previous Company record by 17% and I am excited for future
production once Project Echo is complete and the possible further
expansion through the Phoenix acquisition, announced in the fourth
quarter report. The ounces were produced at a Group cash cost of
$453/oz which is 4% down from the previous year. Although our Group
capex has increased to $4.67 million for the year, this was largely
as a result of Project Echo and Grasvally Bulk-Sample costs.
Our Group remains cash positive and the Group cash balance
increased to $15.3 million (a 128% increase) even with the
increased capex spend and a tax payment of $4.2 million. We
furthermore see cash generated from operations (after income tax
expense) of $12.0 million whilst the average gross basket price was
$935/oz, a 10% increase on the previous year's $850/oz.
Based on current resources, plant infrastructure and operational
performance, we should see similar production performance in FY2018
and, with the roll-out of Project Echo the Company should be able
to maintain production levels of around 70,000 ounces PGMs for many
years going forward."
Financial and production summary Half-year and Full year
Jan - Jun Jul - Dec +- % +-
Unit 2017 2016 Change FY 2017 FY 2016 % Change
H2 H1
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Group Revenue
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Revenue(2) $'000 25,956 24,551 6% 50,497 39,511 28%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Basket
Price $/oz 956 915 4% 935 850 10%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Cash
Margin - Group % 36% 38% -5% 36% 28% 29%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Capital &
Exploration
Expenditure $'000 3,775 973 288% 4,669 1,780 162%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
EBITDA(3) $'000 9,106 9,215 -1% 18,327 11,083 65%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Ave R/$ rate(2) R/$ 13.22 14.02 -6% 13.61 14.43 -6%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Group Cash
Cost(4)
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Per 3E & Au
oz $/oz 474 425 12% 453 470 -4%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
SDO Revenue
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Revenue $'000 25,956 24,551 6% 50,497 39,511 28%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Basket
Price $/oz 956 915 4% 935 850 10%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Gross Cash
Margin - SDO % 40% 41% -2% 40% 33% 21%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Capital Expenditure $'000 3,020 837 261% 3,794 1,420 167%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
EBITDA $'000 10,058 9,945 1% 20,012 12,957 54%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Ave R/$ rate R/$ 13.22 14.02 -6% 13.61 14.43 -6%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
SDO Cash Cost(3)
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Per PGM Feed
ton $/t 26 25 4% 26 23 13%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Per 3E & Au
oz $/oz 449 405 11% 426 437 -3%
-------------------- ------ --------- --------- ------- --------- ---------- ----------
Jan - Jun Jul - Dec +- % +-
Unit 2017 2016 Change FY 2017 FY 2016 % Change
H2 H1
------------- ------ --------- --------- ------- --------- ----------- ----------
Production
- SDO
------------- ------ --------- --------- ------- --------- ----------- ----------
Plant Feed T 1,073,857 1,063,150 -1% 2,137,007 2,179,468 -2%
------------- ------ --------- --------- ------- --------- ----------- ----------
Feed Head
Grade g/t 2.75 2.40 15% 2.65 2.40 10%
------------- ------ --------- --------- ------- --------- ----------- ----------
PGM Plant
Feed Tons T 594,116 574,796 3% 1,168,912 1,133,908 3%
------------- ------ --------- --------- ------- --------- ----------- ----------
PGM Plant
Grade g/t 4.07 4.05 0% 4.06 4.03 1%
------------- ------ --------- --------- ------- --------- ----------- ----------
PGM Plant
Recovery % 45.4% 46.7% -3% 46.4% 43.2% 7%
------------- ------ --------- --------- ------- --------- ----------- ----------
Total 3E and
Au Oz 35,050 35,819 -2% 70,869 60,643 17%
------------- ------ --------- --------- ------- --------- ----------- ----------
(2) The functional currency for SDO is SA Rand and the exchange
rate shown is the average over the period indicated.
(3) EBITDA is Earnings before Interest, taxation, impairment
adjustments, depreciation and amortisation.
(4) Cash costs include plant operating costs such as mining,
processing, administration, royalties and production taxes, but are
exclusive of depreciation, amortisation, reclamation, capital,
project development and exploration costs.
A. SYLVANIA DUMP OPERATIONS
Health, safety and environment
While the SDO achieved significant safety milestones of five
years Lost Time Injury ("LTI") free at Tweefontein and five years
LTI-free at Doornbosch during the past financial year, the Company
unfortunately also saw three LTI's recorded at the Mooinooi and
Steelpoort operations through the year. Before the incident at
Steelpoort, the operation achieved the milestone of nine years
LTI-free. There were, however no significant Section 54 stoppage
notices from the Department of Mineral Resources ("DMR") received
in FY2017.
There were no significant health or environmental incidents
during the year, and the dump operations remain focused to continue
to work diligently towards ensuring that the Company remains
compliant in terms of health, safety and environmental systems and
legislation.
Operations
The SDO production set an annual Company record for the fourth
consecutive year at steady state by achieving 70,869 ounces. This
is a 17% increase year-on-year from the previous record of 60,643
ounces achieved in FY2016.
Cash costs per PGM feed ton increased by 13% to $26/ton (FY2016:
$23/ton), impacted by a 6% stronger ZAR/US$ exchange rate, but
higher PGM ounce production resulted in a decrease in SDO cash
costs per 3E & Au ounce by 3% to $426/oz (R5,802/oz) from
$437/oz (R6,309/oz) year-on-year. As Project Echo commenced with
the roll-out of the first secondary milling and flotation
technology ("MF2") flotation projects at Millsell and Doornbosch,
SDO capital expenditure increased 167% to $3.79 million from $1.42
million recorded in FY2016.
Although PGM feed grades and feed tons increased 1% and 3%
respectively from 4.03g/ton to 4.06g/ton, and from 1,133,908 tons
to 1,168,912 tons for the past year, the biggest contributor
towards the record annual production was the 7% increase in PGM
recovery efficiency from 43.2% in FY2016 to 46.4% in FY2017.
While plant utilisation and feed stability contributed towards
the increased PGM plant throughput, improved flotation technology,
improved flotation stability and higher flotation mass pull
strategy during the year enabled the improvement in the PGM
recovery efficiency.
The 28% SDO year-on-year revenue increase from $39.5million in
FY2016 to $50.5 million in FY2017 was due to a combination of the
gross basket price increase of 10% from $850/oz in FY2016 to
$935/oz and 17% higher PGM ounce production. The higher revenue and
lower operating unit cost contributed towards the SDO EBITDA
improvement of 54% to $20.0 million from $13.0 million recorded in
the previous financial year.
Project Echo
Project Echo commenced during the past year and as at 30 June
2017 a total of $2.2 million has been spent on the Millsell and
Doornbosch MF2 modules. This is within the budget for this phase
and it is expected that these expansion sections will be
commissioned during the next six months. This will assist to fill
the ounce gap from the scheduled closure of the Steelpoort
operation that reached its end of life during June 2017.
This MF2 roll-out will lead to improved PGM recovery
efficiencies, lower PGM production unit costs, increased cash
generation and enable the SDO to extend its operating life and to
sustain its production profile of around 70,000 ounces going
forward.
EXPLORATION AND OPENCAST MINING PROJECTS
Harriet's Wish, Aurora and Cracouw Exploration
The notarial cession of the right to mine iron ore, vanadium and
heavy minerals to a subsidiary of Ironveld Plc ("Ironveld") was
registered with the Mining Titles Office ("MTO") during the first
quarter of the year. The right to mine PGMs, copper, nickel, gold
and silver is furthermore held by the Company having been
registered during FY2016.
The intention to proceed with a water use license application
("WULA") has been delayed as transfer of the title deeds from the
deceased original landowners to lawful occupants and descendants
will need to occur in order to get the necessary permissions from
landowners, as is a requirement for such an application.
Nonnenworth, La Pucella and Altona Platinum Exploration
During the third quarter, the Company reported that the rights
to mine copper, gold, nickel and PGMs, as well as heavy minerals,
iron and vanadium had been granted. The rights were subsequently
executed and registered with the MTO. The process to transfer the
right to mine heavy minerals, iron and vanadium to Ironveld is
underway, pursuant to the agreement concluded in FY2013.
Volspruit Platinum Exploration
During the fourth quarter, the Company was granted the Mining
Right ("MR") to mine PGMs, gold, copper, nickel and chrome as
reported in the quarterly announcement. The process is underway to
execute said rights and have them registered with the MTO. However,
mining cannot commence without the Environmental Authorisation
("EA").
This year has seen the Company actively pursue an appeal against
the decision of the Limpopo Department of Economic Development,
Environment and Tourism ("LEDET") not to grant an EA for the
project. Interested and Affected Parties ("I&APs") submitted
comments to the appeal, to which Sylvania responded in the first
quarter. To date no decision has been forthcoming but it is hoped
that one will be reached soon and this will be communicated to all
stakeholders.
As communicated in the prior year, the Company intends to
proceed with a WULA although this will require preliminary detailed
civil designs of all dam facilities. As this will incur additional
costs, it has been postponed pending the decision on the EA and as
part of our strategy of minimising exploration spend.
Grasvally Chrome Exploration
An amendment to the existing prospecting right to include
processing of the old waste rock dumps was granted by the DMR in
the first quarter. The MR lodged during the first quarter of FY2016
is still awaited however.
In August 2016, the proposed site was visited by the Department
of Water and Sanitation ("DWS") pursuant to the WULA lodged towards
the end of FY2016. Currently the WULA for this project has not yet
been granted however, it is hoped that one will be forthcoming
soon.
FY2017 was an eventful period in terms of the EA for the
project. The Company was issued notification in the second quarter
that the EA for the project had been granted, but this was soon
appealed by I&APs. The Company filed all documents necessary to
finalise the appeal during the third quarter and was pleased to
receive communication from the DMR during the fourth quarter that
the appeal was set aside. Accordingly, the EA for processing the
waste rock dumps stands.
The Company began extraction of a Chrome Bulk Sample during the
third quarter, pursuant to consent granted by the DMR in terms of
section 20 of the Mineral and Petroleum Resources Development Act
("MPRDA"). The plan is to extract 15,000 tons of Run of Mine
("ROM") and at the end of FY2017 a total of five bulk sample
open-pits had been blasted with total excavated ROM stockpiles
measuring 6,167 tons. The remainder is to be extracted once the
beneficiation testing of the initial stockpiles is finalised. The
initial results were positive - a combined concentrate of >50%
Cr(2) O(3) - however a decision has been taken to move
beneficiation to a more suitable plant in Steelpoort to better
liberate the chrome from the ore.
FINANCIALS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2017
2017 2016
Notes $ $
Revenue 1 50,497,045 39,510,771
Cost of sales (36,241,259) (31,780,332)
Gross profit 14,255,786 7,730,439
Other income 271,852 42,985
Profit on sale of property,
plant and equipment 37,449 5,734
Foreign exchange (loss)/gain (22,583) 288,528
Profit on sale of financial
assets at fair value through
profit and loss - 729
Loss on sale of available-for-sale
financial assets - (4,851)
Impairment of exploration
and evaluation assets - (8,280)
General and administrative
costs 2 (1,980,978) (2,259,578)
Operating profit before finance
costs and income tax expense 12,561,526 5,795,706
Finance income 888,548 396,399
Finance costs (244,292) (218,270)
Profit before income tax expense 13,205,782 5,973,835
Income tax expense (4,333,218) (2,240,300)
Net profit for the year 8,872,564 3,733,535
============= =============
Cents Cents
Profit per share for profit
attributable to the ordinary
equity holders of the Company:
Basic earnings per share 3.06 1.28
Diluted earnings per share 3.02 1.24
1. Revenue is generated from the sale of PGM ounces produced at
the seven retreatment plants.
2. General and administrative costs include consulting fees
($0.1 million), legal fees ($0.04 million), travel ($0.2 million),
advisor and PR costs ($0.1 million), Directors' fees ($0.3
million), share based payments ($0.4 million) and other smaller
administrative costs.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2017
Notes 2017 2016
$ $
Net cash inflow from operating
activities 3 12,074,340 1,929,245
Net cash outflow from investing
activities 4 (3,631,791) (1,437,476)
Net cash outflow from financing
activities 5 (791,782) (1,368,254)
------------ ------------
Net increase/(decrease)
in cash and cash equivalents 7,650,767 (876,485)
Effect of exchange fluctuations
on cash held 963,328 (832,835)
Cash and cash equivalents
beginning of year 6,707,022 8,416,342
Cash and cash equivalents,
end of year 15,321,117 6,707,022
------------ ------------
3. Net cash inflow from operating activities includes a net
operating cash inflow of $15,717,566, net finance income of
$575,197 and taxation paid of $4,218,423.
4. Net cash outflow from investing activities includes payments
for property, plant and equipment of $3,524,927, exploration and
evaluation assets of $676,448, cash inflow of $20,359 proceeds on
disposal of property, plant and equipment, cash inflow of $585,031
from Ironveld Holdings for a loan facility granted, a net amount of
$392,309 received for the rehabilitation insurance guarantee on
review of the underlying investment and $428,115 spent for an
investment in a joint venture.
5. The net cash outflow from financing activities consists of
the repayment of borrowings of $226,762 and payments for share
transactions of $565,020.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2017
2017 2016
Notes $ $
Assets
Non-current assets
Equity-accounted investees 6 446,104 -
Other financial assets 7 586,271 710,055
Exploration and evaluation
assets 57,587,900 55,723,424
Property, plant and
equipment 32,257,692 30,132,591
Total non-current assets 90,877,967 86,566,070
------------ ------------
Current assets
Cash and cash equivalents 8 15,321,117 6,707,022
Trade and other receivables 9 19,502,105 16,055,698
Other financial assets 7 1,148,327 1,343,255
Inventories 10 1,797,930 1,693,024
Current tax asset 756,225 80,679
Total current assets 38,525,734 25,879,678
------------ ------------
Total assets 129,403,701 112,445,748
------------ ------------
Equity and liabilities
Shareholders' equity
Issued capital 11 2,979,819 2,979,819
Reserves 12 72,623,111 66,917,322
Retained profit 30,036,689 21,164,125
------------ ------------
Total equity 105,639,619 91,061,266
------------ ------------
Non-current liabilities
Interest bearing loans
and borrowings 13 323,419 171,286
Provisions 14 3,626,989 2,809,228
Deferred tax liability 14,591,815 12,076,899
Total non-current liabilities 18,542,223 15,057,413
------------ ------------
Current liabilities
Trade and other payables 5,075,120 6,115,147
Interest bearing loans
and borrowings 13 146,739 211,922
Total current liabilities 5,221,859 6,327,069
------------ ------------
Total liabilities 23,764,082 21,384,482
------------ ------------
Total liabilities and
shareholders' equity 129,403,701 112,445,748
------------ ------------
6. Equity-accounted investees consist of a 50% interest in a new
joint venture research and development project, Tizer Sylvania
Consortium, which operates a pilot pelletiser plant in South
Africa.
7. Other financial assets consist of the investment linked to
the rehabilitation insurance guarantee included in non-current
assets and the loan receivable granted to Ironveld Holdings (Pty)
Ltd from Sylvania Metals (Pty) Ltd, a South African subsidiary of
the Group which is included in current assets.
8. The majority of the cash and cash equivalents are held in
South Africa and ZAR denominated balances make up $9,424,561 (ZAR
123,106,763) of the total cash and cash equivalents balance.
9. Trade and other receivables consist mainly of amounts receivable for the sale of PGM's.
10. Inventory held is stores and materials for the SDO and
concentrate produced, but not delivered at 30 June 2017.
11. The total number of issued ordinary shares at 30 June 2017
is 297,981,896 Ordinary Share of US$0.01 each (including 8,105,887
shares held in treasury).
12. Reserves include the share premium reserve, 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, reserve for own
shares, the non-controlling interests reserve and the equity
reserve.
13. Interest bearing loans and borrowings are secured instalment
sale agreements over various motor vehicles and plant and
equipment.
14. Provision is made for the present value of closure,
restoration and environmental rehabilitation costs in the financial
period when the related environmental disturbance occurs.
1. The financial information contained in this announcement does
not comprise full financial statements.
2. The consolidated financial statements have been prepared on a
historical cost basis, except for available-for-sale investments,
embedded derivatives, and investments carried at fair value through
profit or loss, which have been measured at fair value. The
consolidated financial information is presented in US Dollars.
CORPORATE INFORMATION
Registered Sylvania Platinum Limited
office:
Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
Postal address: PO Box 976
Florida Hills, 1716
South Africa
Sylvania Website: www.sylvaniaplatinum.com
CONTACT DETAILS
For further information,
please contact:
Terence McConnachie (Chief
Executive Officer) +44 (0) 777 533 7175
Nominated Advisor and
Broker
Liberum Capital Limited +44 (0) 20 3100 2000
Richard Crawley / Neil
Elliot
Communications
Alma PR Limited +44 (0) 77 8090 1979
Josh Royston / Helena
Bogle / Hilary Buchanan
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PMMLTMBMTBLR
(END) Dow Jones Newswires
August 21, 2017 02:00 ET (06:00 GMT)
Sylvania Platinum (LSE:SLP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sylvania Platinum (LSE:SLP)
Historical Stock Chart
From Apr 2023 to Apr 2024