(Alliance News) - Sylvania Platinum Ltd on Monday said production dropped in the fourth quarter of its financial year, after having to close for almost six weeks during lockdown in South Africa.
The platinum group metals producer said it produced 9,055 ounces of platinum, palladium, gold and rhodium, known together as 4E platinum group metals, in the fourth quarter ended June 30, more than halved from 19,968 ounces in the third quarter.
The poor results during the quarter were due to a hard lockdown imposed in South Africa, the location of the company's Sylvania Dump operations and country of focus.
Sylvania Platinum placed Sylvania Dump operations on care and maintenance from March 27 to April 30 during the height of the South African lockdown, which was one of the strictest in the world. Operations were running at 50% during May and then back to 100% in June.
Chief Executive Jaco Prinsloo said: "There is no denying that the unprecedented nature and circumstances under which the operations performed during the past quarter is one to go down not only in the history of the Company, but in industries worldwide.
"The Sylvania Dump operations produced 9,055 4E PGM ounces for the quarter despite an almost six-week interruption related to the national lockdown to prevent the spread of Covid-19 in South Africa, and associated restrictions and limitations placed upon the subsequent start-up in May, with progressive ramp-up to full production in June".
For the financial year ended June 30 as a whole, Sylvania Platinum reported production of 69,026 4E PGM ounces.
Sylvania Dump recorded USD13.2 million in net revenue for the fourth quarter and a net profit of USD2.2 million, down 92% from USD25.3 million the previous quarter, due to the lower production. Cash costs per 4E PGM ounce rose to USD948 in the recent quarter from USD565 in the third quarter, due to a higher proportion of fixed costs amid the lower production.
The company reported a positive earnings before interest, tax, depreciation and amortisation of USD4.2 million in the final quarter, despite the drop in ounces and its consequent effect on operational costs during the quarter. This is still dwarfed by the previous quarter's Ebitda of USD32 million.
Net profit stood at USD2.2 million, compared to USD25.3 million in the third quarter.
Sylvania Platinum had a cash balance of USD55.9 million after buying back 5.6 million shares during the quarter at a cost of USD3.4 million.
Sylvania Platinum shares were up 5.0% at 49.25 pence each on Monday in London.
The strong cash balance is owed to cash inflows from third quarter ounces being delivered.
The impact of this quarter's poor production will be reflected in the first quarter of financial 2021.
Sylvania Platinum said it expects improvement in PGM feed grades and ounces upon completion of the Mooinooi proprietary processing modifications and optimisation project, expected to open early next year.
The new Lannex mill and spiral upgrade is expected to be in full operation by mid-August, enabling the plant to improve processing efficiencies and profitability.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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Sylvania Platinum (SLP)