Sylvania Platinum Regulatory News (SLP)

SYLVANIA PLATINUM LIMITED

("Sylvania Platinum", "Sylvania" or the "Company")

(AIM: SLP)

Final Results

Audited Final Results for the year ended 30 June 2013

Sylvania Platinum today announces its audited final results for the year ended 30 June 2013. Unless otherwise stated, the financial information is presented in US Dollars. The annual report and accounts for the year ended 30 June 2013 are available at the Company's website at www.sylvaniaplatinum.com. 

Financial snapshot

• Group net profit after tax $4,369,231 (2012: net loss of $3,971,803)

• Sylvania dump operations ("SDO") costs of production $708/oz (2012: $568/oz), an increase of 25%, largely on the back of South African on-mine inflation

• G&A costs down 41% from $9,226,614 to $5,467,202

• Net basket price $867/oz (2012:$876/oz), reflecting on-going weakness in both the platinum and rhodium prices

• Capital expenditure down by 32% to $10,310,413 (FY2012 to $15,102,282)

• $4,053,083 cash generated from operations

Operating highlights

• Full year Lost time injury ("LTI") free

• 44,255 oz produced for the year (2012: 45,735 oz)

• Tweefontein, the seventh plant, commissioned

• Completion of Ironveld transaction

• Chrome Tailings Re-Treatment Plant ("CTRP") placed on care and maintenance

The Company's operations are all in South Africa and have been disrupted during the year by labour disputes and safety stoppages on host mines and at refineries as well as power outages and availability. The mining labour environment in South Africa continues to be a concern for the sector in general.

In view of difficult market conditions, certain short-term power constraints at Tweefontein and in line with the Company's focus on cash balance generation and capital expenditure discipline, the board has delayed expenditure on the planned Tweefontein Phase 2.

De-bottlenecking capital expenditure of R5 million has been approved at Mooinooi ROM plant. This, with the other completed improvements to the plants in the SDO operations the Company is confident that it will see an increase in production with seven plants in production (despite the moth-balling of CTRP). The production outlook for the coming year is 51,000 ounces at an estimated group cash cost of $700/oz.

The Company continues to investigate ways of realising value from its portfolio of mineral rights as well as looking to re-configure and re-start the CTRP.

Commenting on the results, CEO Terry McConnachie said: "In a difficult market and with tough operating conditions it is pleasing to be able to announce a profitable year, recognising our results were boosted by the Ironveld transaction. The board is not recommending a dividend at this time but we will continue to monitor the market and our cash. Our approach is to maximise cash flow generation with a view to making distributions to shareholders in line with our previously announced policy. We will continue to achieve that by focusing on the dump reprocessing operations and placing us in a competitive space on the cost curve. Initiatives to realise value from the mining rights portfolio will also be pursued. "

CORPORATE INFORMATION

Registered office: Sylvania Platinum Limited

Clarendon House

2 Church Street

Hamilton HM 11

Bermuda

Postal address: PO Box 524

Wembley WA 6913

Australia

CONTACT DETAILS

For further information please contact: 

 CHAIRPERSON'S LETTER

Dear Shareholders and other stakeholders,

Although I have only been with your Company since April this year, it did not take me long to appreciate the potential of your Company and what makes Sylvania stand out. It was this that drew me to the chair of the Company, having had a tenuous association in the past.

Sylvania is a company now firmly focused on its core competency, a company dedicated to delivering value to shareholders and a Company not tempted into ventures that might detract from that aim.

Sylvania has survived in the small to mid-cap market space where others in the platinum sector have faltered; its strategic focus on re-treatment of tailings has been intensified. It bears recalling that the platinum mining and exploration space is going through torrid and almost-unprecedentedly difficult times. Prices of our principal metals (platinum and rhodium) have been falling all year, many administered costs (eg electricity) that cannot be controlled are rising inexorably and the platinum industry as a whole - most of it concentrated in South Africa - has still to resolve the problems of labour discord and violence that have marred operational performances virtually across the board, not only in platinum.

Sylvania differs markedly from others in this space. With our current focus on dump reprocessing and on generating cash flows, costs per unit of platinum are among the industry's lowest. With our refocus on our core business, and in the prevailing climate in markets, we have no plans to come calling on shareholders for additional capital.

Our differentiation was shown in 2012 when our operations were not directly affected by the mining sector's turmoil and violence. While none of our employees went on strike, many were prevented from work by threats of violence by strikers on mines whose dumps we reprocess, or by our neighbours. This, in its turn, contributed to cutting our production below the annual 60,000 ounces we had targeted.

We have reduced our exploration activities on the Northern Limb of the Bushveld Igneous Complex. Results from the drilling that we have completed so far will be evaluated, but I envisage no early resumption of exploratory drilling - and in the climate prevailing we do not need cash-consuming ventures that are ancillary to our core dump recovery operations.

Furthermore, there is no need for an early start to mine development at our Volspruit property. Given current cost and metal price parameters, the returns on investment in the project would be significantly below what we consider acceptable and well below those we can earn from dump reprocessing and the board is considering its options in respect of this asset.

While these changes might give rise to the misconception that Sylvania's life prospects are limited, this is not correct. One third of the material we process comes from the current residues arising from long-life chrome mining. Two thirds derive from older, existing dumps and many of these exist, untapped. In other words, our operations are long life, and they will be further extended as our in-house R&D delivers the capacity to recover metals left behind by existing technology.

The mining industry's problems across the globe have not gone unnoticed by investors who have become progressively nervous of cash-hungry small-cap minerals companies. Institutions that have been affected by withdrawals have been selling small-cap miners into a market that has become increasingly reliant on individual investors. While the selling urge has focused on companies with cash hungry development projects, our share price has not been unaffected.

In the few months since I joined the Company I have spoken to most of our institutional investors, and their message was clear. They would sooner hold shares in lower-risk, cash-generative companies that deliver cash returns to shareholders than in more-speculative ventures seeking new shareholder funds to finance comparatively risky mining operations.

To put it crisply, we have paid attention to our shareholders' investment preferences and are acting accordingly. From an investor's viewpoint, I believe that Sylvania is more secure than many others in the sector are and that our company will be well positioned to distribute dividends to shareholders as cash balances grow. Sylvania is a less labour intensive producer than those that mine ore. Our operations are inherently safer than those of the platinum miners and our employees are generally more skilled and productive than those in the labour-intensive sectors of the industry.

Furthermore, there are several other ways of delivering shareholder value. Last year we spun off our iron ore assets into Ironveld, and passed shares in the venture directly to our shareholders. Ironveld was non-core, it would most likely have lain idle in our hands and therefore been valued at next to nothing in Sylvania's own market rating. Distributing our holding in specie to our shareholders is allowing the project to be developed by others. Since then, the price of Ironveld shares has risen by at least a quarter, again underscoring the tangible worth of releasing value to shareholders.

As for PGM prices, it would in my opinion be foolhardy to expect any truly significant rises from current levels. The market has been distorted in recent years by perceptions that platinum and palladium are safe-haven investments, much the same as gold used to be perceived. Nothing could be further from the truth. Unlike gold, PGMs are industrial metals, principally used as catalysts. Certainly, the past few years have seen any excess of supply over fundamental fabrication demand being mopped up by speculative or investor purchases.

Currently, speculative holdings of platinum and palladium metal - as bullion coins, jewellery or, more importantly, in holdings of exchange traded funds (ETFs) backed by metal - are roughly equal to a year's supply of newly mined material. Platinum tied up in these so-called investment products offers no returns apart from price rises. They have an opportunity cost and, when prices show signs of correcting or turning down, the likelihood is that bullion investors will seek to limit their downside by selling into a relatively small market.

Several traders and analysts report that the platinum market has moved from oversupply to deficit and is likely to remain there for some time. That may be true looking at the overall picture, but why, then, has the platinum price fallen from the $1,800/ounce region to its current level in the mid $1,300s at the time of writing? If we consider simply industrial and fabrication needs (on the demand side), the market is in surplus. So-called investment buying driven by the entry of ETFs into the market trading on the back of rising gold prices has merely contributed to putting off the day when the market has to return to the stability of prices being determined by the fundamentals of supply (new and recycled metal) and underlying industrial or fabrication demand. True market fundamentals of supply and industrial demand have, temporarily at least, given way to investment demand. But, I believe, the day is fast coming when ETFs will, if anything, turn to being net sellers and that the market for PGMs now has to contend with a great deal of fundamental change before it settles down to sensible pricing. I expect major divestment of speculative bullion positions.

At $1,350/ounce as I write, the platinum price is at its lowest for the year and is almost 25% lower than the year's peak of $1,736 reached on 7 February. If we need further evidence of just how volatile a speculative platinum market can be, let us cast our minds back to 2008 when industrial demand fell sharply. Platinum peaked at a speculative high of $2,273/ounce in March of that year before collapsing to a low of $763/ounce in October, as the global financial crisis took its toll on confidence. That was a fall of two thirds in fewer than eight months.

High cost and prospective mine capacity have to be removed from the market. To be blunt, shaft closures will be called for as well as the shelving or abandoning of new mine projects that are only viable at unsustainably high metal prices. Interventions to defer cuts in production and employee numbers are counterproductive. As far as we at Sylvania are concerned, under my watch we will remain ultra-cautious before venturing beyond our core competency of cost-effective dump reprocessing.

We are well aware of our responsibility to deliver satisfactory returns to our shareholders through all of the market's phases, and we will not be sinking shareholders' money into projects that lie beyond our core competency and that might offer inadequate returns on investment. Too many minerals companies have pursued size for size's sake. Our approach is to maximise cash flows to shareholders. We will continue to achieve that by focusing on dump reprocessing that delivers on that aim and places us at the very lowest end of the cost curve.

Looking forward, I am confident about our Company's performance into the new financial year. In the past year, disruptions indirectly caused by the platinum industry's labour difficulties contributed to our costs rising to some $700/ounce. The start of this new financial year coincided with the annual round of wage increases.

However, we are continuing to reduce overheads while containing other costs. Our aim is to produce 51,000 ounces at an average cash cost of $700/ounce, thereby continuing the company's cash-generative position. The mothballed JV at the CTRP and a decision to defer capital expenditures at Tweefontein are instrumental in delaying the ramp-up to prior targeted levels.

My colleagues and I are highly sensitive to the investment demands of our shareholders. We shall not in the near future be seeking additional capital from shareholders as our internal cash flows are sufficient to finance the Company's needs. We are determined to distribute everything that exceeds those needs, in the absence of alternative investment opportunities in our space.

It remains for me to express my thanks for the unstinting support and dedication of Sylvania's management and employees, that of our business associates and, not least, that of my board colleagues. The company is now structured correctly to move forward confidently and to deliver growing value to shareholders and other stakeholders.

Stuart Murray

Chairperson

CEO AND DEPUTY CEO'S REVIEW

Overview

Once again, Sylvania has managed to complete a year with results which many other platinum companies would be pleased to present. Early in the year, the company announced the sale of Ironveld that allowed the issuance of a dividend in specie to shareholders and the company recognised a profit of $9.9m from the transaction. The final few months in the 2013 financial year saw production from operations recover after the impact of sector wide industrial action and saw the company complete a year without a Lost Time Injury ("LTI"). The company also completed the construction of its seventh plant, paid for in full from internal funds and generated a net cash inflow from operations of $4,053,083.

It is important not to ignore the issues in the South African mining industry and in our 2012 annual report, it was noted that the platinum sector had experienced some particularly disruptive events during the year. This industrial action progressed into the 2013 financial year and peaked at Marikana. Whilst none of the Sylvania staff undertook any industrial action, the indirect impact on the group production saw ounces from all sources decrease by 1,480 ounces compared to 2012 with the biggest variance coming from the placement of the CTRP onto care and maintenance in August 2012. In September, the Tweefontein plant produced its first ounces with this additional capacity offsetting the negative impact placed on the operations by strikes and other work stoppages. The Sylvania plants increased production by 507 ounces year on year.

Following the road show held in January 2013 where a Platinum price of $1,800/oz was forecast by the market, and a dividend payout expected to occur in December 2013, the company has seen a marked drop in the metal price. This drop in revenue due to lower than planned metal prices, coupled with additional disruption to operations in March and on-going uncertainties in the industry lead the Company to focus on extracting value from the dump operations and generating cash, whilst curtailing expenditure in other areas. The status of all the northern limb projects and Everest North is such that the mining right applications were submitted without the need for any significant additional expenditure. Work also continued on the Volspruit Environmental Impact Assessment in terms of its mining right application.

 In terms of the Sylvania Dump Operations, the board decided to delay the expenditure on the planned Tweefontein phase 2 and the Mooinooi stockpile until the cash reserves were strong enough to weather any future potential industry wide disruptions. The impact of this approach on the production for the Group is evident in the latest production plan that sees a slowing of the ramp-up rate to the targeted 60,000 ounces. The production outlook for the coming year has been moderated to 51,000 ounces at SDO operations. We are working on alternatives with our partners at CTRP to see if we can bring CTRP back into operation which would boost this production target.

Work on the Northern Limb projects, Volspruit and Everest North has been slowed, however all the necessary work to obtain the mining rights applied for is still underway.

During the year, the Company has been able to lower its unit costs per ton treated and made good progress in reducing the General and Administration ("G&A") cost. During the year, the company has almost completed its planned move out of Australia and placed more focus on the primary listing in London. This has allowed the company to announce total G&A costs for the year of only $5,467,202.

It is certainly pleasing to note that the Company SDO continue to be profitable and remain in an excellent position to cash in on an upturn in the world economy.

2013 financial performance

While the South African mining industry as a whole has been hard hit financially during FY2013, Sylvania remained cash positive with $6,564,885 (FY2012: $15,696,899) on the balance sheet at year end, and well positioned to exploit opportunities in the future. The Company generated a net cash inflow from operations of $4,053,083.

In line with our strategy, capital expenditure was scaled back by 32% from $15,102,282 in FY2012 to $10,310,413.

Group EBITDA was down only 8% from $3,723,744 in FY2012 to $3,440,875 (excluding the Ironveld transaction) in FY2013. Despite the volatile metal prices and exchange rates over the year as well as a 16% increase in total operating costs, the Group still managed to maintain a positive EBITDA.

2013 operational performance

Because of the Company's cautious approach to ramping-up production, coupled with lower feed grades, total production for the year was down by 3% from 45,735 ounces to 44,255 ounces.

Revenue remained flat year-on-year despite the lower total Group ounces.

The final few months in FY2013 saw production from operations recover and it is encouraging that despite the issues that occurred during the year, the ounces from the Sylvania plants alone grew by 507 ounces year-on-year and operations remained profitable.

Employee safety, health and the environment

The Company completed the 2013 financial year without a single lost-time injury, and remains committed to maintaining this level of performance. As would be expected, Sylvania works closely with the host mines at all times in all aspects of safety, health and the environment.

Dump and ROM operations

During the year under review, the SDO plants alone produced 43,812ounces compared to 43,305 ounces for the previous year. This was augmented by 443 ounces from the CTRP and ad hoc sources, giving a total production volume of 44,255 ounces for the year. During FY2012, the CTRP and ad hoc sources produced 2,430 ounces yielding the total production volume of 45,735 ounces. Despite the tough conditions experienced during FY2013, the production volumes recovered during May and June 2013 with operations producing at a rate of 4,250 ounces/month and the Mooinooi plants producing over 1,000 ounces combined for each month. This bodes well for the future as Mooinooi has by far the largest resource and production potential.

The Company has matured over the past six years and during FY2013, the fourth of the seven plants began treating material for a second time. During the forthcoming year, the Steelpoort plant will be treating solely second pass material whilst at Millsell, Doornbosch and Lannex the plants will treat a blend of first and second pass material.

Millsell

Since 2007, the Millsell plant has been one of the most consistent production plants within the Group. Total ounce production for the financial year was 6,727 ounces at a cash cost of $539/ounce. The plant processes the current arisings from the Millsell mine as well as dump material from a number of different sources. During FY2013, the plant started to process some material for the second time, combined with primary pass material from more distant dumps. As expected from this mature plant, when the operations are not hindered in any way, the plant produced at a rate of 700 ounces/month. This is expected to move towards 580 ounces/month during 2014 as the primary pass material is finished.

Mooinooi

Of all our operations, Mooinooi is arguably the best example of the robustness of our business model, despite external factors largely beyond our control. It also shows how two companies can benefit from designing operations that complement each other by recovering metals that, individually, would be only marginally profitable.

The Mooinooi facility began with a dump reprocessing operation, but a separate plant to process ROM ore delivered by our host mine has expanded its output. Though the new plant that processes ROM was completed in the second half of the FY2012, its start-up was inauspicious. In the first few months, revenues were negatively affected by a sharp decline in metal prices, followed by the effects of strikes and Section 54 stoppages on the host mine. Major stoppages occurred in August and October 2012 and March 2013. Since the Mooinooi plant has by far the longest life with the first pass treatment of dumps expected to go to 2028 and following the recent upturn in production volumes, the Company remains confident that the Mooinooi operations will generate the expected returns in the future. The combined ounce production for the Mooinooi dump plant and the ROM plant for the financial year was 8,374 ounces at a cash cost of $965/ounce.

It has been identified that the Mooinooi ROM plant requires an in-plant stockpile to allow for a more steady feed of ore to the mills. As alluded to earlier, the design for this stockpile has been completed and the Company is currently reviewing the market to determine the date when construction will begin.

The production from both the Mooinooi plants has been showing steady improvements during the year and for the first time, exceeded 1,000 ounces during May and June 2013. This level of production is likely to be maintained into 2014 and will be enhanced when the stockpile is completed.

Steelpoort

As FY2013 progressed, the focus of Steelpoort's operations was increasingly directed towards second-pass treatment of tailings from Steelpoort Dam 1. Over the full year the host company's Steelpoort mine remained idle and thus did not supply any current arisings to the plant. The second-pass treatment of the Steelpoort dam has occurred according to plan and the plant remains profitable. A total of 6,943 ounces were produced at a cash cost of $673/ounce.

The Steelpoort plant showed similar production results to Millsell during the year when not hindered by external forces and is expected to produce around 570 ounces/month during the forthcoming year.

Lannex

A lot of work has been put into improving the mechanical reliability of the Lannex plant during the year and this has allowed throughput figures gradually to improve. Production output from Lannex was disappointing during the year, with the plant only producing 7,850 ounces at a cash cost of $686/ounce. Initially this was due to lack of throughput and more recently due to the feed grade from the dumps and lower current arisings from the host mine. Whilst an improvement in the feed grade is expected, lower current arisings are expected to continue since the chrome market requires the host mine to sell its ore directly from the open pit without processing it further. However, we are in discussions with the mine management to divert this material to us so that the symbiotic relationship of sharing costs will not impact on our ounce production going forward.

Based on the improving chrome market, the aforementioned plan could change at any moment. Should suspended mining operations start up again, this would dramatically extend the life of this operation and allow us to ramp up production.

Although production volumes in FY2013 were disappointing, at below 600ounces/month, the influence of better mechanical reliability at the plant, and the expected improved grades for the sampled dumps, should see the plant producing over 900 ounces/month during 2014.

Doornbosch

Doornbosch has been one of the best performing plants for 2013, consistently out performing its target. The Doornbosch plant was originally built to treat only current arisings, with the Montrose dump material, which is almost depleted, as an additional bonus. Total ounce production for the financial year was 10,384 ounces at a cash cost of $480/ounce.

The Doornbosch plant will be entering into a new phase of second-pass treatment of the Doornbosch dump along with the current arisings in the early part of FY2014. The host mine is building up rapidly and the current arising are increasing rapidly. As this is a long-term operation for the host mine, we strongly believe that this plant will continue to produce excellent recoveries well into the future.

Recovery efficiencies achieved in the second-pass operations thus far are encouraging and should allow the plant to operate at a level of 550 ounces/ month during 2014.

Tweefontein

Construction of the first phase of the Tweefontein plant allowed first ounces to be delivered in September 2012. The original design for Tweefontein planned for the Klarinet open-pit mine to be completed in January 2013, thus allowing the nearby dumps to be treated by the plant whilst it was preparing to treat the ROM ore from the Mooigenoeg adit. With the continuation of the Klarinet mine, the Tweefontein plant is seeing much lower PGM grades in the feed sources than envisaged and this, coupled with the drop in the commodities prices, has caused phase 2 of the project to be redesigned and deferred. The plant produced 3,816 ounces for the year at a cash cost of $869/ounce.

It is planned that the plant will process current arising and dump material. The host mines Tweefontein operation is planned to increase the current arisings stream by implementing a new Klarinet chrome processing plant, thus providing further tails to the Sylvania plant. The cash costs are also expected to decrease significantly per ounce as the Klarinet material is replaced by the Tweefontein dump material.

Chrome Tailings Retreatment Project

The CTRP, which is operated by 50% shareholder Aquarius Platinum and in which Sylvania has a 25% interest, remains on care and maintenance. Sylvania is in the process of demonstrating that CTRP is a viable operation and is currently running various scenarios. Once the studies have been completed and the results are available Sylvania will be initiate a debate on restarting the operation.

Far Northern Limb Operations

Since we reported on the situation at our exploration drilling and possible mine development prospects on the Northern Limb of the Bushveld Igneous Complex in our 2012 review, the platinum industry and market have undergone fundamental changes. Taking these into account, and how these affect our ability to deliver on shareholder expectations, we have made important strategic decisions on projects that lie outside our core competencies.

Our strategy involves deferring capital expenditure and project development until there are fundamental and long-term improvements in the platinum industry. Projects have not been dropped; their development will be reconsidered at a more appropriate time. Sufficient work is continuing to ensure compliance with the terms and conditions of our exploration permits.

Volspruit

Volspruit is envisaged as a shallow, low-cost mine that will eventually be the key to unlocking the full potential of the Northern Limb. When the appropriate time comes, the mine will be developed by a wholly owned subsidiary, Volspruit Mining Company (Pty) Ltd, with the participation of a group of black economic empowerment (BEE) partners who include local communities, business entrepreneurs and an employee trust.

There has been no change to the previously published resource of more than 3 million ounces of PGMs, 74 million pounds of copper and some 270 million pounds of nickel reported at the start of the FY2013. The figures comply with SAMREC (South African Code for Reporting of Exploration Results, Mineral Resources and Reserves).

Further planning will only be finalised once mining rights have been granted.

During the third quarter of FY2013, the Company completed the purchase of the Grasvally and Zoetveld farms adjacent to Volspruit. The two farms are considered critical extensions and parts of the Volspruit project. As a part of the mining right application, the Environmental Impact Assessment was delayed due to the failure of the Nyl River to produce the 'Annual Flood' event. To ensure the process would be handled in the most efficient manner, Sylvania decided to withdraw and re-submit its mining right application, thus giving more time for the EIA process to be completed. The approach taken now will not require the flood event to occur to obtain the expected permissions.

This Mining right application as well as the EIA process is at least a year away so no decisions on progressing this project will be made until the EIA and mining right have been approved.

Harriet's Wish

Our confidence in the excellent PGM mineralisation of the Harriet's Wish property remains undiminished, though drilling has been completely scaled back along with our other Northern Limb exploration work.

PGM grades indicated by drilling at Harriet's Wish were particularly high, with the highest being 8.22g/t over a width of 3.31 metres. This indicated promising extensions to the resource of 4.99 million ounces of combined platinum and palladium indicated in the Kransplaats and Nonnenwerth lying to the south. However, the Harriet's Wish PGM mineralisation lies some 350 metres below surface, at depths that preclude opencast mining. Underground mining lies outside the scope of our competency and, depending on the state of the PGM market, our intention is to sell the properties or to find joint venture partners to finance a new mine.

In April 2013, our subsidiary Hacra Mining and Exploration Company (Pty) Ltd submitted a mining rights application covering the extended Harriet's Wish properties to the DMR. As this is potentially an underground mine and not in the scope of dump retreatment, the board is considering the option of selling this opportunity.

Everest North

Earlier proposals to develop the Everest North property using Aquarius Platinum's Everest South processing plant are on hold and will remain so for the near future. This is despite the fact that in the preceding year a mining rights application had been lodged with the DMR and that an EIA was completed. During FY2013 Aquarius placed the Everest South property and plant on care and maintenance, rendering the Everest North project unviable as a stand-alone project at present.

However, we are investigating various options of merging, selling or entering into a pool and share agreement for the rights to this measured resource. In the meantime, our strategy is to maintain these properties in their currently scaled-back state, incurring minimum expenses.

Outlook

The immediate outlook for the platinum industry appears, if anything, less certain than a year ago. As our chairperson Stuart Murray explains, the market has to return to a balance between supply and demand. Platinum producers cannot continue to rely on investment buying to support PGM prices.

We as a company, and our country as a whole, cannot tolerate any repeat of the events at Marikana - events that indirectly marred our operations during the first half of FY2013. While competition for members by competing unions persists, industrial peace will remain uncertain. Competing unions have sought to attract members by progressively increasing wage demands - demands that cannot be met if South Africa's mines are to remain profitable and capable of providing jobs.

Despite the uncertainty over the future of several of South Africa's platinum producers, we remain confident that Sylvania's corporate strategy will deliver sustainable value to shareholders. Sylvania's cash costs for each PGM are among the platinum industry's lowest which, to a considerable extent, protect the Company from the vagaries of the PGM market and from rising costs. The immediate future may appear cloudy, but we are confident that Sylvania will thrive throughout them.

Thanks

We extend our thanks to everyone who has contributed to Sylvania's progress in a year with more than its share of difficulties - to our employees who have withstood operating in an environment plagued by strikes and intimidation; to the members of our management team who have planned and delivered on appropriate strategies; and to our business partners and colleagues who have unstintingly backed our Company.

Finally, we must welcome and thank Stuart Murray, Sylvania's newly appointed chairperson, who has brought a wealth of experience and fresh insights into our business and is driving the strategies that will build our Company.

Terry McConnachie Nigel Trevarthen

Chief Executive Officer Deputy Chief Executive Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 June 2013

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2013

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2013

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 June 2013