Last checked at 27 Apr 2011 08:07
SYLVANIA PLATINUM LIMITED
("Sylvania Platinum", "Sylvania" or the "Company"
(ASX: SLP, AIM: SLP)
Quarterly Report to 31 March 2011
HIGHLIGHTS
·; Another record quarter for the Sylvania dump operations ("SDO")
o 10,768 ounces PGM 3E and Au produced by the five SDO plants in the quarter;
o 11,086 ounces attributable to Sylvania including CTRP, 9% improvement on last quarter;
o SDO revenue up 16% on the previous quarter;
·; Redomicile of Sylvania from Australia to Bermuda completed;
·; Four target areas ("hot spots") identified for further exploration on the Northern Limb Platreef project;
OVERVIEW
The quarter to 31 March 2011 has been yet another record breaking quarter for Sylvania, producing 10,768 ounces at its five SDO plants. This is a 996 ounce increase on the previous quarter and the Company remains on track to achieve the targeted 40,000 ounces for the financial year to 30 June 2011. SDO revenue increased by 16% from R79 million to R91 million however the average cost per ounce for the quarter increased by 8% from R3,758/oz (US$551/oz) to R4,045/oz (US$585/oz) despite the March monthly performance of R3,515/oz (US$508). The increase in operating cost per ounce is as a result of R1.7 million once-off maintenance costs incurred at Millsell and Lannex as well as the impact of the Christmas break at the host mines in January 2011. The Company had R162 million (A$23 million) cash available at the end of March 2011, up by A$1 million on the previous quarter.
On 26 November 2010, Sylvania announced its intention to redomicile the Group from Australia to Bermuda. A resolution to approve a scheme of arrangement between Sylvania and its shareholders ("Scheme") was put to the members of the Company at the court ordered scheme meeting held on 2 March 2011 and was passed in accordance with section 411(4)(a)(ii) of the Corporations Act 2001 (Cth). The Supreme Court of Western Australia approved the Scheme and the Scheme subsequently became effective on 9 March 2011. The Scheme was implemented on 18 March 2011 and Sylvania Platinum Limited, a company incorporated in Bermuda, is now the ultimate holding company of the Group. Common shares in the capital of Sylvania commenced trading on a normal settlement basis on ASX on 25 March 2011. Admission to trading on AIM also took place on the same date.
On 4 April 2011, Sylvania announced that an independent review of all the Northern limb sites had taken place by MSA Geoservices (Pty) Ltd ("MSA"). Four main hot spots have been indentified for further detailed prospect drilling.
Summary Group Performance
* Unaudited - Group | Unit | Dec 2010 Quarter | Mar 2011 Quarter | % Change | |
Financials | |||||
Revenue | R'000 | 81,507 | 93,759 | 15% | |
Ave R/US$ rate | R/US$ | 6.82 | 6.92 | 1% | |
Production | |||||
PGM Plant Feed Tons | t | 159,533 | 173,486 | 9% | |
PGM 3E and Au | oz | 10,135 | 11,086 | 9% | |
A. SYLVANIA DUMP OPERATIONS
Health, safety and environment
Sylvania has worked since October 2009 without a lost time injury and remains committed to keeping the incident frequency rate at zero through continued education, improving safety procedures and working to the highest possible standards.
Sylvania Dump Operations (100%) : Statistical Information | |||||
* Unaudited | Unit
| Dec 2010 Quarter | Mar 2011 Quarter | +- % Quarter on Quarter | 2011 Financial YTD |
Revenue | |||||
Revenue | R'000 | 78,697 | 91,067 | 16% | 230,782 |
Gross Basket Price | US$/oz | 1,563 | 1,593 | 2% | 1,596 |
Net Basket Price | US$/oz | 1,123 | 1,162 | 3% | 1,158 |
Gross Cash Margin - SDO | % | 54% | 53% | -2% | 48% |
Capital Expenditure | R'000 | 10,162 | 5,401 | -47% | 22,119 |
Ave R/US$ rate | R/US$ | 6.82 | 6.92 | 1% | 6.94 |
EBITDA | R'000 | 23,757 | 35,064 | 48% | 72,341 |
SDO Cash Cost | |||||
Per PGM Feed ton | R/t | 239 | 261 | 9% | 137 |
Per PGM Feed ton | US$/t | 35 | 38 | 9% | 20 |
Per 3E & Au oz | R/oz | 3,758 | 4,045 | 8% | 4,122 |
Per 3E & Au oz | US$/oz | 551 | 585 | 6% | 594 |
Production | |||||
Plant Feed | t | 325,998 | 382,607 | 17% | 965,815 |
Feed Head Grade | g/t | 2.49 | 3.01 | 21% | 2.66 |
PGM Plant Feed Tons | t | 153,705 | 167,039 | 9% | 460,282 |
PGM Plant Grade | g/t | 4.28 | 4.72 | 10% | 4.49 |
PGM Plant Recovery | % | 46.2% | 42.5% | -8% | 44.1% |
Total 3E and Au | oz | 9,772 | 10,768 | 10% | 29,298 |
Millsell
The Millsell operation produced 2,087 ounces for the quarter ended 31 March 2011, against 2,014 ounces in the previous quarter. The plant recorded an all time monthly record production in March 2011 on the back of good throughput rates and higher recoveries. Recoveries increased to 46%, compared to 43.2% in the previous quarter. Continuous steady operation as well as optimisation work done on the bead mill operation resulted in the increased recoveries. Cost of production was R2,908/oz (US$367) compared to the previous quarter of R2,783/oz (US$420). The Millsell dump was still mined during the current quarter, and will be completed by the end of May. Mining of the nearby Waterkloof dump also commenced during the quarter which will ensure sustainable production at Millsell for the short-term. Other alternatives are currently being investigated to supplement plant feed.
Steelpoort
The Steelpoort operation produced a total of 3,044 ounces for the quarter, 568 ounces less than the previous quarter, primarily due to lower feed grades from the host mine. Recoveries were marginally lower at 59% due to one of the re-cleaner cells being off line. This issue has been resolved and the following quarter recoveries are anticipated to increase even further after the installation of a de-sliming cyclone on the spiral plant. The cost per ounce was higher at R2,759/oz (US$383), up from R2,160/oz (US$317) in the previous quarter, mainly due to the lower production and the cost of transporting the Montrose dump material to the plant.
Lannex
The Lannex operation produced a record 2,277 ounces against the previous quarter's production of 1,348 ounces. The increased production is as a result of higher plant availability and utilisation as well as an increase in plant feed grades. The new tailings storage facility has been completed and commissioning is scheduled to commence in the next quarter. Cost per ounce also improved to R4,802/oz (US$694) from R5,823/oz (US$854) the previous quarter.
Mooinooi
The Mooinooi operation produced a record 1,541 ounces for the quarter. This is a 223 ounce increase on the previous quarter's 1,318 ounces. The costs remained high at R4,532/oz (US$655) compared to R4,994/oz (US$660) in the previous quarter as a result of maintenance on the Ball Mill. Several smaller plant improvement projects improved availabilities and utilisation; these costs are one-off and should reduce the $/oz production cost in future. The primary ball mill was off-line for the entire quarter, and is anticipated to start up again at the end of April 2011 with all the repairs and modifications completed. This should enable the operation to handle the increased run of mine ore from underground and from the new HMS plant. The HMS plant is scheduled to be commissioned in early May 2011.
Doornbosch
The Doornbosch plant also produced a record 1,819 ounces for the quarter, against 1,480 ounces in the previous quarter. The increased production was mainly a result of increased throughput through the PGM plant, 17,985 tons compared to 14,218 tons in the previous quarter. The PGM plant feed grade was also higher at 3.79 g/t compared to 3.36 g/t. Cost per ounce showed a marginal improvement to R3,037/oz (US$439) from R3,137/oz (US$460) in the last quarter.
Reduced feed available from the Doornbosch mine still remains an issue and additional ore is being transported from the Montrose dump to reduce the shortfall from the host mine.
Tweefontein
Planning of the equipment configurations for the Tweefontein plant is currently underway. Consulmet (Pty) Ltd has been contracted to complete the engineering phase and will deliver an engineering pack and enquiry documents to invite tenders for implementation. Long lead items will be ordered once the tender process has been completed.
B. CTRP (Sylvania 25% attributable, managed by Aquarius Platinum)
CTRP production decreased from 363 ounces to 318 ounces. Ounce production improved towards the end of the quarter to 31 March 2011 due to increased tons treated. Operating costs were high as a result of major maintenance costs totalling R450,000.
CTRP (25%): Statistical Information | |||||
* Unaudited |
Unit
| Dec 2010 Quarter | Mar 2011 Quarter | +- % Quarter on Quarter | 2011 Financial YTD |
Revenue | |||||
Revenue | R'000 | 2,810 | 2,692 | -4% | 7,952 |
Basket Price | US$/oz | 1,559 | 1,674 | 7% | 1,547 |
Ave R/US$ rate | R/US$ | 6.92 | 6.98 | 1% | 7.06 |
Site Cash Cost | |||||
Per ROM ton | R/t | 359 | 376 | 5% | 291 |
Per ROM ton | US$/t | 52 | 54 | 4% | 41 |
Per PGM oz | R/oz | 5,763 | 7,641 | 33% | 6,318 |
Per PGM oz | US$/oz | 833 | 1,095 | 31% | 895 |
Production | |||||
Plant Feed Tons | t | 5,828 | 6,447 | 11% | 22,745 |
Grade | g/t | 3.36 | 3.13 | -7% | 3.00 |
Recovery | % | 58% | 49% | -16% | 48% |
Total 3E and Au | Oz | 363 | 318 | -12% | 1,048 |
For a graph showing the Sylvania Resources Quarterly production please click on the following web link (Graph 1):
http://www.rns-pdf.londonstockexchange.com/rns/5200F_-2011-4-27.pdf
C. NORTHERN LIMB OPERATIONS
Volspruit Project
The Volspruit Project is located at the Southern end of the Northern Limb of the Bushveld Igneous Complex in South Africa.
The Volspruit project is characterised by a number of processes which are currently being aligned to deliver a single definitive feasibility study ("DFS") which incorporates the process to design, build and commission the open cast mine, PGM concentrator, smelter and CVMR. SRK Consulting has been appointed to compile the DFS tender document due for submission in May 2011, as well as the mining works plan ("MWP"). The social and labour plan ("SLP") is also scheduled for completion in May 2011. Upon receipt both the SLP and the MWP the mining right application can be completed.
The Environmental Impact Assessment ("EIA") process has commenced. The project was registered with the Limpopo provincial department in March 2011 with both the National Environmental Management Act scoping and EIA process being submitted. An application for a waste management license was submitted to the National Department of Environmental Affairs in March 2011. The first phase of public participation has commenced with the first public meeting proposed for June 2011.
Smelting trials on the concentrate obtained from the extractive capability tests performed by Mintek have been completed. The alloy produced from this process has been sent to CVMR in Canada for further testing.
Northern Platreef Project
On 4 April 2011 Sylvania announced a JORC compliant Inferred Resource with four main high grade prospecting target areas/hot spots. The announcement was based on the report received from MSA Geoservices (Pty) Ltd ("MSA") on 30 March 2011 subsequent to their review of all previous resource statements and drilling data. A resource of 4.99 million PGM ounces (2E), 137 million pounds of copper and 101 million pounds of Nickel on all hot spots has been indicated.
The new drilling program, designed to generate the information necessary to upgrade the exploration targets is being planned to commence within the next six months.
The information in relation to Northern Limb Project (previously known as the Aurora and Harriets Wish Projects) is based on information compiled by Mike Hall who is a member of the Australasian Institute of Mining and Metallurgy and who is employed by the MSA Group, Johannesburg, South Africa. Mr Hall has sufficient experience relevant to the style of mineralisation and type of deposit under consideration to qualify as a Competent Person for the purposes of the 2004 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Mr Hall consents to the inclusion in the report of the matters based on the information in the form and context in which they appear.
D. SYLVANIA GROUP
Redomicile of Sylvania from Australia to Bermuda
On 26 November 2010, Sylvania announced that the Company intends to redomicile the holding company of the Sylvania Group from Australia to Bermuda.
A resolution to approve a scheme of arrangement between Sylvania and its shareholders ("Scheme") was put to members of the Company at the court ordered scheme meeting held on 2 March 2011 and was passed in accordance with section 411(4)(a)(ii) of the Corporations Act. The Supreme Court of Western Australia approved the Scheme and the Scheme subsequently became effective on 9 March 2011. On 18 March 2011 the Scheme was implemented and Sylvania Platinum Limited, a company incorporated in Bermuda, is now the ultimate holding company of the Group.
On 10 March 2011 Sylvania Shares commenced trading on ASX on a deferred settlement basis and began trading on ASX on a normal settlement basis on 25 March 2011. Admission to trading of Sylvania Shares on AIM (with holders of depositary interests that confer a unit of beneficial ownership in Sylvania Shares settling trades on AIM in CREST) commenced on 25 March 2011.
Vygenhoek Mining Application (Everest North)
Sylvania and Aquarius Platinum (SA) (Pty) Ltd are still in the process of exploring the business model to develop the Everest North mine to the mutual advantage of both parties. Should an agreement not be reached between the parties, the matter will then be heard by an arbitrator on a date to be arranged.
Jubilee/Sylvania Alliance
The PGE/Ni, Cu smelting and refining study of Volspruit ore has progressed well under the current Smelting and Refining Agreement between Jubilee Platinum Plc ("Jubilee") and Sylvania. The study included roasting, smelting and refining trials on the Volspruit ore to update the design parameters specific to the Volspruit ore characteristics. These roasting and smelting trials have been successfully concluded as part of this pre-feasibility study and have delivered very positive results and the first metal alloy from Volspruit was produced. As part of the base metal refining trials (Nickel, Iron, Copper) this alloy has been sent to Canada for further trials. These trials are currently underway with early indications showing that the alloy produced from the smelting trails demonstrates a good correlation with the conceptual study results which tested an alloy from an external similar orebody. This conceptual study has suggested nickel and PGM recoveries could exceed 95%. The encouraging result achieved during these trials has prompted the decision to appoint external consultants to the project to conclude a techno-economic review. This review will be concluded in June 2011.
CORPORATE INFORMATION
Registered office: Sylvania Platinum Limited
Unit 2, Level 1
Churchill Court
331 - 335 Hay Street
Subiaco WA 6008
Australia
(+61 8) 9226 4777
Postal address: PO Box 524
Wembley WA 6913
Australia
CONTACT DETAILS
In South AfricaTerence McConnachie (CEO Sylvania Platinum Limited)(+27 11) 673 1171
Louis Carroll (FD/Joint Company Secretary)Sylvania Platinum Limited+44 (0) 7969 170 622
In Australia
Richard Rossiter (Chairman)Sylvania Platinum Limited
(+618) 9226 4777
Grant Button (Director/Joint Company Secretary)Sylvania Platinum Limited(+618) 9226 4777
In United KingdomAnthony Rowland/ Ben WrightAmbrian Partners Limited+44 (0) 20 7634 4700
Laurence Read/Beth Harris
Threadneedle Communications
+44 (0) 20 7653 9855
Sylvania Website: www.sylvaniaplatinum.com
Rule 5.3
Appendix 5B
Mining exploration entity quarterly report
Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001, 01/06/10.
Name of entity |
SYLVANIA PLATINUM LIMITED |
ARBN | Quarter ended ("current quarter") | |
147 331 726 | 31 March 2011 |
Consolidated statement of cash flows
Cash flows related to operating activities
| Current quarter $A'000 | Year to date (9 months) $A'000 | |
1.1 | Receipts from product sales and related debtors | 15,028 | 37,031 |
1.2 | Payments for (a) exploration & evaluation (b) development (c) production (d) administration | (218) (1,520) (6,776) (4,102) | (1,001) (4,344) (16,509) (13,149) |
1.3 | Dividends received | ||
1.4 | Interest and other items of a similar nature received | 278 | 905 |
1.5 | Interest and other costs of finance paid | ||
1.6 | Income taxes paid | 30 | (172) |
1.7 | Other (provide details if material) | (873) | (1,816) |
Net Operating Cash Flows |
1,847 |
945 | |
Cash flows related to investing activities | |||
1.8 | Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets |
(7) |
(17) |
1.9 | Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets |
(1) |
2 |
1.10 | Loans to other entities | (7) | (14) |
1.11 | Loans repaid by other entities | 8 | 23 |
1.12 | Other (provide details if material) | 1 | 1 |
Net investing cash flows | (6) | (5) | |
1.13 | Total operating and investing cash flows (carried forward) | 1,841 | 940 |
1.13 | Total operating and investing cash flows (brought forward) | 1,841 | 940 |
Cash flows related to financing activities | |||
1.14 | Proceeds from issues of shares, options, etc. | ||
1.15 | Proceeds from sale of forfeited shares | ||
1.16 | Proceeds from borrowings | ||
1.17 | Repayment of borrowings | (76) | (257) |
1.18 | Dividends paid | ||
1.19 | Other (provide details if material) | (136) | (579) |
Net financing cash flows | (212) | (836) | |
Net increase (decrease) in cash held |
1,629 |
104 | |
1.20 | Cash at beginning of quarter/year to date | 21,779 | 23,539 |
1.21 | Exchange rate adjustments to item 1.20 | (370) | (605) |
1.22 | Cash at end of quarter | 23,038 | 23,038 |
Payments to directors of the entity and associates of the directors
Payments to related entities of the entity and associates of the related entities
Current quarter $A'000 | ||
1.23 |
Aggregate amount of payments to the parties included in item 1.2 |
449 |
1.24 |
Aggregate amount of loans to the parties included in item 1.10 | |
1.25 |
Explanation necessary for an understanding of the transactions | |
|
| |
Non-cash financing and investing activities
2.1 | Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows |
|
2.2 | Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest |
|
Financing facilities available
Add notes as necessary for an understanding of the position.
Amount available $A'000 | Amount used $A'000 | ||
3.1 | Loan facilities | ||
3.2 | Credit standby arrangements |
Estimated cash outflows for next quarter
$A'000 | ||
4.1 | Exploration and evaluation |
1,453 |
4.2 | Development
|
8,563 |
4.3 | Production |
6,464 |
4.4 | Administration
|
1,940 |
Total |
18,420
|
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. | Current quarter $A'000 | Previous quarter $A'000 | |
5.1 | Cash on hand and at bank | 4,754 | 6,581 |
5.2 | Deposits at call |
18,284 |
15,197 |
5.3 | Bank overdraft | ||
5.4 | Other (provide details) | ||
Total: cash at end of quarter (item 1.22) | 23,038 | 21,778 | |
Changes in interests in mining tenements
Tenement reference | Nature of interest (note (2)) | Interest at beginning of quarter | Interest at end of quarter | ||
6.1 | Interests in mining tenements relinquished, reduced or lapsed
|
| |||
6.2 | Interests in mining tenements acquired or increased
|
Issued and quoted securities at end of current quarter
Description includes rate of interest and any redemption or conversion rights together with prices and dates.
Total number | Number quoted | Issue price per security (see note 3) (cents) | Amount paid up per security (see note 3) (cents) | ||
7.1 | Preference +securities (description) | ||||
7.2 | Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs, redemptions | ||||
7.3 | +Ordinary securities
| 301,961,805 | 301,961,805 | N/A | N/A |
7.4 | Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy-backs | ||||
7.5 | +Convertible debt securities (description) | ||||
7.6 | Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted | ||||
7.7 | Options (description and conversion factor) |
359,909 400,000 600,000 5,633,000 6,000,000 |
Nil Nil Nil Nil Nil | Exercise price $1.40 $2.89 $2.67 $1.63 $1.05 | Expiry date 30 June 2011 30 June 2011 30 June 2011 30 June 2011 30 June 2012 |
7.8 | Issued during quarter | ||||
7.9 | Exercised during quarter | ||||
7.10 | Expired during quarter | ||||
7.11 | Debentures (totals only) | ||||
7.12 | Unsecured notes (totals only)
| ||||
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).
2 This statement does give a true and fair view of the matters disclosed.
Sign here: Date: 27 April 2011
(Director/Company secretary)
Print name: Louis Carroll
Finance Director
Notes
1 The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2 The "Nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries andAASB 1026: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
== == == == ==