TIDMSLP
RNS Number : 2572C
Sylvania Platinum Limited
21 February 2022
_____________________________________________________________________________________________________________________________
21 February 2022
Sylvania Platinum Limited
("Sylvania", the "Company" or the "Group")
Interim financial results for the six months ended 31 December
2021
Sylvania (AIM: SLP) is pleased to announce the results for the
six months ended 31 December 2021. Unless otherwise stated, the
consolidated financial information contained in this report is
presented in United States Dollars ("USD" or "$").
Operations and finance
-- Sylvania Dump Operations ("SDO") delivered 32,376 4E PGM ounces (HY1 FY2021: 36,335 4E PGM ounces);
-- Net revenue generated for the period totalled $69.1 million (HY1 FY2021: $84.9 million);
-- Average gross PGM basket price of $2,966/oz (HY1 FY2021: $3,184/oz);
-- Group EBITDA of $36.2 million (HY1 FY2021: $58.0 million);
-- Net profit of $24.4 million (HY1 FY2021: $40.5 million);
-- Cash balance at 31 December 2021 of $110.1 million (HY1 FY2021: $67.1 million);
-- Amended Sale Agreement signed for the sale of the 74% share held in Grasvally Chrome Mine (Pty) Ltd to a 100%
empowerment company for ZAR100.0 million ($6.7 million);
-- Bought back 1,873,430 shares from employees, all transferred to Treasury;
-- Final dividend of 4p per Ordinary Share for FY2021 paid in December 2021 (FY2020:1.6p); and
-- Windfall Dividend of 2.25p per Ordinary Share declared by the Board, to be paid in April 2022.
Challenges
-- Lower than planned Run of Mine ("ROM") and current arising PGM feed grades at the Western operations have
affected production. Management, in conjunction with the host mine, continued to explore alternative feed sources
and to implement processes to optimise feed grades and increase recovery efficiency at the affected operations;
and
-- The temporary suspension of operations at Lesedi extended through Q1 and, subsequent to start-up, the plant
incurred further downtime related to general water shortages at the Western operations during Q2 which was
further exacerbated by the temporary tailings deposition strategy. Post period end, the operation commissioned
a new water supply from additionally installed boreholes and commenced with commissioning of the newly
constructed tailings dam facility that will further mitigate water shortages.
Opportunities
-- Lesedi MF2 is on track and expected to commission in March 2022;
-- The Tweefontein MF2 project is progressing well and expected to commission later during this calendar year as
planned; and
-- The Group remains debt free and continues to generate sufficient cash reserves to fund capital expansion
projects.
Board Update
-- Sylvania appointed Adrian Reynolds and Simon Scott as Independent, Non-executive Directors effective 1 August
2021 and 1 January 2022 respectively; and
-- 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.
Commenting on the period, Sylvania's CEO Jaco Prinsloo said:
"The SDO has achieved 32,376 ounces of PGM production in the
period, with a solid performance from most operations, especially
Tweefontein, which achieved new record quarterly and six-monthly
production performances which helped mitigate the lower production
from Mooinooi and Lesedi during the period. However, the lower PGM
feed grade of Mooinooi ROM material received, the impact of the
temporary production stoppage at Lesedi and subsequent water
shortages, as well as some water supply issues which are being
addressed, have affected production from our Western operations. As
a result, we have made a modest adjustment to our annual PGM
production estimate, with a range of 66,000 to 68,000 ounces now
targeted by the Company.
"Based on the progress that we are making with the Lesedi MF2,
which we plan to commission in March, as well as the provisional
results from targeted sampling campaigns and investigations to
evaluate potential alternative feed sources to mitigate current low
ROM feed grades at Mooinooi, we are expecting a stronger production
performance during HY2 FY2022.
"Through the continuous efforts of our employees and operations
that drive sustainable production, and assisted by the strong PGM
basket price, the Company continues to generate sufficient cash to
fund both expansion requirements and to return value to
shareholders. As a result, I am pleased to announce that, in
addition to the annual dividend paid during the period, the Board
has approved the payment of a second Windfall Dividend of 2.25p per
Ordinary Share, payable in early April 2022. As with the first
Windfall Dividend paid in April 2021, this dividend payment is
based on excess cashflow generated from PGM prices achieved above
long-term broker consensus prices for these metals for the 2021
calendar year. Actual achieved production, metal prices, ZAR
exchange rate, as well as our share of mineral royalties, corporate
and dividend withholding taxes have been taken into account in the
determination.
"In addition, the Company will continue to execute further share
buy backs as opportunities arise as part of its commitment to
returning value to shareholders. As the Company already holds
sufficient shares in Treasury for the current bonus share awards
and the Employee Dividend Entitlement Plan, any such shares
acquired will be cancelled."
Disclaimer
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.
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 six months under review, the average ZAR:USD exchange
rate was ZAR15.03:$1 and the spot exchange rate was
ZAR15.95:$1.
USD Unit Unaudited Unit ZAR
HY1 2021 HY1 2022 % Change % Change HY1 2022 HY1 2021
---------- --------- --------- ---------- ----------
Production
1,421,445 1,184,996 -17% T Plant Feed T -17% 1,184,996 1,421,445
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1.93 1.91 -1% g/t Feed Head Grade g/t -1% 1.91 1.93
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
632,079 589,240 -7% T PGM Plant Feed Tons T -7% 589,240 632,079
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
3.20 3.17 -1% g/t PGM Plant Feed Grade g/t -1% 3.17 3.20
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
55.66% 53.93% -3% % PGM Plant Recovery % -3% 53.93% 55.66%
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
36,335 32,376 -11% Oz Total 4E PGMs Oz -11% 32,376 36,335
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
49,224 41,828 -15% Oz Total 6E PGMs Oz -15% 41,828 49,224
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
3,184 2,966 -7% $/oz Average gross basket price(1) R/oz -8% 44,574 48,296
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Financials (2)
77,250 65,812 -15% $'000 Revenue (4E) R'000 -21% 989,094 1,253,040
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Revenue (by-products including
3,328 5,628 69% $'000 base metals) R'000 57% 84,585 53,988
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
4,319 -2,384 -155% $'000 Sales adjustments R'000 -151% -35,842 70,051
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
84,897 69,056 -19% $'000 Revenue R'000 -25% 1,037,837 1,377,079
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
23,560 27,644 17% $'000 Operating costs R'000 9% 415,466 382,138
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
General and administrative
1,119 1,352 21% $'000 costs R'000 12% 20,322 18,154
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
58,026 36,166 -38% $'000 Group EBITDA R'000 -42% 543,532 941,223
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
574 363 -37% $'000 Net Interest R'000 -42% 5,449 9,316
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
16,864 10,527 -38% $'000 Taxation R'000 -42% 158,214 273,540
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
1,203 1,641 36% $'000 Depreciation and amortisation R'000 26% 24,659 19,514
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
40,534 24,360 -40% $'000 Net profit R'000 -44% 366,108 657,485
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
2,488 7,414 198% $'000 Capital Expenditure R'000 176% 111,421 40,350
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
67,095 110,062 64% $'000 Cash Balance R'000 78% 1,755,066 986,406
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
- - R/$ Ave R/$ rate R/$ -7% 15.03 16.22
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
- - R/$ Spot R/$ rate R/$ 8% 15.95 14.70
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Unit Cost/Efficiencies
616 815 32% $/oz SDO Cash Cost per 4E PGM oz (3) R/oz 23% 12,256 9,996
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
455 631 39% $/oz SDO Cash Cost per 6E PGM oz (3) R/oz 29% 9,486 7,376
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Group Cash Cost Per 4E PGM oz
667 881 32% $/oz (3) R/oz 22% 13,247 10,825
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
Group Cash Cost Per 6E PGM oz
493 682 38% $/oz (3) R/oz 28% 10,254 7,991
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
751 1,025 36% $/oz All-in sustaining cost (4E) R/oz 26% 15,404 12,188
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
801 1,216 52% $/oz All-in cost (4E) R/oz 41% 18,273 12,988
---------- --------- ------ -------------------------------- ------ --------- ---------- ----------
(1) The gross basket price in the table is average gross basket
for the period, used for revenue recognition of ounces delivered
over HY1 FY2022, before penalties/smelting costs and applying the
contractual payability.
(2) Revenue (6E) for HY1 FY2022, before adjustments is $71.1
million (6E prill split is Pt 50%, Pd 18%, Rh 9%, Au 0.3%, Ru 18%,
Ir 5%).
(3) The cash costs include direct operating costs and exclude
royalty tax.
A. OPERATIONAL OVERVIEW
Health, safety and environment
During the period under review there were no significant
occupational health or environmental incidents reported. The
Doornbosch operation remains nine-years Lost-time Injury ("LTI")
free, while Millsell and Lesedi achieved the milestones of one-year
and two-years LTI-free respectively during the period.
Unfortunately, Mooinooi suffered one LTI during July 2021 when an
employee fractured a finger during maintenance.
Operational performance
The SDO achieved 32,376 ounces for the first half of the 2022
financial year. Half-year on half-year PGM production decreased
11%, primarily due to lower treatment volumes at Lesedi. A
combination of lower PGM feed grades and recovery efficiencies
associated with ROM material received from the host mine at
Mooinooi and Lannex during the period, also contributed to the
decrease.
While all other operations either met or exceeded their planned
production volumes, the 7% decrease in PGM plant feed tons during
the period was due to the tailings dam related production
interruption and water shortages at Lesedi. PGM plant feed grade
decreased by 1% during the period, associated with lower grade dump
feed at Millsell and low-grade ROM sources at Mooinooi. PGM plant
recovery decreased 3% when compared to HY1 FY2021, primarily
related to higher ratios of more oxidised ROM material treated at
the Lannex and Mooinooi operations.
An increase of 23% in SDO cash costs per ounce in ZAR terms,
impacted by the lower PGM ounce production, combined with a 7%
stronger ZAR:USD exchange rate, resulted in an increase of 32% in
USD terms from $616/oz to $815/oz. A higher electricity cost due to
above inflation rate increases and higher mining cost due to a host
mine subsidy incurred in an attempt to secure higher grade feed
material, also affected the increase in the cash cost. In addition,
a rise in the consumption of consumables to accommodate the higher
ratio of ROM material at Lannex, as well as more oxidised material
at Mooinooi and Lesedi, were the most significant contributors to
the higher cash cost. Cost control remains key and management
continues to drive various strategies focussed on efficiently
managing costs.
Operational focus areas
During the period, the SDO continued to engage with the host
mines in order to address the lower PGM grades in ROM and current
arising sources, as well as optimisation of blending activities
from surface sources. Various sampling campaigns and investigations
have been performed together with the host mine to evaluate
potential alternative feed sources. It is anticipated that ROM feed
grades should improve during HY2 FY2022.
The remedial action plan to mitigate associated risks relating
to the Lesedi tailings facility, which necessitated a temporary
stoppage of operations in Q1, involved the commencement of
hydro-mining of the affected tailings facility during the period.
However, due to the nature of the emergency tailings deposition
facility and difficulty in recovering return-water from it,
combined with general water shortages in the area, the operation
had not been able to ramp up to normal production levels in Q2 as
anticipated. Post period end, the operation commissioned a new
water supply from additionally installed boreholes and has also
commenced the commissioning of the newly constructed tailings
facility, which is expected to alleviate water shortages allowing
the commencement of normal operations.
In addition to water constraints, power supply to operations
remains a focus area, as vandalism and cable theft at substations
continue, often resulting in unplanned delays to the operations.
Power mitigation strategies have been developed and are being
implemented at the most affected operations.
Capital Projects
Despite the impact of the recent global computer chip shortage
which has affected some timelines for deliverables, the Lesedi MF2
is still expected to commission next month. In addition, the
execution of the Tweefontein MF2 project is progressing well and
expected to commission later this calendar year. The construction
of these MF2 modules will improve the upgrading and recovery of
PGM's at the respective operations.
The construction works on the new Lesedi tailings dam facility
are nearing completion, with early commissioning now underway.
Construction of the new Mooinooi and Doornbosch tailings facilities
is progressing well. These new and improved tailings facilities
comply with the highest international standards and are designed to
both reduce the impact of mine tailings on the environment and
improve operability.
Capital spend increased during the current period compared to
the prior year corresponding period from $2.5 million to $7.4
million, comprising $6.1 million optimisation and stay in business
capital that includes the abovementioned projects, as well as $1.3
million spend on exploration projects. All capital projects are
fully funded from current cash reserves.
Outlook
With the Lesedi MF2 expected to commission next month together
with the implementation of initiatives to address both the water
shortages at the Western operations and the current low ROM feed
grades, we are expecting PGM ounce production to improve during HY2
FY2022.
While the average 4E PGM basket price for HY1 FY2022 was
approximately 30% lower than HY2 FY2021, we remain cautiously
optimistic in terms of the PGM price outlook. Based on market
forecasts for Palladium and Rhodium to remain in deficit and demand
forecast to increase with vehicle sales as the global chip shortage
is resolved, we are expecting PGM prices to remain healthy with
potential modest upside from current levels as the year progresses.
While electric vehicle sales have increased sharply during the past
year, especially as internal combustion engine ("ICE") vehicles
sales were impacted by the global chip shortages, PGM consumption
in ICE vehicles is expected to remain robust for the short to
medium term based on the balance of market fundamentals.
As always, the Company will continue to focus on that which we
are able to control, with our specific focus on improving direct
operating costs, maintaining a safe, stable and efficient
production environment, and ensuring disciplined capital allocation
and control.
Impact of COVID-19
The effects of COVID-19 on both employees and operations have
remained a key focus of the Company. South Africa exited from a
fourth more transmissible wave of COVID-19 during the period and
the extended effects of the pandemic on employees and their
families have been recognised by management. Although the Company
acknowledges that vaccines are a personal choice, together with
control protocols, the Company believes that vaccination is key in
the fight against the pandemic.
An Employee Assistance Program ("EAP") was launched to assist
with the direct and indirect impacts of the pandemic on the work
force. The EAP also provides emotional counselling for a number of
personal life traumas and financial and legal advice. The service
is available to all employees of the Group as well as their
immediate family.
As of 31 December 2021, the Company recorded 138 positive cases
of COVID-19 amongst employees since the start of the pandemic. Post
period end, one active case was recorded with the affected employee
having returned to work as of the date of release of this
announcement. With the increase in vaccinated individuals, as well
as the natural immunity that has built up in the population, the
South African government has adjusted the Level 1 lockdown
regulations. No further forced closure of operations is
anticipated.
B. FINANCIAL OVERVIEW
31 December 2021 31 December 2020
$ $
CONSOLIDATED STATEMENT OF PROFIT OR LOSS Note(s) Reviewed Reviewed
For the half year ended 31 December 2021
Revenue 1 69,055,528 84,896,812
Cost of sales (29,192,755) (24,709,262)
Royalties tax (3,046,322) (2,595,982)
---------------- ----------------
Gross profit 36,816,451 57,591,568
Other income 38,607 332,350
Other expenses 2 (2,330,331) (1,100,567)
---------------- ----------------
Operating profit before net finance income/costs and income tax
expense 34,524,727 56,823,351
Finance income 731,855 888,300
Finance costs (369,302) (313,996)
---------------- ----------------
Profit before income tax expense 34,887,280 57,397,655
Income tax expense 3 (10,527,209) (16,863,716)
Net profit for the period 24,360,071 40,533,939
---------------- ----------------
Other comprehensive income/(loss)
Items that are or may be subsequently reclassified to profit and
loss:
Foreign operations - foreign currency translation differences (13,222,604) 20,661,835
---------------- ----------------
Total other comprehensive income/(loss) (net of tax) (13,222,604) 20,661,835
---------------- ----------------
Total comprehensive income for the year 11,137,467 61,195,774
---------------- ----------------
Cents Cents
------------------------------------------------------------------ ------- ----------------------------------
Earnings per share attributable to the ordinary equity holders of
the Company:
Basic earnings per share 8.93 14.90
Diluted earnings per share 8.86 14.56
------------------------------------------------------------------- ------- ----------------------------------
1. Revenue is generated from the sale of PGM ounces produced at
the six retreatment plants, net of pipeline sales adjustments.
2. Other expenses relate to corporate activities and include
consulting fees, audit fees, travel, advisor and PR costs, share
registry costs, directors' fees, share based payments and other
smaller administrative costs.
3. Income tax expense includes current tax, deferred tax and
dividend withholding tax
The average gross basket price for the six months to 31 December
2021 was $2,966/oz compared to $3,184/oz for the six months ended
31 December 2020. The Group recorded net revenue of $69.1 million
for the six months to 31 December 2021, a 19% decrease half-year on
half-year, as a result of the lower PGM ounce production and basket
price, as well as a negative sales adjustment for the period.
The operational cost of sales represents the direct and indirect
costs of producing the PGM concentrate and amounted to ZAR415.5
million for the reporting period compared to ZAR382.1 million for
the six months to 31 December 2020. The main cost contributors
being salaries and wages of ZAR144.5 million (HY1 FY2021: ZAR135.0
million), mining costs of ZAR53.2 million (HY1 FY2021: ZAR44.3
million), reagents and milling costs of ZAR33.0 million (HY1
FY2021: ZAR31.0 million), and electricity of ZAR55.8 million (HY1
FY2021: ZAR49.5 million).
Group cash cost per ounce was ZAR13,247/oz compared to
ZAR10,825/oz in the previous corresponding period impacted mainly
by the lower ounce production. The all-in sustaining cost ("AISC")
for the Group amounted to ZAR15,404/oz and an all-in cost ("AIC")
of ZAR18,273/oz for the period to 31 December 2021. This compares
to the AISC and AIC for 31 December 2020 of ZAR12,188/oz and
ZAR12,988/oz respectively.
General and administrative costs were $1.4 million (ZAR20.3
million) for the six months to 31 December 2021 compared to $1.1
million (ZAR18.2 million) for the corresponding period in the prior
year. These costs are incurred in USD, GBP and ZAR and relate
mainly to share registry costs, regulatory costs, insurance,
advisory and public relations costs, consulting and legal fees and
stock exchange costs.
Interest is earned on surplus cash invested in South Africa at
an average interest rate of 3.9% per annum. Interest was paid on
instalment sale agreements for the purchase of movable plant and
vehicles; however, all instalment sale agreements were settled
during the six-month period and no further cost will be
incurred.
Income tax is paid in ZAR on taxable profits generated at the
South African operations at a rate of 28%. The income tax charge
for the six months to 31 December 2021 was ZAR136.1 million
compared to ZAR264.8 million for the six months to 31 December 2020
due to the decrease in profit. Deferred tax movements for the Group
relate mainly to unredeemed capital expenditure and provisions.
Dividend withholding tax of $1.3 million was paid on internal
dividends paid from Sylvania Metals for the six-month period.
31 December 2021 31 December 2020
$ $
CONSOLIDATED STATEMENT OF CASHFLOWS Reviewed Reviewed
For the half year ended 31 December 2021
Net cash inflow from operating activities 4 31,599,803 12,327,520
Net cash outflow from investing activities 5 (8,109,477) (2,593,164)
Net cash (outflow) from financing activities 6 (17,178,177) (7,332,565)
---------------- ----------------
Net increase in cash and cash equivalents 6,312,149 2,401,791
Effect of exchange fluctuations on cash held (2,385,646) 8,816,921
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 110,061,938 67,095,324
---------------- ----------------
Note: This is a condensed cashflow statement. Please refer to
the Half Year Interim Financial Statements for more detail.
4. Net cash inflow from operating activities includes a net
operating cash inflow of $43,062,803, net finance income of
$716,028 and taxation paid of $12,179,028.
5. Net cash outflow from investing activities includes payments
for property, plant and equipment of $6,123,805, exploration and
evaluation assets of $1,289,934, loan to joint operation $696,237
and cash inflow of $499 from proceeds on disposal of property,
plant and equipment.
6. The net cash outflow from financing activities consists of
the repayment of borrowings of $122,657, payment of lease
liabilities of $56,691, payments for share transactions of
$2,399,256 and dividends declared and paid of $14,609,573.
Cash is held in USD and ZAR. As at 31 December 2021, the
Company's cash and cash equivalents balance was $110.1 million.
Cash generated from operations before working capital was $36.4
million for the reporting period, with working capital contributing
an inflow of $6.7 million mainly due to the movement in trade
receivables as a result of the decrease in the gross basket price
received. $10.9 million was paid in provisional income tax and the
Company spent $7.4 million on capital expenditure comprising of
$6.1 million on specific optimisation and stay in business
projects, and $1.3 million on exploration projects. In December
2021, $14.6 million was paid to shareholders as a dividend. The
Group holds a portion of cash in ZAR to fund operational working
capital and capital projects. A strengthening ZAR:USD exchange rate
will have a favourable impact on the Group cash balance and a
weakening of the ZAR against the USD will have the opposite
effect.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 December 2021 30 June 2021
For the half year ended 31 December 2021
$ $
Note(s) Reviewed Audited
ASSETS
Non-current assets
Exploration and evaluation expenditure 45,762,424 45,351,817
Property, plant and equipment 40,136,010 39,915,437
Other financial assets 7 815,628 298,864
Total non-current assets 86,714,062 85,566,118
---------------- ------------
Current assets
Cash and cash equivalents 8 110,061,938 106,135,435
Trade and other receivables 9 53,985,850 68,612,119
Other financial assets 7 896,328 885,593
Inventories 10 3,995,753 3,838,147
Current tax asset 5,600,489 4,329,860
---------------- ------------
174,540,358 183,801,154
Assets held for sale 3,822,067 4,216,190
Total current assets 178,362,425 188,017,344
---------------- ------------
Total assets 265,076,487 273,583,462
---------------- ------------
EQUITY AND LIABILITIES
Shareholders' equity
Issued capital 11 2,861,557 2,861,557
Reserves 12 50,152,220 65,314,647
Retained profit 185,527,219 175,776,721
Total equity 238,540,996 243,952,925
---------------- ------------
Non-current liabilities
Borrowings 13 15,889 70,956
Provisions 14 4,121,754 4,539,937
Deferred tax liability 11,979,442 11,154,515
Total non-current liabilities 16,117,085 15,765,408
---------------- ------------
Current liabilities
Trade and other payables 10,338,464 13,652,017
Borrowings 13 79,942 212,651
---------------- ------------
10,418,406 13,864,668
Liabilities directly associated with the assets classified as held for sale - 461
Total current liabilities 10,418,406 13,865,129
---------------- ------------
Total liabilities 26,535,491 29,630,537
---------------- ------------
Total liabilities and shareholder's equity 265,076,487 273,583,462
---------------- ------------
7. Other financial assets mainly consist of:
o The loan receivable granted to TS Consortium from Sylvania
South Africa (Pty) Ltd, a South African subsidiary of the Group. TS
Consortium is a joint operation research and development project.
Sylvania South Africa (Pty) Ltd increased it's 50% interest in the
joint operation to 75% in December 2021.
o Third party loan which is secured over the Grasvally Plant,
bears interest at the Johannesburg Inter-Bank Offer Rate (JIBOR) +
3%, compounded monthly in arrears.
8. Cash and cash equivalents are held in ZAR and USD. ZAR
denominated balances make up $39,883,440 (ZAR635,987,941) of the
total cash and cash equivalents balance.
9. Trade and other receivables consist mainly of amounts
receivable for the sale of PGMs.
10. Inventory held is spares and consumables for the SDO.
11. The total number of issued ordinary shares at 31 December
2021 is 286,155,657 Ordinary Shares of US$0.01 each (including
13,170,222 shares held in treasury), 1,873,430 shares were bought
back from employees and 2,385,000 bonus shares were exercised.
12. 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.
13. Borrowings relate to the right-of-use lease liability.
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.
C. Mineral Asset Development and opencast mining projects
As announced in the Annual Report FY2021, the Group assesses the
value of its mineral asset development projects on a regular and
consistent basis. Various studies have been initiated in order to
determine how best to optimise the respective projects and
consultants were engaged in the prior year to assist with further
research and provide the Board with sufficient data and information
to make decisions on these projects.
Grasvally Chrome Project
An amended Sale Agreement was signed on 3 November 2021 whereby
Sylvania sold its 74% share in Grasvally Chrome Mine (Pty) Ltd to a
100% empowerment company. Sales proceeds of ZAR100.0 million ($6.7
million), payable in fifteen equal quarterly instalments, will
become payable after completion of certain conditions precedent
being fulfilled, including an application for ministerial consent
for the sale in terms of section 11 of the Mineral and Petroleum
Resources Development Act. This has been submitted to the
Department of Mineral Resources and Energy and the Company awaits
the outcome.
Volspruit Platinum Project
The fieldwork for the specialist studies in aid of updating the
Environmental Impact Assessment and Water Use License applications
has been completed. The inclusion of these studies and the already
completed detailed design form part of the overall process to
conclude the outstanding mandated authorisations required on the
project.
Based on the findings of the initial mining optimisation phase
of the study, additional metallurgical test work was commissioned,
which included tests aimed at increasing the payability of the PGM
concentrate expected to be produced by the project. The Company
expects the report of the current test work in Q4 FY2022.
Northern Limb Projects
The Company employed specialist consultants to assist in
evaluating the Northern Limb resources and to explore the economic
potential of the deposits on the Hacra and Aurora properties. This
study is aimed at improving the resource classification and
updating the resource model and included infill drilling and
additional assaying. The drilling has now been completed on both
areas and the geological logging, sampling and assaying of the
drilled core is currently in progress. The updated resource model
will then be subjected to a scoping level mining study to evaluate
a new business case for the area of the Mining Right with the final
study reports expected during Q1 FY2023.
D. CORPORATE ACTIVITIES
Dividend Payment
On 3 December 2021, the Board paid a dividend for FY2021
totalling $14.6 million, equating to 4p per Ordinary Share, to
shareholders on the register on the record date of 29 October
2021.
In addition to the FY2021 dividend paid, the Board has approved
a Windfall Dividend of 2.25p per Ordinary Share for the calendar
year 2021, payable on 8 April 2022. Payment of the Windfall
Dividend will be made to shareholders on the register at the close
of business on 4 March 2022 and the ex-dividend date is 3 March
2022.
Transactions in Own Shares
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 certain PDMRs and employees, and an
additional 806,580 shares were bought back from various employees.
All shares awarded came from Treasury.
Accordingly, at the end of the period the Company's issued share
capital was 286,155,657 Ordinary Shares, of which a total of
13,170,222 Ordinary Shares were held in Treasury, which includes
7,500,000 Ordinary Shares held for the Employee Dividend
Entitlement Plan. Therefore, the total number of Ordinary Shares
with voting rights was 272,985,435.
The Company will continue to evaluate further share buy backs as
the opportunity arises as part of its commitment to returning value
to shareholders. Any shares acquired will be cancelled.
Directorate Changes
Sylvania 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.
During the period the Company was notified that one of the
Company's Independent, Non-executive Directors, Adrian Reynolds,
purchased 20,000 Ordinary Shares, representing 0.007% of the total
number of Ordinary Shares with voting rights in the Company, from
the market.
E. ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
Based on the UN Sustainable Development Goals ("UNSDGs"), the
Company published its "Pathway to ESG" report in the FY2021 Annual
Report. The following update aligns Sylvania's ESG risks,
opportunities and exposure areas to the Company's values, guiding
principles and ESG goals in order to provide progress and
performance feedback. The main driver over the period has been the
Company's adoption of ESG reporting, including defining key
performance indicators ("KPIs)", establishing baselines and
determining data gaps.
Environment
Waste and pollution management
The continuous reworking of mineral waste dumps and the
re-depositing of tailings on the same or enhanced storage
facilities has an inherent positive impact on the environment. Not
only is the volume of mineral waste reduced (through the
abstraction of Chrome and PGMs) but also the potential pollution
from seepage or tailings spillages from tailings storage facilities
("TSF") are minimalised. Nevertheless, a Rehabilitation Fund has
been established by the Company which is reviewed periodically and
contributions made as required.
The Company is currently busy with the construction of three new
and improved tailings facilities, at Lesedi, Mooinooi and
Doornbosch, which comply with the highest international standards
and are designed to both reduce the impact of the mine tailings on
the environment and improve operability.
Non-mineral waste is separated at source in terms of general,
scrap and hazardous waste. Disposal is facilitated through the host
mine's waste management processes. An area for future focus has
been identified which will both improve the quantification of
Sylvania's waste footprint and give formal assurance on legal
disposal.
Carbon transition and related risks
The main focus areas pertaining to the Company's carbon
transition relate to opportunities linked to energy optimisation,
as well as investigation into renewable energy. Sylvania's current
emissions calculations, which are below acceptable thresholds, are
based on Scope 1 and Scope 2 emission sources from the national
power utility, diesel generation and diesel used. Scope 1 and Scope
2 sources are 'direct emissions from owned or controlled sources'
and 'indirect emissions from the generation of purchased
electricity, steam, heating and cooling consumed by the company'
respectively. Scope 3 includes all other indirect emissions that
occur in a company's value chain.
The intention is that strategies focussed on reduction in energy
intensity through optimisation, reduction and replacement of Scope
1 and Scope 2 energy sources with alternatives will be considered,
and finally, the recovery of emissions will be implemented. During
the reporting period, the following actions towards realisation of
emissions reduction include, but are not limited to:
-- Power factor correction installed on 83% of the SDO plants, thereby reducing KVA feeding from the host mine;
-- Newer lighting installations utilising only low-energy LED, with the systematic replacement of older lighting to
this efficient technology; and
-- Studies have been initiated at two plants to assess the suitability of possible photovoltaic (PV) plants to
supplement the daily power usage reverting back to supply from the national power utility.
For the Sylvania Group, greenhouse gases ("GHG") (diesel related
only) emitted in HY1 FY2022 for GHG Protocol Scope 1 emissions are
approximately 1,121.45 ([1]) tCO2e ([2]) (tons of carbon dioxide
equivalent). These figures have not been verified independently at
the time of release and are included as a guide.
Regarding the existing energy consumption, projects and
initiatives, Sylvania is in the process of determining the
following:
-- Average annual greenhouse gas emissions in the form of a carbon equivalent figure (tC02e);
-- Identification of greenhouse gases (e.g.: carbon dioxide, methane, nitrous oxide, F-gases), and formalisation of
reporting of metric tons of carbon dioxide equivalent (tCO2e) for GHG Protocol Scope 1 and Scope 2 emissions;
-- Estimate and report on the appropriate material upstream and downstream (GHG Protocol Scope 3) emissions;
-- GHG Intensity Industry Average (tC02e/ton product); and
-- Ensuring that Sylvania proactively understands its carbon footprint and is aligned with international trends and
acceptable standards for carbon related disclosures (2021 DEFRA Guidelines GHG Conversion Factors for Company
Reporting).
Carbon and energy related aspects:
Indicator FY21 (Total) FY21 (Monthly HY1 FY22 HY1 FY22 Comments
average) (Total) (Monthly
average)
Significant reduction
due to Tweefontein
and Lannex generators
Diesel consumption only required for
in litres by operation power failures and
of buildings (Generators) 320,000.00 26,667.70 13,515.86 2,252.60 not for co-generation.
-------------- -------------- -------------- ------------- ------------------------
Electricity purchased
from host mine Slight increase
(Buildings Owned to electrical upgrades
or Controlled) at Tweefontein and
in kwh 85,877,892.00 7,156,491.00 43,964,238.00 7,327,373.00 Lannex.
-------------- -------------- -------------- ------------- ------------------------
Scope 1: GHG emissions 1,121.45 168.87
(tC02e) ([3]) 93.46 ([4]) 28.16
-------------- -------------- -------------- ------------- ------------------------
Scope 2: GHG emissions 92, 748.12
(tC02e) ([5]) 7, 729.01 47,481.38 7,913.6
-------------- -------------- -------------- ------------- ------------------------
Water management
Water management is an ongoing focus area and current monitoring
data is being reworked and developed to include a breakdown into
the various sources, through the installation of additional water
monitors to provide more detailed information. This will aid in the
refinement of effective water management strategies.
Social
Community, customer and stakeholder relationship
Engagement and communication with employees and stakeholders are
driven through the Employment Engagement Forums ("EEFs") as well as
the Community Liaison Officers ("CLOs"). Both mechanisms have been
effective in bringing the Company's attention to the needs and
expectations of stakeholders.
Furthermore, funding has been allocated for community
learnership programmes in both the Eastern and Western regions,
with 41.5% of this budget already spent in the period. A portion of
the Corporate Social Investment ("CSI") budget was spent on various
community projects, focussing on schools, feeding schemes,
entrepreneurial development, as well as awareness programs within
the community.
Demographics and diversity
The Company supports the strategic drive for Women in Mining and
the workplace profile of women increased 0.6% in the period.
Employment of members from local communities has grown 27% in the
six months to 31 December 2021.
Human Capital
Aligned with the commitments of the Annual Training Plan,
several training and development programmes were facilitated by the
human resources functions of the Company. These form part of the
development process of individuals and is reported on as part of
the Workplace Skills Plan submitted to the Mining Qualification
Authority annually.
Health and safety performance
During HY1 FY2022, no fatal incidents occurred, and both the
Lost Time Injury Frequency Rate ("LTIFR") and Total Recordable
Injury Frequency Rate ("TRIFR") are given in the table below.
Furthermore, no occupational illnesses were recorded in this
reporting period.
Safety, health and environmental incident statistics
Indicators FY21 HY1 FY22
Total Recordable Injury Frequency Rate 1,230 1,064
------ ---------
Lost Time Injury Frequency Rate 0,246 0,213
------ ---------
Fatal Injury Frequency Rate 0,00 0,00
------ ---------
First Aid Cases (FAC) 4 2
------ ---------
Medical treatment cases (MTC) 4 2
------ ---------
Lost time injuries (LTI's) 2 1
------ ---------
Reportable injuries 1 1
------ ---------
Occupational Illness/ disease 1 0
------ ---------
COVID-19
Although the numbers of COVID-19 positive cases reported by the
Company increased to 138 during the period, the impact and severity
has reduced with no COVID-19 related deaths being reported in HY1
FY2022. This is attributed to vaccination of staff, growing
immunity through infection and compliance with other COVID-19
related controls. Operational disruptions due to the COVID-19
pandemic during the period were minimal.
The Company launched an EAP as part of employee wellness to
assist with the direct and indirect impacts of the COVID-19
pandemic on the work force. The EAP is detailed in the COVID-19
impacts section of this report.
Governance
Policy and Guidelines
Sylvania is regularly updating and improving its business and
strategic policies. These are aligned with the expectation of
stakeholders and are focussed on legal compliance and the
management of business risks, providing the required teams needed
to drive the implementation of the commitments made within its
policies.
In terms of compliance with the Mine Health and Safety Act,
1996, no Section 54 or 55 instructions were issued by the
Department of Mineral Resource and Energy ("DMRE") regarding any
non-compliance issues noted at operational levels.
Economic contribution
Sylvania's economic contribution to society is detailed
throughout this Half Year Report which highlights aspects linked
to:
1. Total SA procurement including procurement from local/ host communities
2. Employee and related payments including:
-- Salaries and wages
-- Contributions and employees' tax paid
-- Employee dividend entitlement plan
3. Regulatory payments to South African Revenue Services including:
-- Income tax
-- Value added tax
-- Dividend withholding tax
-- Mineral royalty tax
Economic Contributions
HY1 FY2022 (ZAR) HY2 FY2021 (ZAR) HY1 FY2021 (ZAR)
-------------------------------------------------
Total local procurement 377,274,770 317,966,910 274,482,322
----------------- ---------------------- -----------------
Employee and related payments 155,033,129 145,677,982 137,697,265
----------------- ---------------------- -----------------
Income tax, mineral royalty tax and other taxes 328,555,342 481,934,682 215,210,996
----------------- ---------------------- -----------------
TOTAL 860,863,241 945,579,574 627,390,583
----------------- ---------------------- -----------------
TOTAL (USD) 53,985,595 59,298,241 39,344,291
----------------- ---------------------- -----------------
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
/ Ed Phillips
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 and a chrome
prospect in the Northern Limb of the Bushveld Complex.
For more information visit https://www.sylvaniaplatinum.com/
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
--------------------------------------------------------------------
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 engiine
--------------------------------------------------------------------
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
--------------------------------------------------------------------
[1] Based on 414,503.60 litres diesel consumed and 2021 DEFRA
Guidelines GHG Conversion Factors for Diesel.
[2] This is based on the diesel consumption of the fleet and
diesel generators for H1-YTD and according to the conversion factor
as stipulated by 2021 DEFRA Guidelines GHG Conversion Factors for
Company Reporting - Fuel (Diesel (100% mineral diesel)
[3] Based on 414, 503.60 litres diesel consumed and 2021 DEFRA
Guidelines GHG Conversion Factors for Diesel.
[4] Based on 414, 503.60 litres diesel consumed and 2021 DEFRA
Guidelines GHG Conversion Factors for Diesel.
[5] Based on a conversion factor of 1.08 based on the Eskom
Integrated Report, 2021.
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END
IR SEMSMFEESELE
(END) Dow Jones Newswires
February 21, 2022 02:00 ET (07:00 GMT)
Grafico Azioni Sylvania Platinum (AQSE:SLP.GB)
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