LONDON (ShareCast) - (Sharecast News) - Sylvania Platinum release its results for the quarter ended 31 December on Friday, reporting that Sylvania Dump Operations (SDO) declared 19,206 platinum group metals ounces in the period, down from 20,797 ounces in the first quarter.
The AIM-traded firm said that brought the first half declared ounces to 40,003 ounces, which was a new half-year record.

Net revenue totalled $27.9m for the second quarter, down from $31.2m in the first quarter.

Sylvnia said SDO and group cash costs decreased 7% to ZAR 7,485 ($510) per ounce and ZAR 7,808 ($532( per ounce, respectively.

Cash balances stood at $33.8m at period end, up from $26.6m at the end of the first quarter, after dividends and provisional income tax paid during the quarter.

Looking at its challenges, Sylvania said power interruptions due to Eskom load-shedding and quality of supply resulted in downtime at operations.

Water management was still a focus area at some operations, the board said, despite intermittent rainfall which provided "some relief" during the period.

The firm said the currently-depressed chrome market was putting pressure on chrome miners, and could potentially impact on fresh feed sources at some operations, but it added that operations were able to substitute feed with available dump material in order to run plants at capacity.

Sylvania also highlighted some opportunities, saying that the Current platinum group metals basket price was contributing to "higher than planned" profits and cash balance.

It added that post-commissioning evaluation of platinum group metals grade and recovery optimisation projects, incorporating proprietary processing modifications, at Millsell, Doornbosch and Tweefontein during the past year, had identified an opportunity to roll that circuit modification to the Mooinooi and Lannex plants in order to improve the upgrading and recovery of platinum group metals.

"The group, through the continued diligence of our management and operations teams, has once again produced a strong result in spite of challenges relating to water and power which are both outside of our control," said chief executive officer Terry McConnachie.

"Despite downtime and consequential chokes to the processing plants, our teams were able to explore and implement mitigatory measures and produce a solid 19,206 4E PGM ounces for the quarter.

"Historically, the second quarter is known to present challenges in terms of a dip in production due to the host mines' shutdown over the festive period, however, due to careful planning and controls, the SDO were able to perform very well."

McConnachie said the recent communication of potential retrenchments at some of the company's host mines had necessitated that it reviewed our feed strategy in terms of alternative feed sources to compensate for the potential loss of any current arisings or run-of-mine material to its plants.

"We have been in similar situations before and I believe that through committed engagement with our host mines, and based on flexibility between current arisings and dump material on our operations, we will be able to manage the potential change in ratio of feed sources effectively to minimise or prevent the potential impact of the host mines downsizing.

"The group has reported a cash balance of $33.8m, following the $2.9m dividend payout in November, which was aided by an increase in the platinum group metals basket price."

McConnachie said the group was continuing to maintain a "good" cash holding, which would enable the funding of any further capital expenditure.

"The performance in the first half of the year has established a robust production base to build on and sets us on track to deliver on our targets in 2020."

At 1409 GMT, shares in Sylvania Platinum were down 8.05% at 40p.

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