Annual Financial Report

Sylvania Platinum Limited

07 September 2023

 

                             _____________________________________________________________________________________________________________________________

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.

7 September 2023

Sylvania Platinum Limited

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

Final Results to 30 June 2023

Sylvania (AIM: SLP) the platinum group metals ("PGM") producer and developer, with assets in South Africa, is pleased to announce its final results for the year ended 30 June 2023. Unless otherwise stated, the consolidated financial information contained in this report is presented in United States Dollars ("USD").

Operational Highlights

·      Sylvania Dump Operations ("SDO") exceeded target production by delivering 75,469 4E PGM ounces for the year (FY2022: 67,053 4E PGM ounces);

·      Run of Mine ("ROM") grades received from the host mine at Mooinooi increased significantly over the year contributing to additional ounce production;

·      Successful commissioning of Tweefontein MF2 improved metal recoveries;

·      Optimisation of blending improved grade, recovery and ounce production, especially at the Eastern operations; and

·      Pilot-scale work on pelletizer project completed; the Company is currently engaging with potential industry partners to assess the commercial viability of the technology.

Financial Highlights

·      Net revenue generated for the period totalled $130.2 million (FY2022: $152.0 million);

·      Group EBITDA of $66.0 million (FY2022: $82.8 million);

·      Net profit of $45.4 million (FY2022: $56.2 million);

·      New Dividend Policy approved by the Board and effective from 1 July 2022;

·      Interim dividend of three pence per Ordinary Share declared by the Board and paid in April 2023;

·      Final cash dividend of five pence per Ordinary Share declared by the Board, maintaining an annual eight pence per Ordinary Share dividend for FY2023 (FY2022: eight pence per Ordinary Share);

·      Group cash balance of $124.2 million (excluding $0.8 million restricted cash held as guarantees) with no debt and no pipeline financing; and

·      Bought back a total of 4.8 million Ordinary Shares during the year at an average price of 81.5 pence per share, equating to $4.9 million in aggregate.

ESG Highlights

·      Doornbosch achieved 11-years Lost-Time Injury ("LTI") free in June 2023;

·      New initiatives relating to improved water management undertaken at the Company's operations during the period and a Dynamic Water Balance developed for each plant;

·      24 local community members took part in this year's training and development programme, 11 of whom are women;

·      Support for three ongoing internships and eight internal learnerships, plus 12 external bursaries maintained, and Community Based Employee Training provided to 10 employees; and

·      No occupational illnesses were recorded in FY2023.

Outlook

·      Re-mining of Dam 6A at the Mooinooi Plant has commenced with the focus on optimising the blend to ensure the planned grade profile is achieved;

·      Continuous operational performance improvements relating to the optimisation of feed sources, throughput, recoveries, and cost saving initiatives planned;

·      The updated Mineral Resource Estimate ("MRE") at Volspruit is expected to be completed during Q1 FY2024, and the Preliminary Economic Assessment ("PEA") for the entire project is expected during Q3 FY2024;

·      The Group maintains strong cash reserves to allow funding of expansion and process optimisation capital, and upgrading of the Group's exploration and evaluation assets with the potential to return value to shareholders;

·      The commissioning of the Lannex MF2 flotation circuit to commence in Q1 FY2024, which will further improve PGM recovery efficiencies; and

·      Annual production target of 74,000 to 75,000 4E PGM ounces for FY2024.

Post Period End

·      On 14 July 2023, the Company announced that 3,624,275 Ordinary Shares held in Treasury had been cancelled; and

·      On 9 August 2023, the Company announced that its wholly owned South African subsidiary, Sylvania Metals (Pty) Limited ("Sylvania Metals"), entered into an unincorporated Joint Venture Agreement ("JV") with Limberg Mining Company (Pty) Limited ("LMC"), a subsidiary of ChromTech Mining Company (Pty) Limited ("ChromTech"), the Thaba Joint Venture ("Thaba JV").

Share Buyback

·      The Company will reinstate the Share Buyback programme initiated in May 2023 and will purchase on market Ordinary US$0.01 Shares ("Ordinary Shares") of the Company's issued share capital up to a maximum of $6.4 million. This is the balance of the $10.0 million originally allocated to the Share Buyback.

Commenting on the results, Sylvania's CEO Jaco Prinsloo said:

"I am pleased with another strong production performance by the SDO in delivering 75,469 4E PGM ounces for the period, exceeding our original forecast production. This performance, once again, emphasises our teams' impeccable work ethic, a big thank you to all of you. Keep up the great work!

"The performance was achieved as a result of several factors including the Tweefontein MF2 circuit optimisation following commissioning in Q2 FY2023 which continues to contribute to improved recoveries. The Lesedi MF2 plant was fully commissioned with optimisation of the fine grinding and flotation circuit resulting in improved performance, which, together with improved feed stability and flotation performance at Mooinooi, has contributed towards the overall improved recovery performance. Focus has remained on increasing runtime and improving operational stability and has contributed to improved efficiencies at all sites.

"With regards to safety, our Doornbosch plant achieved 11-years LTI-free in June 2023, which is a major milestone for the operation and is testament to Sylvania's high safety standards. Regrettably, during FY2023, there were two LTIs recorded, an ankle and a knee sprain. Fortunately, both employees recovered well. We have increased our efforts to instil a safety-first mindset by launching the 'Make It Personal' safety campaign during H2 FY2023, designed to improve and maintain personal safety across all our operations.

"Commodity prices remained a challenge with declines of around 28% in the average basket price received for the period. This negatively impacted our overall financial results for the year; however, we remain optimistic about price improvements.

"Rising input costs are a reality for the Group, and for the broader sector, therefore we continue to sustain a pragmatic cash management policy with disciplined capital allocation and control, as well as production cost control. This approach has ensured that the Company has the necessary cash reserves to cover working capital for the pipeline period, finance capital projects, fund growth and exploration, and mitigate any potential future difficulties it may have to deal with. Nonetheless, despite these challenges, I am pleased to report that the Board has declared a final cash dividend of five pence per Ordinary Share for FY2023, resulting in a combined annual dividend of eight pence for the financial year.

"The announcement of the Thaba JV with LMC post year-end represents a major step forward in Sylvania's growth strategy and is a significant step forward for Sylvania Metals in expanding our operations and leveraging the Group's expertise in the recovery of chrome and PGM concentrates. The Thaba JV combines the strengths and expertise of both companies in the mining and processing industry. Sylvania Metals has a proven record in the recovery, sale and distribution of PGMs, while LMC contributes ChromTech's extensive experience of chrome operations, with particular expertise in fine chrome beneficiation.

"I am enthusiastic about the year ahead and believe our operations will continue to deliver a strong production performance and, as a consequence, have set an annual production target of 74,000 to 75,000 4E PGM ounces for FY2024."

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 12 months under review, the average ZAR:USD exchange rate was ZAR17.75:$1 and the spot exchange rate was ZAR18.89:$1.

Operational and Financial Summary

Production					Unit	% Change	FY 2023	FY 2022
Plant Feed					T	9%	2,615,994	2,393,355
Feed Head Grade					g/t	-4%	1.89	1.96
PGM Plant Feed Tons					T	12%	1,372,936	1,221,687
PGM Plant Feed Grade					g/t	-5%	3.06	3.21
PGM Plant Recovery					%	5%	55.86%	53.24%
Total 4E PGMs					Oz	13%	75,469	67,053
Total 6E PGMs					Oz	12%	95,965	85,659

USD			Audited			ZAR
FY 2022	FY 2023	% Change	Unit		Unit	% Change	FY 2023	FY 2022
Financials
2,890	2,086	-28%	$/oz	Average 4E Gross Basket Price1	R/oz	-16%	37,035	43,964
142,489	116,575	-18%	$'000	Revenue (4E)	R'000	-5%	2,069,339	2,167,753
12,368	13,312	8%	$'000	Revenue (by-products including base metals)	R'000	26%	236,295	188,154
-2,912	309	111%	$'000	Sales Adjustments	R'000	112%	5,491	-44,299
151,944	130,196	-14%	$'000	Net Revenue	R'000	0%	2,311,125	2,311,608
48,039	48,277	0%	$'000	Direct Operating costs	R'000	17%	856,920	730,842
17,426	13,492	-23%	$'000	Indirect Operating costs	R'000	-10%	239,477	265,115
2,860	2,790	-2%	$'000	General and Administrative costs	R'000	14%	49,523	43,510
82,768	65,964	-20%	$'000	Group EBITDA4	R'000	-7%	1,170,861	1,259,195
1,254	5,203	315%	$'000	Net Interest	R'000	384%	92,353	19,078
56,151	45,352	-19%	$'000	Net Profit4	R'000	-6%	804,998	854,252
16,405	14,491	-12%	$'000	Capital Expenditure	R'000	3%	257,215	249,579
121,282	124,160	2%	$'000	Cash Balance5	R'000	18%	2,345,382	1,986,185
				Ave R/$ rate	R/$	17%	17.75	15.21
				Spot R/$ rate	R/$	15%	18.89	16.38
Unit Cost/Efficiencies
716	640	-11%	$/oz	SDO Cash Cost per 4E PGM oz3	R/oz	4%	11,355	10,899
561	503	-10%	$/oz	SDO Cash Cost per 6E PGM oz3	R/oz	5%	8,930	8,532
897	771	-14%	$/oz	Group Cash Cost Per 4E PGM oz3	R/oz	0%	13,685	13,643
702	606	-14%	$/oz	Group Cash Cost Per 6E PGM oz3	R/oz	1%	10,757	10,679
1,052	874	-17%	$/oz	All-in Sustaining Cost (4E)	R/oz	-3%	15,509	16,008
1,256	1,033	-18%	$/oz	All-in Cost (4E)	R/oz	-4%	18,345	19,109

¹ The gross basket price in the table is the average gross basket for the year, used for revenue recognition of ounces delivered over FY2023, before penalties/smelting costs and applying the contractual payability.

² Revenue (6E) for FY2023, before adjustments is $129.1 million (6E prill split is Pt 52%, Pd 17%, Rh 9%, Au 0.2%, Ru 17%, Ir 5%). 

³ The cash costs include operating costs and exclude indirect cost for example royalty tax and EDEP payments.

⁴The net profit and Group EBITDA include the profit on the sale of Grasvally Chrome (Pty) Ltd of $1.3 million.

⁵An additional $823,144 restricted cash is held which serves as guarantees to Eskom and the DMRE.

A. OPERATIONAL OVERVIEW

Health, safety and environment

During the period under review, the operations continued to focus on health, safety and environmental compliance. The Group is proud to report that there were no significant health or environmental incidents reported during the year and that it remains fatality-free since inception in 2006.

The Doornbosch operation achieved 11 years LTI-free on 26 June 2023, which is a remarkable achievement by industry and global standards, and management are exceptionally proud of the Doornbosch team. Lannex achieved three years LTI-free during the period and Millsell and Tweefontein are now both LTI-free for more than a year. Regrettably, there was one LTI at the Mooinooi operation (an ankle sprain) and one LTI at the Lesedi operation (a knee sprain) during Q3 FY2023.

The Company continues to target zero harm to employees and every injury that is recorded is fully investigated and corrective measures are implemented to prevent any future reoccurrences. By working together with management and all our employees, we continuously strive to maintain high safety standards and a safe working environment at all operating sites, with each plant continuing to operate in accordance with legislated safety and occupational regulations pertaining to the industry. Moreover, we launched the 'Make It Personal' campaign, which is designed to improve and maintain personal safety on site. We believe that by making safety a personal matter that everyone is responsible for, it will become second nature for all. This will assist to ensure all workers make it home safely, every day, in line with Sylvania's goal of achieving zero harm.

Operational performance

The SDO surpassed the Company's original guidance for the financial year by delivering an annual production of 75,469 4E PGM ounces, which was 13% higher than the prior financial year.

PGM plant feed tons were 12% higher than the previous period owing primarily to the improvement of feed stability and running time at Lesedi, following the tailings related disruptions experienced during FY2022, and optimisation of feed stability and feed sources received from the host mines at the other operations. PGM feed grades decreased by 5% year-on-year, impacted by a lower grade feed source being mined at Lesedi, while recovery efficiencies increased by 5%. This significant recovery improvement was enabled by successful optimisation and commissioning of the Lesedi MF2 and Tweefontein MF2 circuits, respectively during the year, while Mooinooi also saw improved performance as flotation stability and ROM quality improved.

The SDO cash cost per 4E PGM ounce increased by 4% in ZAR (the functional currency) from ZAR10,899/ounce to ZAR11,355/ounce while the USD cash cost decreased 11% to $640/ounce against $716/ounce in the prior year, due to currency movements. The increase in local currency costs was again primarily driven by higher electricity costs and reagent price increases. The effects of rising inflation worldwide and international instability continues to directly impact the cost of reagents, fuel and transport, which all cause operating costs to increase.

Operational focus areas

Based on the success of the roll-out of our secondary milling and flotation programme, Lannex will be the last of our SDO plants where a MF2 circuit will be commissioned, and we expect to complete this by the end of Q1 FY2024. This will further improve PGM recovery efficiencies and enable optimisation of PGM concentrate quality.                                                  

PGM concentrate quality remains a focus area with the potential to improve smelter payability, as both concentrate grade and metal recoveries contribute positively towards the revenue stream of the Group. We are also evaluating a filtration plant to convert to dry filtered concentrate transport instead of the current slurry tankers, which would assist in reducing concentrate transport costs and remediate handling challenges at off-take smelters.

Unfortunately, the Company again experienced localised power supply constraints to operations during the year as a result of load curtailment by the national power utility, as well as vandalism and cable theft at its substations, which especially impacted on production performance at the Lesedi operation that experienced over 300 hours downtime during FY2023. Fortunately, no other operations were materially affected by load reduction. The procurement, installation and commissioning of a back-up generator for Lesedi is expected to be completed by the end of Q1 FY2024. This forms part of the power mitigation strategy.

Capital Projects

Capital expenditure for the year increased 3% to ZAR257.2 million ($14.5 million) from ZAR249.6 million ($16.4 million) in the 2022 financial year in line with the Group's capital project strategy. Capital expenditure for the year was mainly incurred on the construction of the Lannex and Tweefontein MF2 flotation circuits of ZAR94.1 million ($5.3 million) and ZAR46.2 million ($2.6 million) on various tailings deposition facilities.

The Lannex MF2 project was executed during the year and commissioning of the flotation circuit has commenced in Q1 FY2024 with the fine grinding circuit commissioning to commence in Q3 FY2024. Progressive improvement in recoveries is expected at Lannex throughout the year.

The procurement and installation of the back-up generators for the Lesedi and Millsell operations are on track to be commissioned during early FY2024 in order to reduce the impact of power interruptions caused by instability of the national and provincial supply grids. While the Company is fully committed to reducing its carbon footprint in line with its ESG objectives, standalone emergency backup plants operating fully on renewable technologies are still not currently a viable option for the operations. However, these will be introduced in future, where feasible, to lower diesel consumption and boost energy capacity during peak day time running hours.

Approximately ZAR20.2 million ($1.1 million) was spent during FY2023, with a further ZAR15.9 million ($0.9 million) planned for FY2024 for the required expansion of the Company's tailing facilities. This is to ensure integrity and capacity at the tailings deposition facilities, cater for remaining sources that need to be processed at the operations and extend operational life at selected operations.

As part of its commitment to further improve the viability of its exploration projects at the Volspruit and Far Northern Limb projects, the Company anticipates spending approximately ZAR9.0 million ($0.5 million) during FY2024 on the required regulatory Social and Labour Plan ("SLP") spend. More work is currently being carried out through assays and testwork to improve the fundamental parameters that underpin the projects' viability. The outcome of these will be considered before further investment in resource optimisation and feasibility studies is made.

Sylvania partnered with a 'binding technology' player to co-develop a novel chemical bonding process. The aim is to create a cold-bonded chromite ore pellet suitable for ferrochrome ("FeCr") smelters but with the added potential to markedly cut the smelters' electrical energy consumption per ton of FeCr produced. In exchange for funding development costs in the venture, Sylvania holds the licence for any future chrome pellet production in South Africa. This research and development project is expected to yield positive results and may enable the Company to diversify into other areas and commodities. The pelletizer project has progressed well, and pilot-scale work has been completed. Additionally, potential industry partners are being engaged with to assess the commercial viability of the technology.

Post-period end, on 9 August 2023, Sylvania announced that its wholly owned South African subsidiary, Sylvania Metals has entered into an unincorporated JV with LMC, a subsidiary of ChromTech, the Thaba JV. The Thaba JV will process PGM and chrome ores from historical tailings dumps and current arisings from the Limberg Chrome Mine, located on the northern part of the Western Limb of the Bushveld Complex, South Africa. The Thaba JV will add attributable production of approximately 6,500 4E PGM ounces and introduce 200,000 tons of chromite concentrate to Sylvania Metals' existing annual production profile.  Construction is expected to commence in November 2023, with orders for long-lead time equipment being placed from the end of September 2023.

Outlook

Based on the very robust performance during FY2023 and the continued drive for operational enhancements, particularly in optimising feed sources, throughput, recoveries, and cost-saving initiatives, I am expecting another strong operational performance during FY2024. As the optimisation of the Tweefontein MF2 circuit continues and Lannex MF2 circuit comes online during the year, it will assist to mitigate the impact of slightly lower PGM feed grades at some operations, and Sylvania will therefore be able to maintain an annual production guidance between 74,000 to 75,000 4E PGM ounces for the financial year.

B. FINANCIAL OVERVIEW

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
		2023	2022
	Note(s)	$	$
Revenue	1	130,196,100	151,944,273
Cost of sales		(61,290,716)	(61,823,181)
Royalties tax	2	(4,903,977)	(6,920,404)
Gross profit		64,001,407	83,200,688
Other income	3	1,792,134	82,132
Other expenses	4	(4,020,070)	(3,608,140)
Operating profit before net finance costs and income tax expense		61,773,471	79,674,680
Finance income		5,780,364	1,711,371
Finance costs		(576,958)	(457,363)
Profit before income tax expense		66,976,877	80,928,688
Income tax expense	5	(21,625,108)	(24,777,844)
Net profit for the period		45,351,769	56,150,844
Items that are or may be subsequently reclassified to profit and loss:
Foreign operations - foreign currency translation differences		(17,183,248)	(17,747,559)
Total other comprehensive loss (net of tax)		(17,183,248)	(17,747,559)
Total comprehensive income for the year		28,168,521	38,403,285
		Cents	Cents
Earnings per share attributable to the ordinary equity holders of the Company:
Basic earnings per share		17.01	20.62
Diluted earnings per share		16.95	20.40

1.     Revenue is generated from the sale of PGM ounces produced at the six retreatment plants, net of pipeline sales adjustments, penalties and smelting charges. Revenue excludes profit/loss on foreign exchange.

2.     Royalty tax was paid at a rate of 5.6% on attributable platinum ounces and decreased from the prior reporting period due to the lower revenue.

3.     Other income includes the profit on the sale of Grasvally Chrome (Pty) Ltd.

4.     Other expenses relate to corporate activities and include consulting fees, travel cost, audit fees, insurance, forex profit/(loss) on revenue, Directors' fees, share based payments and other administrative costs.

5.     Income tax expense include current tax, deferred tax and dividend withholding tax.

The average gross basket price for PGMs in the financial year was $2,086/ounce - a 28% decrease on the previous year's basket price of $2,890/ounce. The decrease in the overall PGM basket price was primarily due to a circa 40% decrease in rhodium and palladium prices.

Revenue on 4E PGM ounces delivered decreased by 18% in dollar terms to $116.6 million year-on-year (FY2022: $142.5 million) with revenue from base metals and by-products contributing $13.3 million to the total revenue (FY2022: $12.4 million). Net revenue, after adjustments for ounces delivered in the prior year but invoiced in FY2023, decreased 14% on the previous year's $151.9 million to $130.2 million. The decrease in revenue is as a result of the 28% drop in the basket price, mitigated by the increase in production.

The operational cost of sales is incurred in ZAR and represents the direct and indirect costs of producing the PGM concentrate and amounted to ZAR1.1 billion for the reporting period compared to ZAR996.0 million for the period ended 30 June 2022. The main cost contributors being employee costs of ZAR354.0 million (FY2022: ZAR300.6 million), reagents and milling costs of ZAR114.4 million (FY2022: ZAR81.1 million), and electricity costs of ZAR135.3 million (FY2022: ZAR113.4 million). In addition to these the Company paid mineral royalty tax of ZAR87.1 million (FY2022: ZAR105.3 million). The decrease in mineral royalty tax is directly related to the decrease in net revenue and earnings year-on-year. 

Group cash costs decreased by 14% year-on-year from $897/ounce (ZAR13,643/ounce) to $771/ounce (ZAR13,685/ounce). Direct operating costs increased 17% in ZAR (the functional currency) from ZAR730.8 million to ZAR856.9 million and indirect operating costs decreased 10% from ZAR265.1 million to ZAR239.5 million. The decrease in indirect costs is attributable to the decrease to the annual rehabilitation closure cost provision adjustment of ZAR22.2 million (FY2022: ZAR23.0 million increase) and the reduction in mineral royalty taxes.

All-in sustaining costs ("AISC") decreased by 17% to $874/ounce (ZAR15,509/ounce) from $1,052/ounce (ZAR16,008/ounce). Similarly all-in costs ("AIC") of 4E PGMs decreased by 18% to $1,033/ounce (ZAR18,345/ounce) from $1,256/ounce (ZAR19,109/ounce) recorded in the previous period as a result of the higher ounce production during FY2023.

General and administrative costs, included in the Group cash costs, are incurred in USD, GBP and ZAR and are impacted by exchange rate fluctuations over the reporting period. These costs decreased 2% to $2.8 million from $2.9 million in the reporting currency year-on-year mainly due to the depreciation of the ZAR against the USD in USD terms.

However, in ZAR terms there was a 14% increase to ZAR49.5 million from ZAR43.5 million in FY2022. The increase relates mainly to administrative and shared services employee costs (ZAR2.6 million), professional services and fees (ZAR0.6 million), and overseas travel (ZAR2.8 million).

Group EBITDA decreased 20% year-on-year to $66.0 million (FY2022: $82.8 million), the decrease is mainly attributable to the lower metal prices in FY2023 compared to FY2022.

The Group net profit for the year was $45.4 million (FY2022: $56.2 million).

Interest is earned on surplus cash invested in South Africa and Mauritius at an average interest rate of 5.52% per annum across the portfolio.  Interest is accounted for on various leases that are in place.

The Group paid ZAR317.0 million ($17.9 million) in income tax for the financial year compared to ZAR342.6 million ($22.5 million) for the previous financial year. The decrease is as a result of decreased taxable profits mainly due to the decrease in the metal prices during the year. Income tax is paid in ZAR on taxable profits generated at the South African operations. Dividend withholding tax of $1.8 million (ZAR32.6million) was paid during the year.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 30 JUNE 2023 

		2023	2022
	Note(s)	$	$
Net cash inflow from operating activities	6	62,986,987	69,611,329
Net cash outflow from investing activities	7	(15,568,808)	(17,168,387)
Net cash outflow from financing activities	8	(40,778,927)	(32,748,480)
Net increase in cash and cash equivalents		6,639,252	19,694,462
Effect of exchange fluctuations on cash held		(3,761,823)	(4,547,472)
Cash and cash equivalents at the beginning of reporting period		121,282,425	106,135,435
Cash and cash equivalents at the end of the reporting period		124,159,854	121,282,425

6.     Net cash inflow from operating activities includes net cash inflow from operations of $77,677,868, finance income of $5,093,760 and taxation paid of $19,784,637.

7.     Net cash outflow from investing activities includes payments for property, plant and equipment of $12,869,246, exploration and evaluation assets of $1,621,616 and advances paid to the joint operation and third-party loan of $239,528.

8.     Net cash outflow from financing activities includes dividend payments $35,460,674, payment for share transactions $4,912,348 and the repayment of borrowings and leases $405,905.

The cash balance on 30 June 2023 was $125.0 million (FY2022: $121.3 million), including $0.8 million in financial guarantees (FY2022: $0.9 million) which was reallocated to 'other financial assets' for reporting purposes in FY2023. Cash generated from operations before working capital movements was $64.0 million, with net changes in working capital of $13.7 million mainly due to the movement in trade receivables of $12.1 million. Net finance income amounted to $5.1 million and $19.8 million was paid in income tax for the period, including dividend withholding tax of $1.8 million.

At the corporate level, 3.6 million shares were bought back through the Share Buyback programme for a cost of $3.6 million. In December 2022, the Company cancelled 1.2 million Ordinary Shares held in Treasury and a further 3.6 million Ordinary Shares held in Treasury were cancelled post year-end, on 13 July 2023. Bonus shares of 1.8 million Ordinary Shares were exercised by various persons displaying management responsibilities ("PDMRs") and employees which vested from bonus shares awarded to them in August 2019. 0.7 million of the vested bonus shares were repurchased by the Company to satisfy the tax liabilities of PDMRs and certain employees and a further 0.5 million shares were repurchased from PDMRs and certain employees during September 2022 and May 2023. The Company paid its first cash interim dividend of three pence per Ordinary Share amounting to $9.9 million. Dividends of $35.5 million were paid out and a further $1.0 million was paid through the Employee Dividend Entitlement Plan ("EDEP"). 

The impact of exchange rate fluctuations on cash held at year end was a $3.8 million loss due to the ZAR depreciating against the USD by 15%.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2023
		2023	2022
	Note(s)	$	$
ASSETS
Non-current assets
Exploration and evaluation expenditure		46,464,143	46,087,453
Property, plant and equipment		48,650,611	46,298,978
Other financial assets	9	6,352,325	283,450
Other assets		30,024	-
Deferred tax asset		11,088	-
Total non-current assets		101,508,191	92,669,881
Current assets
Cash and cash equivalents	10	124,159,854	121,282,425
Trade and other receivables	11	35,714,003	52,939,589
Other financial assets	9	1,800,402	1,029,205
Inventories	12	5,103,550	4,258,960
Current tax asset		1,472,104	3,486,226
		168,249,913	182,996,405
Assets held for sale		-	3,771,661
Total current assets		168,249,913	186,768,066
Total assets		269,758,104	279,437,947

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2023 (continued)
		2023	2022
	Note(s)	$	$
EQUITY AND LIABILITIES
Shareholders' equity
Issued capital	13	2,790,000	2,801,557
Reserves	14	17,461,465	38,663,288
Retained profit		219,112,582	209,221,487
Total equity		239,364,047	250,686,332
Non-current liabilities
Borrowings and leases	15	380,833	35,031
Provisions	16	4,040,854	5,936,804
Deferred tax liability		12,118,702	11,614,765
Total non-current liabilities		16,540,389	17,586,600
Current liabilities
Trade and other payables		13,522,940	11,110,196
Borrowings and leases	15	330,729	48,957
		13,853,669	11,159,153
Liabilities directly associated with the assets classified as held for sale		-	5,862
Total current liabilities		13,853,669	11,165,015
Total liabilities		30,394,057	28,751,615
Total liabilities and shareholder's equity		269,758,104	279,437,947

9.     Other financial assets consist of:

a.     Contribution paid to the host mine for rehabilitation purposes.

b.     A loan receivable granted to TS Consortium from Sylvania South Africa (Pty) Ltd. Sylvania South Africa (Pty) Ltd interest in the TS Consortium joint operation increased to 75% in the assets and liabilities during the reporting period.

c.     Two separate loans to Forward Africa Mining Pty (Ltd) secured over the Grasvally Plant and bearing interest at the Johannesburg inter-Bank Offer Rate (JIBOR) + 3%.

10.   The majority of the cash and cash equivalents are held in ZAR and USD.

11.   Trade and other receivables consist mainly of amounts receivable for the sale of PGMs.

12.   Inventory held includes spares and consumables for the SDO.

13.   The total number of issued ordinary shares at 30 June 2023 was 279,000,000 Ordinary Shares of US$0.01 each (including 15,939,737 shares held in Treasury).

14.   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. The decrease relates mainly to the movement in the foreign currency translation of $17,747,559 due to the weakening of the ZAR against the USD.

15.   Borrowings and leases consist of right-of-use lease liabilities.

16.   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

The Group owns various mineral asset development projects on the Northern Limb of the Bushveld Igneous Complex located in South Africa for which it has approved mining rights. In the 2021 financial year, a new phase of targeted studies was commissioned on both the Volspruit and Far Northern Limb PGM opportunities to determine how best to optimise the respective projects.  In October 2022, significant progress was reported in the Exploration Results and Resource Statement and work continued during FY2023 towards unlocking mineral potential on these projects.

Volspruit Project

Historical resource statements for Volspruit reported relatively low in-situ grades and, consequently, low PGM concentrates would have necessitated capital-intensive in-house smelting and refining facilities using unproven technologies. This was one of the primary reasons for the relatively slow progress on this project in earlier years. Based on the improved metal prices in recent years and an improved focus on unlocking the potential and further value from existing assets, the Company initiated a resource optimisation study in 2021.

The primary objective was to improve the ore feed grades for the project to enable the production of a higher grade, saleable PGM concentrate, eliminating the need for expensive and complicated downstream processing infrastructure.

The Statement of Exploration Results, Mineral Resources, and Scoping Study released in October 2022 provided a revised Mineral Resource Estimate ("MRE") defining a narrower mineralised zone of the Volspruit North Body, on which a Preliminary Economic Assessment ("PEA") was completed. The result of this initial study was a ROM/Mill feed grade of 15.7 million tons at a grade of 2.13 g/t 3E and a stripping ratio of 6.7 over the life of mine.

Further optimisation studies were identified during the initial study that have continued into the 2023 financial year. More specifically, these include a MRE of the South Body, and the inclusion of the rhodium into an updated Mineral Resource over the entire project area. Updated geological information has been included in the current study phase through the completion of a detailed relogging programme on the historical core which will be included in the interpretation for the new MRE expected to be completed by the end of Q1 FY2024.

A drilling programme of 10 large diameter drillholes was completed in the third quarter of 2023, from which further metallurgical test work will be completed with the aim of increasing the metal recoveries and providing the required detail for plant and infrastructure design to be carried out during the Preliminary Feasibility Study ("PFS") phase. The metallurgical test work results are expected in the third quarter of FY2024. An updated PEA is expected in the same quarter that will include the updated Mineral Resources of the North and South Bodies with the addition of rhodium.

All capital and operational cost inputs will be updated and revised. With the completion of the updated scoping study, the Company will assess whether to proceed to a PFS and the declaration of a Joint Ore Reserves Committee ("JORC") compliant mineral ore reserve over the entire Volspruit project.

The investment in the permitting requirements necessary for the existing mining right has made steady progress during the 2023 financial year with the updated SLP including revised Local Economic Development projects submitted in the fourth quarter. The Water Use License application for mining and on-site processing operations and the updated Environmental Impact Assessment submissions are expected to occur in the first quarter of FY2024.

Far Northern Limb Projects

The Company currently holds approved mining rights for PGMs and Base Metals for both the Hacra and Aurora project areas. Similarly to Volspruit, historical MREs for the project areas did not provide sufficient ore feed grade to produce a saleable PGM concentrate, and consequently limited progress was made in previous years to develop these projects.

As reported last year, the Company commissioned a targeted review of both the Hacra and Aurora projects through infill drilling projects, relogging programmes and selected optimisation studies, which was reported in the Statement of Exploration Results, Mineral Resources, and Scoping Study released in October of 2022. A proof-of-concept study that included the reinterpretation of the mineralisation at Aurora enabled the identification of the near surface T-zone on the La Pucella farm. This represents approximately 12% of the potential strike length held under mining rights on Aurora.

A JORC-compliant Measured and Indicated Resource of 16.2 million tons (including 10% geological loss) at a grade of 2.63 g/t 3E was declared for this proof-of-concept study over the limited area. Initial economic evaluation of the resource indicated a need for increased resource volume, and further studies during the 2023 financial year were conducted to determine the continuity of mineralisation along the remaining strike length. At the end of FY2023, 30,385 metres (76%) of the 40,230 metres of historical core available within the mining right had been relogged. This programme will be completed in Q2 FY2024. A technical study, to be completed in the third quarter of FY2024, will assess the continuity of the T-Zone mineralisation and allow for targeted resource upgrade drilling programmes to be designed.

As reported in the Statement of Exploration Results, Mineral Resources, and Scoping Study released in October 2022, the Hacra North underground target has provided for some significant drilling results. Work continues to evaluate the underground potential with a technical review of the project expected to be completed during the first quarter of FY2024.

D. CORPORATE ACTIVITIES

Dividend Approval and Payment

The Board declared the payment of a cash dividend for FY2022 of eight pence per Ordinary Share, paid on 2 December 2022. Payment of the dividend was made to shareholders on the register at the close of business on 28 October 2022 and the ex-dividend date was 27 October 2022.

As stated in the FY2022 report the Board committed to review the Company's Dividend Policy and effective 1 July 2022, the new Dividend Policy was instituted. The new Dividend Policy allows for a pay out of a minimum of 40% of adjusted free cash flow for the financial year. Where annual dividends are declared, these will be paid in two tranches with an interim dividend equating to one third of the expected full dividend and the final dividend equating to the remaining unpaid balance of the minimum of 40% of actual adjusted free cash flow. The payment of dividends remains at the discretion of the Board. In accordance with the new Dividend Policy, the Board declared its first interim dividend of three pence per Ordinary Share, which was paid out on 6 April 2023. Payment of the interim dividend was made to shareholders on the register at the close of business on 3 March 2023 and the ex-dividend date was 2 March 2023.

The Board has now declared the payment of a final cash dividend for FY2023 of five pence per Ordinary Share, payable on 1 December 2023, which will bring the combined dividend for FY2023 to eight pence per Ordinary Share. Payment of the final dividend will be made to shareholders on the register at the close of business on 27 October 2023 and the ex-dividend date is 26 October 2023.

Further to the dividends paid to shareholders, in accordance with the Company's EDEP whereby eligible employees receive an equivalent dividend paid on shares bought back by the Company in the market and ring-fenced for the EDEP, a total of ZAR16.9 million ($1.0 million) was paid out during the financial year.

Transactions in Own Shares

Returning capital to shareholders remains a key element of the Company's strategic goals and it will continue to review opportunities to do so, when and wherever possible.

At the commencement of the 2023 financial year, shares in the Company were valued at 88 pence per Ordinary Share and at the close of FY2023, the share price had depreciated 9% to 80 pence per Ordinary Share, largely influenced by the macroeconomic environment and volatile PGM prices. As stated previously, even though a great many of the factors influencing the share price are outside of the Company's control, management always pays close attention and will continue to manage the business in the best way possible to provide maximum value for shareholders.

Options over 1,755,000 Ordinary Shares were exercised by various PDMRs and employees which vested from bonus shares awarded to them in August 2019. All shares awarded came from Treasury. 702,300 of the vested bonus shares were repurchased by the Company to satisfy the tax liabilities of PDMRs and certain employees, and an additional 498,950 shares were bought back from various employees during FY2023.

In May 2023, the Company announced an on-market Share Buyback programme to purchase Ordinary $0.01 Shares of the Company's issued share capital, up to a maximum consideration of $10.0 million. 3.6 million shares were bought back through the programme for a cost of $3.6 million up to 30 June 2023. The Board has taken the decision to reinstate this Share Buyback programme to acquire Ordinary US$0.01 Shares to a maximum consideration of $6.4 million.

On 15 December 2022, 1,155,657 Ordinary Shares held in Treasury were cancelled. Additionally, post financial year-end, on 13 July 2023, a total of 3,624,275 Ordinary Shares held in Treasury were cancelled.

At 30 June, the Company's issued share capital was 279,000,000 Ordinary Shares, of which a total of 15,939,737 Ordinary Shares were held in Treasury. Therefore, the total number of Ordinary Shares with voting rights was 263,060,263.

E. ENVIRONMENT, SOCIAL AND GOVERNANCE ("ESG")

Operating as a values-centric business, sustainability remains at the core of our business operations, forming the bedrock of our comprehensive ESG approach. Sylvania stands resolute in its dedication to fostering a constructive impact on its workforce, the sector, and the communities in which it operates.

Sylvania's ESG journey follows a pathway that began with identifying and activating the drivers of ESG, gathering baseline information on potential material risks to ensure that future targets are based on verifiable information and assumptions. The transition phase included designing an ESG strategy and reporting framework. Finally, ESG was embedded throughout Sylvania's business strategy, identifying and including ESG in the Sylvania strategic risk register. This ensures that mitigation strategies for risks or opportunities linked to ESG elements are prioritised.

The spotlight is increasingly on the mining and processing sector due to potential operational hazards and environmental impacts, affecting both employees and communities. As a mineral re-processor, our Company treats its commitment to the planet and people as seriously as its obligations to customers and shareholders. Sylvania believes that a sustainable industry player fosters diversity and inclusivity among its workforce for their growth, while responsibly lessening its environmental footprint and benefiting local communities. Our strategy aligns with the International Council on Mining and Metals' ("ICMM") principles for sustainable development, harmonizing with the United Nations Sustainable Development Goals ("UNSDGs").

In the current year, our ESG review accentuates climate action, water security, tailings management and rehabilitation for environmental aspects. Socially, it underscores female empowerment, workforce diversity, safety, health, training, community relations, and addressing gender-based violence. Governance-wise, the focus encompasses process, code of conduct, sustainable growth, stakeholder engagement, economic contribution, and resource management. Further details will be outlined in the Company's upcoming report, ESG: Supporting our Strategy.

CONTACT DETAILS

For further information, please contact:
Jaco Prinsloo CEO Lewanne Carminati CFO	[phone]
Nominated Adviser and Broker
Liberum Capital Limited	[phone]
Richard Crawley / Scott Mathieson / Kane Collings
Communications
BlytheRay	[phone]
Tim Blythe / Megan Ray	[e-mail]

CORPORATE INFORMATION

Registered and postal address:	Sylvania Platinum Limited
	Clarendon House
	2 Church Street
	Hamilton HM 11
	Bermuda
SA Operations postal address:	PO Box 976
	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 in the Northern Limb of the Bushveld Complex.

For more information visit https://www.sylvaniaplatinum.com/

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.

ANNEXURE

GLOSSARY OF TERMS FY2023
The following definitions apply throughout the period:
3E PGMs	3E ounces include the precious metal elements Platinum, Palladium and Gold
4E PGMs	4E ounces include the precious metal elements Platinum, Palladium, Rhodium and Gold
6E PGMs	6E ounces include the 4E elements plus additional Iridium and Ruthenium
AGM	Annual General Meeting
AIM	Alternative Investment Market of the London Stock Exchange
All-in sustaining cost	Production costs plus all costs relating to sustaining current production and sustaining capital expenditure.
All-in cost	All-in sustaining cost plus non-sustaining and expansion capital expenditure
BCM	Bank cubic metres
CLOs	Community Liaison Officers
Current arisings	Fresh chrome tails from current operating host mines processing 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
EDEP	Employee Dividend Entitlement Programme
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
GISTM	Global Industry Standard on Tailings Management
GRI	Global Reporting Initiative
JORC	Joint Ore Reserves Committee
IASB	International Accounting Standards Board
ICE	Internal combustion engine
IFRIC	International Financial Reporting Interpretation Committee
IFRS	International Financial Reporting Standards
Lesedi	Phoenix Platinum Mining Proprietary Limited, renamed Sylvania 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
MRE	Mineral Resource Estimate
Mt	Million Tonnes
NWA	National Water Act 36 of 1998
PGM	Platinum group metals comprising mainly platinum, palladium, rhodium and gold
PAR	Pan African Resources Plc
PDMR	Person displaying management responsibility
PEA	Preliminary Economic Assessment
PFS	Preliminary Feasibility Study
Pipeline ounces	6E ounces delivered but not invoiced
Pipeline revenue	Revenue recognised for ounces delivered, but not yet invoiced based on contractual timelines
Pipeline sales adjustment	Adjustments to pipeline revenues based on the basket price 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
SLP	Social and Labour Plan
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

 

END