Platinum mining company Sylvania Platinum (LON:SLP) posted record half-year production, but a slow-down in output lead to a somewhat subdued set of second quarter results.
Sylvania Dump Operations production was down from 20,797, to 19,206 4E PGM between the first and second quarters; which brought the half-year to a record total of 40,003 ounces.
The group also posted net revenue narrowing from $31.2 million to $27.9 million, though its cash balance widened from $26.6 million to $33.8 million between the two quarters.
The reduced performance in the second quarter was caused by operational and market hindrances. These included; power interruptions causing downtime in operations, water management continuing to be a focus at some operations and a depressed chrome market putting pressure on chrome miners.
Sylanvania Platinum comments
Speaking on the results, company CEO, Terry McConnachie, said:
“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. 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.”
“The recent communication of potential retrenchments at some of our host mines has necessitated that we review our feed strategy in terms of alternative feed sources to compensate for the potential loss of any current arisings or RoM material to our 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 $33.8 million, following the $2.9 million dividend payout in November 2019, which was aided by an increase in the PGM basket price. The Group continues to maintain a good cash holding which will 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.”
Investor notes
Following the update, the company’s shares dipped 7.39% or 3.22p to 40.28p per share 31/01/20 14:25 GMT. Liberum reiterated their ‘Buy’ stance on Sylvania Platinum stock; the group’s p/e ratio is 8.94, their dividend yield is modest at 1.93%.