Sylvania Platinum posts healthy profit despite production gremlins

SYLVANIA Platinum cut annual production guidance to between 66,000 to 68,000 platinum group metal (PGM) ounces for the its 2022 financial year owing to a number of production constraints including a water shortage its Western operations.

The water shortage resulted in the temporary suspension of the firm’s Lesedi operation. There was also a continuation of lower-than-anticipated feed into its Mooinooi operation. Production guidance for the year had been set at about 70,000 oz.

Nonetheless, the company produced steady PGM output of 16,605 oz in the second (December) quarter compared to 15,771 oz in the first.

Combined with rand weakness against the dollar and the slight uptick in production – water problems notwithstanding – Sylvania posted a net profit of $15.5m compared to $8.6m for the first quarter.

The average gross basket price for the second quarter came in at $2,892 per oz, virtually unchanged from the average of $2,897/oz in the first quarter. However, this was much lower than the $4,576/oz and $4,059/oz that were recorded respectively for the third and fourth quarters of the 2021 financial year.

Commenting on the problems at Lesedi, Sylvania said that the commissioning of a new water supply during January would “mitigate water shortages whilst the operation will remain under pressure until the commissioning of the new tailings deposition facility, expected during the latter part of the third quarter of the 2022 financial year”.