8th Feb 2016 10:48
LONDON (Alliance News) - Sylvania Platinum Ltd on Monday reported a steep fall in profit during the first half of the financial year as revenue plummeted due to a fall in production and lower commodity prices.
The platinum miner operating in South Africa saw its pretax profit in the six months ended December 31 fall to USD817,235 from USD4.8 million a year earlier, as revenue dropped to USD18.5 million from USD27.5 million.
The company has two lines of business, focused on re-treating platinum group metal chrome tailings from third-party mines within South Africa and on developing its own shallow mining operations for low-cost extraction.
"In the light of declining commodity prices and challenging industry conditions during the six months to December 31, 2015 the main operational focus of the company has been on maintaining and improving production stability and ounce production, combined with disciplined operational cost control," said the miner.
Production dropped 5.8% to 29,519 ounces in the first half of the financial year from 31,341 ounces a year earlier, but production was up 12% from the six months ended June 31, when production totalled 26,246 ounces.
"Operational disruptions impacted negatively on plant availability and tons treated during the six months due to an electrical substation fire and subsequent one week downtime at Mooinooi operation, as well as three weeks of violent community protests regarding demands for improved infrastructure and jobs at the Eastern operations as communicated in earlier announcements," said Sylvania.
Despite the operational difficulties, the Sylvania Dump operations, which is comprised of seven active platinum group metal recovery plants that treat chrome tailings from surrounding chrome mines, managed to recover and remains on track to deliver 55,000 ounces for the full year.
Cash costs at the Sylvania Dump operations were also down 18% year-on-year in the first half to USD471 per ounce, but platinum group metal prices were down 26% year-on-year to USD829 per ounce from USD1,115 last year.
Sylvania shares were trading 8.1% lower at 7.01 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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