Sylvania Platinum upbeat on recent Bushveld studies

South Africa-focussed platinum-group metals (PGM) developer and producer Sylvania announced the results of its optimisation studies on its exploration targets on the Northern Limb of the Bushveld Complex on Monday.

The AIM-traded firm said the results included an updated mineral resource estimate and scoping study for the Volspruit Project, which focussed solely on the Volspruit North Body, and a mineral resource estimate and exploration results for the Far Northern Limb Projects,, which consist of the Aurora Project, containing the La Pucella Target, and the Hacra Project.

At the Volspruit Project, it reported a Volspruit North Body measured and indicated mineral resource estimate of 14.87 million tonnes at a 2E plus gold grade of 2.27 grams per tonne, making for 1.08 million 2E plus gold ounces, as well as 19.47 million pounds of copper at a grade of 0.06%, and 55.79 million pounds of nickel at a grade of 0.18%.

It said the Volspruit North Body scoping study was completed, based on long-term metal prices and exchange rate consensus forecast, making for a pre-tax 12.5%-discounted net present value of $27.3m, excluding a “significant potential upside” from rhodium contribution and the South Body PGM ounce inclusion, which was currently being assessed.

The project’s pre-tax internal rate of return was set to be 17.9%, with the pre-feasibility study milestone expected to be completed in 2023, followed by the feasibility study starting in 2024.

Sylvania said the first production milestone was expected about four years after investment decision, with an anticipated payback period from first production of 4.25 years, a life-of-mine of 8.7 years, EBITDA per annum of $30.6m, and a peak funding requirement of $147.4m.

At the Far Northern Limb Projects, meanwhile, the company reported a La Pucella mineral resource estimate on the Aurora Project of 16.21 million tonnes at a 2E plus gold grade of 2.63 grams per tonne, making for 1.37 million 2E plus gold ounces.

The board said the La Pucella Target area is a “near-surface” T-zone discovery, and currently covered 12% of the combined Aurora project area.

It said the discovery of the T-zone near surface indicated that the high-grade zone previously found at depth had the potential to be mined using open pit methods.

A scoping level mining study was being carried out, with results expected in early 2023, while the mineralisation was known to continue at depth, meaning that with future additional drilling an additional underground mineral resource estimate could be reported.

Future studies would be aimed at improving analytical confidence to include rhodium and base metals in the resource estimate, that were currently at the inferred level.

Finally, at the Hacra Project, Sylvania reported “encouraging” 2021 exploration results with various intersections indicating “attractive” grades between 2.3 and 7.4 grams of 2E plus gold per tonne, and a true intersection thickness from 3.4 up to 11.9 metres.

The board said Hacra was contiguous to the Waterberg PGM project, with the company working towards a maiden mineral resource estimate in early 2023.

Looking ahead, the company said that as part of its commitment to further improve the viability of its exploration assets at both the Volspruit and Far Northern Limb projects, and to further unlock economic potential from the owned-and-licenced assets, it expected to spend about ZAR 70m (£3.38m) during 2023, to perform further resource optimisation and to undertake additional exploration drilling.

It said it would apply the same study parameters used in the initial investigations to the remaining target areas, to ensure future value was realised at its exploration assets.

“While the company continues to focus on delivering value from and growing its existing cash generating dump reprocessing operations, the optimisation of value from its exploration assets remains one of the important pillars of Sylvania Platinum's growth strategy and a future value driver,” said chief executive officer Jaco Prinsloo.

“With that in mind, we are proud to deliver these exploration results which I have no doubt will generate significant future value for the company and all of its stakeholders.

“We look forward to sharing further updates in due course.”

At 1147 BST, shares in Sylvania Platinum were up 0.59% at 98.18p.

Reporting by Josh White at Sharecast.com.