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Sylvania Platinum looks like a recovery buy

A South African producer of platinum group metals has seen profits reverse, but it looks like the bottom of the cycle
February 22, 2024

First-half results from Sylvania Platinum (SLP:50p), a South African producer and developer of platinum, palladium and rhodium, bear the scars of a weak platinum group metal (PGM) price environment. Sylvania’s average basket price of $1,311 per ounce (oz) was $1,202 per oz less than in the first half of the 2022-23 financial year, which on flat production of 38,405 ounces resulted in a near-50 per cent fall in revenue to $40.8mn.

At the same time, cash costs at its dump operations on the Eastern and Western Limbs of the Bushveld Complex increased by 13 per cent to $682 an oz. This reflected electricity price inflation, higher transport costs, and consumable and reagent costs associated with MF2 milling and flotation circuits that are improving PGM recovery efficiencies. Although Sylvania’s dump operations are still profitable with all-in costs of $1,037 an oz, the revenue shortfall sent pre-tax profit down from $45.5mn to $8.1mn.

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