Sylvania Resources (ASX:SLV, AIM: SLV) believes corporate action in the platinum industry will take place and the company itself is currently negotiating with five projects with a view to make acquisitions on the platinum-rich South African Bushveld.
Talking at a site visit to its Millsell plant on the western limb of the Bushveld complex, which treats chrome tailings from Camano Chrome mines to recover chrome and platinum, executive manager Zorn Marinkovic, said platinum players were positioning themselves for corporate action, while Sylvania had been in numerous talks over the last 1.5 years.
Marinkovic said the company was very aggressive in its pursuit of additional platinum assets and would make an acquisition as soon as it found a nice one. He believed there were suitable assets available for acquisition on the South African landscape as some players didn't have the funds, technical knowledge or market support to mine platinum successfully.
Sylvania was currently in the process of executing its strategy of ramping up to PGM production of 80,000 ounces by 2010 and its acquisition plans were part of its strategy to sustain and grow production beyond 2010 when production from tailings dumps is forecast to drop off.
Marinkovic said sustaining and enhancing production was also the reason the company planned an additional listing on the JSE that would enhance its ability to make acquisitions.
Sylvania is currently producing about 10,200 PGM ounces annually, while it is in a steep ramp-up phase to production of about 60,000 ounces by 2009. Its Millsell and eastern Steelpoort plants currently process 37,000t a month and its Lannex and Mooinooi plants will each process 70,000t of ore a month by end of this year and start of 2009.
The company's initial production forecast of 70,000 PGM ounces by 2010 was boosted recently by an agreement with Samancor to also treat 300,000t run-of-mine fines annually from Samancor's Broken Hill, Spitzkop and Buffelsfontein chrome mines on the platinum landscape.
The company describes its non-JORC PGM dump resource as 500,000 ounces at 2-6g/t and current arisings. Its agreement with Samancor implies that Sylvania returns chrome recovered from tailings to this company and processes PGM content to concentrate before it sells it off to Anglo Platinum.
The company's revenue per ounce generated in second quarter of 2008 was $2,004/ounce compared to $2,737/ounce expected in third quarter of 2008.
Part of its aggressive growth strategy after 2010 when production from dumps will diminish, is planned shallow mining at Everest North - where the company is exercising its option to acquire 100% of Vygenhoek - to produce 70,000 PGM ounces annually for ten years.
The company hopes to double this production to 140,000 PGM ounces by 2017 through mergers and acquisitions and the processing of more tailings, while it is investigating the possibility of smelting.
Sylvania is led by Terry McConnachie, a South African with 25 years experience in mining and beneficiation of ferroalloys and precious metals.