Sylvania Platinum Divesting Iron Ore Assets in South Africa

Rapidly growing platinum group metals (PGM) producer, Sylvania Platinum, has confirmed it is to sell its iron ore assets, located in the South African Bushveld Igneous Complex (BIC). The BIC is known to hold substantial PGM ore deposits, including palladium, iridium and ruthenium, which are used in the electrical, chemical and petroleum refinery sectors, amongst others.

Sylvania has advised that the sale of the assets would enable it to focus on PGM production from five operational tailings dumps, optimise two established plants (Lannex and Mooinooi), and develop a sixth plant. In addition, Sylvania is to establish shallow, open pit mines on its Northern Limb assets, to expand its low-cost production portfolio. The company intends to develop a PGM product which can be sold with a base metals credit to refineries.

It is understood that the iron ore assets, bought by Sylvania in September 2009, are no longer of value to the company as it is uncertain if further investigation will yield any discoveries.

In a statement, the company said: "The board of Sylvania Platinum has decided to divest its iron assets in order to realise value for them independently and to allow the company to concentrate purely on the production expansion from its platinum group metals tailings dumps and the development of the Northern Limb platinum group metals and base metal surface mining operations."

In the last three months, Sylvania's shares have dropped by over a quarter of their value, but were seen to increase by 4% to 36.5p early on Friday, after the announcement.

Author: Paul Chapman, Analyst