Precious metals producer Sylvania Platinum (SLP:AIM) has rubbished press speculation that its environment report for the Volspruit metals exploration project in South Africa has been rejected by a Limpopo provincial government department.
Sylvania reveals that the Limpopo Department of Economic Development, Environment and Tourism hasn't blocked the application, instead asking for more studies to be done including to cover biodiversity issues. The miner has until 19 July to do the work.
The matter surrounds the Environmental Impact Assessment study, an investigation that all miners must undertake in order to prove that their proposed mining operation will not cause damage to trees, wildlife, natural habitats and water supplies. It is often one of the most difficult hurdles to clear in any mine development; failure to get approval means the EIA must be redone and a new mine plan drawn up.
Sylvania is confident of getting environmental approval, claiming the original submitted study did not find any 'fatal flaws' within the proposed project.
At present, Sylvania is a low-cost producer of platinum by reprocessing old mine waste to recover the metal. It is cash generative and is expected to start paying dividends this year. A shift to building its own mines would arguably mean its internally-generated cash would be better used to fund the development of Volspruit.
It has another exploration project called Grasvally which is undergoing the permitting process. Sylvania plans to complete a drilling campaign and produce a JORC-compliant resource, upon which it will sell the chrome project.
Platinum prices have been weak in 2015, falling 9% year to date. Unlike last year the platinum mining industry is not in the middle of a disruptive labour strike, so there's been higher production levels year-on-year leading to oversupply in the market. (Click on table to enlarge).