September 07, 2008

Sylvania extends Samancor chrome mine fines treatment deal

Sylvania Resources Limited announced that it has signed a further amendment to the Service and Supply Agreement with Samancor Chrome Limited to treat ROM fines from three new sites at Samancor Chrome’s current South African mining operations.

Attributable PGM production will increase by approximately 6 000 oz/pa, or 8% of current production in the short term increasing to approximately 33% of production in five to six years as current dumps are depleted.

The contract amendment agreed with Samancor Chrome provides that an estimated 300,000 tonnes of ROM fines a year will be made available to Sylvania for treatment. These ROM fines have an average grade of 1.4 gram per tonne. Chrome ore recovered from ROM fines treatment will be returned to Samancor Chrome at a nominal charge.

Plant extensions to treat ROM fines at Lannex and Mooinooi are planned at a total capital cost of approximately ZAR 110 million. This will be funded from available cash resources. It added that an additional chrome treatment plant with a capacity of 50,000 tonne per month has been purchased from Samancor Chrome, at a market related price reflecting a saving on the construction of a new plant.

Mr Terry McConnachie CEO of Sylvania said that “We are very pleased to be awarded this additional contract to treat ROM fines from Samancor Chrome’s Broken Hill, Spitzkop and Buffelsfontein East mining operations for PGMs and chrome. This further consolidates our symbiotic relationship with Samancor Chrome in terms of which it benefits from very cheap chrome and we benefit from the PGMs extracted. It also marks a substantial step forward for Sylvania in its growth as a specialized, low cost, high margin producer of PGMs, primarily from tailings located throughout South Africa’s prime, PGM and chrome rich Bushveld Complex.”