- 30% increase in total PGM production to 6 264oz

- 10% decline in total cash operating costs to R2 591/oz (US$327/oz)

- 54% increase in total pre-tax profit to R86.6 million

- Sylvania Dump Operations (SDO) drive improvements

- Millsell, Steelpoort plants fully operational

- 36% increase in PGM production to 5 753oz

- 15% decline in cash operating costs to R2 436/oz (US$308/oz)

- Faster SDO production build-up expected from Mooinooi plant expansion to 70 000tpm

A 36% increase in PGM (3E+Au) production to 5 753 ounces (oz) at Sylvania Dump Operations (SDO), reflecting further operational improvements and the attainment of full PGM production design capacity at the Millsell and Steelpoort plants, resulted in a 30% increase in total production to 6 264oz for the quarter ended 30 June 2008.

Higher production, an average basket price received steady at US$2 705 and a 1% weakening of the US Dollar/Rand (US$/R) exchange rate to 7.92:1 led to a 14% rise in total revenue to R108 848 000.

Total cash operating costs were 10% lower at R2 591/oz (US$327/oz), reflective of higher SDO production, and total profit before tax increased by 54% to R86 805 000.

Sylvania holds a portfolio of shares in various listed companies, including Great Australian Resources Limited. In light of the general downturn in international markets, a revaluation of this portfolio was conducted on 30 June 2008 and its value has been reduced by R22.5 million.

With regard to foreign exchange losses, Sylvania reviews its loans to its South African subsidiaries on a six-monthly basis in order to record accurately the true value of these in their respective currencies. Any exchange loss is then allocated to the quarter under review and the preceding quarter.

SYLVANIA DUMP OPERATIONS (SDO) (100%)

SDO's Millsell and Steelpoort plants both reached full PGM production design capacity during the quarter. SDO production rose by 36% to 5 753oz, due both to a 9% increase in plant feed to 139 289 tons (t) and a 4% improvement in grade to 2.81 grams per ton (g/t). Higher throughput resulted from successful process adjustments at both plants, with none of the disruption to tailings reclamation due to heavy summer rainfall experienced during the previous quarter. Recovery was unchanged at 46%.

While the average basket price received was 2% weaker at R2 692/oz, higher production and a US$/R exchange rate 1% weaker at 7.92:1 resulted in a 19% increase in revenue to R97 578 000.

Cash operating costs were 15% lower at R2 436/oz (US$308/oz), reflecting higher production, and the gross cash margin rose by 2% to 86%.

Capital expenditure was 1% lower at R20 468 000. Capital commitment for the ensuing quarter amounts to R77 000 000.

While supplier delays during the quarter continued to hold up installation of performance-enhancing bead mills at SDO's Millsell and Steelpoort plants, components are now scheduled for delivery by the end of July and installation is expected to take place during August.

Construction of SDO's 70 000 ton per month (tpm) Lannex chrome feed plant and Broken Hill extension continues, with good progress made in the quarter under review on the civils and on placement of orders for and delivery of some key components. Completion of the Broken Hill extension, to treat run-of-mine (ROM) fines from Samancor SA's Broken Hill and Spitzkop mines, continues to be scheduled for the end of August 2008 and of the Lannex plant for the end of December 2008. Commissioning and production ramp-up is scheduled to begin during the first quarter of 2009.

Following a capital construction project planning review during the quarter, it has been decided not to proceed with the construction of the 37 500tpm Elandsdrift chrome feed plant originally intended to treat Elandsdrift chrome tailings, pending the outcome of an environmental impact assessment of an opencast mining operation based on the MG1 surface outcrops at Elandsdrift Mine.

Instead, the chrome concentrator plant at Mooinooi Mine purchased from Samancor SA in February 2008 is being expanded and upgraded to create a 70 000tpm plant of a similar, modular design to the Lannex plant. To be known as the Mooinooi plant, it will treat those Mooinooi chrome tailings for which rights have been secured, as well as current arisings from Samancor's Mooinooi Mine and run of mine (ROM) feed from Samancor's Buffelsfontein Mine.

Synergies with the Lannex plant indicate that the Mooinooi plant can be fast-tracked. Civils construction has begun and it is intended that its completion and commissioning will be concurrent with that of Lannex. Shelving of the Elandsdrift plant in favour of the 87% larger Mooinooi plant will result in a faster build-up in SDO production than initially planned. Should an opencast mining operation at Elandsdrift prove to be unviable, the Elandsdrift chrome tailings will be transported to the Mooinooi plant for treatment.

Safety performance at SDO's operating plants (Millsell and Steelpoort) and at its construction sites (Lannex and Mooinooi) was very satisfactory in the quarter under review. The operating plants' Disabling Injury Frequency Rate (DIFR) remained at 0 and their Lost Time Injury Frequency Rate (LTIFR) improved to 1.38 from the previous quarter's 1.96. An LTIFR of less than 0.5 has been set as a short-term target. A range of safety-related training programmes and awareness campaigns, intended to achieve positive safety behaviour amongst the largely new workforce, has been initiated. At the construction sites, the DIFR and LIFR for the quarter were both 0.

CHROME TAILING RETREATMENT PROJECT (CTRP) (25% ATTRIBUTABLE)

PGM production for the quarter was 11% lower at 2 044oz (511oz attributable to Sylvania). While an increase in the feed rate of tailings dam material led to in a 10% improvement in material processed to 69 618t, the feed's lower grade resulted in a 29% drop in the head grade to 3.25g/t. However, optimisation of the mill circuit by increasing the media charge resulted in a 15% improvement in recovery to 29%.

Lower production resulted in a 17% drop in revenue to R45 million (R11.25 million attributable to Sylvania), in spite of a 15% increase in the average basket price received to US$2 850/oz and a weakening of the average US Dollar/Rand exchange rate to 7.76:1. Cash operating costs were 54% higher at R4 329/oz (US$558/oz) and the gross cash margin declined from 88% to 80%.

OUTLOOK

With both the Millsell and Steelpoort plants now operating at full capacity, we expect SDO production to stabilize at around 6 500oz for the next two quarters, then to start rising again as the two 70 000tpm Lannex and Mooinooi plants are commissioned and their ramp-up gets under way during the first quarter of 2009.

Our confidence in our ability to deliver on our target of 70 000oz of production by 2010 is fuelled both by our track record of success to date with the Millsell and Steelpoort plants and our positive view of the platinum, palladium and rhodium markets going forward. Notwithstanding some recent tightening in platinum and palladium prices, the rhodium price has continued to strengthen and rhodium, of course, comprises a significant 15% of our production split. We believe the supply:demand fundamentals for the PGM basket will continue to favour producers, and that, as a low-risk, low-cost producer relative to our peers, we are particularly well positioned. – Edited Press Release