In June I began a thread entitled “Buy It While It’s Unloved” outlining why I thought Sylvania Resources (SLV) was an excellent prospect, and should be accumulated in the months leading up to commissioning of its first plant. Here are some of the key points I noted then:
- Sylvania had announced a joint venture with Aquarius Platinum (SLV 25%) to produce platinum group metals (PGM's) from chrome tailings dumps in South Africa;
- There were ultimately to be three projects, EACH with anticipated annualised profits for Sylvania of between A$3 and A$3.5 million;
- The first cab off the rank, a plant at Kroondal, would be producing a saleable product by the end of October this year;
- Next year Marikana will be producing, and by the end of 2006, with Everest South also in production, SLV should be making profits in excess of A$10 million per annum;
- Mine life for the project(s) is 12-15 years, and the whole enterprise self-funding without the need for additional capital;
- The investment arithmetic had been worked out VERY conservatively and pointed to a project that is EXTREMELY robust.
I recall wondering at the time whether anyone actually acts on reading these posts.
Well, this is a follow-up. If you HAVE invested in SLV while they have been in the wilderness, be assured the Kroondal plant IS nearing completion. Expect a hefty round of promotion at the time the plant is commissioned – and rejoice in the fact that shares/options in Sylvania at these prices are now very thin on the ground.
From here, the patient investor should begin to receive a bountiful pay-off.
SLV Price at posting:
0.0¢ Sentiment: None Disclosure: Held
