Operations Update HY 2023
Sydney, Aug 10, 2023 AEST (ABN Newswire) - PYX Resources Ltd (LON:PYX) (NSX:PYX), the world's third largest publicly listed Premium Zircon producer by Zircon resources, is pleased to announce an operational update for the six months ended 30 June 2023 ("HY 2023") ahead of the publication of its interim results for the same period, anticipated to be released on or around 13 September 2023.
Premium Zircon sales experienced robust growth during the period, with a remarkable increase of 34% to a sales volume of 5.2kt. The Directors believe this growth is a result of our global client base, customer-centric approach, strong relationships with clients, and the ability to deliver high-quality products that meet their specific needs.
PYX's premium Zircon production has experienced substantial progress, with a noteworthy increase of 33% compared to the previous year. In HY 2023, production volumes reached 5.7kt, showcasing the operational efficiency and dedication to meeting market demand positioning PYX as a leading supplier of premium zircon to the global markets.
Total production for the first half of the year amounted to 6.8kt, a 26% reduction over the same period last year. The Company believes the reduction is attributable to the decision to focus on the production and sale of premium Zircon due to high demand. This follows last year's ramp up of production of its by-products Rutile and Ilmenite, following the award of exploration and extraction licenses, which have been stockpiled with a total of 8.0kt of titanium stockfeed being held in storage. This titanium stockfeed will be sold once the Company receives its export licence from the Indonesian Trade Department, anticipated to be during Q3 2023. PYX Resources remains confident in its ability to maintain this growth trajectory and deliver long-term value to our stakeholders.
In terms of pricing, Premium Zircon has experienced a remarkable upward trend. Starting from January 2021 at US$1,400/t, international pricing (as reported by Asian Metal) steadily increased throughout the year, reaching US$1,800/t in the second half of 2021 and US$2,000/t by January 2022. This positive trajectory continued in the second quarter of 2023, with the price reaching US$2,100/t. Since the third quarter of 2022, the price has remained stable at an impressive US$2,300/t, a 64% increase on 2021 prices, defying the volatility of the market. This exceptional outcome underscores the imbalanced supply and demand dynamics, and our ability to capitalise on this favourable market situation.
PYX's revenue is linked to lower prices in HY 2023 compared to the same period last year, as it took historic advantage of spot prices which were as high as US$3,100 per tonne during HY 2022. During the first half of 2023, PYX sold most of its Premium Zircon at contract prices, following international pricing.
The Directors believe the continued rise in demand for PYX's mineral products, strong market fundamentals and the Company's operational capabilities, ensures PYX is positioned to capitalise on the continued global demand for mineral sands paving the way for sustained growth. PYX remains committed to delivering on our strategic objectives and maximising shareholder value.
Commenting on the Company's achievements in HY23 PYX Resources' Chairman and Chief Executive Officer, Oliver B. Hasler, said:
"I am delighted with our achievements in HY 2023. The Company experienced substantial growth in premium Zircon sales, with a 34% increase, and a production increase of 33%. Our diversified global client base has allowed us to manage and minimise risk. This coupled with the quality of our zircon has resulted in consistent growth in sales whilst our exceptional team on site have been instrumental in ensuring maximum efficiency. I am particularly proud of the two awards given to the Company by the Government authorities in Kalimatan - the Award for the Prevention and Management of COVID-19 in the Workplace and Zero Accident Award 2023 - we are passionate about our people and the safety of our team.
"As we enter the second half of the year, we remain optimistic about our strategic plan and the continued rise of Mineral Sands prices. We remain well positioned to deliver on our goals and benefit from the industry's strength."
One of the significant milestones this year has been the renewal of a 10-year Izin Usaha Pertambangan Operasi Produksi (IUP-OP, Mining Operation and Production Licence) exploration and mining license agreement for the Tisma project, which PYX has a contractual interest in. This renewal, and access to this licence, should solidify PYX's position as a leading player in the mineral resources sector and opens up new opportunities for growth and expansion. PYX believes the Tisma project holds immense potential, and this long-term licence agreement should provide stability and confidence to maximise its value over the coming years.
Also, the Indonesian authorities have set the legislation for Indonesian Mineral Sands companies to export Ilmenite and Rutile to international markets, following a change of the law in Indonesia. The Ministry of Trade of the Republic of Indonesia, following the recommendation of the Ministry of Energy and Natural Resources, has changed the category of Titanium dioxide, with Ilmenite and Rutile now being classified as Non-Metal Commodities, the same as Zircon.
This law change, issued by the Ministry of Trade under regulation No. 13, allowsfor the export of Ilmenite and Rutile as Non-Metal with a minimum grade of TiO2 greater than or equal to 45% for Ilmenite and TiO2 greater than or equal to 90% for Rutile. As a result, PYX Resources is now awaiting the export license of Titanium dioxide from the Trade Department, which is a formality before it can proceed with the export of its titanium stockfeed, of which it currently has 8.3kt in inventory.
PYX Cares Programme
Throughout 2023, PYX remained committed to its PYX Cares programme and submitted its Second Communication on Progress Report to the United Nations Global Compact Organisation, which encompasses five key pillars: People, Planet, Prosperity, Peace, and Partnership.
PYX Resources firmly believes in the importance of community engagement and environmental stewardship. The Company is committed to implementing community projects that not only empower the local population but contribute to the protection of wildlife and the preservation of the natural environment. Through these projects, the Company aims to create sustainable and inclusive opportunities for the community, fostering economic development and improving their quality of life. An example of this was PYX's partnership, for a third year, with the Indonesian Red Cross Society in its annual Indonesian National Blood Donor Day.
Amid this local engagement PYX Resources received an Award for Prevention and Management of COVID-19 in the Workplace in 2023 and a Zero Accident Award 2023, both from the Government authorities in Kalimantan.
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About Pyx Resources Limited
PYX Resources Limited (NSX:PYX) (LON:PYX) is a global producer of premium zircon listed on the National Stock Exchange of Australia and the London Stock Exchange. The Company's flagship asset is the Mandiri mineral sands deposit, located in the alluvium sediment rich region of Central Kalimantan, Indonesia. Boasting the world's 5th largest producing deposit of zircon, PYX is a large-scale, near-surface open pit operation in production since 2015 and with exploration to date validating the presence of additional Valuable Heavy Minerals such as rutile, ilmenite among others within its mineral sands.
Pyx Resources Limited