27 February 2008

Sylvania Resources Limited ('Sylvania' or the 'Company')

(ASX/AIM:SLV)

Sylvania to treat all run of mine fines from three new Samancor sites

• Addendum to the Samancor Chrome Service and Supply Agreement signed to treat all run of mine (“ROM”) fines from Samancor Chrome’s Broken  Hill, Spitzkop and Buffelsfontein East sites

• 6,000 oz/pa initial increase in PGM production for life of mine

• Plant extensions to treat ROM fines  at Lannex (serving Broken Hill and Spitzkop ) and Mooinooi (serving Buffelsfontein East) planned at total capex of approximately R110 million

• 50,000 tpm chrome beneficiation plant acquired from Samancor Chrome

• ROM fines treatment costs covered by receipt of PGE-bearing silicates in return for washing Samancor Chrome’s chrome ROM

Sylvania Resources Limited announced today that it has signed a further amendment to the Service and Supply Agreement with Samancor Chrome Limited (“Samancor Chrome”) 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 t of ROM fines a year will be made available to Sylvania for treatment. These ROM fines have an average grade of 1.4 g/t. Chrome ore recovered from ROM fines treatment will be returned to Samancor Chrome at a nominal charge.

Plans for optimal utilisation of Sylvania’s existing plant infrastructure on Samancor Chrome properties for the treatment of the ROM fines are expected to be finalised within the next two months.

First production of PGMs from ROM fines retreatment is expected in the fourth quarter of 2008, ramping up to more than 200 oz/pm towards the end of the first quarter of 2009.

Plant extensions to treat ROM fines at Lannex (serving Broken Hill and Spitzkop) and Mooinooi (serving Buffelsfontein East) are planned at a total capital cost of approximately R110 million. This will be funded from available cash resources. 

An additional chrome treatment plant with a capacity of 50,000 tpm has been purchased from Samancor Chrome, at a market-related price reflecting a saving on the construction of a new plant.

Sylvania CEO Terry McConnachie said: “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 specialised, low-cost, high-margin producer of PGMs, primarily from tailings located throughout South Africa’s prime, PGM- and chrome-rich Bushveld Complex.”

As consideration for the facilitation of this agreement, Sylvania will issue to Portpatrick Limited (or its nominee) three million fully paid ordinary shares in Sylvania pursuant to the Co-operation Agreement dated 9 December 2005.

For further information please contact:

In South Africa

Terence McConnachie

CEO

Sylvania Resources Limited

(+27 11) 803 7214

In Australia

Mike Langoulant

Company Secretary

Sylvania Resources Limited

(+618) 9481 8711

In United Kingdom

Richard Brown

Ambrian Partners Limited

(+44) 20 7776 6417