TIDMTHS
RNS Number : 0153W
Tharisa PLC
13 April 2023
Tharisa plc
(Incorporated in the Republic of Cyprus with limited
liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
('Tharisa' or the 'Company')
PRODUCTION REPORT FOR THE SECOND QUARTER OF FY2023ED 31 MARCH
2023
Tharisa, the platinum group metals (PGMs) and chrome co-producer
dual-listed on the Johannesburg and London stock exchanges,
announces its production results for Q2 FY2023 and cash balance as
at the quarter end.
Quarter highlights
-- Lost Time Injury Frequency Rate ('LTIFR') of 0.27 per 200 000-man hours worked
-- Mining volume recovery slower than expected with continued
adverse weather negatively impacting flexibility in open pit
-- Contractor appointed on a short term basis to assist with waste mining (starting 1 May 2023)
-- Processing capacity maintained utilising ROM ore stockpiles and strategic ROM ore purchases
-- Chrome output increased 5.7% to 404.8 kt (Q1 FY2023: 383.1 kt) with ROM grades up at 18.4%
-- PGM output lower at 34.3 koz (Q1 FY2023: 42.7 koz) on reduced
recoveries due to sub-optimal ore mix
-- Metallurgical grade chrome concentrate prices up 20.6%
quarter on quarter, and 52.0% up on Q2 FY2022
-- Karo Platinum Project on track and on budget with ground
clearance and civil contractors having commenced work on site
-- Successfully concluded a US$130 million debt facility with
Société Générale and Absa Bank Limited; undrawn
-- US$5 million additional subscription received in the Karo
Mining Holdings Bond increasing total proceeds to US$36.8
million
-- Cash on hand US$205.8 million (31 December 2022: US$213.9
million), with a net cash position of US$106.8 million (31 December
2022: US$101.1 million)
Key Operating Numbers
Quarter Quarter Quarter Quarter Half Half
ended ended on quarter ended year year
31 Mar 31 Dec movement 31 Mar ended ended
2023 2022 % 2022 31 Mar 31 Mar
2023 2022
Reef mined kt 1 028.0 1 081.5 (4.9) 1 419.7 2 109.5 2 833.6
-------- -------- -------- ------------ -------- -------- --------
6E PGMs produced koz 34.3 42.7 (19.7) 44.1 77.0 91.8
-------- -------- -------- ------------ -------- -------- --------
Chrome concentrates
produced (excluding
third party) kt 404.8 383.1 5.7 374.9 787.9 776.7
-------- -------- -------- ------------ -------- -------- --------
Average PGM contained
metal basket price US$/oz 2 032 2 360 (13.9) 2 806 2 216 2 592
-------- -------- -------- ------------ -------- -------- --------
Metallurgical grade US$/t
chrome concentrate CIF
contract price China 269 223 20.6 177 247 175
-------- -------- -------- ------------ -------- -------- --------
Phoevos Pouroulis, CEO of Tharisa, commented:
"Tharisa continued to generate healthy free cash flow in the
second quarter of our financial year despite the significant impact
of severe weather conditions to our open pit mining operations.
While chrome production was up, the ore mix saw PGM output in
January and February fall below expectations for the quarter. With
our operational improvement implemented during the quarter already
delivering results, and the additional flexibility that both new
equipment and the additional waste contractor will bring to the
pit, the second half of our financial year will see an improvement
at our flagship Tharisa mine.
Due to the challenges posed in December through to February
specifically, management took the prudent step of lowering
full-year guidance by 10%. The unique and unparalleled properties
of our orebody, however, were once again shown to reap rewards as
the chrome price reached levels as high as US$300/ tonne and, while
the PGM prices have pulled back recently, even at these levels we
continue to generate healthy margins.
Tharisa's Vision 2025 strategy of reaching optimal and
sustainable production from the Tharisa mine remains intact, and we
will benefit from the significant progress being made at Karo, our
second tier one mine - which remains on time and budget for first
ore to the mill in H2 2024, as we continue to evolve into a
multi-asset/multi-jurisdiction PGM producer."
Health & Safety
-- The health and safety of our stakeholders remains a core
value to the Group and Tharisa continues to strive for zero harm at
its operations
-- LTIFR of 0.27 per 200 000-man hours worked
Market Update
-- PGM prices came under pressure in the quarter as demand
softened and destocking took some shine off the strong pricing seen
in FY2022. Rhodium and palladium prices remain the most affected,
with rhodium suffering from a small, tight, illiquid market
influenced by a single seller. With commodity markets generally
directionless in the quarter as macro events dominated
fundamentals, and a slower than anticipated economic uplift post
easing of COVID-19 restrictions in China, meant the PGM basket
price was lower than most analysts had forecast. However, the
outlook for the PGM basket remains strong as tight supply and
strong demand will ensure prices strengthen, with platinum the
standout metal as the continued shift into a supply deficit becomes
evident
-- Chrome prices remained robust following on from a strong
first quarter, with spot at around US$285/t at the time of writing.
Stockpiles in China continue to hover at historically low levels
while demand for the product from South Africa remains strong,
supply is hampered by loadshedding and inland logistics challenges
affecting the industry. While we will see some short-term
interruptions in China as some furnaces undergo maintenance, the
long-term fundamentals for the metal remain firmly intact, in
particular due to the supply concentration and the operational
challenges some competing industry players have cited publicly,
which will have an impact on the already tight supply-demand
fundamentals
Operational Update
-- Total reef mined of 1 028.0 kt (Q1 FY2023: 1 081.5 kt) as
adverse weather impacted the in-pit flexibility affecting volume
and reef mix
-- Stripping ratio of 12.6 m(3) : m(3) (Q1 FY2023: 10.6 m(3) :
m(3) ) improved as waste was moved in areas recovering from in pit
flooding
-- Total reef tonnes milled for the quarter at 1 370.0 kt (Q1
FY2023: 1 427.8 kt), supplemented by stockpiles and strategic ROM
ore purchases
-- Quarterly PGM production at 34.3 koz (Q1 FY2023: 42.7 koz)
-- Rougher feed grade of 1.66 g/t (Q1 FY2023:1.66 g/t)
-- Recovery of 61.9% (Q1 FY2023: 71.7%) as oxidised UG ROM ore
was also milled affecting PGM recovery
-- Quarterly chrome production at 404.8 kt (Q1 FY2023: 383.1 kt)
-- Grade of 18.4% Cr(2) O(3) (Q1 FY2023: 17.0%)
-- Recovery at 66.6% (Q1 FY2023: 65.7%) as yield from the Vulcan
plant improved. Speciality chrome production was lower due to a
planned spiral replacement programme
Karo Mining Holdings Update
-- Extensive earthworks proceeding to plan
-- Civils contracts for the pouring of the foundations for all
plants and infrastructure at Karo have been awarded
-- Contracts for high voltage power line (31 km EIA permission)
and all main transformers awarded
-- Ordering of long-lead items for the project continuing as per schedule
-- Trial mining to commence
-- 30 kt of ore to provide further information on drilling,
blasting, grade control and processing
-- 150 employees and contractors on site in Zimbabwe, with
majority of Zimbabwe management positions filled
Cash Balance and Debt Position
Tharisa had a cash balance of US$205.8 million (31 December
2022: US$213.9 million) at the end of the quarter, and debt of
US$99.0 million (31 December 2022: US$112.8 million), resulting in
a net cash position of US$106.8 million (31 December 2022:
US$101.1million). These cash and debt numbers exclude the recently
concluded US$130 million facilities which are undrawn at the
reporting period.
Guidance
Due to lower than expected production in Q2 FY2023 production
guidance is reduced by 10% from the previous range of between 175
koz and 185 koz PGMs (6E basis) and 1.75 Mt to 1.85 Mt of chrome
concentrates.
Production Numbers
Quarter Quarter Quarter Quarter Half Half
ended ended on quarter ended year year
31 Mar 31 Dec movement 31 Mar ended ended
2023 2022 % 2022 31 Mar 31 Mar
2023 2022
Reef mined kt 1 028.0 1 081.5 (4.9) 1 419.7 2 109.5 2 833.6
--------- -------- -------- ------------ -------- -------- --------
m(3)
Stripping ratio : m(3) 12.6 10.6 18.9 12.7 11.5 11.9
--------- -------- -------- ------------ -------- -------- --------
Reef milled kt 1 370.0 1 427.4 (4.0) 1 362.2 2 797.4 2 794.3
--------- -------- -------- ------------ -------- -------- --------
PGM flotation feed kt 1 039.6 1 115.3 (6.8) 1 045.7 2 154.9 2 115.0
--------- -------- -------- ------------ -------- -------- --------
PGM rougher feed
grade g/t 1.66 1.66 - 1.74 1.66 1.74
--------- -------- -------- ------------ -------- -------- --------
PGM recovery % 61.9 71.7 (13.7) 75.4 67.0 77.4
--------- -------- -------- ------------ -------- -------- --------
6E PGMs produced koz 34.3 42.7 (19.7) 44.1 77.0 91.8
--------- -------- -------- ------------ -------- -------- --------
Platinum produced koz 19.7 23.2 (15.1) 24.3 42.9 50.8
--------- -------- -------- ------------ -------- -------- --------
Palladium produced koz 6.1 7.5 (18.7) 7.4 13.6 14.9
--------- -------- -------- ------------ -------- -------- --------
Rhodium produced koz 3.0 4.2 (28.6) 4.2 7.2 8.8
--------- -------- -------- ------------ -------- -------- --------
Average PGM contained
metal basket price US$/oz 2 032 2 360 (13.9) 2 806 2 216 2 592
--------- -------- -------- ------------ -------- -------- --------
Platinum price US$/oz 1 004 967 3.8 1 026 976 1 011
--------- -------- -------- ------------ -------- -------- --------
Palladium price US$/oz 1 563 1 952 (19.9) 2 312 1 763 2 125
--------- -------- -------- ------------ -------- -------- --------
Rhodium price US$/oz 10 812 12 951 (16.5) 17 023 12 133 15 189
--------- -------- -------- ------------ -------- -------- --------
Average PGM contained
metal basket price ZAR/oz 35 801 41 682 (14.1) 42 784 39 094 39 721
--------- -------- -------- ------------ -------- -------- --------
Cr(2) O(3) ROM grade % 18.4 17.0 8.2 17.1 17.7 17.6
--------- -------- -------- ------------ -------- -------- --------
Chrome recovery % 66.6 65.7 1.4 67.8 66.2 66.7
--------- -------- -------- ------------ -------- -------- --------
Chrome yield % 29.5 26.8 10.1 27.5 28.2 27.8
--------- -------- -------- ------------ -------- -------- --------
Chrome concentrates
produced (excluding
third party) kt 404.8 383.1 5.7 374.9 787.9 776.7
--------- -------- -------- ------------ -------- -------- --------
Metallurgical grade kt 365.3 347.2 5.2 295.0 712.5 600.3
--------- -------- -------- ------------ -------- -------- --------
Specialty grades kt 39.5 35.9 10.0 79.9 75.4 176.4
--------- -------- -------- ------------ -------- -------- --------
Third party chrome
production kt 45.8 40.9 12.0 53.4 86.8 102.6
--------- -------- -------- ------------ -------- -------- --------
Metallurgical grade US$/t
chrome concentrate CIF
contract price China 269 223 20.6 177 247 175
--------- -------- -------- ------------ -------- -------- --------
Metallurgical grade ZAR/t
chrome concentrate CIF
contract price China 4 827 3 932 22.8 2 700 4 387 2 670
--------- -------- -------- ------------ -------- -------- --------
Average exchange
rate ZAR:US$ 17.8 17.6 1.1 15.2 17.7 15.3
--------- -------- -------- ------------ -------- -------- --------
Paphos, Cyprus
13 April 2023
JSE Sponsor
Investec Bank Limited
Connect with us on LinkedIn and Twitter to get further news and
updates about our business.
Investor Relations Contacts:
Ilja Graulich (Head of Investor Relations and
Communications)
+27 11 996 3500
+27 83 604 0820
igraulich@tharisa.com
Financial PR Contacts:
Bobby Morse / Oonagh Reidy
+44 207 466 5000
tharisa@buchanan.uk.com
Broker Contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / Georgia Langoulant
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Thomas Rider / Nick Macann
+44 207 236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Jennifer Lee / Detlir Elezi
+44 203 207 7800
Nedbank Limited (acting through its Corporate and Investment
Banking division) (RSA Broker)
Carlyle Whittaker
+27 11 294 0061
About Tharisa
Tharisa is an integrated resource group critical to the energy
transition and decarbonisation of economies. It incorporates
exploration, mining, processing and the beneficiation, marketing,
sales, and logistics of PGMs and chrome concentrates, using
innovation and technology as enablers. Its principal operating
asset is the Tharisa Mine, located in the south-western limb of the
Bushveld Complex, South Africa. The mechanised mine has an 18 year
pit life and can extend operations underground by at least 40
years. Tharisa also owns Karo Mining Holdings a low-cost, open-pit
PGM asset under construction and located on the Great Dyke in
Zimbabwe. The Company is committed to reducing its carbon emissions
by 30% by 2030 and the development of a roadmap is continuing to be
net carbon neutral by 2050. Tharisa plc is listed on the
Johannesburg Stock Exchange (JSE: THA) and the Main Board of the
London Stock Exchange (LSE: THS).
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END
DRLGPUCPCUPWGCP
(END) Dow Jones Newswires
April 13, 2023 02:00 ET (06:00 GMT)
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