TIDMTHS
RNS Number : 2755Q
Tharisa PLC
17 October 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 FOURTH QUARTER AND YEARED 30 SEPTEMBER
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 Q4 and financial year ended
FY2023 [1] and cash balance as at the year end.
Quarter highlights
-- Lost Time Injury Frequency Rate ('LTIFR') of 0.11 per 200 000-man hours worked
-- Annual output
-- Chrome production for the year at 1 580.1 kt (FY2022: 1 582.7
kt) with Q4 at 413.4 kt (Q3 FY2023 378.8 kt)
-- PGM production for the year at 144.7 koz (FY2022: 179.2) with
Q4 at 30.7 koz (Q3 FY2023: 37.0 koz)
-- Strong increase in reef mining volumes quarter on quarter, up
27.5% to 1 158.9 kt (Q3 FY2023: 908.8 kt)
-- Average annual metallurgical grade chrome concentrate prices
up 26.2% at US$263/t (FY2022: US$209/t)
-- Significant quarter-on-quarter PGM price decrease of 21.5% to
US$ 1 331/oz (Q3 FY2023: US$ 1 695/oz) (6E basis) accelerated the
annual price retreat of 26.1% with average prices received at US$1
893/oz (FY2022: US$2 564/oz)
-- The continued weakening of PGM prices and macro economics has
resulted in a prudent and strategic decision to extend the Karo
Platinum Project timeline for commissioning by 12 months to June
2025, with the opportunity to accelerate the timeline as markets
become more favourable
-- The Karo Platinum Project has progressed well, and the
revised timeline is aligned to funding availability and provides
flexibility
-- Group cash on hand increased to US$268.8 million (30 June
2023: US$242.6 million), and debt of US$142.2 million (30 June
2023: US$101.1 million), resulting in a net cash position of
US$126.6 million (30 June 2023: US$141.5 million)
-- Production guidance for FY2024 is set between 145 koz and 155
koz PGMs (6E basis) and 1.7 Mt to 1.8 Mt of chrome concentrates
Key Operating Numbers
Quarter Quarter Quarter on Quarter Year ended Year ended Year on
ended 30 ended 30 quarter ended 30 30 Sep 30 Sep year
Sep 2023 Jun 2023 movement % Sep 2022 2023 2022 movement %
Reef mined kt 1 158.9 908.8 27.5 1 314.7 4 177.3 5 505.4 (24.1)
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Reef milled kt 1 310.2 1 302.2 0.6 1 446.8 5 409.8 5 608.2 (3.5)
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
PGMs produced
(6E) koz 30.7 37.0 (17.0) 45.3 144.7 179.2 (19.3)
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Chrome
concentrates
produced
(excluding third
party) kt 413.4 378.8 9.1 416.2 1 580.1 1 582.7 (0.2)
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Average PGM
basket price US$/oz 1 331 1 695 (21.5) 2 400 1 893 2 564 (26.2)
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Average
metallurgical
grade chrome
concentrate
contract price -
42% basis US$/t 291 292 (0.3) 226 263 209 25.8
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Phoevos Pouroulis, CEO of Tharisa, commented:
"The divergence in commodity prices could not have been more
visible than the past quarter which saw us touching 52-week highs
in the chrome market based on solid fundamentals, but these
fundamentals were distinctly lacking in the PGM market, which saw
prices drop more rapidly and lower than the market anticipated,
resulting in broad based challenges for the PGM market on the
supply side.
While current markets are volatile and unpredictable, we believe
in the medium term outlook for PGMs underpinned by a supply side
constrained economy, this supported by a robust chrome market
driven by stable demand.
At Tharisa, our co-product model showed its resilience once
again, supported by a strong recovery in chrome production in the
second half of the year and benefiting from a 26% increase in
price. The earlier operational mining challenges and resulting ore
mix from our own ore and purchased ore did have a negative impact
on PGM recovery and thus production, however, this was supported by
a strong focus and recovery in chrome in the second half of the
year. The waste contractor is now firmly in place, and we see a
recovery in waste mining volumes for FY2024, however, we remain
cautious on our production outlook as evidenced by our guidance for
the coming year.
Our margins remain strong due to our mechanised low cost
operations, with a continued disciplined capital allocation
strategy, ensuring investment in our existing businesses, providing
sustainable growth and return to shareholders.
Given the current PGM basket price weakness and uncertain global
economic outlook, we have taken the measured decision to extend the
Karo Platinum timeline out to commissioning by June 2025, with the
opportunity to accelerate the timeline as markets become more
favourable. The Karo Platinum Project has progressed well, and the
revised timeline is aligned to funding availability and provides
flexibility to navigate volatile market conditions.
Our growth strategy remains firmly intact, with continuous
optimisation at the Tharisa Mine, investment in downstream
beneficiation, and our commitment to the development of the
multi-generational Tier 1 Karo Platinum Project."
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 0.11 per 200 000-man hours worked
Market Update
-- The chrome market continues to support sustainable pricing which is driven by supply-demand fundamentals. Reduced port inventory in China highlights the tight market balance underpinned by the growth in Chinese domestic ferrochrome and stainless steel industries. Supply chain complexities are exacerbated by constrained rail and port logistics in South Africa together with the effect of erratic electricity supply from Eskom
-- PGM market remains under continued pricing pressure with
uncertainty of the macro global economic outlook having a direct
effect on the demand for the precious metals. This is overlain by
further indecisiveness on the future of the internal combustion
engine (ICE). During the latter half of Q4 FY2023 with the steep
decline in PGM prices, analysts have cautioned that higher cost
producers within the PGM industry are not profitable at these
commodity prices. The 'higher for longer' concerns of the global
interest rate market have impacted prices for now and we see muted
upside in the short term for PGM prices. In the medium to longer
term demand drivers including the hydrogen economy, possible supply
cuts at unprofitable PGM producers, project delays and capital
discipline versus demand for the ICE, will require a recovery in
PGM prices to ensure demand is met by supply
Operational Update
-- Improved quarterly reef mined of 1 158.9 kt (Q3 FY2023: 908.8 kt)
-- Annual reef mined down 24.1% to 4 177.3 kt (FY2022: 5 505.4
kt) due to inclement weather and constrained pit flexibility
-- Total annual reef tonnes milled flat at 5 409.8 kt (FY2022: 5
608.2 kt) as strategic ROM ore purchases supplemented own mine
production with Q4 FY2023 milling at 1 310.2 kt (Q3 FY2023: 1 302.2
kt)
-- Annual chrome production at 1 580.1kt (FY2022: 1 582.7 kt)
-- Grade of 17.9% Cr(2) O(3) (FY2022: 17.4%)
-- Recovery at 67.6% (FY2022: 68.3%)
-- Quarterly chrome production at 413.4 kt (Q3 FY2023: 378.8 kt)
-- Grade of 18.7% Cr(2) O(3) (Q3 FY2023: 17.8%)
-- Recovery at 70.0% (Q3 FY2023: 67.9%)
-- Vulcan contributing to strong chrome recovery
-- Annual PGM production at 144.7 koz (FY2022: 179.2 koz)
-- Rougher feed grade of 1.64 g/t (FY2022: 1.70 g/t)
-- Recovery of 66.5% (FY2022: 76.6%) as a result of ore mix from
oxidised material and purchased ROM impacting recoveries
-- Quarterly PGM production at 30.7 koz (Q3 FY2023: 37.0 koz)
-- Rougher feed grade of 1.57 g/t (Q3 FY2023: 1.67 g/t)
-- Recovery of 62.7% (Q3 FY2023: 69.0%)
Karo Platinum Update
-- One LTI recorded on the project for the year under review
-- The PGM price environment has necessitated a review of the
commissioning timeline of the Karo Platinum Project
-- First ore in mill (FOIM) now planned for June 2025
-- Project team has divided major workstreams into smaller
commitments to ensure continued development aligned with funding
availability
-- Manufacturing of key long-lead items nearing completion
-- Revised workstreams designed to accelerate the project
implementation should the PGM market become more favourable
-- Pilot mining is continuing as planned to optimise mining design
-- Additional current resource to reserve conversion underway
Cash Balance and Debt Position
Tharisa had a cash balance of US$268.8 million (30 June 2023:
US$242.6 million) at the end of the quarter, and debt of US$142.2
million (30 June 2023: US$101.1 million), resulting in a net cash
position of US$126.6 million (30 June 2023: US$141.5 million).
Guidance
Production guidance for FY2024 is set between 145 koz and 155
koz PGMs (6E basis) and 1.7 Mt to 1.8 Mt of chrome
concentrates.
Any forward looking statements have not been reported on or
reviewed by Tharisa's auditors.
Production Numbers
Quarter Quarter Quarter Quarter Year Year Year
ended ended on quarter ended ended ended on year
30 Sep 30 Jun movement 30 Sep 30 Sep 30 Sep movement
2023 2023 % 2022 2023 2022 %
Reef mined kt 1 158.9 908.8 27.5 1 314.7 4 177.3 5 505.4 (24.1)
--------- -------- -------- ------------ -------- -------- -------- ----------
m(3)
Stripping ratio : m(3) 14.0 14.2 (1.4) 13.3 12.8 12.8 -
--------- -------- -------- ------------ -------- -------- -------- ----------
Reef milled kt 1 310.2 1 302.2 0.6 1 446.8 5 409.8 5 608.2 (3.5)
--------- -------- -------- ------------ -------- -------- -------- ----------
PGM flotation
feed kt 970.6 996.5 (2.6) 1 108.1 4 122.0 4 274.5 (3.6)
--------- -------- -------- ------------ -------- -------- -------- ----------
PGM rougher
feed grade g/t 1.57 1.67 (6.0) 1.67 1.64 1.70 (3.5)
--------- -------- -------- ------------ -------- -------- -------- ----------
PGM recovery % 62.7 69.0 (9.1) 76.2 66.5 76.6 (13.2)
--------- -------- -------- ------------ -------- -------- -------- ----------
6E PGMs produced koz 30.7 37.0 (17.0) 45.3 144.7 179.2 (19.3)
--------- -------- -------- ------------ -------- -------- -------- ----------
Platinum produced koz 17.3 20.9 (17.2) 25.0 80.3 99.0 (18.9)
--------- -------- -------- ------------ -------- -------- -------- ----------
Palladium produced koz 5.2 6.6 (21.2) 7.9 24.8 30.0 (17.3)
--------- -------- -------- ------------ -------- -------- -------- ----------
Rhodium produced koz 3.0 3.4 (11.8) 4.4 13.5 17.2 (21.5)
--------- -------- -------- ------------ -------- -------- -------- ----------
Average PGM
contained metal
basket price US$/oz 1 331 1 695 (21.5) 2 400 1 893 2 564 (26.2)
--------- -------- -------- ------------ -------- -------- -------- ----------
Platinum price US$/oz 940 1 034 (9.1) 887 981 968 1.3
--------- -------- -------- ------------ -------- -------- -------- ----------
Palladium price US$/oz 1 227 1 441 (14.9) 2 077 1 594 2 107 (24.3)
--------- -------- -------- ------------ -------- -------- -------- ----------
Rhodium price US$/oz 3 841 6 959 (44.8) 13 746 8 992 14 962 (39.9)
--------- -------- -------- ------------ -------- -------- -------- ----------
Average PGM
contained metal 24 34
basket price ZAR/oz 842 31 544 (21.2) 40 850 107 40 437 (15.7)
--------- -------- -------- ------------ -------- -------- -------- ----------
Cr(2) O(3) ROM
grade % 18.7 17.8 5.1 17.3 17.9 17.4 2.9
--------- -------- -------- ------------ -------- -------- -------- ----------
Chrome recovery % 70.0 67.9 3.1 69.6 67.6 68.3 (1.0)
--------- -------- -------- ------------ -------- -------- -------- ----------
Chrome yield % 31.6 29.1 8.6 28.8 29.2 28.2 3.5
--------- -------- -------- ------------ -------- -------- -------- ----------
Chrome concentrates
produced (excluding
third party) kt 413.4 378.8 9.1 416.2 1 580.1 1 582.7 (0.2)
--------- -------- -------- ------------ -------- -------- -------- ----------
Metallurgical
grade kt 338.4 306.0 10.6 325.9 1 356.9 1 233.2 10.0
--------- -------- -------- ------------ -------- -------- -------- ----------
Specialty grades kt 75.0 72.8 3.0 90.3 223.2 349.5 (36.1)
--------- -------- -------- ------------ -------- -------- -------- ----------
Third party
chrome production kt 58.9 56.2 4.8 38.2 201.9 188.2 7.3
--------- -------- -------- ------------ -------- -------- -------- ----------
Average metallurgical
grade chrome
concentrate
contract price
- 42% basis US$/t 291 292 (0.3) 226 263 209 25.8
--------- -------- -------- ------------ -------- -------- -------- ----------
Metallurgical
grade chrome ZAR/t
concentrate CIF
contract price China 5 273 5 519 (4.5) 3 867 4 840 3 345 44.7
--------- -------- -------- ------------ -------- -------- -------- ----------
Average exchange
rate ZAR:US$ 18.7 18.7 - 17.0 18.2 15.8 15.2
--------- -------- -------- ------------ -------- -------- -------- ----------
Paphos, Cyprus
17 October 2023
JSE Sponsor
Investec Bank Limited
Connect with us on LinkedIn 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
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
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 Platinum, 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).
[1] Tharisa's financial year is from 01 October to 30
September
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END
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