TIDMTHS
RNS Number : 7012O
Tharisa PLC
12 October 2021
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
2021
Best quarterly production in the history of the Tharisa Mine
Fourth quarter and year-end highlights
-- Five-year fatality free, with a Lost Time Injury Frequency
Rate ('LTIFR') of 0.34 per 200 000-man hours worked
-- Delivered on production guidance with record quarterly output
of Platinum Group Metals ('PGMs') and chrome concentrates
-- PGM production of 43.7 koz, up 12% Quarter on Quarter
('QoQ'), delivering 157.8 koz for the year, up 11% Year on Year
('YoY') at an average PGM basket price of US$3 074/oz (ZAR45
336/oz), up 80% YoY
-- Chrome output of 395.7 kt, up 4% QoQ, delivering 1 506.1 kt
for the year, up 12% YoY at an average metallurgical grade chrome
price of US$154/t (ZAR2 284/t), up 10% YoY
-- Record production performance has further strengthened the Company's balance sheet
-- Cash balance of US$83.4 million and a positive net cash position of US$47.9 million
-- Decarbonisation targets set at a 30% reduction in emissions
by 2030, carbon net neutral by 2050 across the Company's
operations
Post year-end highlights
-- Commencement of cold commissioning of the Vulcan ultra-fine
chrome processing plant in October 2021, anticipated to increase
recoveries of chrome concentrate to above 80%, thereby increasing
chrome production by 25% to 2.0 Mt
-- Commencement of Salene Chrome plant construction
Guidance for FY2022
-- FY2022 production guidance of between 165 koz to 175 koz PGMs
(6E basis) and 1.75 Mt to 1.85 Mt of chrome concentrates. COVID-19
remains a risk to the Company and guidance is premised on the
current level of economic activity being maintained
Key Operating Numbers
Quarter Quarter Quarter on Quarter Year ended Year ended Year on
ended 30 ended 30 quarter ended 30 30 Sep 30 Sep year
Sep 2021 Jun 2021 movement % Sep 2020 2021 2020 movement %
Reef mined kt 1 404.7 1 507.8 (6.8) 1 405.7 5 379.9 4 971.1 8.2
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
PGMs produced
(6E) koz 43.7 39.0 12.1 40.5 157.8 142.1 11.0
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Chrome
concentrates
produced
(excluding third
party) kt 395.7 379.7 4.2 370.8 1 506.1 1 344.8 12.0
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Average PGM
basket price US$/oz 2 854 3 804 (25.0) 1 951 3 074 1 704 80.4
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Average
metallurgical
grade chrome
concentrate
contract price US$/t 167 160 4.4 142 154 140 10.0
-------- ---------- ----------- ----------- ----------- ----------- ----------- -----------
Phoevos Pouroulis, CEO of Tharisa, commented:
"The fourth quarter of our financial year delivered the highest
production of PGMs and chrome concentrates in the history of the
Tharisa Mine. This performance follows several strategic
initiatives to optimise the operation, these have built a
sustainable platform for Tharisa to deliver further significant
growth over the long life of our open pit operations.
The continued improved performance over the past twelve months
was achieved through the proficiency, commitment and focus of all
our staff, who not only delivered our results safely, but did so in
the face of COVID-19 uncertainty, which saw thousands of man hours
lost during the past 12 months. The challenge of the pandemic
persists on numerous fronts, yet we remain confident that the
measures we have taken in the last two years will continue to allow
us to overcome these and future challenges.
With the FY2022 production guidance provided for the Tharisa
Mine, we see further growth particularly from the investment made
in the Vulcan plant, which is in the cold commissioning phase and
will produce chrome concentrates before the end of 2021. In
Zimbabwe, the exciting developments with Salene Chrome, in the
construction phase, as well as the progress on the development of
Karo Platinum, will contribute to Tharisa's growth trajectory over
the next two years.
As we enter the next phase of the development of our business,
Tharisa remains a key participant in the global transition to a low
carbon economy through the critical metals we produce. Not only
will Tharisa contribute to this transition, we will deliver on our
stated goals of reaching 30% reduction in emissions by 2030 and
carbon neutrality by 2050 through the extraordinary skills and
initiatives of our own research and development team as well as the
adoption of leading technologies."
Health & Safety
-- The health and safety of our stakeholders remains a core
value to the Company and Tharisa continues to strive for zero harm
at its operations
-- LTIFR of 0.34 per 200 000-man hours worked
-- Tharisa recorded its fifth-year fatality free, a testament to
the due diligence and focus of our staff
-- South Africa is at an adjusted Alert Level 1 as the country has exited Wave 3
-- The Company currently has zero active COVID-19 cases
Market Update
-- While the PGM basket price increased by over 80% on an annual
basis, this was somewhat dampened by the softer PGM basket price in
the last quarter, which saw the average basket price reduce by 25%
QoQ. While the upside price movement may be perceived to have
overrun, short term supply-demand disruptions need to be countered
by the strong fundamentals of PGMs in the longer term, driven by a
healthy outlook for the internal combustion engine, investment and
industrial demand. While substitution will take place between
palladium and platinum in catalytic converters over time, the
inability to substitute the minor metals, the largest of which is
rhodium, ensures that the PGM basket price will remain robust for
at least the next 5-year period
-- Chrome prices improved in the last quarter with an increase
of over 4% compared to the June 2021 quarter, and also saw an
increase of 10% on an annual basis, with spot trading at US$165/t.
Prices will need to remain at these levels for most producers to
remain profitable and continue to invest, as shipping rates have
dented margins, with the global logistic industries continuing to
be impacted by the pandemic and challenges with supply chain
management. Despite some output cuts at stainless steel plants in
China, output is nevertheless expected to increase close to double
digit percentage growth compared to 2020 as both domestic demand
and export demand drives higher output levels in China. South
African inland logistics issues have led to longer supply chains
and thus increased pricing for products, while stockpiles of chrome
at port level in China remain constant
Operational Update
-- Total reef mined slightly down QoQ but up over 8% YoY to 5.4 Mt
-- Annual stripping ratio of 11.6 m(3) : m(3) ahead of LOM requirements
-- Tonnes milled increased QoQ leading to an increase in milled
tonnes for the year of over 11% to 5.6 Mt
-- Record quarterly PGM production at 43.7 koz leading to an
annual output of 157.8 koz, within guidance
-- Record quarterly chrome output of 395.7 kt leading to an
increase YoY of 12% in chrome output to 1 506.1 kt, within
guidance
-- The improvements in PGM grade to 1.59 g/t are as a direct
result of the mining efficiencies achieved in the last 18 months,
allowing the mine to focus on 'right mining' to achieve the optimal
grade mix
-- Correct grade mix has resulted in the plants running
optimally, leading to improved recoveries
-- The mine has approximately 2-months ROM stockpile ahead of the plants
Zimbabwe update
-- Salene Chrome is on track to commence production in Q1 FY2022
-- Salene Chrome mining has commenced, and the metallurgical plant construction is in progress
-- Karo Platinum implementation studies completed
Cash Balance and Debt Position
-- Tharisa had a cash balance of US$83.4 million (30 June 2021
US$80.5 million) at the end of the quarter and debt of US$35.5
million (30 June 2021 US$38.7 million) resulting in a positive net
cash position of US$47.9 million (30 June 2021 US$41.8 million),
with a significant portion of capital spent on the construction of
the Vulcan plant being internally funded
-- The Company's strong balance sheet with low leverage
positions it to fund its growth aspirations
Quarter Quarter Quarter Quarter Year Year Year on
ended ended on quarter ended ended ended year movement
30 Sep 30 Jun movement 30 Sep 30 Sep 30 Sep %
2021 2021 % 2020 2021 2020
Reef mined kt 1 404.7 1 507.8 (6.8) 1 405.7 5 379.9 4 971.1 8.2
--------- -------- -------- ------------ -------- -------- -------- ---------------
m(3)
Stripping ratio : m(3) 12.3 10.9 12.8 13.0 11.6 12.1 (4.1)
--------- -------- -------- ------------ -------- -------- -------- ---------------
Reef milled kt 1 428.1 1 413.1 1.1 1 401.8 5 600.0 5 036.1 11.2
--------- -------- -------- ------------ -------- -------- -------- ---------------
PGM flotation
feed kt 1 071.6 1 072.3 (0.1) 1 062.5 4 248.2 3 765.9 12.8
--------- -------- -------- ------------ -------- -------- -------- ---------------
PGM rougher
feed grade g/t 1.59 1.52 4.6 1.54 1.49 1.46 2.1
--------- -------- -------- ------------ -------- -------- -------- ---------------
PGM recovery % 80.0 74.4 7.5 77.1 77.6 80.1 (3.1)
--------- -------- -------- ------------ -------- -------- -------- ---------------
6E PGMs produced koz 43.7 39.0 12.1 40.5 157.8 142.1 11.0
--------- -------- -------- ------------ -------- -------- -------- ---------------
Platinum produced koz 23.6 21.8 8.3 22.7 86.7 78.7 10.2
--------- -------- -------- ------------ -------- -------- -------- ---------------
Palladium produced koz 7.2 5.5 30.9 6.1 24.9 23.0 8.3
--------- -------- -------- ------------ -------- -------- -------- ---------------
Rhodium produced koz 4.3 3.9 10.3 3.9 15.4 13.5 14.1
--------- -------- -------- ------------ -------- -------- -------- ---------------
Average PGM
contained metal
basket price US$/oz 2 854 3 804 (25.0) 1 951 3 074 1 704 80.4
--------- -------- -------- ------------ -------- -------- -------- ---------------
Platinum price US$/oz 1 016 1 185 (14.3) 901 1 080 876 23.3
--------- -------- -------- ------------ -------- -------- -------- ---------------
Palladium price US$/oz 2 295 2 794 (17.9) 2 283 2 513 2 147 17.0
--------- -------- -------- ------------ -------- -------- -------- ---------------
Rhodium price US$/oz 16 721 24 232 (31.0) 10 482 18 860 8 348 125.9
--------- -------- -------- ------------ -------- -------- -------- ---------------
Average PGM
contained metal
basket price ZAR/oz 41 727 53 801 (22.4) 32 978 45 336 27 691 63.7
--------- -------- -------- ------------ -------- -------- -------- ---------------
Cr(2) O(3) ROM
grade % 17.9 18.0 (0.6) 18.0 17.9 18.2 (1.6)
--------- -------- -------- ------------ -------- -------- -------- ---------------
Chrome recovery % 65.0 63.0 3.2 62.3 63.3 62.1 1.9
--------- -------- -------- ------------ -------- -------- -------- ---------------
Chrome yield % 27.7 26.9 3.0 26.4 26.9 26.7 0.7
--------- -------- -------- ------------ -------- -------- -------- ---------------
Chrome concentrates
produced (excluding
third party) kt 395.7 379.7 4.2 370.8 1 506.1 1 344.8 12.0
--------- -------- -------- ------------ -------- -------- -------- ---------------
Metallurgical
grade kt 309.3 280.8 10.1 277.6 1 141.5 1 023.2 11.6
--------- -------- -------- ------------ -------- -------- -------- ---------------
Specialty grades kt 86.4 98.9 (12.6) 93.2 364.6 321.6 13.4
--------- -------- -------- ------------ -------- -------- -------- ---------------
Third party
chrome production kt 52.4 59.0 (11.2) 52.8 223.0 169.8 31.3
--------- -------- -------- ------------ -------- -------- -------- ---------------
Metallurgical
grade chrome US$/t
concentrate CIF
contract price China 167 160 4.4 142 154 140 10.0
--------- -------- -------- ------------ -------- -------- -------- ---------------
Metallurgical
grade chrome ZAR/t
concentrate CIF
contract price China 2 435 2 274 7.1 2 376 2 284 2 231 2.4
--------- -------- -------- ------------ -------- -------- -------- ---------------
Average exchange
rate ZAR:US$ 14.6 14.1 3.5 16.9 14.8 16.2 (8.6)
--------- -------- -------- ------------ -------- -------- -------- ---------------
Paphos, Cyprus
12 October 2021
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 / Augustine Chipungu / James Husband
+44 207 466 5000
tharisa@buchanan.uk.com
Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / David McKeown / Alexander Allen
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Thomas Rider / Pascal Lussier Duquette / Nick Macann
+44 207 236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Jennifer Wyllie / Varun Talwar / 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
mining, processing, exploration and the beneficiation, marketing,
sales and logistics of PGMs and chrome concentrates, using
innovation and technology as enablers. Its principal asset is the
Tharisa Mine located in the South-Western Limb of the Bushveld
Complex, South Africa. The mechanised mine has a 14-year open pit
life and the ability to extend operations underground by at least
an additional 40 years. Tharisa also owns Salene Chrome, a
development stage, low cost, open pit asset, located adjacent to
the Great Dyke in Zimbabwe. 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
DRLUAASRABURAAA
(END) Dow Jones Newswires
October 12, 2021 02:00 ET (06:00 GMT)
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