TIDMTHS
RNS Number : 3813Z
Tharisa PLC
10 January 2020
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')
First quarter production report for the quarter ended 31
December 2019
Stable production sets a steady foundation despite external
disruptions
Salient features for the quarter ended 31 December 2019
-- Reef tonnes mined 1 143.0 kt and tonnes milled 1 247.1 kt
-- Platinum Group Metals ('PGMs') recovery at 82.2% with production of 34.4 koz on a 6E basis
-- Chrome recovery at 63.1% with concentrate production of 342.5 kt
-- Record PGM metal basket price for the quarter at US$1 406/oz,
and increase of 16.1% over the quarter
-- Average chrome price received for the quarter was US$145/t
-- Stripping ratio of 10.9 m(3) :m(3)
-- Unprecedented inclement weather and electricity load shedding by Eskom impacted production
Commenting on the production results, Tharisa CEO Phoevos
Pouroulis, said:
"A solid operational performance from mining and processing lead
to a stable quarter despite the adverse impact of weather, and the
well-publicised Eskom power shortages. Whilst Tharisa benefits from
our overall low usage and stand-by capacity, the unprecedented
moves to "Stage 6" load-shedding and consequent power reductions,
did provide disruption to the processing plants' stability.
Overall, plant performance was commendable. Mining, accounting for
the weather-related impact, was in line with expectations and we
should see a build up towards the latter half of the year. Our
co-product model remains robust as record PGM prices were received.
However, we remain concerned about the prevailing low chrome and
ferrochrome prices, which has had a negative effect on the chrome
industry. Our progress in Zimbabwe is continuing as planned."
Safety
Safety is a core value and Tharisa continues to strive for zero
harm at its operations. A LTIFR of 0.21 per 200 000 man hours
worked was recorded at the end of the quarter.
Production update
The production update for the quarter ended 31 December 2019 is
as follows:
Quarter Quarter Quarter Quarter Year
ended ended on quarter ended ended
31 Dec 30 Sept movement 31 Dec 30 Sept
2019 2019 % 2018 2019
------------ -------- --------- ------------ --------
Reef mined kt 1 143.0 1 248.2 (8.4) 1 090.6 4 627.1
m(3)
Stripping ratio : m(3) 10.9 10.3 5.8 6.7 8.3
Reef milled kt 1 247.1 1 291.2 (3.4) 1 192.5 4 836.0
PGM flotation feed kt 921.0 965.2 (4.6) 901.3 3 605.9
PGM rougher feed
grade g/t 1.41 1.44 (2.1) 1.59 1.47
PGM recovery % 82.2 84.7 (3.0) 76.5 82.1
6E PGMs produced koz 34.4 38.0 (9.5) 33.6 139.7
Average PGM contained
metal basket price US$/oz 1 406 1 211 16.1 983 1 081
Average PGM contained
metal basket price ZAR/oz 20 745 17 792 16.6 14 050 15 531
Cr(2) O(3) ROM grade % 18.3 18.3 - 18.5 18.1
Chrome recovery % 63.1 61.0 3.4 58.9 62.0
Chrome yield % 27.5 26.5 3.8 25.6 26.7
Chrome concentrates
produced (excluding
third party) kt 342.5 341.9 0.2 305.4 1 290.0
Metallurgical grade kt 261.0 252.4 3.4 233.4 977.9
Specialty grades kt 81.5 89.5 (8.9) 72.0 312.1
Third party chrome
production kt 62.3 69.4 (10.2) 52.2 241.1
Metallurgical grade
chrome concentrate US$/t
contract price CIF China 145 148 (2.0) 164 162
Metallurgical grade
chrome concentrate ZAR/t
contract price CIF China 2 120 2 203 (3.8) 2 311 2 322
Average exchange
rate ZAR:US$ 14.7 14.7 - 14.3 14.4
----------------------- ------------ -------- --------- ------------ -------- ---------
Mining
Reef tonnes mined totalled 1 143.0 kt, which when compared to
the previous comparable quarter in December 2018 was up 4.8% but
lower than the previous quarter ended September 2019, as inclement
weather impacted the open pit operation, resulting in a ROM
'opportunity loss ' of over 230 kt. Rainfall during December was
137% higher than the previously recorded highest rainfall in the
five prior years.
The lower reef tonnage had a direct impact on reef milled but
was up when compared to December 2018 at 1 247.1 kt.
The stripping ratio improved against all measurements at 10.9
m(3) :m(3) .
Processing
Stand by power generating capacity mitigated the impact of Eskom
loadshedding on the processing plants although the increase to
"Stage 6" and the resultant electricity curtailment did result in
an overall reduction in tonnes milled of 11.2 kt which had a
further impact on overall chrome production.
PGM production was 34.4 koz (6E basis) from a rougher feed grade
of 1.41 g/t and recoveries at 82.2%.
Chrome concentrate production was 342.5 kt, comprising 261.0 kt
of metallurgical grade and 81.5 kt of specialty grade. Third party
chrome production was 62.3 kt, as the K3 plant was closed during
December.
Market update
Our co-product business model has benefitted from record PGM
prices, with the average PGM contained metal basket price for the
quarter at US$1 406/oz (ZAR20 745/oz), with palladium and rhodium
continuing to be the main driver of the increased basket price.
The average chrome price received for the quarter was US$145/t
with current spot trading at US$133/t, levels the Company believes
are unsustainable in the long-term, but expectations are for chrome
concentrate prices to remain at these levels during the current
quarter, with some potential for improvement into the third
quarter.
Outlook
Tharisa's FY2020 production guidance remains at 155 koz to 165
koz PGMs (6E basis) and 1.45 Mt to 1.55 Mt of chrome
concentrates.
The co-product model remains robust and we continue to enjoy the
benefits of record PGM basket prices as we ramp up production in
both PGM and chrome concentrates.
The above information has not been reported on or reviewed by
Tharisa's auditors.
Paphos, Cyprus
10 January 2020
JSE Sponsor
Investec Bank Limited
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 / James Husband
+44 020 7466 5000
tharisa@buchanan.uk.com
Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / David McKeown
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Thomas Rider / Neil Elliot / Michael Rechsteiner
+44 020 7236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Detlir Elezi
+44 20 3207 7800
Nedbank Limited (acting through its Corporate and Investment
Banking division) (RSA Broker)
Shabbir Norath
+27 11 295 6575
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END
DRLURRVRRWUAARR
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January 10, 2020 02:00 ET (07:00 GMT)
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