REG - Tharisa PLC - 3rd Quarter Production Results

TharisaAnnouncement

12/07/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230712:nRSL6928Fa&default-theme=true

RNS Number : 6928F  Tharisa PLC  12 July 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 THIRD QUARTER ENDED 30 JUNE 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 Q3 FY2023 1  and cash balance as at the quarter end.

Quarter highlights

‒     Lost Time Injury Frequency Rate ('LTIFR') of 0.06 per 200 000-man
hours worked

‒     Processing capacity maintained

‒     PGM output increased to 37.0 koz (Q2 FY2023: 34.3 koz) with yield
maintained and recoveries improving

‒     Chrome output marginally lower at 378.8 kt (Q2 FY2023: 404.8 kt)
on steady grades, yield, and recoveries

‒     Mining volumes remain constrained

‒     Metallurgical grade chrome concentrate prices up 7.8% quarter on
quarter averaging US$290/t (Q2 FY2023: US$269/t)

‒     Karo Platinum Project remains on track with major milestones of
first concrete pour and pilot mining commenced

‒     Cash on hand increased by US$36.8 million to US$242.6 million (31
March 2023: US$205.8 million), resulting in a net cash position of
US$141.5 million (31 March 2023: US$101.1 million

‒     Strong balance sheet to support the growth of the business whilst
providing returns to shareholders

 

Key Operating Numbers

                                                                         Quarter ended 30 June 2023     Quarter ended 31 March 2023     Quarter on quarter movement %    Quarter ended 30 June 2022     Nine months ended 30 June 2023     Nine months ended 30 June 2022
 6E PGMs produced                                       koz              37.0                           34.3                            7.9                              42.1                           114.0                              133.9
 Chrome concentrates produced (excluding third party)   kt               378.8                          404.8                           (6.4)                            389.7                          1 166.7                            1 166.4
 Average PGM contained metal basket price               US$/oz           1 695                          2 032                           (16.6)                           2 677                          2 049                              2 619
 Metallurgical grade chrome concentrate contract price  US$/t CIF China  290                            269                             7.8                              247                            258                                201

 

Phoevos Pouroulis, CEO of Tharisa, commented:

"The unique co-product model was again highlighted with the Company
benefitting from continued favourable chrome pricing while dealing with PGM
pricing pressures, resulting in strong free cash generation - ending the
period with a further strengthened balance sheet with net cash of over
US$140m.

The quarter also allowed us to review our in-pit mining plan with the
appointment of a waste material contractor helping to ensure sustainable
access to the required reef horizons. Our output will, however, remain subdued
for the remainder of the year as we focus on mining flexibility for
sustainable reef operations.

At Karo, we remain on track with project construction, completing our first
concrete pour in June, with pilot mining having commenced. The equity
contribution by Tharisa of US$135 million is being drawn down to match capital
requirements with cash flow as we finalise the senior debt portion for this
globally strategic mine.

Domestic headwinds coupled with macro events and commodity price uncertainty
have pressured the business and led to a material disconnect between equity
valuations and intrinsic valuation underpinned by cash generation. However,
as we have shown in more complex historical times, the nature of Tharisa with
modern, low-cost structures leaves us well positioned to weather the
environment and continue to provide returns to shareholders while actively and
sustainably growing the business."

 

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 0.06 per 200 000-man hours worked

Market Update

‒     The pressure seen in the PGM market manifested itself in some
unusual and often aggressive selling patterns, with renewed fears of a macro
economic slowdown, driven by China and the United States, compounding price
pressures. This despite car sales being set to surpass production last year,
which should underpin a demand for all PGM metals. However, pipeline
destocking meant that this increased demand was satisfied by pipeline
inventories. We maintain that while prices are trading near 52-week lows, in
the medium to long-term, prices should rise, driven by supply complexities in
the major producing regions, with current pricing pressures leading to
increased challenges faced by some higher cost producers. While most
commentators have pulled back price forecasts in line with recent events, the
long-term outlook for even the most conservative forecasts are indicating
higher averages for PGMs than current spot prices

‒     The chrome market showed its ongoing resilience as solid demand
meant prices averaged well above those achieved in the previous quarters.
While port stocks, which were sitting at multi-year lows have increased, the
supply pipeline remains tight, particularly as inland logistics in South
Africa remain challenging. In addition, there have been no major primary
output increases in the local market due to the lack of available resources
and power constraints for smaller producers unable to access standby power.
The chrome market looks set to continue its strong performance for the
remainder of the calendar year 2023, particularly as new furnace commissioning
continues to draw on material demand

Operational Update

‒     Total reef mined of 908.8 kt (Q2 FY2023: 1 028.0 kt) limited by
constrained in pit flexibility notwithstanding the increased waste stripping
at 14.2 m(3): m(3) (Q2 FY2023: 12.6 m(3): m(3))

‒     Total reef tonnes milled for the quarter at 1 302.2 kt (Q2
FY2023: 1 370.0 kt), supplemented by strategic ROM ore purchases

‒     Quarterly PGM production at 37.0 koz (Q2 FY2023: 34.3 koz)

‒     Rougher feed grade of 1.67 g/t (Q2 FY2023: 1.66 g/t)

‒     Recovery of 69.0% (Q2 FY2023: 61.9%) as the plants processed more
fresh material

‒     Quarterly chrome production at 378.8 kt (Q2 FY2023: 404.8 kt)

‒     Grade of 17.8% Cr(2)O(3) (Q2 FY2023: 18.4%)

‒     Recovery at 67.9% (Q2 FY2023: 66.6%)

‒     Speciality chrome production improving as spiral replacement
program has been completed

Karo Platinum Update

‒     No LTI recorded on the project to date

‒     540 people on site, of which 99 are Karo employees with the
balance contractor employees

‒     Concrete foundation pouring progressing well with earthworks
nearing completion

‒     Pilot mining commenced with contractor and staff onsite to
commence operational tests

‒     Long-lead items manufacturing progressing as planned with first
major deliveries schedule for Q4 calendar 2023

‒     Powerline construction to commence this quarter

Cash Balance and Debt Position

Tharisa had a cash balance of US$242.6 million (31 March 2023: US$205.8
million) at the end of the quarter, and debt of US$101.1 million (31 March
2023: US$99.0 million), resulting in a net cash position of US$141.5 million
(31 March 2023: US$101.1million). These cash and debt numbers continue to
exclude the recently concluded US$130 million facilities which are undrawn at
the reporting period.

 

Production Numbers

                                                                         Quarter ended 30 June 2023     Quarter ended 31 March 2023     Quarter on quarter movement %    Quarter ended 30 June 2022     Nine months ended 30 June 2023     Nine months ended 30 June 2022
 Reef mined                                             kt               908.8                          1 028.0                         (11.6)                           1 357.1                        3 018.4                            4 190.7
 Stripping ratio                                        m(3): m(3)       14.2                           12.6                            12.7                             14.2                           12.3                               12.6
 Reef milled                                            kt               1 302.2                        1 370.0                         (4.9)                            1 367.1                        4 099.5                            4 161.4
 PGM flotation feed                                     kt               996.5                          1 039.6                         (4.1)                            1 051.4                        3 151.4                            3 166.4
 PGM rougher feed grade                                 g/t              1.67                           1.66                            0.6                              1.65                           1.66                               1.71
 PGM recovery                                           %                69.0                           61.9                            11.5                             75.6                           67.6                               76.8
 6E PGMs produced                                       koz              37.0                           34.3                            7.9                              42.1                           114.0                              133.9
 Platinum produced                                      koz              20.9                           19.7                            6.1                              23.1                           63.8                               73.9
 Palladium produced                                     koz              6.6                            6.1                             8.2                              7.2                            20.1                               22.1
 Rhodium produced                                       koz              3.4                            3.0                             13.3                             4.0                            10.6                               12.8
 Average PGM contained metal basket price               US$/oz           1 695                          2 032                           (16.6)                           2 677                          2 049                              2 619
 Platinum price                                         US$/oz           1 034                          1 004                           3.0                              958                            994                                994
 Palladium price                                        US$/oz           1 441                          1 563                           (7.8)                            2 100                          1 664                              2 117
 Rhodium price                                          US$/oz           6 959                          10 812                          (35.6)                           15 755                         10 467                             15 370
 Average PGM contained metal basket price               ZAR/oz           31 544                         35 801                          (11.9)                           41 531                         36 671                             40 299
 Cr(2)O(3) ROM grade                                    %                17.8                           18.4                            (3.3)                            17.0                           17.7                               17.4
 Chrome recovery                                        %                67.9                           66.6                            2.0                              70.2                           66.7                               67.8
 Chrome yield                                           %                29.1                           29.5                            (1.4)                            28.5                           28.5                               28.0
 Chrome concentrates produced (excluding third party)   kt               378.8                          404.8                           (6.4)                            389.7                          1 166.7                            1 166.4
 Metallurgical grade                                    kt               306.0                          365.3                           (16.2)                           307.0                          1 018.5                            907.3
 Specialty grades                                       kt               72.8                           39.5                            84.3                             82.7                           148.2                              259.1
 Third party chrome production                          kt               56.2                           45.8                            22.7                             47.4                           143.0                              150.0
 Metallurgical grade chrome concentrate contract price  US$/t CIF China  290                            269                             7.8                              247                            258                                201
 Metallurgical grade chrome concentrate contract price  ZAR/t CIF China  5 519                          4 827                           14.3                             3 900                          4 680                              3 112
 Average exchange rate                                  ZAR:US$          18.7                           17.8                            5.1                              15.6                           18.0                               15.4

 

Paphos, Cyprus

 

12 July 2023

 

JSE Sponsor

Investec Bank Limited

Connect with us on LinkedIn
(https://protect-za.mimecast.com/s/Hc4jCJZK7oIYv07fVi1n3?domain=linkedin.com)
and Twitter
(https://protect-za.mimecast.com/s/hll5CKO75pfnN3jUvSAEZ?domain=twitter.com)
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 (mailto: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 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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DRLNKDBDQBKDAOD