REG - Tharisa PLC - Tharisa Production Report Q1 FY2023

TharisaAnnouncement

11/01/2023 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:20230111:nRSK2857Ma&default-theme=true

RNS Number : 2857M  Tharisa PLC  11 January 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 FIRST QUARTER FY2023 ENDED 31 DECEMBER 2022

Tharisa, the platinum group metals (PGMs) and chrome co-producer dual-listed
on the Johannesburg and London stock exchanges, today announces its production
and cash balance results for Q1 FY2023 1  (#_ftn1)

Quarter highlights

‒      Lost Time Injury Frequency Rate ('LTIFR') of 0.3 per 200 000-man
hours worked

‒      Mining volumes impacted by unprecedented rainfall not seen in
the history of the Tharisa Mine

‒      Processing efficiencies impacted by increased processing of
oxidised ore and variable ROM stockpiles

‒      PGM output marginally lower versus prior quarter at 42.7 koz (Q4
FY2022: 45.3 koz)

‒      Chrome output fell as a direct result of feed and ore mix
variability at 383.1 kt (Q4 FY2022: 416.2 kt) with grades remaining consistent
at 17%

‒      Vulcan Plant optimisation continuing with increased output on
track for H2 FY2023

‒      Production guidance maintained at between 175 koz and 185 koz
PGMs (6E basis) and 1.75 Mt to 1.85 Mt of chrome concentrates

‒      Elevated PGM prices driven by PGM demand for the automotive
industry and lower production from major suppliers; Chrome prices remain
buoyant currently at US$260/t due to eroding Chinese stockpiles

‒      Successful ground breaking at Karo Platinum Mine in Zimbabwe;
project construction ongoing

‒      Raised US$31.8m from bond issue for Karo Mining Holdings on the
Victoria Falls Stock Exchange

‒      Cash on hand US$213.9 million, with a net cash position of
US$101.1 million

‒      Growth strategy firmly on track for FY2023

 

Key Operating Numbers

                                                                         Quarter ended 31 Dec 2022     Quarter ended 30 Sep 2022     Quarter on quarter movement %    Quarter ended 31 Dec 2021     Year    ended 30 Sep 2022
 Reef mined                                             kt               1 081.5                       1 314.7                       (17.7)                           1 413.9                       5 505.4
 6E PGMs produced                                       koz              42.7                          45.3                          (5.7)                            47.7                          179.2
 Chrome concentrates produced (excluding third party)   kt               383.1                         416.2                         (8.0)                            401.8                         1 582.7
 Average PGM contained metal basket price               US$/oz           2 360                         2 400                         (1.7)                            2 394                         2 564
 Metallurgical grade chrome concentrate contract price  US$/t CIF China  223                           226                           (1.3)                            161                           209

 

Phoevos Pouroulis, CEO of Tharisa, commented:

"Despite operational headwinds at the Tharisa Mine, the Company delivered a
solid quarter of PGM and chrome production, underpinning our commitment in
delivering guidance of between 175 koz and 185 koz PGM and 1.75 Mt and 1.85 Mt
chrome concentrates.  The quarter also saw significant progress in the
development of Karo Platinum, which will be our second Tier 1 PGM asset, with
ground breaking and the commencement of the development of the necessary
infrastructure and mine construction, supported by the first bond issue on the
Victoria Falls Exchange in Zimbabwe.

The fatality in October 2022 overshadowed the quarter where output was
hampered by unprecedented rainfall, which registered an annualised increase in
rainfall of 27%. While the changes we have made to the pit layout provided
significantly better drainage, access to the pit was nevertheless hampered due
to the high-water level, directly resulting in pit flexibility being
compromised. Our stockpile management strategy implemented over the past 24
months resulted in minimising the impact to our normal output.

Our growth strategy remains intact, underpinned by further free cash flow
generation in the quarter, as well as progressing with our ambitions to become
a multi-asset and multi-jurisdiction group with the rapid progress of the 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 0.3 per 200 000-man hours worked

Market Update

‒      Chrome prices remain strong, with spot at around US$260/t at the
time of writing. Stockpiles in China remain at the lower end of seasonal
levels despite lower ferrochrome production in the latter part of the quarter.
Demand for chrome remains resilient and shipments are being executed as
rapidly as possible given transport logistics constraints in South Africa.
Tharisa has benefited from its ability to access three ports to ensure we
deliver our products to our clients. Chinese New Year will slow demand towards
the end of January 2023 but with the economy in China opening post COVID-19
restrictions, we continue to foresee strong demand for the product heading
into the Northern Hemisphere spring.

‒      PGM prices remained elevated over the quarter and are set to
continue at these levels on the back of PGM demand from the automotive
industry and lower production from the major suppliers. As forecast, while
palladium prices have rerated, ever growing reduction of platinum surplus
supplies will lead to a deficit over the next 12 to 18 months, according to
consensus industry forecasts. The growing reduction in platinum surplus
supplies has resulted in platinum price increases with rhodium and other minor
PGM basket constituents remaining strong. This is a direct result of the
forecasted lower output due to the operational issues addressed above

Operational Update

‒      Total reef mined of 1 081.5 kt (Q4 FY2022: 1 314.7 kt) as
weather impacted access to all benches, which affected mining and drilling
volumes

‒      Stripping ratio of 10.6 m(3): m(3) (Q4 FY2022: 13.3 m(3): m(3))
in line with new life of mine requirements but also affected by adverse
weather conditions

‒      Total reef tonnes milled for the quarter at 1 427.4 kt (Q4
FY2022: 1 446.8 kt), utilising stockpiles to maintain plant throughput

‒      Quarterly PGM production at 42.7 koz (Q4 FY2022: 45.3 koz)

‒      Rougher feed grade of 1.66 g/t (Q4 FY2022: 1.67 g/t)

‒      Recovery of 71.7% (Q4 FY2022: 76.2%) as oxidised ore from the
stockpile was fed into the circuits

‒      Quarterly chrome production at 383.1 kt (Q4 FY2022: 416.2 kt)

‒      Grade of 17.0% Cr(2)O(3) (Q4 FY2022: 17.3%)

‒      Recovery at 65.7% (Q4 FY2022: 69.6%) impacted by high
variability of ore mix and feed grade, as well as work on spiral adjustment
and replacement, impacting mainly specialty output with metallurgical chrome
output up on a quarter-by-quarter basis

‒      Vulcan Plant optimisation continuing with increased output on
track for H2 FY2023

Karo Platinum Update

‒      Construction commencement ceremony was held on 7 December 2022,
with land clearing continuing

‒      Successful capital raise and listing on VFEX Exchange on 16
December 2022

Cash Balance and Debt Position

‒      Tharisa had a cash balance of US$213.9 million (30 September
2022 US$143.4 million) at the end of the quarter, and debt of US$112.8 million
(30 September 2022 US$64.8 million). The increased cash has resulted in an
improved net cash position of US$101.1 million (30 September 2022 US$78.6
million). The cash and debt numbers include the fully consolidated recent
capital raise on the VFEX

 

Guidance

Production guidance maintained at between 175 koz and 185 koz PGMs (6E basis)
and 1.75 Mt to 1.85 Mt of chrome concentrates.

 

Production Numbers

                                                                         Quarter ended 31 Dec 2022     Quarter ended 30 Sep 2022     Quarter on quarter movement %    Quarter ended 31 Dec 2021     Year    ended 30 Sep 2022
 Reef mined                                             kt               1 081.5                       1 314.7                       (17.7)                           1 413.9                       5 505.4
 Stripping ratio                                        m(3): m(3)       10.6                          13.3                          (20.3)                           11.2                          12.8
 Reef milled                                            kt               1 427.4                       1 446.8                       (1.3)                            1 432.1                       5 608.2
 PGM flotation feed                                     kt               1 115.3                       1 108.1                       0.6                              1 069.3                       4 274.5
 PGM rougher feed grade                                 g/t              1.66                          1.67                          (0.6)                            1.75                          1.70
 PGM recovery                                           %                71.7                          76.2                          (5.9)                            79.3                          76.6
 6E PGMs produced                                       koz              42.7                          45.3                          (5.7)                            47.7                          179.2
 Platinum produced                                      koz              23.2                          25.0                          (7.2)                            26.5                          99.0
 Palladium produced                                     koz              7.5                           7.9                           (5.1)                            7.5                           30.0
 Rhodium produced                                       koz              4.2                           4.4                           (4.5)                            4.6                           17.2
 Average PGM contained metal basket price               US$/oz           2 360                         2 400                         (1.7)                            2 394                         2 564
 Platinum price                                         US$/oz           967                           887                           9.0                              997                           968
 Palladium price                                        US$/oz           1 952                         2 077                         (6.0)                            1 941                         2 107
 Rhodium price                                          US$/oz           12 951                        13 746                        (5.8)                            13 522                        14 962
 Average PGM contained metal basket price               ZAR/oz           41 682                        40 850                        2.0                              36 897                        40 437
 Cr(2)O(3) ROM grade                                    %                17.0                          17.3                          (1.7)                            18.1                          17.4
 Chrome recovery                                        %                65.7                          69.6                          (5.6)                            65.6                          68.3
 Chrome yield                                           %                26.8                          28.8                          (6.9)                            28.1                          28.2
 Chrome concentrates produced (excluding third party)   kt               383.1                         416.2                         (8.0)                            401.8                         1 582.7
 Metallurgical grade                                    kt               347.2                         325.9                         6.5                              305.3                         1 233.2
 Specialty grades                                       kt               35.9                          90.3                          (60.2)                           96.5                          349.5
 Third party chrome production                          kt               40.9                          38.2                          7.1                              49.2                          188.2
 Metallurgical grade chrome concentrate contract price  US$/t CIF China  223                           226                           (1.3)                            161                           209
 Metallurgical grade chrome concentrate contract price  ZAR/t CIF China  3 932                         3 867                         1.7                              2 471                         3 345
 Average exchange rate                                  ZAR:US$          17.6                          17.0                          3.5                              15.4                          15.8

 

Paphos, Cyprus

 

11 January 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 (mailto: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 development stage, low-cost, open-pit PGM asset 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  (#_ftnref1) Tharisa's financial year begins 01 October each year and
finishes on 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  MSCBSGDBGDBDGXG