Tharisa PLC Q2 FY2018 Production Report 31 March 2018 (3185K)
10 April 2018 - 4:00PM
UK Regulatory
TIDMTHS
RNS Number : 3185K
Tharisa PLC
10 April 2018
Tharisa plc
(Incorporated in the Republic of Cyprus with limited
liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
ISIN: CY0103562118
('Tharisa')
Second quarter production report for the quarter ended 31 March
2018
Tharisa delivers another robust quarter as it advances plans to
increase production
Highlights for the quarter ended 31 March 2018
-- PGM recoveries at 82.2% exceed targeted recoveries of 80.0%
-- PGM production of 38.2 koz
-- Improved chrome recovery at 66.3% exceeded targeted recovery of 65.0%
-- Record chrome concentrate production of 366.7 kt
-- Vision 2020 projects on track to produce 200 kozpa PGMs and 2 Mtpa chrome in 2020
Highlights for the six months (H1 FY2018) ended 31 March
2018
-- PGM production at 77.0 koz, up 11.4% from 69.1 koz in H1 FY2017
-- Chrome concentrate production at 732.5 kt, up 15.0% from 636.8 kt in H1 FY2017
Safety
Safety remains a priority and Tharisa continues to strive for
zero harm at its operations. A LTIFR of 0.12 per 200 000 man hours
worked was recorded at the end of March 2018.
During the quarter the operations recorded two safety milestones
with the mining operations achieving 1 000 000 fatality free shifts
and the Genesis Plant achieving 365 LTI free days.
Production update
The production update for the quarter ended 31 March 2018 is as
follows:
Quarter Quarter Quarter on Quarter Half year Half year
ended 31 Mar ended 31 Dec quarter ended 31 Mar ended ended
2018 2017 move % 2017 31 Mar 31 Mar
2018 2017
------------------- -------------- ------------- ------------- ------------ ------------- ---------- ----------
Reef mined kt 1 206.0 1 245.3 (3.2) 1 219.2 2 451.3 2 449.1
m(3) waste/
Stripping ratio m(3) reef 8.5 7.8 9.0 7.5 8.1 8.4
Reef milled kt 1 287.2 1 310.2 (1.8) 1 211.3 2 597.4 2 417.7
PGM flotation feed kt 936.0 959.6 (2.5) 897.9 1 895.6 1 783.0
PGM rougher feed
grade g/t 1.54 1.49 3.4 1.56 1.52 1.54
6E PGMs produced koz 38.2 38.8 (1.5) 34.3 77.0 69.1
PGM recovery % 82.2 84.3 (2.5) 76.2 83.2 78.3
Average PGM
contained metal
basket price US$/oz 953 865 10.2 783 909 760
Average PGM
contained metal
basket price ZAR/oz 11 384 11 827 (3.7) 10 355 11 606 10 306
Cr O ROM grade % 18.2 18.1 0.6 17.5 18.1 17.5
Chrome recovery % 66.3 65.5 1.2 62.5 65.9 63.4
Chrome yield % 28.5 27.9 2.2 26.0 28.2 26.3
Chrome
concentrates
produced kt 366.7 365.8 0.2 314.6 732.5 636.8
Metallurgical
grade kt 281.2 277.7 1.3 239.2 558.9 484.3
Specialty
grades kt 85.5 88.1 (3.0) 75.4 173.6 152.5
Third-party
production kt 53.4 52.8 1.1 - 106.2 -
Metallurgical
grade chrome
concentrate US$/t CIF
contract price China 206 179 15.1 338 193 278
Metallurgical
grade chrome
concentrate ZAR/t CIF
contract price China 2 444 2 426 0.7 4 430 2 436 3 783
Average exchange
rate ZAR:US$ 12.0 13.6 (11.8) 13.2 12.8 13.6
------------------- -------------- ------------- ------------- ------------ ------------- ---------- ----------
Mining
The transition to owner mining has progressed well. The fleet
purchased from the mining contractor has been supplemented by
additional drill rigs and yellow fleet to optimise the fleet
ensuring that it has the capability of achieving the required
mining run rates.
The focus during this period has been on employee training using
world class on mine simulators to ensure competency training and
the implementation of preventative maintenance protocols. This has
improved the effective utilisation of the overall mining fleet as
demonstrated by the 12.0% improvement in the waste mined to 3.0
Mm(3) during the quarter.
Improvements in the drill and blast operations, in particular,
have contributed to improved fragmentation of run of mine feedstock
and therefore more consistent feed into the plants contributing to
the plants operating at above design name plate capacity. PGM
rougher feed grades improved by 3.4% to 1.54 g/t while Cr O ROM
grades remained steady at 18.2%.
The stripping ratio at 8.5 is trending towards the life of mine
average of 9.6 on a per cubic metre basis and ensures ongoing
access to the reef horizons whilst maintaining the supply of ore to
the processing plants. Reef tonnes mined totalled 1.2 Mt,
marginally lower even though there were fewer working days in this
typically shorter quarter which also saw higher than usual rainfall
during the latter part of the period under review.
Processing
During the quarter, 1.3 Mt was milled, resulting in PGM
production of 38.2 koz on a 6E basis (at a recovery of 82.2%) and
chrome production of 366.7 kt, 85.5 kt of which are specialty
grades (at a recovery of 66.3%).
Further improvements in production are expected as the Vision
2020 optimisation projects come on stream during Q4 FY2018 and Q1
FY2019. The introduction of an additional crusher circuit at the
Genesis Plant will be commissioned in July 2018. The ZAR90 million
(approximately US$7.4 million) project aims to increase the Genesis
Plant throughput by 15.0% or about 180 ktpa, targeting an increase
in the higher value specialty chrome grade production by adding
approximately 24 ktpa of chemical grade chrome concentrate and
approximately 18 ktpa of foundry grade chrome concentrate.
Market update
The average PGM contained metal basket price (per ounce) for the
quarter ended 31 March 2018 was up 10.2% to US$953 (ZAR11 384),
which was US$88 an ounce higher than the US$865 (ZAR11 827)
achieved in the quarter ended 31 December 2017. PGM basket prices
continued to reflect improvements in palladium, rhodium and
ruthenium prices which comprise 16.3%, 9.2% and 13.6% respectively
of the Tharisa PGM basket.
Contracted metallurgical grade chrome concentrate prices
increased 15.1% to US$206 per tonne from US$179 per tonne in the
previous quarter due to improved liquidity and consistent stock
levels at ferrochrome and stainless steel producers in China.
Current metallurgical chrome spot prices remain above US$200 per
tonne.
As at 26 March 2018, Chinese port stock levels were at 2.8 Mt,
around two-and-a-half months' supply into the ferrochrome and
stainless steel industry. Global growth in stainless steel
production remains robust with an independent market research
company forecasting a further rise in worldwide output of nearly
5.0% in calendar 2018.
Specialty chrome concentrates, which comprised 23.3% of
Tharisa's chrome production in Q2 FY2018, continued to attract a
premium above the contracted metallurgical chrome concentrate
prices.
Outlook
Tharisa remains firmly on track to achieve its FY2018 production
guidance of 150 koz PGMs and 1.4 Mt chrome concentrates, of which
350 kt will be specialty grade chrome concentrates. The near term
focus will be on advancing the Vision 2020 projects that will
ensure Tharisa delivers 200 kozpa of PGMs and 2 Mtpa of chrome
concentrates by 2020.
The above information has not been reported on or reviewed by
Tharisa's auditors.
Paphos, Cyprus
10 April 2018
JSE Sponsor
Investec Bank Limited
Investor Relations contact:
Tharisa plc
Sherilee Lakmidas
+27 11 996 3538
+27 79 276 2529
slakmidas@tharisa.com
Broker contacts:
Peel Hunt LLP (Joint Broker)
Ross Allister / James Bavister / David McKeown
+44 207 7418 8900
BMO Capital Markets Limited (Joint Broker)
Jeffrey Couch / Neil Haycock / Thomas Rider
+44 020 7236 1010
Financial PR contacts:
Bobby Morse / Anna Michniewicz
+44(0) 20 7466 5000
tharisa@buchanan.uk.com
This information is provided by RNS
The company news service from the London Stock Exchange
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