TIDMTHS
RNS Number : 8007V
Tharisa PLC
11 April 2019
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' or the 'Company')
Production report for the quarter ended 31 March 2019
Mining volumes show upward trend as Tharisa invests to deliver
on Vision 2020
Salient features for the quarter ended 31 March 2019
-- Quarterly improvement in reef tonnes mined and stripping
ratio, of 3.9% and 10.4% respectively
-- Production drilling improved by 9.5% quarter on quarter
-- Completed two thirds removal of the required additional
in-pit material for the pit optimisation
-- Platinum Group Metals ('PGM') recovery at 85.5% with PGM
production of 34.0 koz, an increase of 11.8% and 1.2% respectively
quarter on quarter
-- Chrome recovery at 62.9% with chrome production of 308.7 kt,
an increase of 6.8% and 1.1% respectively
Salient features for the six months ended 31 March 2019
-- Pit redesign and bench optimisation on track
-- Investment in mining fleet delivering results
-- Chrome feed grade slightly improved from 18.1% to 18.2%
-- Increased third party chrome production from comparable period by 5.9% to 112.5 kt
-- While the chrome market was weaker with an average US$30/t
reduction in the metallurgical grade chrome concentrate contract
price, the PGM basket price increased by 11.9% in US$
Commenting on the production results, Tharisa CEO Phoevos
Pouroulis, said:
"I am pleased to report that we are once again on track to meet
our Vision 2020 targets in part assisted by substantial
improvements from our mining operations in the second quarter. We
have made considerable progress in redesigning the pit, which
necessitated moving almost 1.3 million m(3) of additional in-pit
material over the last six months. When this is factored into our
overall strip ratio, we are now tracking our LOM strip ratio. This
illustrates that Tharisa has capacity to mine the volumes required
to meet our Vision 2020 targets. We are also pleased that our
recoveries are once again heading to industry best standards due to
sustainably providing fresh ore to the plants rather than the
inclusion of lower grade tailings. To support the delivery of our
targets, we have fully assessed the mining fleet and brought
forward the mining equipment replacement programme, where
necessary. Tharisa has also made the appropriate investments to
ensure the supply of consistent power to our operations in view of
the uncertain power situation in South Africa over the last few
months."
Safety
Safety is one of Tharisa's core values and the Company continues
to strive for zero harm at its operations. An LTIFR of 0.24 per 200
000-man hours worked was recorded at the end of the quarter.
Production update
The production update for the quarter ended 31 March 2019 is as
follows:
Quarter Quarter Quarter Quarter Half Half
ended ended on quarter ended year year
31 Mar 31 Dec movement 31 Mar ended ended
2019 2018 % 2018 31 Mar 31 Mar
2019 2018
------------ ----------- ----------- ------------ -------- -----------
Reef mined kt 1 132.9 1 090.6 3.9 1 206.0 2 223.5 2 451.3
m(3)
Stripping ratio : m(3) 7.4 6.7 10.4 8.5 7.1 8.1
Reef milled kt 1 145.0(*) 1 192.5(*) (4.0) 1 287.2 2 337.5(*) 2 597.4
PGM flotation
feed kt 850.3 901.3 (5.7) 936.0 1 751.6 1 895.6
PGM rougher feed
grade g/t 1.46 1.59 (8.2) 1.54 1.49 1.52
PGM recovery % 85.5 76.5 11.8 82.2 80.7 83.2
6E PGMs produced koz 34.0 33.6 1.2 38.2 67.6 77.0
Average PGM contained
metal basket
price US$/oz 1 048 983 6.6 953 1 017 909
Average PGM contained
metal basket
price ZAR/oz 14 694 14 050 4.6 11 384 14 382 11 606
Cr(2) O(3) ROM
grade % 18.0 18.5 (2.7) 18.2 18.2 18.1
Chrome recovery % 62.9 58.9 6.8 66.3 60.8 65.9
Chrome yield % 27.0 25.6 5.5 28.5 26.3 28.2
Chrome concentrates
produced (excluding
third party) kt 308.7 305.4 1.1 366.7 614.1 732.5
Metallurgical
grade kt 232.6 233.4 (0.3) 281.2 466.0 558.9
Specialty grades kt 76.1 72.0 5.7 85.5 148.1 173.6
Third party chrome
production kt 60.3 52.2 15.5 53.4 112.5 106.2
Metallurgical
grade chrome
concentrate contract US$/t
price CIF China 162 164 (1.2) 206 163 193
Metallurgical
grade chrome
concentrate contract ZAR/t
price CIF China 2 268 2 311 (1.9) 2 444 2 289 2 436
Average exchange
rate ZAR:US$ 14.2 14.3 (0.7) 12.0 14.0 12.8
----------------------- ------------ ----------- ----------- ------------ -------- ----------- --------
(*) includes the processing of 23.1 kt, 75.9 kt and 99.0 kt of
commissioning tails through the processing plants for the quarter
ended 31 March 2019, quarter ended 31 December 2018 and half year
ended 31 March 2019 respectively
Mining
Drilling of both waste and reef, the foundation to delivering on
required mining volumes, increased by 9.5% quarter on quarter and
contributed to the successful mining of 1 132.9 kt of ROM during
the quarter, a 3.9% increase over the previous quarter. A total of
2.4 Mm(3) of over- and inter- burden waste was mined for the
quarter, an increase of 15.6% from the first quarter. The stripping
ratio of 7.4 on a m(3) :m(3) basis remained below the LOM average
of 9.5.
Notable was our overall ability to move increased volume as the
mine moved almost 1.3 Mm(3) of additional in-pit material in order
to optimise the pit over the six months. This additional volume was
not included in the calculation of the strip ratio, but accounted
for about 25% of the total volume moved during the half year. When
included in the stripping ratio calculation, the total waste volume
moved by the mining fleet in the second quarter achieved a ratio of
9.4 m(3) :m(3) . The pit redesign, which will require a further 0.6
Mm(3) of material to be moved, will achieve the following:
-- The extension and widening of the East Pit to optimise logistics
-- Improved access to the East Pit from the north side with more
regular backfill now possible on the south side as the pit advances
to the north
-- Longer benches and thus better drilling, blasting and hauling
continuity as access roads that previously ran north-south are now
running parallel to the pit as the pit advances
-- Longer benches will also ensure more optimal product mix and
grade control to be delivered to both the Genesis and Voyager
Plants, which have a PGM and chrome bias respectively
The new Caterpillar 6050 face shovel was commissioned in the
last quarter and has proven its ability to move large volumes of
waste material, with over 1.1 Mm(3) of waste material moved since
commissioning for the quarter.
The transition to a 24-hour continuous operation in the East Pit
was completed in the latter part of the quarter after a slight
delay, resulting in a capacity increase of 15%.
As a consequence of the pit redesign, the optimal reef mix was
not mined and impacted on the PGM rougher feed grade which declined
by 8.2% for the quarter to 1.46 g/t and the Cr(2) O(3) ROM feed
grade which decreased by 2.7% to 18.0% for the period.
Processing
The reduced level of ROM material was supplemented with the
re-processing of 23.1 kt commissioning tailings to maintain plant
throughput, comprising 2.0% of combined mill throughput, allowing
for a total of 1 145.0 kt of reef to be milled in the second
quarter, a 4.0% decrease from the first quarter. The re-processing
of commissioning tails was discontinued early in the quarter,
allowing the process recoveries to return to previous levels.
While the processing operations are largely insulated from load
shedding stage 1 to 3 in South Africa, the unprecedented stage 4
load shedding in March 2019 introduced instability into the
processing plants and, at times, necessitated the stopping of
certain processing circuits including the crusher circuits and part
of the mill circuits, thereby impacting on overall production.
Subsequently measures have been put in place to mitigate the risk
of further load shedding and the impact on production with
alternative standby diesel generator capacity.
PGM production increased by 1.2% to 34.0 koz (6E basis) over the
previous quarter and it was pleasing to see recoveries of 85.5%.
Chrome concentrate production increased by 1.1% to 308.7 kt, a
recovery of 62.9%. The production of specialty grade chrome
concentrates increased by 5.7%, from 72.0 kt in the last quarter to
76.1 kt.
The chrome production for the quarter from the Lonmin K3 chrome
plant was 60.3 kt, an increase of 15.5% from the previous
quarter.
Market update
The average PGM contained metal basket price for the second
quarter was US$1 048/oz (ZAR14 694/oz), an increase of 6.6% in US$
terms from the last quarter and 4.6% in ZAR terms.
The average metallurgical grade chrome concentrate contract
price was US$162/t (ZAR2 268/t), which was marginally lower in US$
(1.2%) and ZAR terms (1.9%) for the quarter. The Group's policy is
to make continuous monthly sales and maintain limited pipeline
inventory with metallurgical grade chrome contract prices
strengthening by some US$20/t to approximately US$180/t post the
reporting period.
Specialty chrome concentrates, which accounted for 24.7% of
Tharisa's quarterly chrome production, continued to attract a
premium to metallurgical chrome concentrate prices.
Zimbabwe
Tharisa has a 26.8% shareholding in Karo Mining Holdings
Limited, which was awarded a Special Grant over an area covering 23
903 ha on the Great Dyke of Zimbabwe, one of the world's largest
PGM resources. Drilling has been very successful on the property
and at the end of March 2019, approximately 17 250 metres and 102
holes have been completed with various regulatory permissions
either having been granted or under review by the relevant
authorities.
Outlook
Tharisa's FY2019 production guidance remains at a minimum of 150
koz PGMs (6E basis) and 1.4 Mt of chrome concentrates, of which 25%
is expected to be speciality grade chrome concentrates. The Tharisa
team will continue to implement the Vision 2020 projects during
FY2019, targeting 200 koz of PGMs and 2.0 Mt of chrome concentrates
in CY2020.
The above information has not been reported on or reviewed by
Tharisa's auditors.
Paphos, Cyprus
11 April 2019
JSE Sponsor
Investec Bank Limited
Financial PR contacts:
Bobby Morse / Augustine Chipungu
+44 020 7466 5000
tharisa@buchanan.uk.com
Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / James Bavister / David McKeown
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Jeffrey Couch / Thomas Rider
+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 / Richard Damant
+27 11 295 6575
Investor relations contacts:
Daniel Thöle / Ilja Graulich
+27 61 400 2939 / +27 83 604 0820
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END
DRLSFMFESFUSEDL
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