TIDMTHS
RNS Number : 6630E
Tharisa PLC
09 July 2021
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 FY2021[1]ED 30 JUNE
2021
Highlights
-- Achieved 5 million fatality free shifts
-- Delivered record mining rates and tonnes processed
-- Record quarterly chrome concentrate output and increased PGM
production supported by stronger pricing
-- Balance sheet strengthened with cash increasing to US$80.5
million post US$10.8 million interim dividend payment
-- FY2021 guidance maintained
Key Operating Numbers
Quarter ended Quarter ended Quarter on Quarter ended Year on year
30 June 2021 31 March 2021 quarter 30 June 2020 movement %
movement %
Reef mined kt 1 507.8 1 233.2 22.3 1 291.3 16.8
-------- ---------------- ---------------- ---------------- ---------------- ----------------
PGMs produced
(6E) koz 39.0 35.8 8.9 35.0 11.4
-------- ---------------- ---------------- ---------------- ---------------- ----------------
Chrome
concentrates
produced
(excluding third
party) kt 379.7 358.4 5.9 321.4 18.1
-------- ---------------- ---------------- ---------------- ---------------- ----------------
Average PGM
basket price US$/oz 3 804 3 290 15.6 1 593 138.8
-------- ---------------- ---------------- ---------------- ---------------- ----------------
Average
metallurgical
grade chrome
concentrate
contract price US$/t 160 155 3.2 143 11.9
-------- ---------------- ---------------- ---------------- ---------------- ----------------
Phoevos Pouroulis, CEO of Tharisa, commented:
"Operationally, the third quarter was one of the strongest in
the Company's history, with record mining and processing rates,
supported by strong PGM and chrome pricing. Combined with reaching
5 million fatality free shifts and another excellent LTFIR, Tharisa
remains on track to deliver safe and sustainable returns for all of
our stakeholders.
Revenues and margins continue to be healthy as the combination
of our favourable PGM basket saw record prices, in addition to a
steady increase in the pricing of our chrome concentrates. These
price increases are a direct result of the increase in demand for
our critical metals as economies focus on rebuilding post the
global pandemic. Moreover, given the rapid adoption of
decarbonisation initiatives, we see these prices being sustainable
for the foreseeable future.
Despite the headwinds of South Africa being placed on Alert
Level 4 in its fight against the COVID-19 pandemic, with its impact
on our employees and stakeholders, our operational performance
continues to benefit from the ongoing optimisation programmes,
underpinned by the robustness and consistency of the Tharisa Mine
with 14 years of open pit and 40 years underground mine life.
Our growth projects remain on track, with the construction of
the proprietary Vulcan fine chrome recovery plant on schedule for
commissioning by year end, adding an additional 20% chrome to our
current production levels and these at very low operating costs.
Our new development project in Zimbabwe, Salene Chrome, is
progressing well and is planned to be in production start-up before
the end of the calendar year.
The continued improvement in our mining, underpinned by the
consistency of the Tharisa Mine, provides Tharisa with confidence
in delivering on our guidance for the full year."
Health & Safety
-- Safety is a core value and Tharisa continues to strive for zero harm at its operations
-- Achieved 5 million fatality free shifts on 1 June 2021
-- Industry-leading safety record with a LTIFR of 0.12 per 200 000 man hours worked
-- South Africa is at an adjusted Alert Level 4 as Wave 3 reaches peak
-- Tharisa has recorded an increase in active COVID-19 cases from prior waves
Market Update
-- Tharisa's PGM basket price was 15.6% higher quarter on
quarter (Q3 2021 vs Q2 2021) and remains above US$3 000/oz at the
time of writing, despite the recent decline in the rhodium price,
highlighting the unique prill split benefits. The use of PGMs in
the hydrogen economy has not been fully recognised as the market is
focused on the premature decline of the internal combustion engine.
PGMs play a vital role not only in emission control in traditional
drive engines but a major role in hydrogen fuel cells, the greening
of the economy and PGMs continue to be a critical component of the
changing drive train make-up. We remain confident that the unique
and flexible PGM metal properties will have a robust outlook, being
evident in the demand for the precious metals in a number of
growing diversified industries, while PGM production increases
across the industry remain limited, therefore supporting stronger
long-term prices
-- Higher chrome ore prices were achieved in the quarter despite
subdued demand owing to a reduction of ferrochrome production in
China, caused by electricity control measures. Stainless steel
producers are operating at historic high levels, creating robust
demand for ferrochrome, resulting in tightness of supply and
consequently increasing the price of ferrochrome at the end of the
quarter, which bodes well for the current and future chrome ore
price. The Company was successful in meeting its delivery
obligations, despite continued inland logistical challenges in
South Africa and limited shipping availabilities. Sea borne
logistics costs continued to trend upwards
Operational Update
-- Record reef mined at 1.5 Mt, up 22.3% QoQ and 16.8% YoY
-- Record tonnes processed at 1.4 Mt, up 5.0% QoQ and 15.8% YoY
-- PGM production up 8.9% QoQ to 39.0 koz (up 11.4% YoY) as
rougher feed grade improved by 7.8% to 1.52 g/t
-- Record chrome concentrate tonnes produced at 379.7 kt, up 5.9% QoQ and 18.1% YoY
-- Stripping ratio 10.9 m(3) : m(3) ahead of LOM requirements
-- PGM recoveries impacted by now resolved secondary mill motor issues
-- Optimisation programmes remain on track, with Vulcan
construction completion by end September 2021
Cash Balance and Debt Position
-- Tharisa had a cash balance of US$80.5 million (31 March 2021
US$72.8 million) at the end of the quarter and debt of US$38.7
million (31 March 2021 US$43.0 million) resulting in a positive net
cash position of US$41.8 million (31 March 2021 US$29.8 million).
The Company paid out an interim dividend of US$10.8 million on 30
June 2021
Guidance for FY2021
-- Guidance is maintained at 155 koz to 165 koz PGMs (6E basis)
and 1.45 Mt to 1.55 Mt of chrome concentrates
-- COVID-19 remains a risk to the Company and guidance is
premised on the current level of economic activity being
maintained
Paphos, Cyprus
9 July 2021
JSE Sponsor
Investec Bank Limited
Connect with us on LinkedIn and Twitter 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
Financial PR contacts:
Bobby Morse / Augustine Chipungu / James Husband
+44 207 466 5000
tharisa@buchanan.uk.com
Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / David McKeown / Alexander Allen
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Thomas Rider / Pascal Lussier Duquette / Nick Macann
+44 207 236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Jennifer Wyllie / Varun Talwar / 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 incorporating mining,
processing, exploration and the beneficiation, marketing, sales and
logistics of PGMs and chrome concentrates. Its principal asset is
the Tharisa Mine located in the South-Western Limb of the Bushveld
complex, South Africa. The mechanised mine has a 14-year open pit
life of mine (LOM) and the ability to extend operations underground
by at least an additional 40 years. Tharisa also owns the Salene
Chrome project, a development stage, low cost, open pit asset,
located in the Great Dyke in Zimbabwe. Tharisa is listed on the
Johannesburg Stock Exchange (JSE: THA) and the Main Market of the
London Stock Exchange (LSE: THS).
Quarter Quarter Quarter Quarter Nine months
ended ended on quarter ended ended 30
30 Jun 31 Mar movement 30 Jun Jun 2021
2021 2021 % 2020
Reef mined kt 1 507.8 1 233.2 22.3 1 291.3 3 975.3
------------ -------- -------- ------------ -------- ------------
m(3)
Stripping ratio : m(3) 10.9 11.8 (7.6) 12.0 11.3
------------ -------- -------- ------------ -------- ------------
Reef milled kt 1 413.1 1 345.2 5.0 1 220.2 4 171.9
------------ -------- -------- ------------ -------- ------------
PGM flotation feed kt 1 072.3 1 023.9 4.7 909.9 3 176.5
------------ -------- -------- ------------ -------- ------------
PGM rougher feed grade g/t 1.52 1.41 7.8 1.52 1.46
------------ -------- -------- ------------ -------- ------------
PGM recovery % 74.4 77.1 (3.5) 78.7 76.8
------------ -------- -------- ------------ -------- ------------
6E PGMs produced koz 39.0 35.8 8.9 35.0 114.1
------------ -------- -------- ------------ -------- ------------
Platinum produced koz 21.8 19.8 10.1 19.6 63.1
------------ -------- -------- ------------ -------- ------------
Palladium produced koz 5.5 5.4 1.9 5.6 17.7
------------ -------- -------- ------------ -------- ------------
Rhodium produced koz 3.9 3.5 11.4 3.4 11.1
------------ -------- -------- ------------ -------- ------------
Average PGM contained
metal basket price US$/oz 3 804 3 290 15.6 1 593 3 159
------------ -------- -------- ------------ -------- ------------
Platinum price US$/oz 1 185 1 164 1.8 751 1 105
------------ -------- -------- ------------ -------- ------------
Palladium price US$/oz 2 794 2 399 16.5 1 975 2 588
------------ -------- -------- ------------ -------- ------------
Rhodium price US$/oz 24 232 21 521 12.6 7 401 19 999
------------ -------- -------- ------------ -------- ------------
Average PGM contained
metal basket price ZAR/oz 53 801 49 273 9.2 29 266 46 733
------------ -------- -------- ------------ -------- ------------
Cr(2) O(3) ROM grade % 18.0 18.0 - 18.2 17.9
------------ -------- -------- ------------ -------- ------------
Chrome recovery % 63.0 62.4 1.0 61.1 62.8
------------ -------- -------- ------------ -------- ------------
Chrome yield % 26.9 26.6 1.1 26.3 26.6
------------ -------- -------- ------------ -------- ------------
Chrome concentrates
produced (excluding
third party) kt 379.7 358.4 5.9 321.4 1 110.4
------------ -------- -------- ------------ -------- ------------
Metallurgical grade kt 280.8 272.8 2.9 250.9 832.2
------------ -------- -------- ------------ -------- ------------
Specialty grades kt 98.9 85.6 15.5 70.5 278.2
------------ -------- -------- ------------ -------- ------------
Third party chrome
production kt 59.0 49.5 19.2 - 170.6
------------ -------- -------- ------------ -------- ------------
Metallurgical grade
chrome concentrate US$/t
contract price CIF China 160 155 3.2 143 149
------------ -------- -------- ------------ -------- ------------
Metallurgical grade
chrome concentrate ZAR/t
contract price CIF China 2 274 2 304 (1.3) 2 560 2 220
------------ -------- -------- ------------ -------- ------------
Average exchange rate ZAR:US$ 14.1 15.0 (6.0) 18.0 14.9
------------ -------- -------- ------------ -------- ------------
[1] Tharisa's financial year is from 1 October 2020 to 30 September 2021
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END
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