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First quarter production report for the quarter ended 31 December 2017
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')
First quarter production report for the quarter ended 31 December 2017
Tharisa commences FY2018 with a record Q1
Highlights for the three months ended 31 December 2017
- Successful transition to owner mining model
- Record tonnes milled of 1 310.2 kt, up 0.8% quarter on quarter
- Chrome recovery of 65.5% exceeds targeted recovery of 65.0%
- Record chrome concentrate production of 365.8 kt, up 1.5% quarter on quarter
- Record specialty chrome concentrate production of 88.1 kt, up 5.5% quarter on quarter
- Solid PGM production of 38.8 koz
- Record PGM recoveries at 84.3%, exceeding targeted recoveries of 80.0%
Safety
Safety remains a priority and Tharisa continues to strive for zero harm at its operations. A LTIFR of
0.15 per 200 000 man hours worked was recorded for the quarter.
Production update
The production update for the quarter ended 31 December 2017 is as follows:
Quarter Quarter Quarter on Quarter Year
ended ended quarter ended ended
31 Dec 30 Sept movement 31 Dec 30 Sept
2017 2017 2016 2017
Reef mined kt 1 245.3 1 300.8 (4.3) 1 229.9 5 025.1
Stripping ratio m³ waste/ 7.8 6.6 18.1 9.0 7.5
m³ reef
Reef milled kt 1 310.2 1 299.4 0.8 1 206.4 4 916.2
PGM flotation feed kt 959.6 950.3 1.0 885.1 3 599.2
PGM rougher feed g/t 1.49 1.58 (5.7) 1.52 1.56
grade
6E PGMs produced koz 38.8 39.0 (0.5) 34.8 143.6
PGM recovery % 84.3 81.0 4.1 80.5 79.7
Average PGM US$/oz 865 825 4.8 740 786
contained metal
basket price
Average PGM ZAR/oz 11 827 10 866 8.8 10 287 10 492
contained metal
basket price
Cr?O? ROM grade % 18.1 18.4 (1.6) 17.5 17.8
Chrome recovery % 65.5 63.6 3.0 64.3 64.1
Chrome yield % 27.9 27.7 0.7 26.7 27.1
Chrome kt 365.8 360.5 1.5 322.2 1 331.2
concentrates
produced
Metallurgical kt 277.7 277.0 0.3 245.1 1 008.1
grade
Specialty kt 88.1 83.5 5.5 77.1 323.1
grades
Third-party kt 52.8 20.0 164.0 - 20.0
production
Metallurgical US$/t CIF 179 172 4.1 250 200
grade chrome China
concentrate
contract price
Metallurgical ZAR/t CIF 2 426 2 250 7.8 3 488 2 667
grade chrome China
concentrate
contract price
Average exchange ZAR: 13.6 13.2 - 13.9 13.4
rate
Mining
With effect from 1 October 2017 the mine successfully transitioned from a mining contractor model
to an owner mining model. Total reef mined from the open pit for the quarter was 1 245.3 kt, in line
with the preceding quarter.
The focus during the quarter was on increased waste removal to ensure that sufficient reef was
available in the optimal blend ahead of the processing plants. Total waste of approximately 2.7 million
m3 was moved during the quarter, 27% of which was interburden (including top soil) at a stripping
ratio of 7.8 on a m3:m3 basis. With the road diversion having been completed, the additional shallow
area was mined resulting in both lower stripping and lower grades as oxidised ore was mined and
processed. This area has now been substantially mined through and the reef strike length increased.
The life of open pit average stripping ratio is 9.7 on a m3:m3 basis.
Processing
During the quarter, 1 310.2 kt were milled, resulting in PGM production of 38.8 koz on a 6E basis and
chrome production of 365.8 kt, 88.1 kt of which is specialty grades. This represents a 1.5%
improvement in total chrome production and a 5.5% increase in specialty grade production quarter
on quarter.
The focus on continued improvement resulted in improved PGM recoveries at 84.3%, a new record
above the targeted recoveries of 80.0%. Chrome recoveries at 65.5% also exceeded targeted
recoveries of 65.0%. With tonnes processed exceeding tonnes mined, the ore stockpiles ahead of the
processing plants were partially utilised. As at 31 December 2017, the ore stockpiles ahead of the
processing plants totalled 242.7 kt or approximately two weeks of plant throughput.
Market update
The average PGM contained metal basket price (per ounce) for the three months to end
31 December 2017 was US$865 (ZAR11 827), which was US$40 an ounce higher than the US$825
(ZAR10 866) achieved in the quarter to end 30 September 2017. PGM basket prices continued to
reflect improvements in spot palladium and rhodium prices with palladium comprising 16.6% and
rhodium comprising 9.4% of the Tharisa basket.
Spot palladium prices averaged US$993 per ounce in Q1 FY2018, ending the calendar year at
US$1 057 an ounce, while spot rhodium prices averaged US$1 351 per ounce in Q1 FY2018, ending
the calendar year at US$1 470 an ounce. Spot palladium prices increased 58.0% and rhodium prices
increased 52.6% in 2017.
Contracted metallurgical grade chrome concentrate prices increased 4.1% to US$179 per tonne from
US$172 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 are
above US$200 per tonne for February 2018 shipment.
As at 29 December 2017, Chinese port stock levels were at 2.2 Mt, or approximately two months’
supply into the ferrochrome and stainless steel industry. The market fundamentals for chrome remain
sound with continued growth forecast for the global stainless steel industry.
Specialty chrome concentrates, which comprise 24.1% of Tharisa’s total chrome production,
continued to attract a premium above the contracted metallurgical chrome concentrate prices.
Outlook
Tharisa’s FY2018 production guidance remains at 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 continued
operational improvements and the commencement of 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 January 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)
Matthew Armitt / Ross Allister
+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
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