Wrap Text
Production Report for the second Quarter ended 31 March 2022
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 SECOND QUARTER ENDED 31 MARCH 2022(1)
Stable mining and PGM output as Vulcan Plant comes online
Tharisa, the platinum group metals (PGMs) and chrome co-producer dual-listed on the Johannesburg
and London stock exchanges, announces production and cash balance numbers for Q2 FY2022.
Second quarter highlights
- Lost Time Injury Frequency Rate (‘LTIFR’) of 0.72 per 200 000 man-hours worked
- Mining rates maintained with mining blend optimised for PGMs, resulting in slightly lower chrome
grade
- Steady recoveries, despite secondary mill breakdowns, resulting in slightly lower quarterly
production in Q2 compared to the record Q1:
- PGM production of 44.1 koz, down 7.5% (Q1: 47.7 koz) at an improved average PGM basket
price up 17.2% at US$2 806/oz (Q1: US$2 394/oz)
- Chrome production of 374.9 kt, down 6.7% (Q1: 401.8 kt), at an improved average metallurgical
grade chrome price up 9.9% to US$177/t (US$161/t)
- Gradual ramp up of Vulcan Plant production with plant commissioning
- Consistent production into rising commodity prices further strengthened the Company’s balance
sheet
- Cash balance of US$101.5 million and a positive net cash position of US$25.9 million
- FY2021 final dividend payment of US$14.1 million on 16 March 2022
- Announced acquisition of remaining 26% shareholding in Tharisa Minerals in a landmark BEE
transaction
- Acquired controlling interest in Karo Mining Holdings with exercise of farm-in option at a discount to
the project NPV for a purchase consideration of US$27.0 million
- Appointed Bernard Pryor as MD of Karo Mining Holdings post quarter end
Quarter Quarter Quarter on Quarter Half year Half year
ended ended quarter ended ended ended
31 Mar 31 Dec movement 31 Mar 31 Mar 31 Mar
2022 2021 % 2021 2022 2021
Reef mined kt 1 419.7 1 413.9 0.4 1 233.2 2 833.6 2 467.5
6E PGMs produced koz 44.1 47.7 (7.5) 35.8 91.8 75.1
Chrome concentrates produced kt 374.9 401.8 (6.7) 358.4 776.7 730.7
(excluding third party)
Average PGM contained metal US$/oz 2 806 2 394 17.2 3 290 2 592 2 823
basket price
Metallurgical grade chrome US$/t 177 161 9.9 155 175 145
concentrate contract price CIF
China
Phoevos Pouroulis, CEO of Tharisa, commented:
“Another safe and strong mining performance in what is traditionally our toughest operating quarter.
Mining rates remain at record levels with production being impacted by certain secondary mill challenges
which have since been addressed. These challenges dampened throughput and in turn production. This
quarter’s output, though slightly lower, needs to be measured against our record breaking quarterly run
rate and our step change to higher output remains intact on an annualised basis. Despite these challenges,
on a half year comparable basis to 2021, PGM and chrome concentrates production increased by 22.2%
and 6.3% respectively.
With continued focus on grade and throughput and the ramp-up of the Vulcan Plant production, we remain
confident on achieving market guidance.
As Tharisa maintains its growth strategy, we have taken significant strides in simplifying the Group
structure, through the consolidation of our ownership of Tharisa Minerals in a landmark BEE transaction,
benefiting all shareholders. We also progressed our much anticipated cross border step by announcing our
plans for developing the tier 1 Karo PGM project, doubling our PGM production within 24 months.
The transformation of Tharisa into a multi-asset, multi-commodity and multi-jurisdiction business,
combined with strong PGM and chrome prices, as well as the further production upside from initiatives
including the ramp of the Vulcan Plant at the Tharisa Mine, provide a very healthy outlook for the prospects
of the Company in the second half of the year, and beyond.”
Health & Safety
- The health and safety of our stakeholders remains a core value to the Company and Tharisa continues
to strive for zero harm at its operations
- LTIFR of 0.72 per 200 000 man-hours worked
Market Update
- The PGM market was driven by two forces, one structural, where demand for all metals remained
strong, pushing prices up as the market absorbed potential inventory overhangs from the last 12
months, as the global pipeline for automobiles and computer chips grew, as economic activity was
lifted. The second force, unfortunately, was driven by geopolitical events, that saw buyers ensuring
access to metal supply due to uncertainty of supply from Russia. These concerns are warranted as
the latest sanctions by the London Platinum and Palladium Market on certain refiners indicates the
market will tighten, although demand from certain countries still trading with Russia is being met by
that output, for now. Any operational shortfall by the major producing country, South Africa, will
assist in the tight demand supply balance supporting prices and, unless there is a significant drop in
economic activity, prices and the outlook for the next 24 months and the longer term remain firmly
intact.
- Higher chrome prices were in line with global trends for commodities. Strong demand was supported
by lower pipeline inventories and increased consumption. Despite the continued logistical challenge,
both inland and sea freight, Tharisa was able to deliver into its order book with inventory on hand at
normal levels. Prices remain healthy but we are of the view there are too many headwinds to
incentivise new production thus maintaining the current supply/demand balance, which at this stage,
may be weighted to a slight deficit.
Operational Update
- Total reef mined 1 419.7 kt, flat quarter on quarter
- Stripping ratio increased 13.4% to 12.7 m3: m3 as the mine continues to enhance its in pit flexibility
with the increased life of the open pit
- Tonnes milled reduced as a consequence of secondary mill issues since resolved
- H1 PGM production up 22.2% to 91.8 koz and down 7.5% at 44.1 koz QoQ due to lower milling and
lower recoveries due to secondary mill by-passing
- H1 chrome production rose by 6.3% to 776.7 kt and fell almost 7% QoQ to 374.9 kt due to the lower
milling and lower feed grade
Vulcan Plant ramp-up slower than forecast, however reaching higher levels in March 2022, with the
daily target output due to be reached within this quarter
Zimbabwe update
- As previously announced, Tharisa has increased its shareholding in Karo Holdings to 66.3% and this
was completed post quarter end
- Implementation study at Karo Platinum proving the robust economics of the first phase of the project
while still presenting significant growth opportunities
Salene Chrome plant commissioning underway, production due to commence in Q3 FY2022
Cash balance and debt position
- Tharisa had a cash balance of US$101.5 million (31 December 2021 US$79.1 million) at the end of
the quarter and debt of US$75.6 million (31 December 2021 US$54.7 million) after a final FY2021
dividend payment of US$14.1 million. The increased cash has resulted in a positive net cash position
of US$25.9 million (31 December 2021 US$24.4 million).
Guidance
- FY2022 production guidance of between 165 koz to 175 koz PGMs (6E basis) and 1.75 Mt to 1.85 Mt
of chrome concentrates is maintained.
Quarter Quarter Quarter on Quarter Half year Half year
ended ended quarter ended ended ended
31 Mar 31 Dec movement 31 Mar 31 Mar 31 Mar
2022 2021 % 2021 2022 2021
Reef mined kt 1 419.7 1 413.9 0.4 1 233.2 2 833.6 2 467.5
Stripping ratio m 3 : m3 12.7 11.2 13.4 11.8 11.9 11.5
Reef milled kt 1 362.2 1 432.1 (4.9) 1 345.2 2 794.3 2 758.9
PGM flotation feed kt 1 045.7 1 069.3 (2.2) 1 023.9 2 115.0 2 104.2
PGM rougher feed grade g/t 1.74 1.75 (0.6) 1.41 1.74 1.42
PGM recovery % 75.4 79.3 (4.9) 77.1 77.4 78.1
6E PGMs produced koz 44.1 47.7 (7.5) 35.8 91.8 75.1
Platinum produced koz 24.3 26.5 (8.3) 19.8 50.8 41.3
Palladium produced koz 7.4 7.5 (1.3) 5.4 14.9 12.2
Rhodium produced koz 4.2 4.6 (8.7) 3.5 8.8 7.2
Average PGM contained metal US$/oz 2 806 2 394 17.2 3 290 2 592 2 823
basket price
Platinum price US$/oz 1 026 997 2.9 1 164 1 011 1 063
Palladium price US$/oz 2 312 1 941 19.1 2 399 2 125 2 374
Rhodium price US$/oz 17 023 13 522 25.9 21 521 15 189 18 354
Average PGM contained metal ZAR/oz 42 784 36 897 16.0 49 273 39 721 43 051
basket price
Cr2O3 ROM grade % 17.1 18.1 (5.5) 18.0 17.6 17.8
Chrome recovery % 67.8 65.6 3.4 62.4 66.7 62.6
Chrome yield % 27.5 28.1 (2.1) 26.6 27.8 26.5
Chrome concentrates produced kt 374.9 401.8 (6.7) 358.4 776.7 730.7
(excluding third party)
Metallurgical grade kt 295.0 305.3 (3.4) 272.8 600.3 551.3
Specialty grades kt 79.9 96.5 (17.2) 85.6 176.4 179.4
Third party chrome production kt 53.4 49.2 8.5 49.5 102.6 112.4
Metallurgical grade chrome US$/t 177 161 9.9 155 175 145
concentrate contract price CIF
China
Metallurgical grade chrome ZAR/t 2 700 2 471 9.3 2 304 2 670 2 203
concentrate contract price CIF
China
Average exchange rate ZAR:US$ 15.2 15.4 (1.3) 15.0 15.3 15.3
Footnote:
(1) Tharisa’s financial year begins 01 October and ends on 30 September.
Key Operating Numbers
Paphos, Cyprus
12 April 2022
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 / Ariadna Peretz / 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 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 mining, processing, exploration, 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 a 20-year open-pit life and the ability to extend operations underground by at least
an additional 40 years. Tharisa also owns Karo Mining Holdings and Salene Chrome, development stage,
low-cost, open-pit PGM and chrome assets respectively, 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).
Date: 12-04-2022 07:05:00
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