Wrap Text
Production Report for the Third Quarter ended 30 June 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 THIRD QUARTER ENDED 30 JUNE 2022(1)
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 Q3 FY2022.
Third Quarter Highlights
- Lost Time Injury Frequency Rate (‘LTIFR’) of 0.49 per 200 000-man hours worked
- Achieved 6 million fatality free shifts
- Strong mining and milling throughput leading to:
- PGM production at 42.1 koz (Q2 FY2022 44.1 koz), at a normalised rougher feed grade of
1.65 g/t (Q2 FY2022 1.74 g/t) with steady recoveries at 75.6% (Q2 FY2022 75.4%)
- Chrome production at 389.7 kt up from the previous quarter (Q2 FY2022 374.9 kt)
- Vulcan Plant ramp up reflected in steady improvement in chrome recoveries – throughput
recoveries of 80% expected to be reached by year end
- Strong commodity prices and steady production during the quarter delivering strong cash balance
increases
- PGM basket price of US$2 677/oz (Q2 FY2022 US$2 806/oz) down 4.6%
- Metallurgical grade chrome price up 39.5% at US$247/t (Q2 FY2022 US$177/t)
- Cash balance of US$112.6 million and a positive net cash position of US$48.0 million
- Successful registration of solar power project for 40-megawatt peak (‘MWp’) with environmental
and development authority to further de-risk the operations from the dependence on the national
power grid and reduce carbon emissions in line with our carbon reduction strategy
- Growth strategy remains firmly on track
Footnote:
(1) Tharisa’s financial year begins 01 October and ends on 30 September.
Key Operating Numbers
Quarter Quarter Quarter on Quarter Nine Nine
ended ended quarter ended months months
30 June 31 March movement 30 June ended ended
2022 2022 % 2021 30 June 30 June
2022 2021
Reef mined kt 1 357.1 1 419.7 (4.4) 1 507.8 4 190.7 3 975.3
6E PGMs produced koz 42.1 44.1 (4.5) 39.0 133.9 114.1
Chrome concentrates produced kt 389.7 374.9 3.9 379.7 1 166.4 1 110.4
(excluding third party)
Average PGM contained metal US$/oz 2 677 2 806 (4.6) 3 804 2 619 3 159
basket price
Metallurgical grade chrome US$/t 247 177 39.5 160 201 149
concentrate contract price CIF
China
Phoevos Pouroulis, CEO of Tharisa, commented:
“The team at Tharisa has completed a commendable quarter, maintaining strong production output
which, supported by the favourable commodity markets, ensures a healthy balance sheet that will allow
us to continue implementing our strategy.
The global macrotrends are challenging but Tharisa Mine’s life of more than sixty years gives us a strong
foundation and the necessary financial resources to weather the headwinds of a tough economic climate,
slowing growth, rising inflation, and weaker commodity markets.
As always, our focus remains on safety, operational excellence, and maintaining a low-cost profile. This
quarter, our PGM and chrome output was strong once again, driven by the volume extracted from the
Tharisa Mine open pit. Production from the Vulcan Plant is steadily increasing to nameplate capacity,
proving that Tharisa’s proprietary technology is working well.
With our investment in almost 10 MW of standby power generation we have had negligible disruption to
our operations due to the challenges at Eskom and the subsequent power curtailments.
Notwithstanding the rail and port infrastructure challenges, the logistics team have successfully exported
our chrome products via various channels and modalities.
Beyond South Africa, our growth strategy remains on track with the detailed engineering design work,
upfront infrastructure, and placement of long lead capital items for the Karo Platinum project continuing
to progress in parallel with the finalisation of the financing options.
Overall, this has been a supportive quarter for our organic and development growth.”
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 0.49 per 200 000 man-hours worked
- Achieved 6 million fatality free shifts
Market Update
- The PGM market, while pricing overall lower compared to the beginning of the year, is holding up
well supported by the continued tight supply-demand fundamentals of the various elements.
Slowing economic growth will influence the demand side, however, slowdown in supply and no
major new projects coming online within the next 24 months means any demand increase is
expected to lead to price increases. Recycling continues to slow requiring shortfalls to be met
from primary supply
- The quarter continued to be overshadowed by significant external factors including the war in
Ukraine, concerns about inflationary cost pressures, supply chain constraints and zero Covid
policy in China. Nonetheless, higher prices were achieved during the quarter for chrome against
the backdrop of destocking of port inventory and robust ferrochrome & stainless-steel production
in China. We expect a price retreat in the next quarter although implementation of various stimuli
in China and / or supply disruptions would reduce the extent of such a threat
Operational Update
- Total reef mined of 1 357.1 kt (Q2 FY2022 1 419.7 kt)
- Stripping ratio of 14.2 m3: m3 (Q2 FY2022 12.7 m3: m3) ensuring flexibility is maintained and stockpile
management optimised
- Tonnes milled maintained due to a strong mining performance while ROM stockpiles stand at two
months, in line with the current mine schedule
- PGM output at 42.1 koz (Q2 FY2022 44.1 koz)
- Normalised grade at 1.65 g/t (Q2 FY2022 1.74 g/t)
- Recoveries at 75.6% (Q2 FY2022 75.4%)
- Chrome production of 389.7 kt up 3.9% from the previous quarter (Q2 FY2022 374.9 kt)
- Cr2O3 grade at 17.0% (Q2 FY2022 17.1%)
- Recoveries at 70.2% (Q2 FY2022 67.8%)
- Vulcan Plant technology proven to work well as overall chrome recoveries increase
Karo Platinum Update
- Key management positions are being filled
- Orders for long-lead items are being placed
- ESIA for concentrator and infrastructure has been submitted to the authorities
- Given inflationary pressures, the implementation team is reviewing the capex budgets
- Financing discussions continuing with multiple funding solutions being targeted
- National Project Status benefits being negotiated
Cash Balance and Debt Position
- Tharisa had a cash balance of US$112.6 million (31 March 2022 US$101.5 million) at the end of
the quarter, and debt of US$64.6 million (31 March 2022 US$75.6 million) after an interim FY2022
dividend payment of US$8.8 million. The increased cash has resulted in a positive net cash
position of US$48.0 million (31 March 2022 US$25.9 million)
Guidance
FY2022 production guidance maintained at between 165 koz and 175 koz PGMs (6E basis). Guidance for
chrome production is reduced by 10% to between 1.55 Mt and 1.65 Mt due to lower chrome feed grade
and slower Vulcan Plant ramp-up
Quarter Quarter Quarter on Quarter Nine Nine
ended ended quarter ended months months
30 June 31 March movement 30 June ended ended
2022 2022 % 2021 30 June 30 June
2022 2021
Reef mined kt 1 357.1 1 419.7 (4.4) 1 507.8 4 190.7 3 975.3
Stripping ratio m3: m3 14.2 12.7 11.8 10.9 12.6 11.3
Reef milled kt 1 367.1 1 362.2 0.4 1 413.1 4 161.4 4 171.9
PGM flotation feed kt 1 051.4 1 045.7 0.5 1 072.3 3 166.4 3 176.5
PGM rougher feed grade g/t 1.65 1.74 (5.2) 1.52 1.71 1.46
PGM recovery % 75.6 75.4 0.3 74.4 76.8 76.8
6E PGMs produced koz 42.1 44.1 (4.5) 39.0 133.9 114.1
Platinum koz 23.1 24.3 (4.9) 21.8 73.9 63.1
Palladium koz 7.2 7.4 (2.7) 5.5 22.1 17.7
Rhodium koz 4.0 4.2 (4.8) 3.9 12.8 11.1
Average PGM contained metal US$/oz 2 677 2 806 (4.6) 3 804 2 619 3 159
basket price
Platinum US$/oz 958 1 026 (6.6) 1 185 994 1 105
Palladium US$/oz 2 100 2 312 (9.2) 2 794 2 117 2 588
Rhodium US$/oz 15 755 17 023 (7.4) 24 232 15 370 19 999
Average PGM contained metal ZAR/oz 41 531 42 784 (2.9) 53 801 40 299 46 733
basket price
Cr2O3 ROM grade % 17.0 17.1 (0.6) 18.0 17.4 17.9
Chrome recovery % 70.2 67.8 3.5 63.0 67.8 62.8
Chrome yield % 28.5 27.5 3.6 26.9 28.0 26.6
Chrome concentrates produced kt 389.7 374.9 3.9 379.7 1 166.4 1 110.4
(excluding third party)
Metallurgical grade kt 307.0 295.0 4.1 280.8 907.3 832.2
Specialty grades kt 82.7 79.9 3.5 98.9 259.1 278.2
Third party chrome production kt 47.4 53.4 (11.2) 59.0 150.0 170.6
Metallurgical grade chrome US$/t 247 177 39.5 160 201 149
concentrate contract price CIF
China
Metallurgical grade chrome ZAR/t 3 900 2 700 44.4 2 274 3 112 2 220
concentrate contract price CIF
China
Average exchange rate ZAR:US$ 15.6 15.2 2.6 14.1 15.4 14.9
Paphos, Cyprus
12 July 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
+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: 12-07-2022 07:05:00
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