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Tharisa’s second quarter mining and processing at steady state levels on an annualised basis
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
ISIN: CY0103562118
('Tharisa')
Tharisa’s second quarter mining and processing at steady state levels on an annualised basis
Below is Tharisa’s second quarter production report for three months ended 31 March 2016.
Safety
Safety remains a priority and Tharisa continues to strive for zero harm at its operations. An improved
focus on safety in the second quarter resulted in reduced lost time injuries. The lost time injury
frequency rate as at 31 March 2016, was 0.3 per 200 000 hours.
The quarter on quarter analysis needs to take into account the reversion to a single mining
contractor in the first quarter of FY2016 and the number of production shifts lost due to safety
stoppages in that quarter. A continued focus on safety contributed to a significant reduction in
safety related stoppages in Q2 FY2016 and resulted in mining and processing achieving steady state
levels for the quarter.
Production update
The production update for the quarter ended 31 March 2016 is as follows:
Quarter Financial
Quarter ended Quarter Half year Half year year ended
ended 31 ended ended ended 30
31 March December 31 March 31 March 31 March September
2016 2015 2015 2016 2015 2015
Reef mined kt 1 234.2 1 124.4 1 042.1 2 358.6 1 948.0 4 183.2
Stripping ratio m³
waste/m³
reef 7.1 6.4 9.8 6.8 10.0 10.7
Reef milled kt 1 199.6 997.4 1 167.1 2 197.0 2 198.7 4 400.4
PGM flotation feed
tonnes kt 942.3 765.8 907.2 1 708.1 1 712.2 3 446.2
PGM rougher feed
grade g/t 1.74 1.61 1.65 1.68 1.65 1.62
6E PGMs produced koz 36.0 24.0 33.0 60.0 57.4 118.0
PGM recovery % 68.5 60.4 68.6 65.0 63.1 65.8
Average PGM
contained metal
basket price US$/oz 685 687 935 686 945 885
Average PGM
contained metal
basket price ZAR/oz 10 849 9 865 10 991 10 448 10 888 10 608
Cr?O? RoM grade % 18.3 18.5 18.8 18.4 18.7 18.3
Chrome recovery % 63.9 61.5 57.5 62.8 56.7 58.0
Chrome yield % 27.7 27.3 26.2 27.5 25.6 25.5
Chrome
concentrates kt 332.3 272.1 305.5 604.4 563.3 1 122.2
Quarter Financial
Quarter ended Quarter Half year Half year year ended
ended 31 ended ended ended 30
31 March December 31 March 31 March 31 March September
2016 2015 2015 2016 2015 2015
produced
Metallurgical
grade kt 259.9 238.7 283.6 498.6 515.9 1 009.4
Speciality
grades kt 72.4 33.4 21.9 105.8 47.4 112.8
Metallurgical grade
chrome
concentrate US$/t CIF
contract price China 81 124 155 106 156 158
Metallurgical grade
chrome
concentrate ZAR/t CIF
contract price China 1 262 1 777 1 742 1 562 1 793 1 894
Average exchange
rate ZAR:US$ 15.8 14.2 11.7 15.0 11.5 12.0
Second quarter commentary
Tharisa Minerals recorded a number of milestone achievements during the quarter including (on an
annualised basis) reef mined exceeding the steady state required run rate of 4.8 Mtpa, mill
throughput performing at nameplate design capacity and contained PGM production on a 6E basis
meeting the steady state production level.
The continued focus on opening up access to the full mining strike length and benefits of
maintaining the correct multi-reef layer profile are being realised not only in terms of mine costs,
but importantly consistency of plant feed grades resulting in improved recoveries. The continued
focus on interburden stripping (rather than overburden stripping) contributed to improved ore
exposure and feed grade flexibility during the quarter with a relatively low stripping ratio of 7.1 on a
per m3 basis. This is expected to return to the life of open pit average stripping ratio of 8.5 on a m3
basis in the near term.
The improved reef mining has increased ROM stockpiles ahead of the mills and has allowed for
improved reef layer blending and better feed grade consistency, resulting in improved plant
recoveries and running times.
Contained PGMs on a 6E basis for the quarter, on an annualised basis, achieved steady state
production of 144.0 kozpa. The focus on improving the recoveries will continue with a targeted
recovery of 70% in the near term. The average PGM basket price for the quarter at US$685 per
ounce remained constrained by global macroeconomic conditions. The weaker US$ price was,
however, offset by the weakening of the ZAR against the US$. The average PGM basket price of
ZAR10 849 per ounce is an improvement of ZAR984 per ounce on the average price achieved in Q1
FY2016.
There was a marked decline in the average metallurgical grade chrome concentrate price achieved
from an average of US$124 per tonne in Q1 FY2016 to US$81 for Q2 FY2016. The prices primarily
were affected by the slowdown in the Chinese economy and uncertainty around growth and
consumption of raw materials. We have noted an improvement in these prices as demand returns
to sustainable levels with current transaction levels at approximately US$100 per tonne.
The Voyager chrome processing circuit was modified to facilitate an increase in the production of
higher value specialty grade chrome concentrates on the back of depressed metallurgical grade
chrome concentrate prices. This flexibility has allowed chrome production to be distributed to more
globally diversified markets. The circuit modification has resulted in improved chrome recoveries
nearing the 65% target without impacting PGM recoveries.
The achievement of steady state production levels bodes well for Tharisa and reinforces the group’s
place as a globally competitive low cost PGM and chrome co-producer and further entrenches its
position as an operationally cash generative business throughout the commodity cycle.
The above information has not been reported on or reviewed by Tharisa’s auditors.
Paphos, Cyprus
7 April 2016
Sponsor
Investec Bank Limited
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