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First quarter production report: three months ended 31 December 2015
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
ISIN: CY0103562118
('Tharisa')
First quarter production report: three months ended 31 December 2015
Safety
Safety remains a top priority and Tharisa continues to strive for zero harm at our operations.
The lost time injury frequency rate as at 31 December 2015, was 0.17 per 200 000 hours.
Production update
The production update for the quarter ended 31 December 2015 is as follows:
Quarter ended Quarter ended Financial year
31 December 31 December ended 30
2015 2014 September 2015
Reef mined kt 1 124.4 905.9 4 183.2
Stripping ratio m³ waste/m³
reef 6.4 10.1 10.7
Reef milled kt 997.4 1 031.6 4 400.4
PGM flotation feed
tonnes kt 765.8 805.0 3 446.2
PGM rougher feed grade g/t 1.61 1.66 1.62
6E PGMs produced koz 24.0 24.4 118.0
PGM recovery % 60.4 56.9 65.8
Average PGM contained
metal basket price US$/oz 687 956 885
Average PGM contained
metal basket price ZAR/oz 9 865 10 720 10 608
Cr2O3 RoM grade % 18.5 18.5 18.3
Chrome recovery % 61.5 55.8 58.0
Chrome yield % 27.3 25.0 25.5
Chrome concentrates
produced kt 272.1 257.8 1 122.2
42% metallurgical
grade kt 238.7 232.3 1 009.4
Chemical and
foundry grades kt 33.4 25.5 112.8
42% metallurgical grade
chrome concentrate US$/t CIF
contract price China 124 159 158
42% metallurgical grade
chrome concentrate ZAR/t CIF
contract price China 1 777 1 767 1 894
Quarter ended Quarter ended Financial year
31 December 31 December ended 30
2015 2014 September 2015
Average exchange rate ZAR:US$ 14.2 11.1 12.0
First quarter commentary
The reef mined at the Tharisa Mine increased relative to the comparable quarter and the increase is
commendable given the reversion during the quarter to a single mining contractor and the number
of production shifts lost due to safety stoppages.
The transition back to a single contractor from the multi-contractor model progressed according to
the change management plan. Mining production was, however, impacted by a number of section
54 instructions issued by the Department of Mineral Resources. These safety related stoppages
resulted in a loss of approximately 42 weighted production shifts (approximately 15.1% of mill
throughput).
Bulk over burden waste stripping was decelerated during the quarter to focus on inter-burden
stripping, thereby accelerating the exposure to reef. This impacted favourably on the stripping ratio
in the short term by reducing the ratio to 6.4 on a per m3 basis (the life of open pit average stripping
ratio being 8.5 on a per m3 basis). The focus remains on opening up access to the full strike length
without compromising the overburden stripping. The benefits of maintaining the correct multi-
horizon profile will be realised in due course, not only in terms of mining costs but also improved
plant feed grades and recoveries.
The suspension of the mining operations following a fatality on 28 September 2015 resulted in the
ROM stockpiles being substantially depleted. Accordingly, during the quarter a non-optimal blend of
reef was fed into the plants. This has had a negative impact on production, which is expected to
stabilise in Q2 FY2016. The mine plan addresses the rebuild of the ROM stocks. Processing
throughput was also hampered by the section 54 instructions.
PGM production was impacted by the planned processing of weathered ore extracted from the free
dig Far West Pit and the opening up of the western section of the Central Pit. Recoveries remain in
line with the plan and are expected to return to the target recovery of 72% once unweathered ore is
processed towards the end of the second quarter of FY2016.
The PGM basket price for the quarter of US$687 remains constrained by global macroeconomic
conditions.
Chrome production benefitted from improved chrome recoveries and approached the planned 65%.
The chrome concentrate contract price has remained under pressure following the weakening of the
South African Rand and devaluation of the Renminbi against the United States Dollar. This coupled
with the continued slowdown in the Chinese economy, has resulted in not only reduced pricing but
also product demand. The Group continued to benefit from the sales revenue earned on the higher
value-add chemical and foundry grade chrome concentrates, which are premium products marketed
to a broader market.
While the Group strives to achieve PGM steady state of 144 kozpa and chrome concentrates of 1.5
Mtpa, the impact of the stoppages during this quarter on production make achieving that target in
FY2016 a challenging task. These production levels are, however, expected to be achieved on an
annualised basis during the financial year. Tharisa’s large-scale, long-life, open pit PGM and chrome
co-product mine remains on track to prove itself a viable and attractive business notwithstanding
the current commodity cycle.
The above information has not been reported on or reviewed by Tharisa’s auditors.
Paphos, Cyprus
15 January 2016
Sponsor
Investec Bank Limited
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