Wrap Text
Abridged Pre-listing Statement
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
(Date of incorporation: 28 February 2008)
Share code: THA
ISIN: CY0103562118
("Tharisa" or "the Company" or together with its subsidiaries "the Group")
ABRIDGED PRE-LISTING STATEMENT
The Pre-listing Statement of Tharisa, dated 25 March 2014 ("Pre-listing Statement") is not an invitation
to the public to subscribe for ordinary shares in the issued share capital of Tharisa ("Shares").
The Pre-listing Statement is issued in compliance with the JSE Listings Requirements ("Listings
Requirements") for the purposes of providing information to the public regarding the Listing of Tharisa
on the securities exchange of the JSE Limited ("Listing") and to selected investors ("Qualifying
Investors") regarding the private placement by way of an offer for subscription for up to 23,393,971
Shares ("Private Placement" or "Offer").
Tharisa has been granted approval by the JSE for a primary listing under the "General Mining" sector of the
Main Board of the JSE under share code: THA and ISIN: CY0103562118.
For a single addressee acting as principal, offers can only be made at an aggregate acquisition cost of not less
than R1,000,000 (one million Rand).
This abridged Pre-listing Statement contains the salient features of the Company, the Listing and the Private
Placement and as such is not intended to be comprehensive. For a full appreciation of the Company, the
Listing and the Private Placement, the Pre-listing Statement should be read in its entirety.
1. INTRODUCTION
The JSE has granted Tharisa a listing of up to 257,333,677 Shares in the "General Mining" sector of the
Main Board of the JSE under the abbreviated name "Tharisa", with effect from the commencement of
trade on Tuesday, 8 April 2014 ("Listing Date"), subject to the Company having satisfied the Listings
Requirements regarding the spread of public shareholders.
The financial year-end of the Company is 30 September each calendar year.
2. MISSION STATEMENT
To maximise shareholder returns through innovative exploitation of mineral resources in a responsible
manner.
3. NATURE OF BUSINESS AND PROSPECTS
3.1 Introduction to the Group
Tharisa is domiciled, incorporated and registered in the Republic of Cyprus as a public company
limited by shares. Tharisa is an integrated resources group incorporating mining, processing,
beneficiation, marketing, sales and logistics of platinum group metals ("PGMs") and chrome
concentrate through its 74% interest in Tharisa Minerals Proprietary Limited ("Tharisa
Minerals") (mining and processing) and its wholly-owned subsidiaries including Arxo
Metals Proprietary Limited ("Arxo Metals") (processing and beneficiation), Arxo Logistics
Proprietary Limited ("Arxo Logistics") (logistics) and Arxo Resources Limited ("Arxo
Resources") and Dinami Limited ("Dinami") (collectively, marketing and sales).
Tharisa's objective is to become a leading natural resources company focused on originating,
developing and operating mines in the PGM, chrome and steel raw material sectors to service
growing global demand through integrated mining, processing, marketing, sales and logistics
operations. The Company's strategy is to focus on growth through value accretive acquisitions,
development and operation of large-scale and low cost projects that are in or close to production.
Tharisa is led by a strong management team with significant sector expertise and a track record
in the successful origination, development and operation of mining projects.
3.2. Key investment highlights
Tharisa provides direct access to a PGM and chrome concentrate open pit co-producer with an
integrated marketing, sales and logistics platform:
- shallow and large (835Mt resource) PGM and chrome concentrate co-producer;
- mechanised open pit operations with over 23 years life of mine and a 36 year life of mine
underground extension;
- located in the lowest cost quartile of the PGM and chrome concentrate cost curves;
- operationally de-risked:
- Tharisa mine is cash generative in FY2014 and is currently at c.87% (for the
5 months ending 28 February 2014) of steady state production of 4,800,000
tonnes per annum run of mine ore;
- capital investment programme completed (mine and infrastructure development
for the Tharisa Mine and processing plants);
- mining, environmental and water use permits and licenses have been granted and
are valid;
- processing, marketing, sales and logistics platform is fully operational;
- processing flexibility provided through the Voyager and Genesis standalone
concentrator plants which are independently operated by Tharisa Minerals;
- PGM concentrate off-take agreement with Impala Refining Services Limited; and
- 25,000 tons per month chrome concentrate off-take agreement with the
Noble Group;
- global marketing and sales of chrome concentrate to an established customer base;
- established marketing and sales platform with direct access to market and price discovery
which provides a channel for future growth;
- in-house, cost effective mine to customer logistics solution;
- stable labour and community relations;
- mechanised open pit mining with a comparatively small and skilled contractor labour
force; and
- capital appreciation through value accretive growth and dividend policy of 10% of net
profit after tax.
The Group is well positioned to benefit from projected growth in demand for both PGMs
and chrome concentrate. Rising income per capita in emerging markets will drive commodity
demand as consumers purchase more goods. As income per capita increases, the structure of the
economy moves away from agriculture towards industry, which increases commodity demand.
Supply is likely to be constrained due to rising costs and capacity reductions at underground
mines in South Africa.
3.3. Competitive strengths
Tharisa is uniquely positioned through:
- commitment to health, safety and environmental management;
- stable labour and community relations;
- shallow and large scale PGM and chrome resource, one of the world's single largest
chrome resources, enabling Tharisa to be a large scale supplier of consistent products over
several decades;
- mining of all six MG chromite layers which allows for the co-production of PGM and
chrome concentrate;
- located in the lowest cost quartile of the PGM and chrome concentrate cost curves
underpinned by low risk mining and beneficiation processes;
- mechanised and skilled labour force;
- independent processing plants providing operational flexibility;
- capacity to produce metallurgical, chemical and foundry grade concentrates for different
markets;
- direct relationships with its South African and international customers;
- integrated marketing, sales and logistics platform;
- extensive industry and management experience with a successful track record of
identifying, developing and operating open pit and underground mining operations; and
- pioneering, innovative and unique approach to viable mineral extraction and beneficiation.
3.4. Strategy
Tharisa's strategy for future growth through:
- becoming a leading natural resources company focused on originating, developing and
operating mines in the PGM, chrome and steel raw material sectors to service growing
global demand through integrated mining, processing, marketing, sales and logistics
operations. The strategy is to focus on growth through value accretive acquisition,
development and operation of large-scale and low cost projects that are in or close to
production;
- growth through innovative research and development projects;
- implementation of the optimisation initiatives to maximise value extraction;
- leveraging off the established marketing, sales and logistics platform for expansion into
multi-commodities with geographic diversity; and
- capital discipline through the return of dividends to shareholders, through a dividend
policy of 10% of net profit after tax, and growth driven by capital allocation to low risk
projects and opportunities.
3.5. Business overview
Tharisa Minerals
Tharisa Minerals, a 74% subsidiary of the Company, owns and operates the Tharisa mine, located
95 km north west of Johannesburg in the south western region of the bushveld complex, the
world's leading source of platinum and chrome, and within close proximity to the town of
Rustenburg, South Africa.
Salient features of the Tharisa mine:
- shallow and large scale PGM and chrome resource;
- producing and operationally cash generative in FY2014;
- large-scale open pit PGM and chrome mid-tier operation;
- over 23 years life of mine open pit and a 36 year life of mine underground extension
(commencing in year 19);
- 8.5 average life of mine stripping ratio (m3 to m3 basis);
- co-production of PGMs and chrome concentrate through the mining and processing
of all six MG chromitite layers;
- commenced production in March 2009;
- currently at c.87% (for the 5 months ending 28 February 2014) of steady state
production of 4,800,000 tonnes per annum run of mine ore;
- average steady state production of 144,000 troy ounces per annum of 5PGE + Au
and 1,850,000 tonnes per annum of chrome concentrate in FY2016; and
- monthly run of mine ore processing capacity of 400,000 tonnes per month at its
independent and standalone Voyager and Genesis concentrator plants;
- processing flexibility to produce metallurgical, chemical and foundry grade chrome
concentrate;
- off take agreement with Impala Refining Services Limited for PGM concentrate;
- off take, agency and global marketing and sales of chrome concentrate through Arxo
Resources to an established customer base;
- dedicated research team focused on enhancing operating efficiencies through initiatives
including:
- increasing the run of mine stock pile to provide mining and processing flexibility;
- a magnetic separation circuit for additional chrome concentrate yield; and
- ultra fine grinding with high energy flotation for additional PGM recovery.
Black Economic Empowerment ("BEE"):
Tharisa Minerals complies with the BEE ownership criteria in the Mining Charter through
a broad-based community trust and Thari Resources Proprietary Limited, holding a 6% and
20% interest in Tharisa Minerals, respectively. As at 31 December 2013, Tharisa Minerals has
a BEE compliance score of 93.0% and achieves an "excellent" rating in compliance with the
Mining Charter.
Tharisa places a high priority on community relations and initiatives. In this context, Tharisa
Minerals has establised an engagement forum for the local community surrounding the Tharisa
mine and has implemented initiatives for job creation, permanent housing, poverty alleviation,
basic infrastructure and community development, which projects are and will continue to be
funded from future dividends from the Tharisa mine.
Arxo Metals
Arxo Metals, an indirectly wholly-owned subsidiary of Tharisa, is the producing, beneficiation
research and development company of the Group.
Arxo Metals conducts research and development into further downstream beneficiation
opportunities to expand and optimise the Group's operations, including:
- magnetic separation circuits to enhance chrome yields;
- ultra fine grinding with high energy flotation to increase PGM recoveries;
- DC PGM smelting and hydrometallurgical feasibility studies;
- development and feasibility of producing chrome alloys as a high value feed material for
the stainless steel industry; and
- further recovery of chrome ore from tailings produced at the Tharisa mine and other
mines.
In addition to research and development, Arxo Metals produces higher value chemical and
foundry grade chrome concentrates at its Challenger plant, which is capable of producing a
minimum of ~8,000 tonnes per month of foundry and chemical grade chrome concentrate, for
which it has an off-take agreement with Rand York Minerals Proprietary Limited.
Arxo Resources
Arxo Resources, a wholly-owned subsidiary of Tharisa, provides direct access to the international
chrome concentrate customer base, in particular in the Peoples Republic of China, and provides
an established marketing and sales platform with direct access to market and price discovery
which provides a channel for future growth through:
- an integrated marketing and sales operation for chrome concentrate; and
- direct channels with an international customer base of third party sales revenue.
Tharisa accounted for ~9% of South African chrome concentrate production and ~4% of global
chrome concentrate production for the 2013 financial year.
Arxo Logistics
Arxo Logistics, a wholly-owned subsidiary of Tharisa, provides:
- an integrated logistics platform to mitigate logistics risks and providing a competitive
advantage;
- road transportation of PGM concentrate to Impala Refining Services Limited;
- road and rail transport capacity, warehousing facilities and port facilities at the Richards
Bay Dry Bulk Terminal and the Durban port to handle the full steady state production
levels of 155,000 tonnes per month of chrome concentrate;
- transportation of chrome concentrate from the Tharisa Mine to either: the Richards Bay
Dry Bulk Terminal by rail and then loaded onto bulk vessels; or by road to warehouses and
then packed into containers and transported by either road or rail to the Durban stacks
for shipment by container vessels;
- shipment of chrome concentrate production from the Richards Bay Dry Bulk Terminal
and the Durban port to customers in Asia and other international markets through bulk
and container vessels; and
- a platform to service third party customers in the future.
During the 2013 financial year, Arxo Logistics shipped 488,000 tons of chrome concentrate in
containers and 545,000 tonnes in bulk shipments.
Dinami
Dinami, a wholly-owned subsidiary of Tharisa, provides marketing, sales and agency services in
relation to Arxo Metals' foundry and chemical grade chrome concentrates as well as third party
products.
4. DIRECTORS
The overall direction, supervision and management of Tharisa is the responsibility of the board of
directors of Tharisa ("Directors").
The full names, ages, capacities and business addresses of the Directors are set out in the table below:
Principal
Full name, occupation
age and Business and Date
nationality address function appointed
Loucas Christos Pouroulis Office 108 - 110 Executive 27 October 2010
75 S. Pittokopitis Business Centre Chairman
Cypriot 17 Neophytou Nicolaides
and Kilkis Streets, 8011
Paphos, Cyprus
Phoevos Pouroulis Office 108 – 110 Chief Executive 27 October 2010
39 S. Pittokopitis Business Centre Officer
Cypriot/South African 17 Neophytou Nicolaides
and Kilkis Streets, 8011
Paphos, Cyprus
Michael Gifford Jones Eland House, The Braes, Chief Finance 30 January 2013
51 3 Eaton Avenue, Bryanston Officer
South African Johannesburg, 2021, South Africa
John David Salter Office 108 – 110 Lead 27 October 2010
55 S. Pittokopitis Business Centre Independent
British 17 Neophytou Nicolaides non-executive
and Kilkis Streets, 8011 Director
Paphos, Cyprus
Ioannis Drapaniotis Office 108 – 110 Independent 3 May 2008
74 S. Pittokopitis Business Centre non-executive
Greek 17 Neophytou Nicolaides Director
and Kilkis Streets, 8011
Paphos, Cyprus
Antonios Djakouris Office 108 – 110 Independent 11 October 2011
66 S. Pittokopitis Business Centre non-executive
Cypriot 17 Neophytou Nicolaides Director
and Kilkis Streets, 8011
Paphos, Cyprus
5. DETAILS OF THE PRIVATE PLACEMENT
Offer price range per share R42.75 to R55.21
Number of shares to be offered 23,393,971 to 18,111,503
Amount to be raised in terms of the Offer R1,000,000,000
The Offer comprises an offer for subscription of up to 23,393,971 Shares , subject to Qualifying Investor
demand to whom the Offer will be specifically addressed. Investec Bank Limited ("Bookrunner")
has been granted an option by the Company, from the Listing Date, to allot additional Shares of up to
15% of the number of Shares issued pursuant to the Private Placement. Such action, if commenced at
the discretion of the Bookrunner, may be discontinued at any time, but may under no circumstances
continue beyond the 30th calendar day after the Listing Date.
The Listing and the Offer are conditional on obtaining the minimum spread of shareholders required
in terms of the Listings Requirements, which provide that, unless the JSE determines otherwise,
the number of public shareholders, as defined in the Listings Requirements, must be at least 300 who
will hold a minimum of 20% of the Shares. The Listing may not proceed if these shareholder spread
requirements are not met, and in such event the Private Placement and any acceptance thereof will
not be of any force or effect and no person shall have any claim whatsoever against the Company or
any other person.
6. SALIENT FINANCIAL INFORMATION
The following salient financial information has been extracted from the consolidated financial statements
of the Group for the year ended 30 September 2013 and for the quarter ended 31 December 2013:
12 months to 30 September 3 months to
(audited) 31 December
FY2011 FY2012 FY2013 Q1 FY2014
US$'000 US$'000 US$'000 US$'000
Revenue 28,128 53,889 215,455 65,674
Gross loss/profit (1,247) (8,225) 25,885 11,107
Results from operating (36,871) (33,518) (663) 5,532
activities
Loss for the year (88,548) (29,971) (47,443) (10,571)
Loss per share (US$) (12.76) (3.40) (6.31) (1.47)
Net cash used in operating (49,257) (9,195) (2,956) (2,459)
activities
Cash and cash equivalents 134,783 52,805 28,017 13,326
at the end of the year
7. SALIENT DATES AND TIMES
Opening date of the Offer (09:00) Monday, 24 March 2014
Last date for applicants to submit their application forms to the Wednesday, 2 April 2014
Bookrunner in order to be considered for the book build and qualify
for participation in the Offer (12:00)
Date on which applicants will be notified of the number of Shares which Thursday, 3 April 2014
they have been allocated in terms of the Offer (12:00)
Offer price and results of Offer announced on SENS Friday, 4 April 2014
Last date for applicants to make payment with respect to their Friday, 4 April 2014
allocated Shares (12:00)
Shares listed on the JSE (09:00) Tuesday, 8 April 2014
Notes:
1 All references to dates and times are local dates and times in South Africa. These dates and
times are subject to amendment. Any such amendment will be released on SENS and published
in the press.
2 Qualifying Investors must advise their central securities depository participant ("CSDP") or
broker, as the case may be, of their acceptance of the Private Placement in the manner and within
the cut-off time stipulated by their CSDP or broker, as the case may be.
8. COPIES OF THIS PRE-LISTING STATEMENT
Copies of the Pre-listing Statement may be obtained during normal business hours from Tuesday,
25 March 2014 from:
- Tharisa Minerals, Eland House, The Braes, 3 Eaton Avenue, Bryanston, Johannesburg, 2021,
South Africa;
- Tharisa, Office 108 – 110, S. Pittokopitis Business Centre, 17 Neophytou Nicolaides and Kilkis
Streets, 8011 Paphos, Cyprus;
- Computershare Investor Services Proprietary Limited, Ground Floor, 70 Marshall Street,
Johannesburg, 2001, South Africa; and
- Investec Corporate Finance, a division of Investec Bank Limited, 2nd Floor, 100 Grayston Drive,
Sandown, Sandton, 2196, South Africa.
25 March 2014
Johannesburg
Investment Bank, Bookrunner and Sponsor
Investec
Specialist Bank
Financial Advisor
HSBC
South African Legal Advisor
BAKER & MCKENZIE
Legal Advisor to the Board
TERRY MAHON ATTORNEYS
Cyprus Legal Advisor
LL LAW
Corporate Financial Lawyers
South African Legal Advisor to the Bookrunner
ENSAFRICA
United Kingdom Legal Advisor to the Bookrunner
HOGAN LOVELLS
Technical Advisor
COFFEY
Auditors
KPMG
Reporting Accountants
KPMG
Communication Advisor
BRUNSWICK
Transfer Secretaries
COMPUTERSHARE
Transfer Secretaries
CYMAIN REGISTRARS LTD
Date: 25/03/2014 01:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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