To view the PDF file, sign up for a MySharenet subscription.

THARISA PLC - Third quarter production report for the period ended 30 June 2017

Release Date: 10/07/2017 08:00
Code(s): THA     PDF:  
Wrap Text
Third quarter production report for the period ended 30 June 2017

Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
ISIN: CY0103562118
('Tharisa')


Third quarter production report for the period ended 30 June 2017
Another record quarter for Tharisa


Highlights for the three months ended 30 June 2017
    -    Record quarterly reef mined of 1 275.2 kt continues to exceed the required run rate of 4.8
         Mtpa on an annualised basis
    -    Record chrome concentrate production of 333.9 kt, up 6.1% quarter on quarter
    -    Record specialty chrome production of 87.1 kt, 26.1% of total chrome production and up
         15.5% quarter on quarter
    -    PGM production of 35.4 koz, up 3.2% quarter-on-quarter
    -    Record PGM recoveries at 81.3% and chrome recoveries at 66.0% exceeding targeted
         recoveries of 80.0% and 65.0% respectively


Commenting on Q3 production, Tharisa CEO Phoevos Pouroulis, said:
“Tharisa Minerals has again shown incremental improvements in production volumes and recoveries.
We continue to examine ways to further optimise our operations and look forward to achieving our
targeted recoveries and production outlook for the financial year.”




Safety
Safety remains a top priority and Tharisa continues to strive for zero harm at its operations. There
were no lost time injuries during the quarter and consequently we recorded an improved LTIFR of
0.08 per 200 000 man hours worked.
    Production update
    The production update for the quarter ended 30 June 2017 is as follows:
                                                                                                  Nine
                                              Quarter     Quarter    Quarter on       Quarter   months
                                               ended        ended       quarter        ended     ended
                                              30 June   31 March     movement         30 June   30 June
                                                 2017        2017                %      2016      2017


Reef mined              kt                    1 275.2      1 219.2            4.6     1 235.4   3 724.3
Stripping ratio         m³ waste/m³ reef          6.9          7.5                        7.4       7.8
Reef milled             kt                    1 199.1      1 211.3            (1.0)   1 192.2   3 616.8
PGM flotation feed
tonnes                  kt                      866.0       897.9             (3.6)    929.6    2 648.9
PGM rougher feed
grade                   g/t                      1.57         1.56            0.6        1.64     1.55
6E PGMs produced        koz                      35.4         34.3            3.2        33.5    104.6
PGM recovery            %                        81.3         76.2            6.7        68.5     79.3
Average PGM
contained metal
basket price            US$/oz                    792         783              1.1       745       771
Average PGM
contained metal
basket price            ZAR/oz                 10 443      10 355              0.8    11 162    10 352


Cr?O? ROM grade         %                        17.8         17.5            1.7        17.7     17.6
Chrome recovery         %                        66.0         62.5            5.6        61.6     64.3
Chrome yield            %                        27.8         26.0            6.9        25.8     26.8
Chrome concentrates
produced                kt                      333.9       314.6             6.1      307.1     970.7
   Metallurgical
   grade                kt                      246.8       239.2             3.2      225.6     731.1
   Specialty grades     kt                       87.1         75.4        15.5           81.5    239.6


Metallurgical grade     US$/t CIF China           147         338        (56.5)          105       212
                                                                                                               Nine
                                                     Quarter       Quarter    Quarter on      Quarter      months
                                                       ended        ended        quarter        ended        ended
                                                     30 June    31 March      movement        30 June      30 June
                                                        2017          2017              %        2016         2017
chrome concentrate
contract price
Metallurgical grade
chrome concentrate
contract price               ZAR/t CIF China           1 892         4 430         (57.3)       1 589         2 844
Average exchange
rate                         ZAR:US$                     13.2         13.2              -         15.0         13.5




Mining

Reef mined from the open pit totalled a record 1 275.2 kt for the quarter. This is a 5% improvement
on the 1 219.2 kt mined in Q2 and brings the monthly average to 413.8 kt over the first nine months
of FY2017. The increase in production is mainly attributable to a focus on continuous improvement
initiatives particularly in the drill and blast operations. The benefits of these initiatives, in terms of the
availability and utilisation of mining equipment, should continue into Q4.

Total waste of approximately 2.5 Mm3 was moved during the quarter at a stripping ratio of 6.9 on a
m3:m3 basis. The waste stripping remained below the LOM average of 9.7 as the team’s focus
remained on interburden stripping to ensure access to the reef horizons. The lower stripping ratio
was also due to the planned pit extension following the road diversion. The benefits of the shorter
waste hauling distances associated with the road diversion will be delivered in the latter part of Q4. It
is forecast that stripping for Q4 will be above 9 m3:m3.

In addition to the focus on increasing waste stripping ahead of ore mining to ensure sustained access
to the reef horizons, there is a continued emphasis on mining consistent reef grades for feed into the
processing plants.


Processing

During the quarter 1 199.1 kt of ore was milled, resulting in PGM production of 35.4 koz on a 6E basis
and record chrome production of 333.9 kt, 87.1 kt (26.1%) of which are specialty grade concentrates.
The chrome feed grade improved by 2% while the 6E PGM rougher feed grade remained consistent
compared to the previous quarter. The marginally lower mill throughput for Q3 was due to the timing
of the planned maintenance during the quarter.
The continuous improvement initiatives focused on crusher throughput and improved crusher run
time. The positive impact of these initiatives on plant throughput was evidenced towards the end of
Q3 and will flow into Q4. Despite the marginally lower throughput, the total PGM and chrome
production increased by 3% and 6% respectively when compared to Q2.

Both PGM and chrome recoveries exceeded target during the quarter with PGM recoveries at 81.3%,
against a target of 80%, and chrome recoveries at 66.0%, against a target of 65%.

The high energy flotation successfully implemented at the Voyager PGM recovery circuit has been
incorporated into the PGM recovery circuit of the Genesis Plant and is scheduled to be completed by
the end of July 2017. This will contribute to improved PGM production in Q4, although production
may be partially impacted by the planned oxidized ore being mined as the open pit is extended
through the road diversion area.


Market update

The average per ounce PGM basket price for the three months ended June 2017 was US$792
(ZAR10 443), which is US$9 an ounce higher than the US$783 (ZAR10 355) price achieved in the
quarter ended March 2017.

While contracted metallurgical grade chrome concentrate prices decreased to US$147 per tonne
from US$338 per tonne, there are signs that prices have found a floor and there is increased price
stability within the chrome concentrate market. Despite Chinese port stock levels of 2.46 Mt, liquidity
has returned on the back of continued stainless steel demand and consumption out of China. The
fundamentals of the global stainless steel market remain sound with continued growth forecast in
2017, further supporting strong demand for chrome units in the form of ferrochrome and chrome
ores. Specialty chrome concentrates, which comprise 26.1% of total chrome concentrate production
and which supplies the chemical and foundry markets, continue to attract a premium above the
contracted metallurgical chrome concentrate prices.
Transition to owner mining model
Tharisa Minerals entered into a binding term sheet with MCC Contracts Proprietary Limited (MCC) on
10 May 2017 in terms of which Tharisa Minerals will purchase, subject to the fulfilment of certain
conditions precedent, certain of MCC’s existing equipment, strategic components, site infrastructure
and spare parts, and transfer the employees currently deployed at its Tharisa Mine in South Africa.

On 6 July 2017, shareholders were advised that the transaction had been unconditionally approved by
the South African Competition Commission. The effective date of the transaction will be the date
immediately following the fulfilment or waiver, as applicable, of the remaining conditions precedent,
or such later date as may be agreed between the parties. The long stop date for fulfilment of these
conditions is 30 September 2017.

The change in the operating model is expected to have both cost and operational benefits as well as
providing financial flexibility, thereby cementing Tharisa’s low-cost high margin position.


New Mining Charter

The Mining Charter was first introduced in 2004 as a regulatory instrument aimed at initiating
transformation in the South African mining sector. Tharisa Minerals complies with the requirements
of the Mining Charter. The Mining Charter III was gazetted on 15 June 2017. The Group is studying
and assessing the regulations and the way forward to ensure compliance. Tharisa remains committed
to transformation in the mining industry.


Outlook

PGM and chrome production remains on track to meet the FY2017 production guidance of
approximately 147.4 koz PGMs on a 6E basis and 1.3 Mt chrome concentrates, of which 300 kt will be
specialty grade chrome concentrates.


The above information has not been reported on or reviewed by Tharisa’s auditors.


Paphos, Cyprus
10 July 2017


JSE Sponsor
Investec Bank Limited


Investor Relations contact:
Tharisa plc
Sherilee Lakmidas
+27 11 996 3538
+27 79 276 2529
slakmidas@tharisa.com


Broker contacts:
Peel Hunt LLP (Joint Broker)
Matthew Armitt / Ross Allister
+44 207 7418 8900


BMO Capital Markets Limited (Joint Broker)
Jeffrey Couch/Neil Haycock/Thomas Rider
+44 020 7236 1010


Financial PR contacts:
Bobby Morse/Anna Michniewicz
+44(0) 20 7466 5000
tharisa@buchanan.uk.com

Date: 10/07/2017 08:00:00 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.

Share This Story