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THARISA PLC - Third quarter production report for the period ended 30 June 2018

Release Date: 09/07/2018 07:05
Code(s): THA     PDF:  
Wrap Text
Third quarter production report for the period ended 30 June 2018

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

Third quarter production report for the period ended 30 June 2018
Tharisa achieves important safety milestone and delivers another record quarter

Highlights for the three months ended 30 June 2018
    -   Tharisa Minerals achieves 2 million fatality free shifts from processing activities
    -   Record PGM recoveries at 85.6%, continue to exceed targeted recoveries of 80.0%
    -   Record PGM production of 39.5 koz, up 3.4% quarter on quarter
    -   Record chrome recoveries at 67.8%, exceeding targeted recovery of 65.0%
    -   Record total chrome concentrate production of 376.3 kt, up 2.6% quarter on quarter
    -   Record specialty grade chrome concentrate production at 95.2 kt, 25.3% of total chrome
        concentrate production
    -   Record production at the Lonmin K3 chrome plant of 59.6 kt, up 11.6% quarter on quarter
    -   Acquisition of interests providing low cost entry into highly prospective properties in

Commenting on Q3 production, Tharisa CEO Phoevos Pouroulis, said:
“The ethos of safe production is a core value at Tharisa and we are extremely proud of our employees
for embracing this value and continuing to focus on achieving a zero harm working environment.
Tharisa has illustrated maturity and depth by delivering another record quarter while embarking on
its growth strategy through development and exploration programmes. We look forward to
delivering on our production guidance for the full financial year and on our growth plans outlined in
Vision 2020 in conjunction with the highly prospective projects in Zimbabwe.”
Safety remains a core value and Tharisa continues to strive for zero harm at its operations. An LTIFR
of 0.15 per 200 000 man hours worked was recorded at the end of June 2018 and the following two
safety milestones were achieved by the Tharisa Mine during the quarter:
    -    1 million fatality free shifts on 26 March 2018 from mining operations
    -    2 million fatality free shifts on 14 May 2018 from processing operations.

Production update
The production update for the quarter ended 30 June 2018 is as follows:

                                  Quarter     Quarter     Quarter     Quarter        Nine      Nine
                                   ended       ended         on       ended       months      months
                                   30 June    31 March    quarter     30 June        ended    ended
                                    2018        2018      move %       2017       30 June     30 June
                                                                                     2018      2017

Reef mined                kt        1 244.1     1 206.0      3.2       1 275.2    3 695.3     3 724.3
Stripping ratio        m³: m³           8.0         8.5     (5.9)          6.9          8.1       7.8
Reef milled               kt        1 291.2     1 287.2      0.3       1 199.1    3 888.6     3 616.8
PGM flotation feed        kt         929.7        936.0     (0.7)        866.0    2 825.3     2 648.9
PGM rougher feed         g/t           1.54        1.54       -           1.57         1.53      1.55
6E PGMs produced         koz           39.5        38.2      3.4          35.4        116.5     104.6
PGM recovery              %            85.6        82.2      4.1          81.3         84.0      79.3
Average PGM            US$/oz          947          953     (0.6)          792         922       771
contained metal
basket price
Average PGM            ZAR/oz       11 947      11 384       4.9       10 443        11 721    10 352
contained metal
basket price
Cr?O? ROM grade           %            18.2        18.2       -           17.8         18.1      17.6
Chrome recovery           %            67.8        66.3      2.3          66.0         66.5      64.3
Chrome yield              %            29.1        28.5      2.1          27.8         28.5      26.8
Chrome                    kt         376.3        366.7      2.6         333.9    1 108.8       970.7
   Metallurgical         kt         281.1        281.2       -          246.8     840.0      731.1
   Specialty             kt           95.2        85.5     11.3          87.1     268.8      239.6
Third-party              kt           59.6        53.4     11.6              -    165.8           -
Metallurgical          US$/t          193          206     (6.3)         147        193        212
grade chrome            CIF
concentrate            China
contract price
Metallurgical          ZAR/t        2 477        2 444      1.4         1 892     2 449      2 844
grade chrome            CIF
concentrate            China
contract price
Average exchange      ZAR:US$         12.6        12.0      5.0          13.2      12.7        13.5

The owner mining operating model continues to progress well, as evidenced by the 3.2%
improvement in the reef mined from the open pit. A total of 1 244.1 kt was mined in the three
months to end June 2018, bringing the reef mined to 3 695.3 kt in the nine months to end June

The stripping ratio at 8.0 on a per cubic metre basis remains below the life of mine average of 9.6.
While ensuring ongoing access to the reef horizons and maintaining the supply of ore to the
processing plants, the stripping ratio is planned to increase to the life of mine stripping ratio. 2.9
Mm3 of waste was mined for the quarter, a 3.3% decrease compared to the previous quarter.

Improvements in the drill and blast operations maintained improved fragmentation of run of mine
feedstock to the plants and feed grades remained steady with PGM rougher feed grades at 1.54 g/t
and Cr?O? ROM grades at 18.2%.
Tharisa is encouraged by the mining team’s adoption of continuous improvement strategies and the
subsequent results.

During the quarter 1 291.2 kt of ore was milled, resulting in record PGM production of 39.5 koz on a
6E basis and record total chrome concentrate production of 376.3 kt, of which 95.2 kt (25.3%) are
specialty grade concentrates. PGM and chrome concentrate production increased by 3.4% and 2.6%
respectively when compared to Q2. Both PGM and chrome recoveries exceeded target during the
quarter with PGM recoveries at 85.6%, against a target of 80%, and chrome recoveries at 67.8%,
against a target of 65%.

PGM production in the first nine months of FY2018 totalled 116.5 koz, with total chrome production
at 1 108.8 kt, of which 268.8 kt (24.2%) was specialty grade chrome concentrates.

Third-party production at the Lonmin K3 chrome operation increased 11.6% to 59.6 kt during the
quarter, bringing production from the Lonmin K3 chrome plant to 165.8 kt during the first nine
months of FY2018.

Market update
The average PGM basket price for the three months ended June 2018 was US$947 (ZAR11 947) per
ounce, which is fractionally lower in US dollar terms but 4.9% higher in South African Rand terms
due to a 5% weakening of the ZAR against the USD.

The average metallurgical grade chrome concentrate price was US$193/t, 6.3% lower in US$ terms
however again offset by the weaker Rand. Spot prices have since returned to above the US$200/t
level. Strong stainless steel market fundamentals are expected to continue supporting metallurgical
grade chrome concentrate demand.

Specialty chrome concentrates, which comprise circa 25% of Tharisa’s total chrome concentrate
production continue to attract a significant premium to metallurgical chrome concentrate prices.

Tharisa is confident that it remains on track to achieve its FY2018 production guidance of 150 koz
PGMs and 1.4 Mt of chrome concentrates, of which at least 350 kt will be specialty grade chrome
concentrates. The Vision 2020 projects will ensure that Tharisa delivers 200 kozpa of PGMs and 2
Mtpa of chrome concentrates by 2020.

The near term focus in South Africa will be on advancing the Vision 2020 projects. In Zimbabwe
good progress is being made on regulatory approvals including National Project Status applications
and Environmental Impact Assessment reports and approvals, following which the planned
exploration programmes will commence.

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

Paphos, Cyprus
9 July 2018

JSE Sponsor
Investec Bank Limited

Investor Relations contact:
Tharisa plc
Sherilee Lakmidas
+27 11 996 3538
+27 79 276 2529

Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / James Bavister / David McKeown
+44 207 7418 8900

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

Nedbank Limited (acting through its Corporate and Investment Banking division) (RSA Broker)
Shabbir Norath / Reginald Demana
+27 11 295 6575

Financial PR contacts:
Bobby Morse
+44(0) 20 7466 5000

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