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Share Picks, South Africa

Tharisa: Ready To Shoot The Lights Out


There are few companies on the JSE whose profits look as if they will shoot the lights out. One of them is Tharisa, an integrated resource group incorporating mining of chrome and PGM metals.

A SENS announcement a week ago says that Tharisa is taking 900 employees onto its books this month as well as buying a fleet of second hand trucks and drilling equipment. The trucks and mining equipment come with a bill of R415 million, but the timing of these essentials is perfect for Tharisa.

The company did not want to pay these large costs until contractors had outlined the size of its mine. Now this has been done, it is a perfect time for Tharisa to expand its workforce and take on board vital trucks to move pay-dirt.

“The contractor model was appropriate while the Tharisa Mine was in development since it reduced the upfront capital spend on a fleet, enabled Tharisa Minerals to understand its ore body fully and allowed the company to determine the optimal fleet requirements for mining its specific ore body,” says Tharisa CEO Phoevos Pouroulis.

But it’s on the profits front that Tharisa starts to spark. The Group’s commodities are priced in US dollars and the cost base is mainly in ZAR, and therefore the Group is positioned as a rand hedge stock. The company is also listed on the London Stock Exchange.

Tharisa generated profits of US$68.3 million (2016: US $4.5 million). Revenue was up by a massive US $175.1 million (2016: US$86 million). The company also produced net cash of US $44.2 million (2016: US$18.2 million). That’s shooting the lights out.


credit: Graph Provided by Sharenet Advanced Online Charts

Trade THA From 0.3%

Going forward, Tharisa expects continued strong operational performance for the remainder of the year, with a focus on improving the chrome feed grades, and also expects continued improvement in recoveries for both PGM and chrome concentrates.


Jeremy Woods

Jeremy Woods trained for three years as a journalist on the Herts Advertiser, St Albans, in the U.K. Once qualified, he left England to work as a crime reporter on the Vancouver Sun in Canada. After three years, he worked for the Los Angeles Times as a trainee financial journalist, spending most of his time reading company accounts and finding publishable stories in them. He moved to South Africa and for the last five years in journalism worked for the Sunday Times, Business Times, as Investment Editor. He has also published a financial thriller called “Special Payments”, which was a best-seller on publication, and optioned three times for a film.

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