12 Oct - 9 min read

Production report for the fourth quarter and year ended 30 September 2021

Production report for the fourth quarter and year ended 30 September 2021

Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
('Tharisa' or the 'Company')


PRODUCTION REPORT FOR THE FOURTH QUARTER AND YEAR ENDED 30 SEPTEMBER 2021
Best quarterly production in the history of the Tharisa Mine


Fourth quarter and year-end highlights
    -   Five-year fatality free, with a Lost Time Injury Frequency Rate (‘LTIFR’) of 0.34 per 200 000-man
        hours worked
    -   Delivered on production guidance with record quarterly output of Platinum Group Metals
        (‘PGMs’) and chrome concentrates
            - PGM production of 43.7 koz, up 12% Quarter on Quarter (‘QoQ’), delivering 157.8 koz for
              the year, up 11% Year on Year (‘YoY’) at an average PGM basket price of US$3 074/oz
              (ZAR45 336/oz), up 80% YoY
            - Chrome output of 395.7 kt, up 4% QoQ, delivering 1 506.1 kt for the year, up 12% YoY at
              an average metallurgical grade chrome price of US$154/t (ZAR2 284/t), up 10% YoY
    -   Record production performance has further strengthened the Company’s balance sheet
            - Cash balance of US$83.4 million and a positive net cash position of US$47.9 million
    -   Decarbonisation targets set at a 30% reduction in emissions by 2030, carbon net neutral by 2050
        across the Company’s operations

Post year-end highlights
    -   Commencement of cold commissioning of the Vulcan ultra-fine chrome processing plant in
        October 2021, anticipated to increase recoveries of chrome concentrate to above 80%, thereby
        increasing chrome production by 25% to 2.0 Mt
    -   Commencement of Salene Chrome plant construction


Guidance for FY2022
    -   FY2022 production guidance of between 165 koz to 175 koz PGMs (6E basis) and 1.75 Mt to 1.85
        Mt of chrome concentrates. COVID-19 remains a risk to the Company and guidance is premised
        on the current level of economic activity being maintained
Key Operating Numbers

                                       Quarter   Quarter   Quarter on   Quarter     Year      Year      Year on
                                        ended     ended      quarter     ended    ended     ended          year
                                        30 Sep    30 Jun   movement      30 Sep   30 Sep    30 Sep    movement
                                         2021      2021            %      2020     2021      2020            %


Reef mined                    kt       1 404.7   1 507.8        (6.8)   1 405.7   5 379.9   4 971.1         8.2

PGMs produced (6E)            koz         43.7      39.0        12.1       40.5    157.8     142.1         11.0

Chrome concentrates           kt         395.7     379.7         4.2      370.8   1 506.1   1 344.8        12.0
produced (excluding third
party)

Average PGM basket price      US$/oz     2 854     3 804       (25.0)     1 951    3 074     1 704         80.4


Average metallurgical grade   US$/t       167       160          4.4       142       154       140         10.0
chrome concentrate
contract price



Phoevos Pouroulis, CEO of Tharisa, commented:
“The fourth quarter of our financial year delivered the highest production of PGMs and chrome
concentrates in the history of the Tharisa Mine. This performance follows several strategic initiatives to
optimise the operation, these have built a sustainable platform for Tharisa to deliver further significant
growth over the long life of our open pit operations.

The continued improved performance over the past twelve months was achieved through the proficiency,
commitment and focus of all our staff, who not only delivered our results safely, but did so in the face of
COVID-19 uncertainty, which saw thousands of man hours lost during the past 12 months. The challenge
of the pandemic persists on numerous fronts, yet we remain confident that the measures we have taken
in the last two years will continue to allow us to overcome these and future challenges.

With the FY2022 production guidance provided for the Tharisa Mine, we see further growth particularly
from the investment made in the Vulcan plant, which is in the cold commissioning phase and will produce
chrome concentrates before the end of 2021. In Zimbabwe, the exciting developments with Salene Chrome,
in the construction phase, as well as the progress on the development of Karo Platinum, will contribute to
Tharisa’s growth trajectory over the next two years.

As we enter the next phase of the development of our business, Tharisa remains a key participant in the
global transition to a low carbon economy through the critical metals we produce. Not only will Tharisa
contribute to this transition, we will deliver on our stated goals of reaching 30% reduction in emissions by
2030 and carbon neutrality by 2050 through the extraordinary skills and initiatives of our own research
and development team as well as the adoption of leading technologies.”


Health & Safety
   -   The health and safety of our stakeholders remains a core value to the Company and Tharisa
       continues to strive for zero harm at its operations
   -   LTIFR of 0.34 per 200 000-man hours worked
   -   Tharisa recorded its fifth-year fatality free, a testament to the due diligence and focus of our staff
   -   South Africa is at an adjusted Alert Level 1 as the country has exited Wave 3
   -   The Company currently has zero active COVID-19 cases

Market Update
   -   While the PGM basket price increased by over 80% on an annual basis, this was somewhat
       dampened by the softer PGM basket price in the last quarter, which saw the average basket price
       reduce by 25% QoQ. While the upside price movement may be perceived to have overrun, short
       term supply-demand disruptions need to be countered by the strong fundamentals of PGMs in
       the longer term, driven by a healthy outlook for the internal combustion engine, investment and
       industrial demand. While substitution will take place between palladium and platinum in catalytic
       converters over time, the inability to substitute the minor metals, the largest of which is rhodium,
       ensures that the PGM basket price will remain robust for at least the next 5-year period

   -   Chrome prices improved in the last quarter with an increase of over 4% compared to the June
       2021 quarter, and also saw an increase of 10% on an annual basis, with spot trading at US$165/t.
       Prices will need to remain at these levels for most producers to remain profitable and continue to
       invest, as shipping rates have dented margins, with the global logistic industries continuing to be
       impacted by the pandemic and challenges with supply chain management. Despite some output
       cuts at stainless steel plants in China, output is nevertheless expected to increase close to double
       digit percentage growth compared to 2020 as both domestic demand and export demand drives
       higher output levels in China. South African inland logistics issues have led to longer supply chains
       and thus increased pricing for products, while stockpiles of chrome at port level in China remain
       constant


Operational Update
   -   Total reef mined slightly down QoQ but up over 8% YoY to 5.4 Mt
   -   Annual stripping ratio of 11.6 m3: m3 ahead of LOM requirements
   -   Tonnes milled increased QoQ leading to an increase in milled tonnes for the year of over 11% to
       5.6 Mt
   -   Record quarterly PGM production at 43.7 koz leading to an annual output of 157.8 koz, within
       guidance
   -   Record quarterly chrome output of 395.7 kt leading to an increase YoY of 12% in chrome output
       to 1 506.1 kt, within guidance
   -   The improvements in PGM grade to 1.59 g/t are as a direct result of the mining efficiencies
       achieved in the last 18 months, allowing the mine to focus on ‘right mining’ to achieve the optimal
       grade mix
   -   Correct grade mix has resulted in the plants running optimally, leading to improved recoveries
   -   The mine has approximately 2-months ROM stockpile ahead of the plants


Zimbabwe update
   -   Salene Chrome is on track to commence production in Q1 FY2022
   -   Salene Chrome mining has commenced, and the metallurgical plant construction is in progress
   -   Karo Platinum implementation studies completed


Cash Balance and Debt Position
   -   Tharisa had a cash balance of US$83.4 million (30 June 2021 US$80.5 million) at the end of the
       quarter and debt of US$35.5 million (30 June 2021 US$38.7 million) resulting in a positive net cash
       position of US$47.9 million (30 June 2021 US$41.8 million), with a significant portion of capital
       spent on the construction of the Vulcan plant being internally funded
   -   The Company’s strong balance sheet with low leverage positions it to fund its growth aspirations

                                     Quarter   Quarter   Quarter on   Quarter     Year      Year      Year on
                                      ended     ended      quarter     ended    ended     ended          year
                                      30 Sep    30 Jun   movement      30 Sep   30 Sep    30 Sep    movement
                                       2021      2021            %      2020     2021      2020            %

Reef mined                  kt       1 404.7   1 507.8        (6.8)   1 405.7   5 379.9   4 971.1         8.2

Stripping ratio             m3: m3      12.3      10.9        12.8       13.0     11.6      12.1         (4.1)

Reef milled                 kt       1 428.1   1 413.1         1.1    1 401.8   5 600.0   5 036.1        11.2

PGM flotation feed          kt       1 071.6   1 072.3        (0.1)   1 062.5   4 248.2   3 765.9        12.8

PGM rougher feed grade      g/t         1.59      1.52         4.6       1.54     1.49      1.46          2.1

PGM recovery                %           80.0      74.4         7.5       77.1     77.6      80.1         (3.1)

6E PGMs produced            koz         43.7      39.0        12.1       40.5    157.8     142.1         11.0

    Platinum produced       koz         23.6      21.8         8.3       22.7     86.7      78.7         10.2

    Palladium produced      koz          7.2       5.5        30.9        6.1     24.9      23.0          8.3

    Rhodium produced        koz          4.3       3.9        10.3        3.9     15.4      13.5         14.1

Average PGM contained       US$/oz     2 854     3 804       (25.0)     1 951    3 074     1 704         80.4
metal basket price

    Platinum price          US$/oz     1 016     1 185       (14.3)      901     1 080       876         23.3

    Palladium price         US$/oz     2 295     2 794       (17.9)     2 283    2 513     2 147         17.0

    Rhodium price           US$/oz    16 721    24 232       (31.0)    10 482   18 860     8 348        125.9

Average PGM contained       ZAR/oz    41 727    53 801       (22.4)    32 978   45 336    27 691         63.7
metal basket price

Cr2O3 ROM grade             %           17.9      18.0        (0.6)      18.0     17.9      18.2         (1.6)

Chrome recovery             %           65.0      63.0         3.2       62.3     63.3      62.1          1.9

Chrome yield                %           27.7      26.9         3.0       26.4     26.9      26.7          0.7

Chrome concentrates         kt         395.7     379.7         4.2      370.8   1 506.1   1 344.8        12.0
produced (excluding third
party)

  Metallurgical grade       kt         309.3     280.8        10.1      277.6   1 141.5   1 023.2        11.6

  Specialty grades          kt          86.4      98.9       (12.6)      93.2    364.6     321.6         13.4

Third party chrome          kt          52.4      59.0       (11.2)      52.8    223.0     169.8         31.3
production
  Metallurgical grade     US$/t          167       160           4.4    142     154       140            10.0
  chrome concentrate      CIF
  contract price          China

  Metallurgical grade     ZAR/t        2 435      2 274          7.1   2 376   2 284    2 231             2.4
  chrome concentrate      CIF
  contract price          China

  Average exchange rate   ZAR:US$       14.6       14.1          3.5    16.9    14.8     16.2            (8.6)



Paphos, Cyprus
12 October 2021
JSE Sponsor
Investec Bank Limited

Connect with us on LinkedIn and Twitter to get further news and updates about our business.

Investor relations contacts:
Ilja Graulich (Head of Investor Relations and Communications)
+27 11 996 3500
+27 83 604 0820
igraulich@tharisa.com

Financial PR contacts:
Bobby Morse / Augustine Chipungu / James Husband
+44 207 466 5000
tharisa@buchanan.uk.com

Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / David McKeown / Alexander Allen
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Thomas Rider / Pascal Lussier Duquette / Nick Macann
+44 207 236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Jennifer Wyllie / Varun Talwar / Detlir Elezi
+44 203 207 7800
Nedbank Limited (acting through its Corporate and Investment Banking division) (RSA Broker)
Carlyle Whittaker
+27 11 294 0061

About Tharisa
Tharisa is an integrated resource group critical to the energy transition and decarbonisation of
economies. It incorporates mining, processing, exploration and the beneficiation, marketing, sales and
logistics of PGMs and chrome concentrates, using innovation and technology as enablers. Its principal
asset is the Tharisa Mine located in the South-Western Limb of the Bushveld Complex, South Africa. The
mechanised mine has a 14-year open pit life and the ability to extend operations underground by at
least an additional 40 years. Tharisa also owns Salene Chrome, a development stage, low cost, open pit
asset, located adjacent to the Great Dyke in Zimbabwe. Tharisa plc is listed on the Johannesburg Stock
Exchange (JSE: THA) and the Main Board of the London Stock Exchange (LSE: THS)

Date: 12-10-2021 07:05:00
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