Tharisa likely to deliver 300% improvement in earnings

In terms of the JSE Listings Requirements, companies are required to provide guidance to the market when they are satisfied that a reasonable degree of certainty exists that the financial results for the current reporting period will differ by at least 20% from the results of the previous corresponding reporting period.

Tharisa is preparing its financial statements for FY2020, with the financial results expected to be released on or about 30 November 2020.

Tharisa’s basic earnings and headline earnings for the twelve months ended 30 September 2020 are expected to increase by 300% to 325% relative to the EPS and HEPS of US$ 4 cents per share for the financial year ended 30 September 2019.

MINING

Reef tonnes mined for the year, 4 971.1 kt were mined, which is a 7.4% increase, with milling 4.1% higher at 5 036.1 kt for the year. This performance is particularly impressive given that these volumes were attained whilst increasing the stripping ratio to 13.0 m3:m3, well ahead of the LOM requirements of 9.8 m3:m3.

This opening of the pit, which has seen bench lengths increase, has also meant we have had improved flexibility in the reef mix we feed into our plants, with over 360 kt of ROM stockpile ahead of the plant.

PROCESSING

Both plants again performed above nameplate capacity, with steady feed grades of 1.54 g/t for the rougher feed grade on the PGMs and 18.0% ROM grade on the chrome resulting in PGM recovery rates of 77.1% and 62.3% on the chrome.

Total PGM production for the year was up just under 2% at 142.1 koz, with the fourth quarter delivering 40.5 koz of the total.

Chrome concentrate production for the year was 1 344.8 kt of chrome, of which 321.6 kt was specialty grade.

Production at the K3 Plant was interrupted for a longer period due to the COVID-19 restrictions on underground mining, resulting in annual production of 169.8 kt.

Tharisa has also approved the project restart of the construction of the Vulcan Plant with anticipated completion in 12 months using internal cash flows and available facilities to finance the construction.

The PGM market saw record prices for some of the group elements. The overall basket price received by Tharisa reached record highs, notably on the back of palladium and rhodium price increases. The average basket price for the year US$1 704/oz.

A weaker exchange rates caused by COVID-19 and global macro forces, saw the PGM basket price rally to ZAR27 691/oz for the year.

The chrome market had a weak start to the year, however, prices spiked during the peak of COVID-19 in South Africa, as buyers competed for material. The average sales price achieved for the year was US$140/t, 13.6% lower than for the previous year.

Tharisa’s FY2021 production guidance is 155 koz to 165 koz PGMs (6E basis) and 1.45 Mt to 1.55 Mt of chrome concentrates.

Tharisa plc is an investment holding company with controlling interests in platinum group metals (PGM) and chrome mining, processing operations and associated sales and logistics operations. It operates the Tharisa Mine, a co-producing, open pit PGM and chrome mine located in the Bushveld Complex of South Africa.

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