Tharisa holds firm as dual product model enables steady development of projects
Last updated: 03:03 11 Jan 2024 EST, First published: 05:54 01 Dec 2020 EST
Snapshot
- Tharisa increases production in first quarter, record for chrome output
- Tharisa reinforces financial position with new debt, as construction at Karo continues
- Tharisa’s ‘positive dividend surprise’ exceeds expectations - analyst
- Tharisa "cautiously optimistic" after tough year for PGMs
About the company
Tharisa PLC is an integrated resource group critical to the energy transition and decarbonisation of economies.
The company incorporates mining, processing, exploration, and the beneficiation, marketing, sales, and logistics of PGMs and chrome concentrates, using innovation and technology as enablers.
Its principal operating asset is the Tharisa Mine located in the south-western limb of the Bushveld Complex, South Africa.
How it is doing
Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) hailed a positive start to its financial year with record chrome production and increased platinum group metals (PGM) output despite inclement weather.
Production was boosted by an 8.7% increase in mill throughput, with PGM output increasing to 35.7 koz in the quarter ending 31 December from 30.7 koz in the fourth quarter of the prior year, while chrome output climbed to 462.8 kt from 413.4 kt.
Tharisa anticipates continued growth in 2024, with production guidance set between 145-155 koz for PGMs and 1.7-1.8 Mt for chrome concentrates.
Chief executive Phoevos Pouroulis credited operational improvements and waste mining advances for the quarter's achievements.
Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) confirmed that weak platinum prices had taken a toll on earnings in its latest financial year.
Platinum basket (PGM) prices dropped by 26% to US$1,893 an ounce on average over the year to end-September 2023, though chrome prices went the other way, rising by 25.8%.
Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) has confirmed that earnings for the financial year just ended will be well below the previous year.
The South Africa-based miner had already flagged that timelines for its Karo Platinum project development had been revised due to weak PGM (platinum group metals) prices and volatile macroeconomic conditions.
Insight: Tharisa reinforces financial position with new debt, as construction at Karo...
In uncertain times like these, production beats exploration in the mining industry - hands down.
But, for a junior or mid-cap company like Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) the optimum position is to have a significant growth pipeline as well.
What the brokers say
Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF)’s underlying earnings fell slightly short of Peel Hunt's estimation of US$140 million, though analysts retained the platinum miner’s 'buy' rating with a 195p price target.
The minor discrepancy is attributed to lower cash operating costs, which could not entirely offset the marginally reduced realised pricing.
Tharisa's reported net income stood at US$82.2 million, closely matching Peel Hunt's projection of US$81.5 million.
What management says
Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) CEO Phoevos Pouroulis speaks to Thomas Warner from Proactive after the mining company published its annual report for a 2023 characterised by challenges not only for Tharisa but for the wider platinum group metals (PGM) sector.
Pouroulis discusses what he has called the company's resilience amid a challenging year marked by weather impacts, declining platinum group metals (PGM) prices, and South African infrastructure issues. Despite these challenges, Tharisa maintained steady chrome production at 1.58 million tonnes, benefiting from a 25% increase in prices of the metal.
The company navigated electricity and logistics problems, ensuring timely delivery to customers and achieving a healthy return despite the lower earnings from PGMs. Pouroulis highlights Tharisa's adaptability and strategic focus on co-producing PGM and chrome concentrates.