Positive outlook, lower debt boosts confidence at Tharisa
JOHANNESBURG - THARISA Minerals surged on the JSE yesterday after reporting a positive cash position, lower debt and improved production growth during the first quarter of 2021 ended December 2020.
The Cyprus headquartered platinum group metals (PGM) and chrome producer which operates the Tharisa Mine in the North West, inched up 7.87 percent to R27.40 at 1pm on news that its cash balance was $49.8 million (R770m) at the end of the quarter.
Tharisa said its total debt fell to $45m from $70m at the end of the 2020 financial year.
The group said $5.5m of the debt was trade finance facilities, resulting in a positive net cash position of $4.8m.
It said that its PGM contained metal basket price had improved 70 percent year-on-year to $2 399 an ounce in November.
The group proposed a bumper final dividend for the year ended September after generating mega-profits as it rode the wave of strong metal prices.
Tharisa said its annual PGM and chrome concentrate production guidances for 2021 were on track at between 155 000 to 165 000 ounces of PGMs (6E basis) and between 1.45 million and 1.55 million tons of chrome concentrates.
Chief executive Phoevos Pouroulis said that the first quarter provided a solid platform for the group to meet its production guidance for the current financial year, with all key metrics delivering strong growth versus the same period in 2020.
“The consistent performance has been delivered in a strong spot market for PGMs in particular and stable chrome prices,” Pouroulis said.
PGM production was 14.2 percent higher year-on-year on a 6E basis to 39 300 ounces up from 34 400 ounces in the first quarter of 2020.
Chrome concentrate production, excluding third parties, was 8.7 percent higher year-on-year to 372 300 tons, up from 342 500 tons in the first quarter of 2020, and marginally stronger versus 370 800 tons in the fourth quarter of 2020.
Pouroulis said the Covid-19 pandemic remained a risk to the company and its forecasts and guidance were premised on the current level of economic activity being permitted by government regulations
“The headwinds from the global Covid-19 pandemic continue to challenge the industry worldwide,” he said. The group confirmed 35 active cases at the Tharisa Mine at the time of reporting and said a second employee has succumbed to the Covid-19 pandemic.
Tharisa said it had concluded a four-year wage deal with the four labour unions represented at the Tharisa Mine, effective from July 2020 until June 30, 2024. It also said that the construction of the Vulcan processing plant remained on schedule and on budget for commissioning at the end of this financial year.
Tharisa shares closed 4.33 percent higher at R26.50 on the JSE yesterday.