THARISA, a platinum group metals (PGM) and chrome producer, yesterday reported a fall in production for its second quarter to end-March as mill breakdowns weighing on production, but said it was on track to meet its market guidance.
The JSE- and London Stock Exchange-listed company said its PGMs production for the second quarter was 44 100 ounces, a 7.5 percent drop from the 47 700 ounces produced in the quarter ended December 31, 2021.
Tharisa chief executive Phoevos Pouroulis said: “Another safe and strong mining performance in what is traditionally our toughest operating quarter. Mining rates remain at record levels with production impacted by certain secondary mill challenges that have since been addressed. These challenges dampened throughput and, in turn, production.”
Chrome production also decreased to 374 900 tonnes, a 6.7 percent decrease from the 401 800 tonnes produced in the first quarter.
Tharisa said it had a cash balance of $101.5 million (R1.5 billion) at the end of the quarter and debt of $75.6m after a final full year 2021 dividend payment of $14.1m.
The increased cash resulted in a positive net cash position of $25.9m compared to $24.4m for 2021.
The PGM market was driven by two forces, one structural, where demand for all metals remained strong, pushing prices up as the market absorbed potential inventory overhangs from the past 12 months, as the global pipeline for automobiles and computer chips grew, as economic activity was lifted, the firm said.
“The second force, unfortunately, was driven by geopolitical events, that saw buyers ensuring access to metal supply due to uncertainty of supply from Russia. These concerns are warranted as the latest sanctions by the London Platinum, and Palladium Market on certain refiners indicates the market will tighten,” it said.
However, the lowered production was counteracted by an improved average PGMs basket price, which increased by 17.2 percent to $2 806 an ounce, compared to $2 394 an ounce in the first quarter.
“This quarter’s output, though slightly lower, needs to be measured against our record-breaking quarterly run rate, and our step change to higher output remains intact on an annualised basis. Despite these challenges, on a half year comparable basis to 2021, PGM and chrome concentrate production increased by 22.2 percent and 6.3 percent, respectively,” Pouroulis said.
Pouroulis said the company continued to focus on grade and throughput and the ramp-up of the Vulcan Plant production. The production plant is an R1 billion ultra-fine chrome recovery and beneficiation plant at the mine, which began the cold commissioning process in October.
“We remain confident in achieving market guidance. As Tharisa maintains its growth strategy, we have taken significant strides in simplifying the group structure, through the consolidation of our ownership of Tharisa Minerals in a landmark BEE (black economic empowerment) transaction, benefiting all shareholders,” he said.
Looking ahead, for the year ending September 30, Tharisa expected platinum production to be between 165 000 and 175 000 ounces, up from 157 800 ounces the year before, while 1.75 million tonnes (Mt) to 1.85 Mt of chrome concentrates was maintained.
Pouroulis said the company had also progressed in its much-anticipated cross-border step by announcing its plans for developing the tier 1 Karo PGM project, doubling its PGM production within 24 months.
“The transformation of Tharisa into a multi-asset, multi-commodity and multi-jurisdiction business, combined with strong PGM and chrome prices, as well as the further production upside from initiative including the ramp of the Vulcan Plant at the Tharisa Mine, provide a very healthy outlook for the prospects of the company in the second half of the year, and beyond,” he said.
In late trade, Tharisa’s share was 2.93 percent down at R31.50, having risen 50.93 percent in the past three years.
BUSINESS REPORT ONLINE