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Miner, processor and marketer of chrome and
platinum group metals (PGMs) Tharisa reported a 49.1% year-on-year decrease in
earnings a share to $0.27 for the financial year ended September 30.
Revenue decreased by 5.3% to $649.9-million
from $686-million in the prior financial year, with the group saying it
remained relatively resilient to the fall in platinum group metal (PGM) prices
and sales volumes, while benefitting from the strength of robust chrome sales
volumes and an uptick of 25.8% in the realised chrome prices.
Tharisa’s major investment is its
wholly-owned subsidiary Tharisa Minerals, which owns and operates the Tharisa
mine, an openpit PGM and chrome mine located in the Bushveld Complex of South
Africa.
Tharisa also has a 75% shareholding in Karo
Mining, which has an indirect 85% interest in a development stage PGM asset,
located on the Great Dyke in Zimbabwe.
CEO Phoevos Pouroulis said on December 14
that domestic headwinds in the period included electricity challenges at the
Tharisa mine, as well as logistics challenges necessitating a move from rail to
road transport.
Macroeconomic challenges included
uncertainty, geopolitics, inflation, a volatile commodity price environment and
fiscal and regulatory uncertainty.
Pouroulis highlighted tailwinds as
including a buoyant chrome commodity market, counter cyclical commodities in
the group’s basket, and fundamental for both commodities being robust.
He informed that there was strong momentum
in the hydrogen economy and that the group would be exploring this as it
benefits PGMs.
The Chinese stainless steel outlook is also
said to be positive, benefiting chrome demand.
Tharisa's earnings before interest, taxes,
depreciation and amortisation (Ebitda) totalled $136.8-million, a 42.4%
year-on-year decrease primarily owing to inflationary and operational cost
increases exceeding revenue growth over the period along with commodity price
volatility.
Chrome production was 1.58-million tonnes,
while the average metallurgical grade chrome concentrate prices were up 25.8%
at $263/t, compared to $209/t in 2022.
PGM production was 144 700 oz, compared
with 179 200 oz in 2022.
The average PGM basket price retreated by
26.2%.
OUTLOOK
Tharisa noted that its co-product model
proved its resilience once again, with the company having benefited from a
25.8% increase in chrome prices.
The earlier operational mining challenges
and subsequent suboptimal ore mix from its own mined ore and purchased ore did
have a negative impact on PGM recovery and thus production.
The group highlights that its margins
remain strong owing to its mechanised low-cost operations, with a continued
disciplined capital allocation strategy, ensuring investment in its existing
businesses, providing sustainable growth and returns to shareholders.
Given the current PGM basket price weakness
and uncertain global economic outlook, it has taken the measured decision to
extend the Karo platinum project timeline out to commissioning by June 2025,
with the opportunity to accelerate the timeline as markets become more
favourable.
The project is said to have progressed
well, and the revised timeline is aligned to funding availability and provides
flexibility to navigate volatile market conditions.
Tharisa’s growth strategy remains intact,
with continuous optimisation at the Tharisa mine, investment in downstream
beneficiation, and it commitment to the development of the multi-generational
Tier 1 Karo platinum project subject to funding and favourable market
conditions.
Production guidance for full-year 2024 is
set between 145 000 oz and 155 000 oz of PGMs and 1.7-milllion to 1.8-million
tonnes of chrome concentrate.