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So the current MCAP is £190m and we hold around £100m in cash? So the effective valuation the market is placing on us is £90m. I find that quite unbelievable.
Makes perfect sense to delay karo until PGM prices recover.
Chrome is the major cash cow for Tharisa. For me its all about cash flows rather than production figures.
Cash at hand is up to $268million / £220million gpb.
Net cash $126.6mil / £104million gbp a decrease of $14mil / $11.4mil - given capex i think this is a great result.
Mcap £190 million. So minus cash the assets including both mines are being valued at just £86million by the market.
And final dividend in March 2024?
March 23 was 4 cents March 22 was 5 cents
Must be vulnerable to a predator, especially with that cash pile.
Tamesis:
Key points:
• PGM production below – despite quarterly reef mined ticking up well in Q4 (up 27% q-o-q), overall PGMs produced came
8% below our total year forecast. We note that the main driver of this difference in this quarter was due to the lower grade
feed and PGM recoveries as a result of RoM being purchased from 3rd party suppliers (which is still planned for next year as
waste stripping continues in Fy24 albeit at a lower rate). Management are guiding to a lower PGM output in Fy24 as result.
Despite the tougher interim mining environment (& PGM market), Tharisa cleary are not looking to reduce processing
capacity. The company does operate on the lower quartile of the cost curve compared to its peers, and can be expected to
weather a softer market. In turn this also ensures the full production levels of chrome for Fy24 (guidance up ~8% to 1-7 –
1.8mt). This being said, any improvements in reef mined will only have upside for the company as they reduce the margin
loss on PGMs from cost of the purchased RoM (and grade recovery depending on the RoM materials available).
• Chrome concentrate production being delivered into a strong market– chrome production this quarter is largely in
line with our forecast at 413.4kt, with strong q-o-q increase of 9.1%. Speciality chrome production up q-o-q at 75kt (Q3
FY2023: 72.8kt). Full year production was in line and the company is guiding to a c.8% increase in FY24. Recovery rates
are hitting c.70%, reflecting Vulcan’s performance amongst other parts of the operation. Chrome spot price holding up well
at $291/t vs our modelled price of $280/t and we believe the company is well placed to continue taking advantage of the
expected strong pricing environment in Fy24 driven by supply demand fundamentals.
I am surprised that the stock is down on today's production update. PGM production was short of course and guidance for next year has been reduced, but the miss was not huge, and certainly not very material in the context of PGM profitability at current PGM basket price levels, and also a portion of the PGM reduction has been tactically sought in order to support chrome volumes. Personally, I am delighted to heart that Karo is being pushed out, as this is not the right market to load up on debt to build a mine that is high on the cost curve. I woud dearly like management to address the cost competitiveness of Karo because I frankly question the wisdom of building it with such a murky medium term outlook for PGM pricing. But that aside, THS is managing a difficult market very well in my view, and maintains a strong balance sheet and capacity to meet dividend expectations.
it seems to be general stock market conditions -any announcement is seen as an excuse to further mark down a shareprice -anything negative is pounced on and anything positive ignored.
so with cash in the bank exceeding £100 million the market in its wisdom is valuing the sa tharisa mine operation at £80 million (less than one years profits?) still a very profitable operation at current chrome price which would cost at least $500 million to build today (and that of course does not include finance costs)
if i was in charge of a large miner’s m and a department i would be seriously looking at tharisa well this is below the radar-any bid under £2 per share is a complete bargain and of course could be undertaken by a share for **************-glencore perhaps?
I don't know their financial situation but highly doubt the Pouroulises would sell Tharisa at a fraction of its asset value, so being acquired is extremely unlikely, in my view. The market value being ascribed to Tharisa does however send a message to management regarding Karo - why invest in a new mine that will be valued by the market at a fraction of its capital cost, not to mention barely be profitable at lower PGM price levels? In my view Karo should be mothballed for the time being and cash flow diverted to paying down debt and raising the dividend.
Agree Seatank-ever since Karo was commenced the shareprice has gone in one direction -the cash costs for Karo at over $1000 per PGM ounce seemed to be very high .
Agree the dividend should be maintained but I fear Karo will be used as an excuse to cut it despite some $125 million net cash.
Also I would encourage the management to set aside say $10 million to undertake some sort of share buy back.
I was not suggesting a sale “at a fraction of asset price” but anything circa £2 per share should be considered