Member Info for Mike1959

Murder, obviously this depends on the exchange rate you use.But rhe difference is still not enough to make the arbitrage work by selling on JSE and buying on Aim.

Hi Bustard, yes the hedge loss was an opportunity cost,exactly as you describe, but we would not have sold the gold more more, the revenue number in the accounts would be the same but rather the hedge loss would not have been included in the Cost of Production which would have lowered the Cosr of Production and increased the profit so in that respect it was an actual cost to the business.

What has spooked the share is that the $17.4m

hedge loss came as a big surprise to most people as the hedge loss was considerably smaller 6 and 12 months before.

As you say, good news that the hedge is ending at rhe end of this month but everyone should expect that the hedge loss for Jan and Feb combined is likely to be $7 to 8 m due to the higher gold price (offset by higher revenue).

Hi Hxul, I get slightly different numbers but we are in the same ball-park. Tharisa tell us the total investment in KMH to get to 75% was USD 135.3 m and then a further $20m= $155.3m to get to 76.22%..From the KMH abridged consolidated accounts to 30th Sept 2024 there were 57,032 ordinary shares in KMH, Tharisa owns 76.22% or 43,,470 shares and Medway/Leto the other 13,562 shares so for Tharisa to get to 80% we have to buy an extra 10,778 shares while Medway/Leto stays unchanged at 13,562 shares.

if we pay $7184/share (same price as paid in June 2023,July 2023 and FY up to Sept 2024 when our share increased from 70% to76.22%) x 10,778 share s= additional $77.4 million spend on top of the $155.3m already spent up to = total spend of $232.7 million compared to your $243 million. So we broadly agree!

. Like you I think the increase to 80% will be drip-fed over the next 2-18 months to confuse the numbers and keep the capex in KMH ticking along particularly if we barely break even in the current H1 or even shows a small loss. As we have said before $232.7m or $243 m sounds like a big spend when KMH only has a NAV of $100.926 m at the end of Sept 2024 and the Tharisa market capitalisation today of $225 m The Board might think and say it is a tremendous investment but not one director has voted with their own money and bought shares since August 2022.

To make matters even worse, unless the pgm basket seriously improves then I think an impairment on KMH is likely. On this basis I think the Board should reduce the $7184/share price to increase to 80%, or alternatively ask our partner ,Medway/Leto to contribute.

We are told that "there are 96 million inferred ounces (6E) deriving a value of US$4.8/oz, which compares favourably to comparable transactions" but using inferred numbers generated by another company is pie in the sky. I would prefer to work on the more realistic latest proven/possible reserves of 2.3 million ozs (admittedly only calculated for the open pit mining) which is equivalent to about 10 years of open pit mining and it would be good to know what the "comparable transactions" were.

.Adjustments in stock value will be shown in the cost of production but overall stocks will be shown on the balance sheet..yes, the lower of manufacturing cost or realisation value and with rising gold prices this will be manufacturing cost- very roughly this would be 3 to 4% difference but if the assay is only agreed say 3to 5 weeks after delivery at the refinery then the gold price could could have fallen or increased by say 5% and included recent times more likely to have increased.

So swings and roundabouts.

With the Australian tailings operation it will be interesting to find out where the semi-refined gold goes and also what is the corporation tax and royalties in Australia compared to S A frica?

Bustard, we are both in the same ball park.

for what is is worth I make 2025 revenue $518 m(based on gold sales of 203,000 oz, production 210,000 oz) ,cost of production -303.4, other income +7.4, other expenses -31.3, gain on acquisition +25.2 ,impairment -3.0,royalties -3.4, finance income +2.0, finance costs -14.0 = profit before tax $196 million.

I still think gold sales for the next 4 months will average nearer $2900/oz rather than $2800/oz which would increase the profit before tax to around $206 million.

I am being a bit more conservative than most , expecting a few small production hiccups and with increasing production over the next 12-18 months then sales will lag behind production as the gold has got to be processed then converted to gold dore before sale to Rand Refinery.

Thanks Ilja.

So when we increased our share in KMH from 70 to 75% inferred a total value for KMH of USD 390 million, that I accept and that it was reported.

But then during FY 2024 we bought share to the value of USD 20 million increasing our share from 75 to 76.22% which now infers a higher value of $410 million which has not been explained and then between Oct to Dec 2024 we bought more shares costing USD 12.8 million increasing our shareholding from 76.22% to 76.94% inferring a higher value for KMH of USD 423 million which has not been explained.

These are big numbers when Mr Market gives Tharisa a market capitalisation of only USD 178 million and the NAV is USD 780 million.

Also that Karo inferred pgm 96 missing ozs of 6E was generated by Zimplats back in 2017 and has never been fully checked by Tharisa and as an inferred resource includes both economic and uneconomical ozs and includes open pit and underground resources.

Thanks Visitor, I remember having seen it but could not remember where!

Hi Ilja, thanks very much for your valiant and tenacious reply.

As hxul has expressed below , the Tharisa equity input into Karo is far from clear so even if you say it has been explained by RNS , just for clarity it would be good if you could kindly explain this again.

Regarding the Total/Chariot solar farm I am amazed that we are waiting for the final regulatory approval as each day of delay is costing us money. When was the regulatory approval applied for and is there a particular reason for the delay?

I see on page 67 of the 2024 integrated annual report, the solar farm was assumed to be working for the full 2025 financial year.

Excellent news that the chrome price is showing a steep recovery and hopefully we will now just avoid a loss for H1.

Bustard, for the remainder of FY 2025 at $2800/oz my suggestion is operating profit $210m , profit before tax $196m.Then for 2026 operating profit $285m, profit before tax $280m.

A long way to go yet so I have not even considered 3027.

As you the numbers are confusing but there is alot happening!

Bustard,

Assuming the collar is a physical collar and not a synthetical collar then you are correct that the effect of a physical collar in Feb will just reduce the expected revenue by $100 to $200k or an opportunity cost as you say. But a synthetic collar would not reduce the revenue and the $100 to 200k loss is taken elsewhere.

....it is also worth mentioning the current zero-cost collar hedge for July 2024 to Feb 2025 applies to just 1,991 oz/month guaranteeing a minimum price of $2,102 and a maximum price of $2,797/oz so this has not kicked in between July 2024 to Jan 2025, but with Feb now above $2,900 we will probably lose $0.1 to 0.2 million on this ( obviously offset by the higher price.

The next collar for March to June 2025 means would not get higher than $3,039/oz on 12,577 oz/ month even if we were fortunate enough for the gold price to go above that level.

Bustard, regarding the hedge, this was a stipulation of the loan to build MTR as a safety feature just in case the gold price collapsed.So back in 2023 we sold 4,846 oz per month at USD 1,909/oz forward until Feb 2025.

This is a synthetic sale as it is not a physical sale but a paper sale so each month 4,846 oz is bought back as a synthetic or paper purchase ans PAF has to pay the difference.As the gold price increases so we have to buy the synthetic paper purchase at a higher price and so have a bigger loss compared to the original synthetic paper sale back in 2023. So between June to Dec 2024 we bought back 4,846 oz x 6 when the price averaged over USD 2,500/oz having originally sold it for just USD 1909/ oz back in 2023 which generated a loss of USD 17.4 million which is probably included in the Costs of Production which at USD135.4 million in H1 were unusually high.Our physically produced gold is still sold and included in Revenue.

With the higher gold price in Jan I calculate the synthetic loss will be -USD 3.8 m and with the even higher gold price so far this month about -USD 4.4m this month.Thank goodness it then finishes.

Had the gold price fallen between 2023 to Feb 2025 then the synthetic hedge would have generated a profit and protected the borrowed funds.

.....looks like the chrome price is $230+/tonne today.

Waterloo04,see the article on miningmx 12th Feb "Pan African calls time on rampant gold theft at Sheba mine".

Now that the Chinese Lunar New Year is over the fantastic news is that the chrome price is now USD 225/tonne.

It is usually shown weekly on the Tharisa website, Investors tab rhen "weekly pgm and chrome info".

On 31st Jan the chrome price was $202.50/ tonneCIF Chinese port.

Considering the quarterly and special dividend represented 7% of the share price yesterday, I think a 5.19% drop today is a positive result.

The Chinese holidays finished yesterday and we also had the first daily increase in the BHSI this year. The information from Kristof shows the Index needs a massive recovery to dent a massive hit to NAV this quarter.

The change from investment fund to commercial limited company should go through next week but the current accounting method of reporting NAV and vessel fair market values will continue until the end of the current quarter ( also financial year) and then change to the depreciation model from April onwards.We have got to expect a more flexible dividend policy and it would be good to eventually hear from the Company what that is.

Sam- how is Koh Samui?

Today purchases are nearly x 4 sales but the share price is still down 2 01%?

BP, I agree that there are green shoots.

But still seems crazy to me that both Europe and US are still buying palladium out of Russia (Norlisk).

Hxul, i agree with your numbers that Tharisa will have to spend around $77.3 million to increase our share in Karo Mining Holdings from 76.22% to 80%, this will probably be spent bit by bit as the capex is required.

As you point out this is at a massive premium to the current NAV value of KMH of $100.926 m at the end of September last year which allows for accumulated losses of $16.096 m. In itself that KMH NAV of $100.926 m shows just how high it is compared the the actual value of Tharisa.

To make matters worse the VFEX abridged accounts for KMH show an equity partner will pay $31.3 m , I assume this is Medway/ Leto paying for their 20% later rather than sooner.