Last checked at 9 Jul 2019 07:00
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
('Tharisa' or the 'Company')
Production report for the quarter ended 30 June 2019
Overall production improvement sets up a strong finish
Salient features for the quarter ended 30 June 2019
‒ Quarterly improvement in reef tonnes mined and milled up 2.0% and 5.4% respectively
‒ Stripping ratio at 8.3 (m3:m3) with pit redesign substantially completed
‒ Platinum Group Metals ('PGM') recovery at 82.1% with PGM production of 34.1 koz
‒ Chrome recovery at 65.5% with chrome production up 8.2% to 334.0 kt
‒ Investment in fleet capacity demonstrating volume capability and availability to meet future targets
‒ Karo Mining has completed the first phase of its drilling campaign on time and within budget
Commenting on the production results, Tharisa CEO Phoevos Pouroulis, said:
"The improvement in key production metrics sets the mine up for a strong finish to the 2019 financial year and good momentum in to 2020. The pit redesign, which has been largely completed, and our ability to move tonnage ensures that we develop a sustainable and viable large-scale open pit operation, capable of producing volume output for the years ahead. The changes we made in the past quarters with regards to mining fleet improvement and pit optimisations will benefit us into the future."
Safety
Safety is one of Tharisa's core values and the Company continues to strive for zero harm at its operations. An LTIFR of 0.22 per 200 000-man hours worked was recorded at the end of the quarter.
Production update
The production update for the quarter ended 30 June 2019 is as follows:
|
| Quarter ended 30 Jun 2019 | Quarter ended 31 Mar 2019 | Quarter on quarter movement % | Quarter ended 30 Jun 2018 | Nine months ended 30 Jun 2019 | Nine months ended 30 Jun 2018 |
Reef mined | kt | 1 155.4 | 1 132.9 | 2.0 | 1 244.1 | 3 378.9 | 3 695.3 |
Stripping ratio | m3: m3 | 8.3 | 7.4 | 12.2 | 8.0 | 7.5 | 8.1 |
Reef milled | kt | 1 207.3 | 1 145.0* | 5.4 | 1 291.2 | 3 544.8* | 3 888.6 |
PGM flotation feed | kt | 889.1 | 850.3 | 4.6 | 929.7 | 2 640.7 | 2 825.3 |
PGM rougher feed grade | g/t | 1.45 | 1.46 | (0.7) | 1.54 | 1.48 | 1.53 |
PGM recovery | % | 82.1 | 85.5 | (4.0) | 85.6 | 81.2 | 84.0 |
6E PGMs produced | koz | 34.1 | 34.0 | 0.3 | 39.5 | 101.7 | 116.5 |
Average PGM contained metal basket price | US$/oz | 1 064 | 1 048 | 1.5 | 947 | 1 033 | 922 |
Average PGM contained metal basket price | ZAR/oz | 15 297 | 14 694 | 4.1 | 11 947 | 14 690 | 11 721 |
Cr2O3 ROM grade | % | 17.8 | 18.0 | (1.1) | 18.2 | 18.1 | 18.1 |
Chrome recovery | % | 65.5 | 62.9 | 4.1 | 67.8 | 62.4 | 66.5 |
Chrome yield | % | 27.7 | 27.0 | 2.6 | 29.1 | 26.7 | 28.5 |
Chrome concentrates produced (excluding third party) | kt | 334.0 | 308.7 | 8.2 | 376.3 | 948.1 | 1 108.8 |
Metallurgical grade | Kt | 259.4 | 232.6 | 11.5 | 281.1 | 725.5 | 840.0 |
Specialty grades | kt | 74.6 | 76.1 | (2.0) | 95.2 | 222.6 | 268.8 |
Third party chrome production | kt | 59.1 | 60.3 | (2.0) | 59.6 | 171.6 | 165.8 |
Metallurgical grade chrome concentrate contract price | US$/t CIF China | 174 | 162 | 7.4 | 193 | 166 | 193 |
Metallurgical grade chrome concentrate contract price | ZAR/t CIF China | 2 525 | 2 268 | 11.3 | 2 477 | 2 361 | 2 449 |
Average exchange rate | ZAR:US$ | 14.4 | 14.2 | 1.4 | 12.6 | 14.2 | 12.7 |
* includes the processing of 23.1 kt and 99.0 kt of commissioning tails through the processing plants for the quarter ended 31 March 2019 and nine months ended 30 June 2019 respectively
Mining
Reef tonnes mined continued to improve at the Tharisa Mine with an increase of 2.0% as compared to the previous quarter, to 1 155.4 kt mined. Additional material available to the mine resulted in total reef tonnes milled increasing by 5.4% to 1 207.3 kt in the quarter, bringing total tonnes mined to 3 378.9 kt and total tonnes milled to 3 544.8 kt for the year to date. The mine recorded a pleasing 12.2% improvement in stripping ratio, up from 7.4 m3:m3 in the March quarter to 8.3 m3:m3 in the June quarter under review. As part of the ongoing pit redesign, the mine moved an additional 470 000 Mm3 of in-pit material during the quarter to optimise the pit. When included in the stripping ratio calculation, the total waste volume moved by the mining fleet in the second quarter achieved a ratio of 9.7 m3:m3 as compared to 9.4 m3:m3 in Q2. The Tharisa Mine is continuing to create flexibility which will result in improvements to the reef mix thereby improving plant feed grades.
Processing
PGM production increased by 0.3% to 34.1 koz (6E basis) over the previous quarter and recoveries were maintained at 82.1%. The slight decrease compared to the previous quarter being due to the MG reef horizon mix into the plant differing as a result of the planned mining.
Chrome concentrate production increased by 8.2% to 334.0 kt, with recoveries improving by 4.1% to 65.5% compared to the previous quarter. Of the total chrome concentrates produced, 259.4 kt were metallurgical grade, an improvement of 11.2% versus the previous quarter and 74.6 kt were speciality grade, versus 76.1 kt in the previous quarter,
The chrome production for the quarter from the Lonmin K3 chrome plant was 59.1 kt compared to 60.3 kt in the previous quarter.
Market update
The average PGM contained metal basket price for the third quarter was US$1 064/oz (ZAR15 297/oz), an increase of 1.5% in US$ terms from the last quarter and 4.1% in ZAR terms.
The average chrome price received, while slightly up in the June quarter at US$174/t compared to US$162/t in the March quarter, is showing a downward trend on a nine month basis at US$166/t, with current spot around US$140/t. This compared to an average of US$193/t for the comparable nine month period in financial year 2018.
New Business
Karo Mining Holdings Limited has completed the first phase of its drilling campaign on time and within budget, measuring a total of 30 km of diamond core drilling over 206 holes. Preliminary resource data will be available in November 2019.
Tharisa has completed the value engineering and front-end engineering work undertaken on the data used in the Definitive Feasibility Study for the Vulcan Plant. This, together with input from engineering and cost consultants will be presented to the New Business Development Committee of the Tharisa Board for approval.
Outlook
Tharisa's FY2019 production guidance remains unchanged.
The above information has not been reported on or reviewed by Tharisa's auditors.
Paphos, Cyprus
09 July 2019
JSE Sponsor
Investec Bank Limited
Investor relations contacts:
Daniel Thöle / Ilja Graulich
+27 61 400 2939 / +27 83 604 0820
Financial PR contacts:
Bobby Morse / Augustine Chipungu
+44 020 7466 5000
tharisa@buchanan.uk.com
Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / James Bavister / David McKeown
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Jeffrey Couch / Thomas Rider
+44 020 7236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Detlir Elezi
+44 20 3207 7800
Nedbank Limited (acting through its Corporate and Investment Banking division) (RSA Broker)
Shabbir Norath
+27 11 295 6575