Tharisa explores raising output of special chrome
Speciality-grade chrome prices have shot up 44%
Tharisa, a chrome and platinum group metals miner, reported strongly higher interim financial numbers and it is investigating a "substantial" increase of its speciality chrome production, which it sells for a premium to its chrome concentrate.
Tharisa reported a 5% increase in chrome concentrate to 636,800 tonnes, putting it squarely on track to meet its 1.3-million tonne full-year forecast. Chrome is used to make stainless steel. Platinum group metals output increased 15% to 69,100oz as the company moved towards 147,000oz of production in 2017.
Speciality-grade chrome shot up 44% to 152,500 tonnes. It is used either in foundries as a lining material or in the leather tanning and paint industries.
Revenue more than doubled to $175m from $86m and headline earnings leapt to $0.16 per share from $0.01 a year ago.
Based on its strong performance and demand for speciality chrome, Tharisa is studying the economics of extracting and processing chrome from its undeveloped UG1 reef at its mine near Brits.
The chrome would be streamed into its speciality chrome business, which achieves a $20 to $30 premium over chrome concentrate sales, said chief financial officer Michael Jones.
The feasibility study into the construction of an opencast mine and specialist treatment plant would be taken to the board later in 2017.
"It will be a material contribution to our overall mining tonnes," Jones said. "We won’t be borrowing money from the banks for this project, which will be built in our financial year to end-2018."
"It’s not a significant cost. We are looking at a relatively short payback period of less than a year. We must be very careful not to flood the speciality-grade chrome market and erode the margins," he said.
Tharisa is buying the entire mining fleet of 184 pieces of mining equipment for $22m as well as taking on $6m of lease agreements from its mining contractor MCC.