After reporting strong operations, Tharisa sets its sights on growth
With another strong operational performance behind it, the chrome and PGM miner casts its focus to Zimbabwe
Chrome and platinum group metals (PGMs) miner Tharisa reported strong operational results and a total $0.04 per share dividend for its 2018 financial year.
Improved production of both chrome and PGMs offset a decline in the price of metallurgical chrome but benefited from a higher PGM price, resulting in revenue rising to $406m in the year to end-September from $349m in the previous year.
Chrome sales make up $250m of revenue and PGMs $117m. Tharisa’s trading arm realised revenue of nearly $39m.
Pretax profit fell to $65m from $91m, with the $21m purchase of a mining fleet in the switch to owner-mining from using a contractor weighing on the profit line.
Chrome output increased by almost 9% to 1.4-million tons and PGM production rose by 6% to 152,200oz.
Tharisa is the fourth-largest producer of South African chrome and the seventh-biggest PGM miner in the country. SA dominates the world’s supply of chrome, producing 55% or 16.6-million tons a year, and is by far the largest source of PGMs.
The price for the basket of PGMs Tharisa produces increased by 6% because of the higher prices for palladium, rhodium and other minor PGM metals.
Metallurgical grade chrome prices, covering the bulk of Tharisa’s chrome output, fell to $186/ton from $200/ton the previous year.
Speciality grade chrome, which is a niche market and makes up a quarter of Tharisa’s chrome output, saw prices reaching a $50 premium over the metallurgical chrome price.
The purchase of the secondhand mining fleet, which has been refurbished, will give Tharisa the capacity to reach its financial 2019 production targets of 1.5-million tons of chrome, including 375,000 tons of speciality chrome, and 160,000oz of PGMs.
Tharisa has set itself a target of 2-million tons of chrome and 200,000oz of PGMs by 2020.
Tharisa, which has taken up property positions in Zimbabwe on chrome and PGM deposits, has cash of nearly $67m and total debt of $77m.
CEO Phoevos Pouroulis has spoken of being a “first mover” in Zimbabwe, which is a large producer of PGMs from operations owned by Impala Platinum, Sibanye-Stillwater and Anglo American Platinum.
The removal of Robert Mugabe as president of Zimbabwe and his replacement with Emmerson Mnangagwa gave Tharisa the confidence to enter the country.
Tharisa declared a final dividend of $0.02 per share, bringing its full-year total dividend to $0.04.