JOHANNESBURG (miningweekly.com) – While Cyprus-headquartered integrated resources company Tharisa continued to ramp up its 74%-owned South Africa-based Tharisa mine, outside Rustenburg, pushing first-half revenue and operating profit higher, the company posted a loss for the six months ended March 31.

The newly JSE-listed group, which was developing the low-risk large-scale 23-year openpit platinum group metals (PGMs) and chrome concentrate operation, widened its headline loss a share and its basic and diluted loss a share from $2.29 and $2.27 in the comparative period last year to $3.70 and $3.71 respectively in the period under review.

After accounting for a $15.3-million debt repayment and changes in the fair value of financial liabilities leading to a $30.6-million nonrecurring charge, the group incurred a higher pretax loss of $31.1-million, compared with the loss of $22.1-million recorded in the interim period the year before.

Tharisa reported a loss for the period of $28-million, an increase on the loss of $16.6-million during the six months ended March 2013.

The group had also seen a reduction in its gross profit margin from 21.1% in the interim period in 2013, to 16% during the six months under review, with a gross profit of $20.2-million.

This was attributed to higher mining and engineering costs, owing to post-commissioning engineering optimisation activities, including accelerated mill relinings, equipment repairs and maintenance costs, as Tharisa ramped up production at the mine.

However, as steady progress was made in developing the operation and increasing production, the company also increased its revenue and operating profit for the six months under review, Tharisa CEO Phoevos Pouroulis pointed out to Mining Weekly Online on Tuesday.

Operating profit rose 19.2% to $7.4-million, while net cash generated from operations rose to $28.8-million, a significant turnaround from the $32.6-million in cash used in operations during the first half of last year.

Despite lower commodity prices, group revenue reached $126.1-million in the first half of 2014, a 22.6% increase compared with that earned in the six months ended March 2013, as the introduction of premium foundry- and chemical-grade products boosted revenue and PGM output increased.

Platinum, palladium, rhodium, ruthenium, iridium and gold (5PGE + Au) production increased to 38 400 oz – an increase of 21.7% over the 28 000 oz delivered in the corresponding period the year before.

Tharisa’s metallurgical-grade chrome concentrate production declined from 584 700 t in 2013, to 500 000 t during the period under review. However, when including, for the first time, the 69 400 t of premium foundry- and chemical-grade concentrates, output reached 569 400 t.

“The production outlook for the [full] year is promising and we remain on track to attain steady-state production during the 2016 financial year,” Pouroulis said.

Tharisa planned to deliver between 80 000 oz and 90 000 oz of 5PGE + Au and between 1.15-million tonnes and 1.3-million tonnes of chrome concentrates for the full year.

Further, Pouroulis pointed out that good progress had been made to ensure Tharisa remained on track to achieve steady-state production of 144 000 oz of PGMs and 1.85-million tonnes of chrome concentrate during the 2016 financial year.

The company, which listed on the JSE in April, raising $47.9-million, continued to optimise chrome yield and enhance PGM recovery.

A magnetic separation project to recover chrome fines had started with the installation of the first two production-scale magnetic separation units.

Three high-energy flotation cells had been commissioned on the cleaner flotation circuit, with another four planned for installation on the rougher and recleaner circuits before the end of the current quarter.

Pouroulis remained optimistic of the Tharisa mine’s outlook, noting that the low-risk, shallow, dual-revenue operation, which boasted mechanised mining and skilled workers, had, by design, set a robust, stable environment for the future.

Further, he believed the economic fundamentals for PGMs and chrome remained sound with strong demand amid supply constraints providing a platform for more favourable commodity prices.

“Since [March 31], the PGM basket price and chrome concentrate prices have increased and continue to show signs of strengthening,” he said.