Dual-listed Tharisa achieved a “commendable” third quarter, ended June 30, maintaining strong production, which was supported by the favourable commodity markets, ensuring a healthy balance sheet that will allow the company to continue implementing its strategy, CEO Phoevos Pouroulis says.

“The global macrotrends are challenging, but Tharisa Mine’s life of more than 60 years gives us a strong foundation and the necessary financial resources to weather the headwinds of a tough economic climate, slowing growth, rising inflation and weaker commodity markets.

“As always, our focus remains on safety, operational excellence and maintaining a low-cost profile. This quarter, our platinum group metals (PGMs) and chrome output were strong once again, driven by the volume extracted from the Tharisa Mine openpit,” he notes.

The Tharisa Mine is located in the south-western limb of the Bushveld Complex, in South Africa.

For the quarter to June 30, there was strong mining and milling throughput leading to PGMs production at 42 100 oz, at a normalised rougher feed grade of 1.65 g/t, with steady recoveries at 75.6%.

Chrome production was 389 000 t, up from the previous quarter.

Strong commodity prices and steady production during the quarter delivered strong cash balance increases.

A PGMs basket price of $2 677/oz was 4.6% lower than the previous quarter, while the metallurgical grade chrome price was up by 39.5% quarter-on-quarter, at $247/t.

Tharisa had a cash balance of $112.6-million at the end of the quarter, and debt of $64.6-million after an interim dividend payment of $8.8-million.

The increased cash has resulted in a positive net cash position of $48-million.

Pouroulis says production from the Vulcan plant at the Tharisa Mine is steadily increasing to nameplate capacity, proving that Tharisa’s proprietary technology is working well.

The Vulcan plant ramp-up reflected in steady improvement in chrome recoveries – throughput recoveries of 80% are expected to be reached by year-end.

Pouroulis notes that investment in almost 10 MW of standby power generation has ensured negligible disruption to the company’s operations owing to the challenges at State-owned power utility Eskom and the subsequent power curtailments.

Tharisa also successfully registered a solar power project for 40 MW with the environmental and development authority to further de-risk the operations from the dependence on the national power grid and reduce carbon emissions in line with the company’s carbon reduction strategy.

“Notwithstanding the rail and port infrastructure challenges, the logistics team has successfully exported our chrome products via various channels and modalities,” says Pouroulis.

Tharisa also owns Karo Mining Holdings and Salene Chrome – development stage, low-cost, openpit PGM and chrome assets, respectively, which are located on the Great Dyke in Zimbabwe.

“Beyond South Africa, our growth strategy remains on track with the detailed engineering design work, upfront infrastructure and placement of long lead capital items for the Karo Platinum project continuing to progress in parallel with the finalisation of the financing options.

“Overall, this has been a supportive quarter for our organic and development growth,” Pouroulis comments.

MARKET UPDATE

The PGMs market, while pricing lower comparatively with the beginning of the year, is holding up well, supported by the continued tight supply-demand fundamentals of the various elements, Tharisa says.

Slowing economic growth will influence the demand side; however, a slowdown in supply and no major new projects coming online within the next 24 months means any demand increase is expected to lead to price increases. Recycling continues to slow, requiring shortfalls to be met from primary supply, the company adds.

It notes that the quarter under review continued to be overshadowed by significant external factors including the war in Ukraine, concerns about inflationary cost pressures, supply chain constraints and China’s zero Covid-19 policy.

Despite this, higher prices were achieved during the quarter for chrome against the backdrop of destocking of port inventory and robust ferrochrome and stainless steel production in China.

Tharisa expects a price retreat in the next quarter although implementation of various stimuli in China and/or supply disruptions would reduce the extent of such a threat.

Full-year production guidance is maintained at between 165 000 oz and 175 000 oz for PGMs.

Guidance for chrome production has been reduced by 10% to between 1.55-million and 1.65-million tonnes owing to a lower chrome feed grade and the slower-than-expected Vulcan plant ramp-up.