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Tharisa bounces back as strong commodity prices help earnings

Snapshot

Tharisa's commodity mix allows for increased exposure to palladium and other PGMs

Tharisa PLC -

Quick facts: Tharisa PLC

Price: 132 GBX

LSE:THS
Market: LSE
Market Cap: £354.64 m
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  • Significant high margin PGM production
  • Chrome production supplies steel demand
  • Experienced mining operators run the business

What does Tharisa do?

Tharisa PLC (LON:THS) owns and operates mines in South Africa that produce a basket of commodities, principally chrome and the platinum group metals (PGMs).

The company's production is weighted more heavily towards palladium than others in the PGM space.

How's it doing?

Tharisa boosted revenue by 18% to US$406mln in the year to September 30, 2020, while earnings rose by 119.8% to US$113.1mln.

Net cash flow was US$73mln as the company’s chrome and platinum group metal production in South Africa was supported by strong commodities prices.

The company produced 142,100 ounces of platinum group metals and 1.34mln tonnes of chrome concentrates.

The final dividend was increased by 367% to 3.5 US cents per share.

For 2021, Tharisa PLC expects to produce between 155,000 ounces to 165,000 ounces of platinum group metals, and between 1.45mln tonnes and 1.55mln tonnes of chrome concentrates.

In Zimbabwe, Tharisa said it had started the second phase of drilling which is progressing well.

The original timeline for the Karo project has been affected by COVID-19, which will mean a 12-month delay, but Tharisa said it still sees the Great Dyke of Zimbabwe as a fantastic opportunity to mine high-grade low-cost PGMs.

In the meantime, there has been a strong increase in prices for metallurgical chrome, which had been lagging those of other steel commodities.

What the boss says, Phoevos Pouroulis chief executive

The engine of our business is the Tharisa open cast mine in the Bushveld Complex, South Africa.

"It is one of the few mines which co-produces both PGMs and chrome commercially from the same ore body.

"The mine has benefited from the remedial action taken in 2018 and 2019 with the optimisation of the pit layout, improved waste stripping, with the substantial further investment in our mining fleet, coupled with the continuous optimisation of the production plants.

"These actions have positioned Tharisa to benefit from an increasing PGM basket price."

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Tharisa presents at the Proactive One2One virtual conference

Tharisa's (LON:THS) CEO Phoevos Pouroulis pitches to investors at the Proactive One2One virtual conference. Tharisa is an integrated resource group incorporating exploration, mining, processing, and the beneficiation, marketing, sales and logistics of PGMs and chrome concentrates. The...

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