Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) said its co-product model showed its resilience in the year to September, as chrome production remained stable amid stronger prices, to balance out a dip in platinum group metal (PGM) output and a fall in prices.
A sharp drop in PGM spot prices in the latest quarter to US$1,331 per oz meant the average price received during the year retreated 26.1% US$1,893/oz.
As a result of the continued weakening of PGM prices and macro economics, Tharisa’s board said it had taken the “prudent and strategic” decision to extend the Karo platinum project timeline for commissioning by 12 months to June 2025.
Chief executive Phoevos Pouroulis said there remains the opportunity to accelerate the timeline as markets become more favourable.
Group net cash ended the year at US$126.6 million, up from US$80.4 million at the end of September last year, with cash on hand of US$268.8 million and debt of US$142.2 million.
Noting that the chrome market had seen 52-week highs, the company said PGM prices dropped more rapidly and lower than the market anticipated, resulting in broad-based challenges for the PGM market on the supply side.
Pouroulis said the company believes the medium term outlook for PGMs is underpinned by a supply side constrained economy.
He hailed the company’s strong margins, continued disciplined capital allocation, and the resilience provided by the co-product model, saying a strong focus and recovery in chrome in the second half of the year provided support, as earlier PGM operational mining challenges and ore mix had a negative impact on recovery and production, which fell 17% to 30.7koz in the quarter and 19.3% to 144.7koz for the year.
He said the waste contractor is in place and a recovery in waste mining volumes is expected for the new financial year.
Pourolis said the company was giving a cautious production outlook, nevertheless, with guidance for 2024 set between 145koz and 155koz PGMs and 1.7Mt to 1.8Mt of chrome concentrates.
“Our growth strategy remains firmly intact,” he said, “with continuous optimisation at the Tharisa Mine, investment in downstream beneficiation, and our commitment to the development of the multi-generational Tier 1 Karo Platinum Project."