Broker Peel Hunt detected some reasons to be cheerful in the latest production report from South Africa-focused mining group Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF).
In its update, the company said its platinum group metals (PGM) output in the third quarter was 36,900 ounces, up from 35,300 ounces in the previous quarter. The average price for PGMs stayed steady at $1,391 per ounce, compared to $1,343 per ounce in the second quarter. Chrome production also rose to 410,200 tonnes from 402,700 in the previous quarter.
The company’s targets for the full year remain between 145-155,000 ounces of PGMs and 1.7 -1.8 million tonnes of chrome concentrates.
Peel in a note to clients said: "The increased rates of mining indicate that the waste contractor has opened up much more of the pit, allowing Tharisa to raise ore mining rates.
"As this ore feed normalises, PGM grades should also improve, as it can process a better balance of the six different seams.
"Similarly, higher rates of own ore should allow improved chrome recoveries, as the ore mix returns to optimal for the process plant. This should be enough to see incrementally higher production in the September quarter, meeting the unchanged guidance."
The broker repeated its 'buy' recommendation 195p price target. In early afternoon trading, the stock was flat at 82.9p.