Critical minerals group Tharisa PLC (LSE:THS, JSE:THA, OTC:TIHRF) has reported stronger-than-expected cash generation, closing the fourth quarter with a net cash position of $109 million.
Peel Hunt had anticipated a net debt of $28 million but attributes the surprise to Tharisa's likely use of receivables factoring and reduced capital expenditure at both its Karo project and Tharisa operations.
Chrome production for the quarter reached 427,000 tons, slightly exceeding Peel's estimate of 422,000 tons. However, platinum group metals (PGM) output came in at 37,100 ounces, just below the expected 37,800 ounces.
Tharisa's higher chrome output was driven by improved ore grades and better processing recoveries. Despite stronger PGM recovery rates of nearly 71%, the lower quality of ore limited overall production.
The South Africa and Zimbabwe-focused miner has issued new guidance, forecasting PGM output between 140,000 and 160,000 ounces, below Peel's estimate of 166,000 ounces. Chrome output is expected to range from 1.65 million to 1.8 million tons, close to Peel’s forecast of 1.78 million tons.
The City broker also highlighted ongoing discussions around financing for the Karo project, which are expected to delay its development by six to 12 months. With weak pricing in the PGM market, Peel believes investors could view the delay as a positive.
Its analysts maintained their 'buy' rating on Tharisa, with a price target of 200p. Tharisa shares are currently trading at 70p, up 3% on the day.