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Tharisa confident of delivery on 'Vision 2020' project as Vulcan plant gets go ahead

Snapshot

  • South Africa-based chrome and platinum miner
  • Aims for 155,000 oz of PGMs, 1.45mt chrome concentrate in 2020
  • 'Vision 2020’ aims for a run rate of 200,000 oz PGMs, 2mln tonnes of chrome

Quick facts: Tharisa PLC

Price: 79 GBX

LSE:THS
Market: LSE
Market Cap: £210.62 m
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How it's doing

Tharisa PLC (LON:THS) upped production in its latest quarter of the year to September as benefits from a restructuring of its Platinum and chrome mine in South Africa started to come through.

The pit layout was revised, waste stripping improved and bottlenecks eased at the production plants.

That meant disruption and lower production overall this year said chief executive Phoevos Pouroulis, but Tharisa is now on track to hit meet its target run-rate of 200,000oz of Platinum and 2mt of chrome per year by the end of 2020.

Amounts mined rose by 8% to 1.25Mt in the final quarter to September, with Platinum recoveries 11% higher at 38,000oz while chrome production rose slightly to 342,000t even though recoveries dropped.

Over the full year, Tharisa produced 139,000oz of Platinum (PGMs) and 1.29mt of chrome and forecast a rise to between 155,000 oz to 165,000oz PGMs and 1.45 Mt to 1.55 Mt of chrome concentrates in the current twelve months.

Basic and headline earnings per share for the year to September are expected to be US$4c per share or 79% lower than the US$19c seen a year ago.

Vulcan expansion

In August, Tharisa confirmed it would press ahead with the construction of a proprietary Vulcan Plant.

The new kit will lead to a 47% reduction in chrome tailings, boost chrome recovery rates to 82% from 65% and add additional capacity of up to 400,000 tonnes per year at lower costs.

Tharisa’s ‘Vision 2020’ is a target for production of 200,000 ounces of Platinum group metals and 2mt of chrome concentrate annually..

Capital costs of the new plant will be US$54.2mln with hot commissioning projected for the end of the year.

“First chrome production from the Vulcan plant is expected within 15 months."

What the boss says, Phoevos Pouroulis

"Though this translated into lower production than last year's record performance, the significant work done provides Tharisa with a clear path to delivering on our Vision 2020 strategy. The key remaining investment to achieve our production goal, the Vulcan plant, is under construction and remains firmly on track for commissioning in calendar Q4 2020," the chief executive said.

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Inflexion points

  • PGM prices have improved as palladium and rhodium picked up, chrome though has softened
  • Vision 2020 targets - 5.6mln tonnes of reef mined to produce 200,000oz pgms and 2mln tonnes of chrome concentrate
  • Vulcan plant is last part of 2020 milestones
  • Exploration at Karo in Zimbabwe continues with 25,000m drilled
  • Intersected main sulphide zone with assay results being assayed
  • In October, part of the Karo licence in Zimbabwe was made a special economic zone (SEZ)

What the broker says: Berenberg

"Tharisa is, we believe, one of the few ways to play a compelling PGM space.

"We thus reiterate our Buy rating with a price target of 140p."

 

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Watch

Tharisa PLC still generating strong cash despite curtailed operational output

Tharisa PLC's (LON:THS) head of investor relations Ilja Graulich talks Proactive London's Andrew Scott through the group's results for the year to the end of September 2019. Tharisa posted sharply lower profits in the period as lower production and weaker chrome prices hit revenues however,...

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