Wrap Text
Production report for the quarter ended 31 March 2019
Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
ISIN: CY0103562118
('Tharisa' or the 'Company')
Production report for the quarter ended 31 March 2019
Mining volumes show upward trend as Tharisa invests to deliver on Vision 2020
Salient features for the quarter ended 31 March 2019
- Quarterly improvement in reef tonnes mined and stripping ratio, of 3.9% and 10.4% respectively
- Production drilling improved by 9.5% quarter on quarter
- Completed two thirds removal of the required additional in-pit material for the pit optimisation
- Platinum Group Metals ('PGM') recovery at 85.5% with PGM production of 34.0 koz, an increase of
11.8% and 1.2% respectively quarter on quarter
- Chrome recovery at 62.9% with chrome production of 308.7 kt, an increase of 6.8% and 1.1%
respectively
Salient features for the six months ended 31 March 2019
- Pit redesign and bench optimisation on track
- Investment in mining fleet delivering results
- Chrome feed grade slightly improved from 18.1% to 18.2%
- Increased third party chrome production from comparable period by 5.9% to 112.5 kt
- While the chrome market was weaker with an average US$30/t reduction in the metallurgical grade
chrome concentrate contract price, the PGM basket price increased by 11.9% in US$
Commenting on the production results, Tharisa CEO Phoevos Pouroulis, said:
“I am pleased to report that we are once again on track to meet our Vision 2020 targets in part assisted
by substantial improvements from our mining operations in the second quarter. We have made
considerable progress in redesigning the pit, which necessitated moving almost 1.3 million m3 of additional
in-pit material over the last six months. When this is factored into our overall strip ratio, we are now
tracking our LOM strip ratio. This illustrates that Tharisa has capacity to mine the volumes required to
meet our Vision 2020 targets. We are also pleased that our recoveries are once again heading to industry
best standards due to sustainably providing fresh ore to the plants rather than the inclusion of lower grade
tailings. To support the delivery of our targets, we have fully assessed the mining fleet and brought forward
the mining equipment replacement programme, where necessary. Tharisa has also made the appropriate
investments to ensure the supply of consistent power to our operations in view of the uncertain power
situation in South Africa over the last few months.”
Safety
Safety is one of Tharisa's core values and the Company continues to strive for zero harm at its operations.
An LTIFR of 0.24 per 200 000-man hours worked was recorded at the end of the quarter.
Production update
The production update for the quarter ended 31 March 2019 is as follows:
Quarter Quarter Quarter on Quarter Half year Half year
ended ended quarter ended ended ended
31 Mar 31 Dec movement 31 Mar 31 Mar 31 Mar
2019 2018 % 2018 2019 2018
Reef mined kt 1 132.9 1 090.6 3.9 1 206.0 2 223.5 2 451.3
Stripping ratio m3: m3 7.4 6.7 10.4 8.5 7.1 8.1
* *
Reef milled kt 1 145.0 1 192.5* (4.0) 1 287.2 2 337.5 2 597.4
PGM flotation feed kt 850.3 901.3 (5.7) 936.0 1 751.6 1 895.6
PGM rougher feed grade g/t 1.46 1.59 (8.2) 1.54 1.49 1.52
PGM recovery % 85.5 76.5 11.8 82.2 80.7 83.2
6E PGMs produced koz 34.0 33.6 1.2 38.2 67.6 77.0
Average PGM contained US$/oz 1 048 983 6.6 953 1 017 909
metal basket price
Average PGM contained ZAR/oz 14 694 14 050 4.6 11 384 14 382 11 606
metal basket price
Cr2O3 ROM grade % 18.0 18.5 (2.7) 18.2 18.2 18.1
Chrome recovery % 62.9 58.9 6.8 66.3 60.8 65.9
Chrome yield % 27.0 25.6 5.5 28.5 26.3 28.2
Chrome concentrates kt 308.7 305.4 1.1 366.7 614.1 732.5
produced (excluding
third party)
Metallurgical grade kt 232.6 233.4 (0.3) 281.2 466.0 558.9
Specialty grades kt 76.1 72.0 5.7 85.5 148.1 173.6
Third party chrome kt 60.3 52.2 15.5 53.4 112.5 106.2
production
Metallurgical grade US$/t CIF 162 164 (1.2) 206 163 193
chrome concentrate China
contract price
Metallurgical grade ZAR/t CIF 2 268 2 311 (1.9) 2 444 2 289 2 436
chrome concentrate China
contract price
Average exchange rate ZAR:US$ 14.2 14.3 (0.7) 12.0 14.0 12.8
* includes the processing of 23.1 kt, 75.9 kt and 99.0 kt of commissioning tails through the processing plants for the quarter ended 31 March 2019, quarter ended
31 December 2018 and half year ended 31 March 2019 respectively
Mining
Drilling of both waste and reef, the foundation to delivering on required mining volumes, increased by
9.5% quarter on quarter and contributed to the successful mining of 1 132.9 kt of ROM during the quarter,
a 3.9% increase over the previous quarter. A total of 2.4 Mm3 of over- and inter- burden waste was mined
for the quarter, an increase of 15.6% from the first quarter. The stripping ratio of 7.4 on a m3:m3 basis
remained below the LOM average of 9.5.
Notable was our overall ability to move increased volume as the mine moved almost 1.3 Mm3 of additional
in-pit material in order to optimise the pit over the six months. This additional volume was not included
in the calculation of the strip ratio, but accounted for about 25% of the total volume moved during the
half year. When included in the stripping ratio calculation, the total waste volume moved by the mining
fleet in the second quarter achieved a ratio of 9.4 m3:m3. The pit redesign, which will require a further
0.6 Mm3 of material to be moved, will achieve the following:
- The extension and widening of the East Pit to optimise logistics
- Improved access to the East Pit from the north side with more regular backfill now possible on the
south side as the pit advances to the north
- Longer benches and thus better drilling, blasting and hauling continuity as access roads that previously
ran north-south are now running parallel to the pit as the pit advances
- Longer benches will also ensure more optimal product mix and grade control to be delivered to both
the Genesis and Voyager Plants, which have a PGM and chrome bias respectively
The new Caterpillar 6050 face shovel was commissioned in the last quarter and has proven its ability to
move large volumes of waste material, with over 1.1 Mm3 of waste material moved since commissioning
for the quarter.
The transition to a 24-hour continuous operation in the East Pit was completed in the latter part of the
quarter after a slight delay, resulting in a capacity increase of 15%.
As a consequence of the pit redesign, the optimal reef mix was not mined and impacted on the PGM
rougher feed grade which declined by 8.2% for the quarter to 1.46 g/t and the Cr2O3 ROM feed grade
which decreased by 2.7% to 18.0% for the period.
Processing
The reduced level of ROM material was supplemented with the re-processing of 23.1 kt commissioning
tailings to maintain plant throughput, comprising 2.0% of combined mill throughput, allowing for a total
of 1 145.0 kt of reef to be milled in the second quarter, a 4.0% decrease from the first quarter. The re-
processing of commissioning tails was discontinued early in the quarter, allowing the process recoveries
to return to previous levels.
While the processing operations are largely insulated from load shedding stage 1 to 3 in South Africa, the
unprecedented stage 4 load shedding in March 2019 introduced instability into the processing plants and,
at times, necessitated the stopping of certain processing circuits including the crusher circuits and part of
the mill circuits, thereby impacting on overall production. Subsequently measures have been put in place
to mitigate the risk of further load shedding and the impact on production with alternative standby diesel
generator capacity.
PGM production increased by 1.2% to 34.0 koz (6E basis) over the previous quarter and it was pleasing to
see recoveries of 85.5%. Chrome concentrate production increased by 1.1% to 308.7 kt, a recovery of
62.9%. The production of specialty grade chrome concentrates increased by 5.7%, from 72.0 kt in the last
quarter to 76.1 kt.
The chrome production for the quarter from the Lonmin K3 chrome plant was 60.3 kt, an increase of
15.5% from the previous quarter.
Market update
The average PGM contained metal basket price for the second quarter was US$1 048/oz (ZAR14 694/oz),
an increase of 6.6% in US$ terms from the last quarter and 4.6% in ZAR terms.
The average metallurgical grade chrome concentrate contract price was US$162/t (ZAR2 268/t), which
was marginally lower in US$ (1.2%) and ZAR terms (1.9%) for the quarter. The Group's policy is to make
continuous monthly sales and maintain limited pipeline inventory with metallurgical grade chrome
contract prices strengthening by some US$20/t to approximately US$180/t post the reporting period.
Specialty chrome concentrates, which accounted for 24.7% of Tharisa's quarterly chrome production,
continued to attract a premium to metallurgical chrome concentrate prices.
Zimbabwe
Tharisa has a 26.8% shareholding in Karo Mining Holdings Limited, which was awarded a Special Grant
over an area covering 23 903 ha on the Great Dyke of Zimbabwe, one of the world’s largest PGM
resources. Drilling has been very successful on the property and at the end of March 2019, approximately
17 250 metres and 102 holes have been completed with various regulatory permissions either having
been granted or under review by the relevant authorities.
Outlook
Tharisa’s FY2019 production guidance remains at a minimum of 150 koz PGMs (6E basis) and 1.4 Mt of
chrome concentrates, of which 25% is expected to be speciality grade chrome concentrates. The Tharisa
team will continue to implement the Vision 2020 projects during FY2019, targeting 200 koz of PGMs and
2.0 Mt of chrome concentrates in CY2020.
The above information has not been reported on or reviewed by Tharisa's auditors.
Paphos, Cyprus
11 April 2019
JSE Sponsor
Investec Bank Limited
Financial PR contacts:
Bobby Morse / Augustine Chipungu
+44 020 7466 5000
tharisa@buchanan.uk.com
Broker contacts:
Peel Hunt LLP (UK Joint Broker)
Ross Allister / James Bavister / David McKeown
+44 207 7418 8900
BMO Capital Markets Limited (UK Joint Broker)
Jeffrey Couch / Thomas Rider
+44 020 7236 1010
Berenberg (UK Joint Broker)
Matthew Armitt / Detlir Elezi
+44 20 3207 7800
Nedbank Limited (acting through its Corporate and Investment Banking division) (RSA Broker)
Shabbir Norath / Richard Damant
+27 11 295 6575
Investor relations contacts:
Daniel Thöle / Ilja Graulich
+27 61 400 2939 / +27 83 604 0820
Date: 11/04/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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