TIDMTHS
RNS Number : 1136T
Tharisa PLC
10 October 2017
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')
Fourth quarter and full year production report for the period
ended 30 September 2017
Tharisa reports a strong end to another year of record
production
Highlights for the three months ended 30 September 2017
-- Record reef mined of 1.3 Mt, up 2.0% quarter on quarter
-- Record tonnes milled of 1.3 Mt, up 8.4% quarter on quarter
-- Record chrome concentrate production of 360.5 kt, up 8.0% quarter on quarter
-- PGM production of 39.0 koz, up 10.2% quarter on quarter
-- PGM recoveries at 81.0% exceeding targeted recoveries of 80.0%
Highlights for the financial year ended 30 September 2017
-- Reef mined of 5.0 Mt, up 3.9%
-- Reef milled of 4.9 Mt, up 5.6%
-- PGM production of 143.6 koz, up 8.3%
-- Record chrome concentrate production of 1.3 Mt, up 7.0%
-- Specialty grade chrome production of 323.1 kt, up 19.9%
Commenting on the production results, Tharisa CEO Phoevos
Pouroulis, said:
"Through our continued focus on mining and processing
improvements and optimisation we have delivered an excellent
operational performance for FY2017. We see more potential in the
year ahead and will be embarking on unlocking greater value through
the successful transition to owner mining, primarily focusing on
reducing dilution and improving feed grades from within the
open-pit. Furthermore, our organic optimisation projects should
yield additional recoveries, lowering our unit costs and enhancing
our production going forward. We are excited by opportunities
within the mining sector and look to grow our business through
strategic investments and co-operation agreements leveraging off
our existing infrastructure."
Safety
Safety remains a priority and Tharisa continues to strive for
zero harm at its operations. There were no lost time injuries
during the quarter and consequently we recorded an improved LTIFR
of 0.07 per 200 000 man hours worked. Tharisa Minerals was awarded
three safety awards in 2017: the Best Safety Performance and Best
Improved Performance awards at Mine Safe 2017, and an award from
the Mine Health and Safety Council for 2 000 fatality free
production shifts.
Production update
The production update for the quarter and year ended 30
September 2017 is as follows:
Quarter Quarter Quarter Year Year Year on
ended 30 ended 30 ended 30 ended ended year
Sept June Sept 2016 30 Sept 30 Sept movement %
2017 2017 2017 2016
------------------- ------------- ------------ ------------ ------------ ------------ ------------- -----------
Reef mined kt 1 300.8 1 275.2 1 243.3 5 025.1 4 837.2 3.9
m(3) waste/
Stripping ratio m(3) reef 6.6 6.9 8.2 7.5 7.3 -
Reef milled kt 1 299.4 1 199.1 1 267.2 4 916.2 4 656.3 5.6
PGM flotation feed kt 950.3 866.0 937.9 3 599.2 3 575.6 0.7
PGM rougher feed
grade g/t 1.58 1.57 1.61 1.56 1.65 (5.5)
6E PGMs produced koz 39.0 35.4 39.1 143.6 132.6 8.3
PGM recovery % 81.0 81.3 80.6 79.7 69.9 14.0
Average PGM
contained metal
basket price US$/oz 825 792 804 786 736 6.8
Average PGM
contained metal
basket price ZAR/oz 10 866 10 443 11 289 10 492 10 881 (3.6)
Cr O ROM grade % 18.4 17.8 17.5 17.8 18.0 (1.1)
Chrome recovery % 63.6 66.0 63.5 64.1 62.7 2.2
Chrome yield % 27.7 27.8 26.2 27.1 26.7 1.5
Chrome
concentrates
produced kt 360.5 333.9 332.2 1 331.2 1 243.7 7.0
Metallurgical
grade kt 277.0 246.8 250.1 1 008.1 974.3 3.5
Specialty
grades kt 83.5 87.1 82.1 323.1 269.4 19.9
Third-party chrome
production kt 20.0 - - 20.0 - -
Metallurgical
grade chrome
concentrate US$/t CIF
contract price China 172 147 157 200 120 66.7
Metallurgical
grade chrome
concentrate ZAR/t CIF
contract price China 2 250 1 892 2 193 2 667 1 751 52.3
Average exchange
rate ZAR:US$ 13.2 13.2 14.1 13.4 14.8 -
------------------- ------------- ------------ ------------ ------------ ------------ ------------- -----------
Mining
Tharisa's reef mining operations achieved a new record in Q4
FY2017 with 1.3 Mt of reef mined. Notably the Cr(2) O(3) run of
mine grade improved to 18.4% with the continuous focus on
improvement in the drill, blast and reefing operations.
Total waste of approximately 2.5 Mm(3) was moved during the
quarter at a stripping ratio of 6.6 on a m(3) :m(3) basis. The
waste stripping remained below the LOM average of 9.7 and this will
be a focus area going forward to ensure that sufficient reef is
available in the optimal blend for the processing plants. Key to
achieving the required waste stripping is the drill and blast
operations and Tharisa has insourced its drilling operations and
purchased additional drill rigs to achieve the required stripping
ratio.
With throughput into the plant exceeding nameplate capacity, the
stockpiles ahead of the processing plants total 307.7 kt, with a
target of 400.0 kt to ensure optimal reef layer blending, feed
grade and throughput consistency into the plants.
Tharisa mined 5.0 Mt of ROM in FY2017, which is 3.9% higher than
in FY2016 and in excess of the plant processing nameplate capacity
of 4.8 Mt. The PGM rougher feed grade, however, reduced from 1.65
g/t to 1.56 g/t as more weathered ore was included in the ROM
following the road diversion and mining of that area to expand the
mining footprint. The Cr(2) O(3) ROM grade was effectively the same
as the prior year.
The transition to an owner mining model, which included the
transfer and employment of approximately 900 mining contractor's
employees, was effective as of 1 October 2017. In addition to the
purchase of the contractor's mining fleet, Tharisa Minerals
supplemented the fleet with additional drill rigs, excavators and
mining equipment. Please refer to Tharisa's announcement dated 22
September 2017 for more details on the transaction.
Processing
Reef milled during the quarter was 8.4% higher at 1.3 Mt
benefitting from the increased availability and feed consistency of
the ROM ore. The increase in reef milled together with the
improvement in PGM recoveries at 81.0% resulted in a 10.2% increase
in PGM production at 39.0 koz (on a 6E basis). Record chrome
production of 360.5 kt was achieved, 83.5 kt of which was specialty
grade concentrates.
The high energy flotation circuit successfully commissioned at
the Voyager Plant PGM recovery circuit has been replicated in the
PGM recovery circuit of the Genesis Plant. This circuit was
commissioned in August 2017. The benefit on the PGM recoveries from
the Genesis Plant was, however, offset by the lower PGM rougher
feed grades as more weathered ore was processed.
A total of 4.9 Mt of reef was milled in FY2017, a 5.6% increase
year on year. PGM production was 8.3% higher at 143.6 koz,
marginally below FY2017 guidance of 147.4 koz, at an average
recovery rate of 79.7% in line with targeted recoveries of 80.0%.
Chrome production at 1.3 Mt was in line with market guidance and
was up 7.0% with chrome recovery averaging 64.1%. Optimisation
initiatives planned should ensure that Tharisa achieves its
targeted recovery of 65.0% for chrome concentrates.
During Q4 FY2017, Tharisa concluded an agreement with Lonmin to
operate its K3 UG2 chrome plant. Arxo Metals, a subsidiary of
Tharisa, commenced operating this plant effective 29 August 2017.
The plant has produced 20.0 kt of UG2 chrome concentrate.
Production from this plant is expected to exceed 200 ktpa, the
marketing and sales of which expands the basket of chrome
concentrates sold by Tharisa and leverages off its established
logistics and marketing platforms.
Chrome concentrate inventories on hand as at 30 September 2017
was 78.7 kt.
Market update
The average PGM contained metal basket price for the three
months ended September 2017 was US$825 (ZAR10 866) per ounce, which
is US$33 an ounce higher than the US$792 (ZAR10 443) per ounce
achieved in the quarter ended June 2017 and US$50 an ounce higher
for the 2017 financial year compared to FY2016. The higher basket
prices reflect, in particular, the increase in spot palladium
prices, which surpassed the platinum price during the quarter.
With improved liquidity in the market during Q4 FY2017,
contracted metallurgical grade chrome concentrate prices increased
17% to US$172 per tonne from US$147 per tonne the previous quarter,
bringing the total average realised metallurgical chrome price
during FY2017 to US$200 per tonne. As at 29 September 2017, Chinese
port stock levels were slightly above 2 Mt, or approximately two
months' supply into the domestic Chinese ferrochrome and stainless
steel industry.
The fundamentals of the global stainless steel market remain
sound with continued growth forecast in 2018, supporting demand for
chrome units in the form of ferrochrome and chrome ores. Specialty
chrome concentrates, which comprised 24.3% of Tharisa's total
chrome concentrate production in FY2017 and which supplies the
chemical and foundry markets, continue to attract a premium of more
than US$30 per tonne above the contracted metallurgical chrome
concentrate prices.
Outlook
Tharisa's FY2018 production guidance is 150 koz PGMs and 1.4 Mt
chrome concentrates, of which approximately 350 kt will be
specialty grade chrome concentrates.
Tharisa continues to focus on delivering operational
improvements, and through additional investment in R&D and
innovation is geared to unlock even greater value for all
stakeholders. The near term focus will be on operational
improvement and in-pit optimisation following the transition to the
owner mining model.
The above information has not been reported on or reviewed by
Tharisa's auditors.
Paphos, Cyprus
10 October 2017
JSE Sponsor
Investec Bank Limited
Investor Relations contact:
Tharisa plc
Sherilee Lakmidas
+27 11 996 3538
slakmidas@tharisa.com
Broker contacts:
Peel Hunt LLP (Joint Broker)
Ross Allister/ Chris Burrows
+44 20 7418 8900
BMO Capital Markets Limited (Joint Broker)
Jeffrey Couch/Neil Haycock/Thomas Rider
+44 20 7236 1010
Financial PR contact:
Bobby Morse/Anna Michniewicz
+44 20 7466 5000
tharisa@buchanan.uk.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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