Tharisa PLC Q1 FY2018 Production Report 31 December 2017 (3832B)
January 10 2018 - 2:00AM
UK Regulatory
TIDMTHS
RNS Number : 3832B
Tharisa PLC
10 January 2018
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')
First quarter production report for the quarter ended 31
December 2017
Tharisa commences FY2018 with a record Q1
Highlights for the three months ended 31 December 2017
-- Successful transition to owner mining model
-- Record tonnes milled of 1 310.2 kt, up 0.8% quarter on quarter
-- Chrome recovery of 65.5% exceeds targeted recovery of 65.0%
-- Record chrome concentrate production of 365.8 kt, up 1.5% quarter on quarter
-- Record specialty chrome concentrate production of 88.1 kt, up 5.5% quarter on quarter
-- Solid PGM production of 38.8 koz
-- Record PGM recoveries at 84.3%, exceeding targeted recoveries of 80.0%
Safety
Safety remains a priority and Tharisa continues to strive for
zero harm at its operations. A LTIFR of 0.15 per 200 000 man hours
worked was recorded for the quarter.
Production update
The production update for the quarter ended 31 December 2017 is
as follows:
Quarter ended Quarter ended Quarter on Quarter ended Year
31 Dec 30 Sept quarter 31 Dec 2016 ended
2017 2017 movement 30 Sept
2017
------------------- ----------------- ---------------- --------------- --------------- --------------- ---------
Reef mined kt 1 245.3 1 300.8 (4.3) 1 229.9 5 025.1
m(3) waste/
Stripping ratio m(3) reef 7.8 6.6 18.1 9.0 7.5
Reef milled kt 1 310.2 1 299.4 0.8 1 206.4 4 916.2
PGM flotation feed kt 959.6 950.3 1.0 885.1 3 599.2
PGM rougher feed
grade g/t 1.49 1.58 (5.7) 1.52 1.56
6E PGMs produced koz 38.8 39.0 (0.5) 34.8 143.6
PGM recovery % 84.3 81.0 4.1 80.5 79.7
Average PGM
contained metal
basket price US$/oz 865 825 4.8 740 786
Average PGM
contained metal
basket price ZAR/oz 11 827 10 866 8.8 10 287 10 492
Cr O ROM grade % 18.1 18.4 (1.6) 17.5 17.8
Chrome recovery % 65.5 63.6 3.0 64.3 64.1
Chrome yield % 27.9 27.7 0.7 26.7 27.1
Chrome
concentrates
produced kt 365.8 360.5 1.5 322.2 1 331.2
Metallurgical
grade kt 277.7 277.0 0.3 245.1 1 008.1
Specialty
grades kt 88.1 83.5 5.5 77.1 323.1
Third-party
production kt 52.8 20.0 164.0 - 20.0
Metallurgical
grade chrome
concentrate
contract price US$/t CIF China 179 172 4.1 250 200
Metallurgical
grade chrome
concentrate
contract price ZAR/t CIF China 2 426 2 250 7.8 3 488 2 667
Average exchange
rate ZAR:US$ 13.6 13.2 - 13.9 13.4
------------------- ----------------- ---------------- --------------- --------------- --------------- ---------
Mining
With effect from 1 October 2017 the mine successfully
transitioned from a mining contractor model to an owner mining
model. Total reef mined from the open pit for the quarter was 1
245.3 kt, in line with the preceding quarter.
The focus during the quarter was on increased waste removal to
ensure that sufficient reef was available in the optimal blend
ahead of the processing plants. Total waste of approximately 2.7
million m(3) was moved during the quarter, 27% of which was
interburden (including top soil) at a stripping ratio of 7.8 on a
m(3) :m(3) basis. With the road diversion having been completed,
the additional shallow area was mined resulting in both lower
stripping and lower grades as oxidised ore was mined and processed.
This area has now been substantially mined through and the reef
strike length increased. The life of open pit average stripping
ratio is 9.7 on a m(3) :m(3) basis.
Processing
During the quarter, 1 310.2 kt were milled, resulting in PGM
production of 38.8 koz on a 6E basis and chrome production of 365.8
kt, 88.1 kt of which is specialty grades. This represents a 1.5%
improvement in total chrome production and a 5.5% increase in
specialty grade production quarter on quarter.
The focus on continued improvement resulted in improved PGM
recoveries at 84.3%, a new record above the targeted recoveries of
80.0%. Chrome recoveries at 65.5% also exceeded targeted recoveries
of 65.0%. With tonnes processed exceeding tonnes mined, the ore
stockpiles ahead of the processing plants were partially utilised.
As at 31 December 2017, the ore stockpiles ahead of the processing
plants totalled 242.7 kt or approximately two weeks of plant
throughput.
Market update
The average PGM contained metal basket price (per ounce) for the
three months to end 31 December 2017 was US$865 (ZAR11 827), which
was US$40 an ounce higher than the US$825 (ZAR10 866) achieved in
the quarter to end 30 September 2017. PGM basket prices continued
to reflect improvements in spot palladium and rhodium prices with
palladium comprising 16.6% and rhodium comprising 9.4% of the
Tharisa basket.
Spot palladium prices averaged US$993 per ounce in Q1 FY2018,
ending the calendar year at US$1 057 an ounce, while spot rhodium
prices averaged US$1 351 per ounce in Q1 FY2018, ending the
calendar year at US$1 470 an ounce. Spot palladium prices increased
58.0% and rhodium prices increased 52.6% in 2017.
Contracted metallurgical grade chrome concentrate prices
increased 4.1% to US$179 per tonne from US$172 per tonne in the
previous quarter due to improved liquidity and consistent stock
levels at ferrochrome and stainless steel producers in China.
Current metallurgical chrome spot prices are above US$200 per tonne
for February 2018 shipment.
As at 29 December 2017, Chinese port stock levels were at 2.2
Mt, or approximately two months' supply into the ferrochrome and
stainless steel industry. The market fundamentals for chrome remain
sound with continued growth forecast for the global stainless steel
industry.
Specialty chrome concentrates, which comprise 24.1% of Tharisa's
total chrome production, continued to attract a premium above the
contracted metallurgical chrome concentrate prices.
Outlook
Tharisa's FY2018 production guidance remains at 150 koz PGMs and
1.4 Mt chrome concentrates, of which 350 kt will be specialty grade
chrome concentrates. The near term focus will be on continued
operational improvements and the commencement of the Vision 2020
projects that will ensure Tharisa delivers 200 kozpa of PGMs and 2
Mtpa of chrome concentrates by 2020.
The above information has not been reported on or reviewed by
Tharisa's auditors.
Paphos, Cyprus
10 January 2018
JSE Sponsor
Investec Bank Limited
Investor Relations contact:
Tharisa plc
Sherilee Lakmidas
+27 11 996 3538
+27 79 276 2529
slakmidas@tharisa.com
Broker contacts:
Peel Hunt LLP (Joint Broker)
Matthew Armitt / Ross Allister
+44 207 7418 8900
BMO Capital Markets Limited (Joint Broker)
Jeffrey Couch / Neil Haycock / Thomas Rider
+44 020 7236 1010
Financial PR contacts:
Bobby Morse / Anna Michniewicz
+44(0) 20 7466 5000
tharisa@buchanan.uk.com
This information is provided by RNS
The company news service from the London Stock Exchange
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