TIDMTHS
RNS Number : 4535K
Tharisa PLC
10 July 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')
Third quarter production report for the period ended 30 June
2017
Another record quarter for Tharisa
Highlights for the three months ended 30 June 2017
-- Record quarterly reef mined of 1 275.2 kt continues to exceed
the required run rate of 4.8 Mtpa on an annualised basis
-- Record chrome concentrate production of 333.9 kt, up 6.1% quarter on quarter
-- Record specialty chrome production of 87.1 kt, 26.1% of total
chrome production and up 15.5% quarter on quarter
-- PGM production of 35.4 koz, up 3.2% quarter-on-quarter
-- Record PGM recoveries at 81.3% and chrome recoveries at 66.0%
exceeding targeted recoveries of 80.0% and 65.0% respectively
Commenting on Q3 production, Tharisa CEO Phoevos Pouroulis,
said:
"Tharisa Minerals has again shown incremental improvements in
production volumes and recoveries. We continue to examine ways to
further optimise our operations and look forward to achieving our
targeted recoveries and production outlook for the financial
year."
Safety
Safety remains a top 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 0.08 per 200 000 man hours worked.
Production update
The production update for the quarter ended 30 June 2017 is as
follows:
Quarter on Nine months
Quarter ended Quarter ended quarter ended
30 June 31 March movement Quarter ended 30 June
2017 2017 % 30 June 2016 2017
------------------- ---------------- --------------- --------------- -------------- --------------- ------------
Reef mined kt 1 275.2 1 219.2 4.6 1 235.4 3 724.3
m(3) waste/m(3)
Stripping ratio reef 6.9 7.5 7.4 7.8
Reef milled kt 1 199.1 1 211.3 (1.0) 1 192.2 3 616.8
PGM flotation feed
tonnes kt 866.0 897.9 (3.6) 929.6 2 648.9
PGM rougher feed
grade g/t 1.57 1.56 0.6 1.64 1.55
6E PGMs produced koz 35.4 34.3 3.2 33.5 104.6
PGM recovery % 81.3 76.2 6.7 68.5 79.3
Average PGM
contained metal
basket price US$/oz 792 783 1.1 745 771
Average PGM
contained metal
basket price ZAR/oz 10 443 10 355 0.8 11 162 10 352
Cr O ROM grade % 17.8 17.5 1.7 17.7 17.6
Chrome recovery % 66.0 62.5 5.6 61.6 64.3
Chrome yield % 27.8 26.0 6.9 25.8 26.8
Chrome
concentrates
produced kt 333.9 314.6 6.1 307.1 970.7
--------------- --------------- -------------- --------------- ------------
Metallurgical
grade kt 246.8 239.2 3.2 225.6 731.1
Specialty
grades kt 87.1 75.4 15.5 81.5 239.6
--------------- --------------- -------------- --------------- ------------
Metallurgical
grade chrome
concentrate
contract price US$/t CIF China 147 338 (56.5) 105 212
Metallurgical
grade chrome
concentrate
contract price ZAR/t CIF China 1 892 4 430 (57.3) 1 589 2 844
Average exchange
rate ZAR:US$ 13.2 13.2 - 15.0 13.5
------------------- ---------------- --------------- --------------- -------------- --------------- ------------
Mining
Reef mined from the open pit totalled a record 1 275.2 kt for
the quarter. This is a 5% improvement on the 1 219.2 kt mined in Q2
and brings the monthly average to 413.8 kt over the first nine
months of FY2017. The increase in production is mainly attributable
to a focus on continuous improvement initiatives particularly in
the drill and blast operations. The benefits of these initiatives,
in terms of the availability and utilisation of mining equipment,
should continue into Q4.
Total waste of approximately 2.5 Mm(3) was moved during the
quarter at a stripping ratio of 6.9 on a m(3) :m(3) basis. The
waste stripping remained below the LOM average of 9.7 as the team's
focus remained on interburden stripping to ensure access to the
reef horizons. The lower stripping ratio was also due to the
planned pit extension following the road diversion. The benefits of
the shorter waste hauling distances associated with the road
diversion will be delivered in the latter part of Q4. It is
forecast that stripping for Q4 will be above 9 m(3) :m(3) .
In addition to the focus on increasing waste stripping ahead of
ore mining to ensure sustained access to the reef horizons, there
is a continued emphasis on mining consistent reef grades for feed
into the processing plants.
Processing
During the quarter 1 199.1 kt of ore was milled, resulting in
PGM production of 35.4 koz on a 6E basis and record chrome
production of 333.9 kt, 87.1 kt (26.1%) of which are specialty
grade concentrates.
The chrome feed grade improved by 2% while the 6E PGM rougher
feed grade remained consistent compared to the previous quarter.
The marginally lower mill throughput for Q3 was due to the timing
of the planned maintenance during the quarter.
The continuous improvement initiatives focused on crusher
throughput and improved crusher run time. The positive impact of
these initiatives on plant throughput was evidenced towards the end
of Q3 and will flow into Q4. Despite the marginally lower
throughput, the total PGM and chrome production increased by 3% and
6% respectively when compared to Q2.
Both PGM and chrome recoveries exceeded target during the
quarter with PGM recoveries at 81.3%, against a target of 80%, and
chrome recoveries at 66.0%, against a target of 65%.
The high energy flotation successfully implemented at the
Voyager PGM recovery circuit has been incorporated into the PGM
recovery circuit of the Genesis Plant and is scheduled to be
completed by the end of July 2017. This will contribute to improved
PGM production in Q4, although production may be partially impacted
by the planned oxidized ore being mined as the open pit is extended
through the road diversion area.
Market update
The average per ounce PGM basket price for the three months
ended June 2017 was US$792 (ZAR10 443), which is US$9 an ounce
higher than the US$783 (ZAR10 355) price achieved in the quarter
ended March 2017.
While contracted metallurgical grade chrome concentrate prices
decreased to US$147 per tonne from US$338 per tonne, there are
signs that prices have found a floor and there is increased price
stability within the chrome concentrate market. Despite Chinese
port stock levels of 2.46 Mt, liquidity has returned on the back of
continued stainless steel demand and consumption out of China. The
fundamentals of the global stainless steel market remain sound with
continued growth forecast in 2017, further supporting strong demand
for chrome units in the form of ferrochrome and chrome ores.
Specialty chrome concentrates, which comprise 26.1% of total chrome
concentrate production and which supplies the chemical and foundry
markets, continue to attract a premium above the contracted
metallurgical chrome concentrate prices.
Transition to owner mining model
Tharisa Minerals entered into a binding term sheet with MCC
Contracts Proprietary Limited (MCC) on 10 May 2017 in terms of
which Tharisa Minerals will purchase, subject to the fulfilment of
certain conditions precedent, certain of MCC's existing equipment,
strategic components, site infrastructure and spare parts, and
transfer the employees currently deployed at its Tharisa Mine in
South Africa.
On 6 July 2017, shareholders were advised that the transaction
had been unconditionally approved by the South African Competition
Commission. The effective date of the transaction will be the date
immediately following the fulfilment or waiver, as applicable, of
the remaining conditions precedent, or such later date as may be
agreed between the parties. The long stop date for fulfilment of
these conditions is 30 September 2017.
The change in the operating model is expected to have both cost
and operational benefits as well as providing financial
flexibility, thereby cementing Tharisa's low-cost high margin
position.
New Mining Charter
The Mining Charter was first introduced in 2004 as a regulatory
instrument aimed at initiating transformation in the South African
mining sector. Tharisa Minerals complies with the requirements of
the Mining Charter. The Mining Charter III was gazetted on 15 June
2017. The Group is studying and assessing the regulations and the
way forward to ensure compliance. Tharisa remains committed to
transformation in the mining industry.
Outlook
PGM and chrome production remains on track to meet the FY2017
production guidance of approximately 147.4 koz PGMs on a 6E basis
and 1.3 Mt chrome concentrates, of which 300 kt will be specialty
grade chrome concentrates.
The above information has not been reported on or reviewed by
Tharisa's auditors.
Paphos, Cyprus
10 July 2017
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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