Tharisa turns its fortunes around

Half-year profit, higher output

THARISA Minerals, a low-cost platinum group metals (PGM) and chrome concentrate producer, rallied almost 13 percent on the JSE yesterday on news that it had swung to a profit in the six months to March and it was eyeing higher output.

The company’s stock on the JSE yesterday climbed as much as 12.7 percent, before closing 7.14 percent up at R6.75.

Cyprus-based Tharisa is owned by the Pouroulis family and debuted on the JSE last year. It operates the Tharisa mine, an open-pit mine 45 kilometres east of Rustenburg, one of the world’s biggest chrome resources.

Turnaround

It is also focused on beneficiation and logistics through its subsidiaries Arxo Resources and Arxo Logistics.

A profit before tax of $7.1 million (R88m) was reported in the six months to March from a $31.1m loss in the comparative period last year.

Profit for the half year was $4.9m compared with a loss of $28.2m in the prior half year.

“The turnaround in profitability demonstrates the benefits of being a low-cost coproducer of platinum group metals (PGMs) and chrome concentrates within a challenging commodity environment,” chief executive Phoevos Pouroulis said in a statement yesterday.

The company said yesterday that its PGM recoveries had exceeded its plan and the achievement of steady state production of 144 000 ounces a year was targeted for the 2016 financial year. It also revised its chrome production.

“Management continues to focus on the improvement of the chrome recoveries to achieve steady state production,” it said.

Output

With the installed wet high intensity magnetic separation units not achieving the expected improvement in chrome recoveries and further test work on this and other technologies continuing, the steady state chrome production had been revised to 1.5 million tons a year and was expected to be achieved in the 2016 financial year, Pouroulis said.

PGM output climbed by 49.5 percent in the six months to March to 57 400 ounces compared with 38 400 ounces in the previous comparative period.

The platinum belt was shut for five months last year owing to a wage strike at the three top platinum producing companies.

Tharisa sells its PGM output to Impala Refining Services in terms an off-take agreement and trucks the chrome concentrate to the Marikana siding from where it is railed to Richards Bay. A total of 58 400 ounces has been sold during the period of the Impala Refining Services agreement.

Production in the third quarter would probably take a percent knock in the third quarter, the company said.

Planned maintenance programmes, which include the reconfiguration of the crushing circuit at the Voyager Plant, is expected to result in an estimated loss in production time of approximately 12 percent for the third quarter.

“Appropriately blended mined ore is being fed into the processing plants on a consistent basis from June 2015. The resulting stability in feed grade will improve recoveries to design levels.

“PGM and chrome concentrate production in the second half of the 2015 financial year is expected to approximate first half 2015 production.”