Tough first half for Tharisa


Tough first half for Tharisa

Published Date: 2019-05-16 | Source: Stephen Gunnion | Author: Stephen Gunnion

Tough first half for Tharisa

Production was affected after it decided to reconfigure its open pit mine to make access easier.

Tharisa Plc has reported a drop in first-half profit after producing less chrome and platinum group metals (PGMs) and as the price of chrome concentrate fell. However, it said the average price for a basket of PGMs increased by 11.9% to $1,017 an ounce, benefitting from higher palladium and rhodium prices. Other PGM metals include platinum, gold, ruthenium and iridium.

The platinum and chrome producer said it focused on redesigning its pit over the six months to end-March, which will improve access to the East Pit at the Tharisa Mine and provide a better product mix and grade control for its Genesis and Voyager processing plants. It also moved to a 24-hour continuous operation in the East Pit, resulting in a 15% increase in mining capacity. As a result of the pit redesign, it said the optimal reef mix wasn't mined over the period.

It mined a total 2.22 million tons of reef. Production of platinum group metals fell 12.2% to 67,600 ounces while chrome concentrate production declined by 16.2% to 614,100 tons.

Revenue fell by 16% to $166.5 million and operating profit declined by 65% to $14.3 million. Earnings and headline earnings per share dropped 60% to 4c and it's cut its interim dividend by 16% to 0.5c. It generated net cash from operations of $41.4 million, with a free cash flow of $17.1 million.

Chrome concentrate is used to produce stainless steel and Tharisa said increasing demand for the metal would support chrome.

It expects a strong operational performance for the remainder of the year with a focus on increasing its production through the continual improvement processes. It said the benefits of the pit redesign should become evident in the second half of the financial year. Operational improvements that started in the second quarter continued into the third quarter and it has maintained its full-year production guidance of at least 150,000 ounces PGMs and 1.4 million tons of chrome concentrates, of which 350,000 tons will be specialty grade.

It's also sticking to its Vision 2020 target of 200,000 ounces a year of PGMs and 2-million tonnes of chrome concentrates in its 2020 financial year.

Its shares closed unchanged at R20 yesterday.

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