Tharisa PLC First quarter FY2017 Production Report (8323T)

TIDMTHS

RNS Number : 8323T

Tharisa PLC

11 January 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')

First quarter production report for the period ended 31 December 2016

Another quarter of solid production from Tharisa

Highlights for the three months ended 31 December 2016

   --     Reef mined continues to exceed the required run rate of 4.8 Mtpa on an annualised basis 
   --     PGM production of 34.8 koz and chrome concentrate production of 322.2 kt 
   --     Specialty chrome production at 23.9% of total chrome production 
   --     PGM recoveries above target at 80.5% and chrome recoveries improve to 64.3% 
   --     Contracted metallurgical chrome prices up 59.2% quarter-on-quarter 

Safety

Safety remains a top priority and Tharisa continues to strive for zero harm at its operations. We are pleased to report that there were no LTI's during the quarter.

Production update

The production update for the quarter ended 31 December 2016 is as follows:

 
 
                                                                               Quarter on                       Year 
                                          Quarter ended     Quarter ended        quarter                        ended 
                                             31 Dec            30 Sep           movement      Quarter ended     30 Sep 
                                              2016              2016                %          31 Dec 2015       2016 
-------------------  -----------------  ----------------  ----------------  ---------------  ---------------  -------- 
 
 Reef mined                  kt                  1 229.9           1 243.3            (1.1)          1 124.4   4 837.2 
                      m(3) waste/m(3) 
 Stripping ratio            reef                     9.0               8.2                -              6.4       7.3 
 Reef milled                 kt                  1 206.4           1 267.2            (4.8)            997.4   4 656.3 
 PGM flotation feed 
  tonnes                     kt                    885.1             937.9            (5.6)            765.8   3 575.6 
 PGM rougher feed 
  grade                     g/t                     1.52              1.61            (5.6)             1.61      1.65 
 6E PGMs produced           koz                     34.8              39.1           (11.0)             24.0     132.6 
 PGM recovery                %                      80.5              80.6            (0.1)             60.4      69.9 
 Average PGM 
  contained metal 
  basket price             US$/oz                    740               804            (8.0)              687       736 
 Average PGM 
  contained metal 
  basket price             ZAR/oz                 10 287            11 289            (8.9)            9 865    10 881 
 
 Cr O RoM grade              %                      17.5              17.5                -             18.5      18.0 
 Chrome recovery             %                      64.3              63.5              1.3             61.5      62.7 
 Chrome yield                %                      26.7              26.2              1.9             27.3      26.7 
 Chrome 
  concentrates 
  produced                   kt                    322.2             332.2            (3.0)            272.1   1 243.7 
                                        ----------------  ----------------  ---------------  ---------------  -------- 
     Metallurgical 
      grade                  kt                    245.1             250.1            (2.0)            238.7     974.3 
     Specialty 
      grades                 kt                     77.1              82.1            (6.1)             33.4     269.4 
                                        ----------------  ----------------  ---------------  ---------------  -------- 
 
 Metallurgical 
  grade chrome 
  concentrate 
  contract price      US$/t CIF China                250               157             59.2              124       120 
 Metallurgical 
  grade chrome 
  concentrate 
  contract price      ZAR/t CIF China              3 488             2 193             59.1            1 777     1 751 
 Average exchange 
  rate                    ZAR:US$                   13.9              14.1                -             14.2      14.8 
-------------------  -----------------  ----------------  ----------------  ---------------  ---------------  -------- 
 

Mining

Tharisa's team mined consistently above the combined plant processing capacity of 400 ktpm, bringing the total reef mined from the open pit to 1 229.9 kt for the quarter. The focus remained on grade control and the optimal blend of material ahead of the operation's two plants. During the quarter a total of 3.0 Mm(3) of waste (both interburden and overburden) was removed to expose ore at a stripping ratio of 9.0 on a m(3) :m(3) (waste:reef) basis. This is in line with the life of open pit average stripping ratio of 8.9 on a m(3) :m(3) basis.

Processing

During the quarter 1 206.4 kt tonnes were milled notwithstanding planned routine maintenance, including annual mill relining.

PGM recoveries at 80.5% remained well above the targeted recovery of 70%, resulting in PGM production of 34.8 koz on a 6E basis.

Total chrome concentrate production was 322.2 kt at a recovery rate of 64.3%, edging closer to the targeted recovery of 65% for chrome. Of that 322.2 kt, 77.1 kt was higher-value specialty grade material. Specialty grade material typically fetches a premium to metallurgical grade chrome.

Market update

The average PGM basket price for the three months ended December 2016 was US$740/oz (ZAR10 287/oz), which is US$64/oz lower than the US$804/oz (ZAR11 289/oz) price achieved in the quarter ended September 2016.

Metallurgical grade chrome prices have risen almost 60% over the quarter with an average contract price of US$250/t CIF main ports China achieved during the quarter. This represents an improvement of US$93/t on the CIF contracted selling price concluded in the September 2016 quarter. Current market prices are significantly higher and while demand has eased ahead of the Chinese New Year (end January 2017), market fundamentals and lower Chinese port stocks should spur purchasing thereafter.

Outlook

PGM and chrome production remains on track to meet the FY2017 production guidance of 147.4 koz PGMs and 1.3 Mt chrome concentrates, of which 300 kt will be specialty grade chrome concentrates.

"We are positive about the prospects for the year ahead and believe that, with the support of buoyant chrome prices, 2017 will be a definitive year with reduced unit costs and increased operating margins," said Tharisa CEO Phoevos Pouroulis.

The above information has not been reported on or reviewed by Tharisa's auditors.

Paphos, Cyprus

11 January 2017

JSE Sponsor

Investec Bank Limited

Investor Relations contact:

Sherilee Lakmidas

[phone]

[phone]

[e-mail]

This information is provided by RNS

The company news service from the London Stock Exchange

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