Tharisa Share Discussion Threads

[basem1] 24/6/2021 08:09

Good posts guys Keep the faith

[redtrend] 24/6/2021 04:27

AimSurfer - to try and answer your question what PGM price do they break-even, it's best to use the most recent 2021 Interims Ending March 2021:

PGMS

PGM Cost of Sales: $96.812m (based on Forex 15.3)
With PGM Oz of 75,100 Oz, the all-in cost per oz for PGMs is $1,289oz
With ZAR strengthening to 14.3, the all-in cost is likely now $1,379oz, however production should increase in 2nd half (85k to counter ZAR strength and increased diesel prices).

I call it "all-in cost" rather than AISC (All-in including for Stay in Business Capex), because using the cost of sales metric from interims includes for D&A and impairments (non-cash costs). Simplistically this broadly mirrors the SIB Capex.

Based on the current 6E PGM basket ($3,225oz) and minus refiners fee of circa 13-15%, the THS PGM sale price is circa $2,800oz.

So there is still a very large margin of $1,400oz x 160k oz (annualised, not taking into account planned increase to 200k oz over 2yrs or so) = $224m.


CHROME

You can do the same number crunching on Chrome using Interims. But to summarize, using $155tn Chrome, all-in cost of $105tn, I calculate margin of $63m for Chrome based on 1.5m tonnes.

Post Sept 2021 for FYE Sept 2022, THS should have annualized 2MT chrome thanks to Vulcan project. AS the operating cost of Vulcan is very low (it was stated in one of the investor calls but can't remember off top of my head), pro-rata basis with 2MT chrome, this should significantly lower all-in cost per tonne and increase margin to $95-100m based on $155tn Chrome.


So not including the Marketing and Agency arms which bring in small profits of circa $2m nor future growth prospects in Zimbabwe expansions, SA THS vertical expansions/ refining initiatives, we're looking at margin of $287m - $324m, albeit once you take into account SA Tax and the THS Non-controlling interest (BEE), you're looking at post-tax margin of $172-192m (albeit depends how accountants crunch numbers on D&A etc.), when THS current market cap £338m ($473m).

So THS still on a paltry PE of 2.5 - 2.75 even with softening of PGM basket, when it has a 50+yrs life of mine (14yrs open pit + 40yrs underground)!

[sotolo] 23/6/2021 22:43

What an intelligent post Feynzz, just so.

[sotolo] 23/6/2021 22:42

What an intelligent post Feynzz, just so

[feynzz] 23/6/2021 18:34

Hi sipps,

The Pouroulis family owns >40% of the shares in the company so I don't think your statement about no skin in the game is correct.

The company has done at least 2 Investor Meet presentations in the last 3 months and the message of growth is very clear. Investing c$50m on the Vulcan plant this year which would increase chrome production by 25% at a variable price of $10/t. They have also said that they are working on building an in-house smelting complex so that from the end of next year they can refine their own metals which would enable them to save the 15% they currently pay to refiners. In addition, they will ramp up their PGM production to 200k PGMoz in the next 18 months.

I agree the basket price has fallen quite a lot but it is still greater than the H1 average when they made a $60m NPAT on a 75koz PGM production. Production for H2 should be greater than 80koz. The main thing to wait and see is where Rhodium settles. If it can settle around the $14k mark that would be excellent for Tharisa.

[sipps] 23/6/2021 17:55

Sotolo - reasons for selling..
Directors - not enough skin in the game.
Small investors - no protection / news / rns / placings - to combat Fidelity selling.
Future outlook - company failure to promote growth, margins, investment etc. I felt they are relying too much on now historic profit that may not guarantee share price rise .. a lack of confidence in the company is stopping new investors taking a new position. I need to see sentiment improve before I'm back in... good luck

[aimsurfer] 23/6/2021 15:23

At what PGM price do they break-even?

[sotolo] 23/6/2021 14:56

I think that something stopping investors buying might be the now 25% fall in price they get for PGM’s which of course still cost the same to produce, and the worry this may go far further, so you are probably wise to sell out to Lucky and me who are bravely or maybe foolhardily pLaying at catching knives, buying and getting sore hands

[sotolo] 23/6/2021 14:56

I think that something stopping investors buying might be the now 25% fall in price they get for PGM’s which of course still cost the same to produce, and the worry this may go far further, so you are probably wise to sell out to Lucky and me who are bravely or maybe foolhardily pLaying at catching knives, buying and getting sore hands

[sipps] 23/6/2021 13:34

I'm out now - was my largest holding - but just did not like the lack of support - its like something is stopping investors buying THS - good luck all holders -

[ukgeorge] 22/6/2021 08:15

R24.29 (current price) is £1.22.45

Yesterdays low open can partly be explained by the fall there. Roll on sentiment moving back to being positive. After all we have had a long spell of exceptional metals prices even if Rhodium has declined a bit recently.

[sipps] 22/6/2021 07:32

Tharisa up 5.1% on JSE South Africa Market yesterday 21st June ... Need UK to catch up and start to see value on offer ...

[sotolo] 21/6/2021 22:02

Tiger, great to find you here, I wondered where you had gone. I sold more Cey a week ago, and bought more Tharisa with the money this morning in two trances as could only buy £30k at first. Where do you see rhodium going? Glad you are busy again. All best

[nimrod22] 21/6/2021 18:48

I suspect tomorrow will be an up, with Palladium rising today 4% in Dollar terms. I notice Sibanye Stillwater SBSW (a PGM producer) on the US market already rose today by 3.4%. As I mentioned earlier THS is dropping in to an oversold position re the RSI graph.
China is still a price taker, rather than a fixer despite its efforts first to control/contain imports and then releasing stockpiles, none of this works in the near to long term; the market will decide the price.

[ukgeorge] 21/6/2021 09:37

I wish they would announce a share buy back scheme or an extradornary dividend. I know it is unlikely.

Also hoping the correction in precious metals is over.

[dr pinkstone] 19/6/2021 10:46

Tiger--I followed your posts on LSE--glad you are here.

[jon4567] 18/6/2021 15:10

TBTT is back from the dead and the share price starts to recover. Order is restored!

[tigerbythetail] 18/6/2021 14:26

Hi!
I've previously posted on the LSE board. However, my account got suspended permanently over there thanks to some of the rampers on the LSE EUA board. (If ever you wanted to make an argument against the SIPP freedoms - the freedom to invest your own pension money as you see fit - that board would make a good place to start.)
Since people are asking, I just wanted to say that I still hold a lot of THS shares (and a lesser number of SLP shares), and I'm buying in the current dip.
I'm also completely overloaded with work, so I won't be posting very much for the next few weeks!

[haywards26] 18/6/2021 14:01

Just need to be patient and let value out. THS is a cash cow currently and have been for months, like most of the miners. Metal prices are volatile, China are messing about which will impact pricing short term. But supply and demand will correct medium/longer term pricing levels..

[sipps] 18/6/2021 10:59

today at 11am - SLP up 6%+ - THS Down -2.8% - wheres the logic... cant help but think that the now seemingly ended previous selling from Fidelity etc has affected confidence as to whether the share price will rise to reflect THS true value - or at least closer to it .. on every comparison THS is way better value than SLP with tons more upside, mine life, basket price average etc...

[ukgeorge] 18/6/2021 10:07

The share price seems to be pricing in a crash in the rhodium price, I can't think of any other reason to explain why the share price is at a 4 month low. Incredible really.

FIL Investment Advisors, must still be selling and until they are cleared the share price is going to struggle.

The only real catalysts in the near term other than metal prices should be, Q3 production results which are due on 8th July

It will be interesting to get an update on the Cash Balance and Debt Position.

[sipps] 17/6/2021 15:21

spread greater than dividend .. also price drop today greater than dividend. I think most mining stocks affected by FED and gains over last 6 months - risk / reward not so good ... but THS still way to low...

[farnesbarnes] 17/6/2021 14:20

Affan on twitter:

#THS
SP=136p

Cash at 31 March= 8.5p per share
Inventory=11p
Net receivables= 20p
Exp H2 NPAT = £75m = 27.8p
Exp FY22+FY23 NPAT (assume $2,550 basket (26% discount from today)) = £193m = 71.7p ps

CA+H2+FY22+FY23 itself is 139p +get a free ride on min 2.2m PGMoz+>20mt chrome

[basem1] 17/6/2021 13:36

Commodity prices are a lot weaker today too The looming threat of inflation and higher interest rates are the current fear factors regarding growth Just be cautious guys I am 90% cash now