Tharisa Share Discussion Threads

[stemis] 04/4/2024 14:49:50

Actually, although I accept the figure is likely to be a bit out of date, as at 12 October 2022 the cash cost of Karo was $1,096/PGM oz. Current Karo basket price is $1,240.61.

It's excitable nonsense to claim that Tharisa have 'bet the whole company's future on Karos'. Net of Tharisa's net cash, the remaining investment in Karo (if they decided to fund it themselves) represents about 19 months ebitda.

However this is the thing about cyclical industries (mining, shipping etc). When the price is low, everyone assumes it'll always stay so and so no-one invests. Then there is a shortage of capacity, demand picks up, prices surge and everyone assumes it'll last for ever and piles in with new investment. Which causes an overcapacity and prices crash. Repeat and repeat.

No investment advice but the right time to invest is at the bottom of that cycle when optimism is at it's lowest. It wouldn't take much of an improvement in the basket price for Karo to be significantly profitable

Whatever they decide, Tharisa management have a lot of skin in the game here. I doubt they are making their decisions lightly...

[tigerbythetail] 04/4/2024 14:00:39

The rise is welcome. The buyback is welcome.
But the essential problem here remains unaddressed. The company is pouring money into the building of Karo in Zimbabwe, but the Karo PGM basket price remains far lower than required to make the new mine even vaguely viable.
How does the mine get finished, except on yet more Tharisa money? I don't believe they will be able to raise non-recourse debt finance for it given its economics and the jurisdiction.
Will the new mine ever break-even operationally, let alone pay back the capital invested in it and actually make money?
Can the Zimbabwe government be trusted to stick to their side of the bargain?
Management here have bet the whole company's future on Karo. I don't see any significant signs yet of the PGM market turning and improving. Therefore, I'm happy to watch and see how things develop from here.

[stemis] 04/4/2024 12:45:13

Pretty much back to where it was before some woeful financial analysis on London South East scared a few holders out of their shares. On the bright side I suppose it provided the company with an opportunity to buy back a few shares at a bargain price...

[ianb5004] 04/4/2024 12:27:09

Rising nicely since the buy back announcement. I am reliably informed there has been a large holder who wanted out which has trashed the sp, compounded by pi,s panicked sells.
Nothing like a low share price to trash sentiment. Logic can go out of the window during such times.

Ths remains a profitable divi payer thats sat at a valuation far below its worth.

[theapiarist] 26/3/2024 08:09:56

At these prices the company are getting a bargain.

[faz] 26/3/2024 07:21:30

Share buy back and why not-they have the money and the share price is way under what it it should be (as they themselves point out!).

[crooky1967] 08/3/2024 20:40:14

Look like a larger seller as well. Has been a few 250k sells over the past few days.

[gkace] 06/3/2024 15:48:38

Anyone noticed Palladium and platinum price today lol

[nigelpm] 06/3/2024 15:42:25

Yup - too cheap - Karo notwithstanding - I think the discount has been hugely overdone by some nervous PI's and lots following in their footsteps.

[stemis] 06/3/2024 15:32:46

It will be interesting to see the interims. Based on production and average basket prices in Q1 and Q2, turnover should be marginally ahead of the comparable period last year, with stronger chrome prices offsetting weaker PGM. Obviously I don't know about costs, however in comparable H1 last year company did EPS of 14p and generated (pre capex & dividends) $96m of cashflow, after a positive $23m movement in working capital.

At current share price that's an annualised P/E of 1.7

[nigelpm] 06/3/2024 15:10:10

Influential Twitter poster back in :

#THS I have bought back some. A 48p share price is just too low giving it a market cap of £144m and last reported net cash of $109m. Chrome prices are still really high c$290/t, shorts seem to be closing on Palladium and Platinum/Rhodium are due a move up. May not do much in the short term but I just can't sit outside at this price

[tigerbythetail] 06/3/2024 13:57:02

This really isn't a case of foolish PI impatience vs. wise management pursuing a long term strategy that will eventually reward patient shareholders.
The Karo (mis)adventure has the potential to go horribly wrong for Tharisa. It could drive the whole company into the ground.
That is why this company trades on a valuation that, on the face of it, seems derisory.
A reminder - just a few short years ago chrome traded at $120/t, not $300/t. If the chrome price drops and PGM prices don't pick up, then Tharisa will be in an unenviable position.

[nakedmolerat] 06/3/2024 13:12:23

depends what your strategy is

wait for growth, upward trend of share price, positive results

or just hold whatever the price because it looks a good buy or is cheap?

[nigelpm] 06/3/2024 11:34:51

100% Stemis. You see it regularly on these boards, twitter and LSE - so much short term impatience and gamblers barely looking in front of their noses.

[stemis] 06/3/2024 10:34:33

Directors usually have a longer time frame than most PI's, who just want to see the share price go up in the short term, take a profit and move on, even if it means liquidating the company. They are also closer to the market than most of us. I don't imagine the board of THS took the decision lightly to invest large amount of cash (42% of which would accrue to them) in Karo. If Karo is worthless, as the share price suggests, then a great chunk of the PGM mining industry is worthless and I find that hard to believe. But in the end we will see...

[whitehunter] 06/3/2024 10:25:30

When Tharisa invest cash in Karo, implicitly 42% of it is technically attributable to the largest shareholders so it is not as if they are bystanders. Though the prospect of a return on invest is harder to judge atm.

[stemis] 06/3/2024 10:16:25

It's also worth bearing in mind that THS management own 42% of the company so they are hardly indifferent to shareholder value.

[stemis] 06/3/2024 10:13:32

Bit of a misrepresentation, Sotolo

What Tharisa said was "I have reported such [comments] to the LSE, particular those referring to Tharisa as being corrupt or insinuating that we are not aware of our regulatory obligations wrt to disclosing information. We have also notified our legal team of these comments."

[tigerbythetail] 06/3/2024 10:08:10

Hi Sotolo!
I don't really know what to say - except I'm sorry that this has turned out like this (at least for now).
The recent share price drop here has shocked me. The Tharisa mine (in South Africa) is still decently profitable, thanks to chrome prices, but the market doesn't value that at all.
I do think platinum prices will eventually recover somewhat, based on industrial demand, but I also think that palladium may have further to fall. Platinum seems to have almost entirely lost its role as a precious metal / store of value. Gold is at all-time highs but platinum hasn't reacted at all.
IMO, the sensible course of action for Tharisa is to stop funding Karo immediately. But I don't think Tharisa's BoD are capable of making such a hard decision. Which means they will get dragged in deeper and deeper. I can't imagine who would lend them money for a project with such terrible economics without a guarantee from Tharisa itself. Indeed, I can't really imagine why anybody would lend them any money at all for Karo.
So here we are. I hope this is the bottom. It really should be, but I don't trust management to make the necessary decisions, so I'll steer clear for now.

[sotolo] 05/3/2024 17:54:55

Well Tiger very prescient of you to sell. In the less than 4 weeks since the price has fallen by a quarter. I sadly held on, despite one huge danger sign, the company threatening its shareholders for posting on lse, really scary and brutal in my opinion, but maybe I am delicate in South African terms. At least it appears one can still post relatively freely here but not of course your post with a word to do with soda water that I cannot repeat despite it is in your post. If the company is that rattled I wonder whether it will raise the debt it needs for Karo given the lowly capitalisation now, you seem to have been prescient and wise. Now Inwish Inhad held on to Centamin and never switched here. Do you think it will recover or do you still not hold much hope for it?

[stemis] 23/2/2024 17:50:09

Here's the last detailed update on Karos

hxxps://www.tharisa.com/pdf/investors/presentation/2022/20221012-tharisa-kmh-marketing-presentation-october-2022-final.pdf

At the time the cash cost was US$1 096/PGM oz (exc royalties & tax). Forecast production 194k oz pa. Company has a 5 year tax holiday from operations. Average PGM basket price in quarter ended 31 December 2023 was $1,344

[stemis] 23/2/2024 08:47:33

Clearly, all haven't 'dumped it' as otherwise it would have no shareholders. Amazingly, the same number of shares are owned now as were a year ago. Every seller has a buyer.

[nakedmolerat] 22/2/2024 23:44:30

the chart is awful, nobody has confidence in karo and money still seems to be thrown at a mine that will be lose making, unless prices return to where they once were

this is why all have dumped it, i have no confidence in the board at all