Tharisa Resources’s shares surged by almost 16% after the platinum group metals (PGM) miner said it delivered a strong annual financial performance driven by record PGM and chrome production.
The shares increased by 15.6% to an intra-day high of R26, later closing the day flat.
In its annual results released yesterday, Tharisa said annual PGM production was up 13.6% at 179.2 ounces compared to the previous year’s 157.8 ounces. Chrome production rose by 51% at 1 582.7 ounces compared to 2021’s 1 506.1 ounces at an average metallurgical grade chrome price of $209 (R3 628) per tonne, up 35.7%.
Average PGM basket prices during this period were at $2 564 an ounce down by almost 17%.
Tharisa set its production guidance for the year at between 175 000 ounces and 185 000 ounces of PGMs, and between 1.75 million and 1.85 million tonnes of chrome concentrates.
The group reported a 22.7% growth in revenues of R10.9 billion, an increase from R8.8bn in the previous year, with record net profit of R2.6bn, a 35.6% increase from the R2bn reported in the previous year.
It also reported a 44% increase in earnings per share to 53.8c for the period under review, and announced a final dividend of $0.04 per share bringing the total dividend $0.07 per share.
Tharisa CEO Phoevos Pouroulis said: “This year has been characterised by an extraordinary performance from the Tharisa Mine, with a strong financial performance driven by record PGM and chrome production, in a highly challenging environment.
“The 2022 financial year has provided not only record production of the metals, which we mine, but also the consolidation of the foundations of the next stage of our growth for the coming decade and beyond,” he said.
Pouroulis said this had materialised through the completion of the world’s largest chrome processing plant, the commencement of the construction of the Karo Platinum Project in Zimbabwe, the significant progress made in the beneficiation strategies across all its businesses and the landmark black economic empowerment transaction, which would deliver value to all its shareholders for years to come.
Pouroulis said the complex operating environment in the major producing region of South Africa, which has had to deal with inflationary pressures and erratic electricity supply, meant that the supply side would remain constrained for some time.
Looking ahead, Pouroulis said the global supply of rhodium and palladium continued to be in a deficit. Platinum might also face a deficit in the next 18 months.
“We’ve seen platinum breakthrough that elusive $1 000/oz mark, and we believe these are the early signs of physical tightness in the market, with China importing well in excess of the forecast demand of the platinum requirements. We believe this is the hedging or taking the position for the very vast investment they’re making in the hydrogen economy,” Pouroulis said.
Anchor Capital investment analyst Seleho Tsatsi said yesterday that the PGM basket price was down 17% year on year. Weakness in rhodium and palladium in particular had contributed to a lower PGM basket price.
“As a smaller PGM miner, however, Tharisa was able to offset some of that weakness through volume growth. Volumes were up 14%.
“This is quite different from the dynamic at some of the major PGM miners where volume growth is much harder to come by, leaving these businesses more dependent on PGM basket price growth to drive earnings forward,” he said.
Tsatsi said going forward, the market would be keenly watching how the PGM basket price performed, if the country does indeed enter a global economic slowdown or recession.
BUSINESS REPORT