Tharisa Plc · JSE:THA
Tharisa — Investor Presentation (January 2020)
34 slides from Tharisa's investor presentation, January 2020
Slide 1: Different by Design
Different by Design January 2020 Engineering the mining company of the future
Slide 2: Sustainable Polymetallic Business Model
SUSTAINABLE POLYMETALLIC BUSINESS MODEL • Discover ‒ Large scale resources ‒ Complimentary opportunities in the resource universe • Develop ‒ Innovative approach to mineral extraction ‒ New processes and technologies to enhance value further • Deliver ‒ Safe production growth in both PGM and chrome
Slide 3: FY2019 Salient Features
FY2019 SALIENT FEATURES EMPLOYEES AND CONTRACTORS TRAINING SPEND INTERNS/GRADUATES & STUDY ASSISTANCE 2 826 US$3.5m 20 & 20 21% female REEF MINED PGM PRODUCTION (5PGE+Au) CHROME CONCENTRATE PRODUCTION 4.63 Mt 139.7 koz 1.29 Mt REVENUE OPERATING PROFIT EBITDA US$342.9 m US$24.2 m US$51.6 m PROFIT BEF
Slide 4: FY2019 in Review
FY2019 IN REVIEW INCREASED 3RD PARTY PRODUCTION increase of 8.7% to 241.1 kt TA I L W I N D S RALLY IN PD, RH AND RU STABLE RECOVERIES PGM recovery at 82.1% (FY2018: 84.1%) Mostly in our control PRICES* Chrome recovery at 62.0% (FY2018: 66.0%) increases of 58.0% - Pd, 102.8% - Rh EBITDA US$51.6 m IN
Slide 5: FY2019 Themes
FY2019 THEMES CO-PRODUCT OPERATIONALLY CASH INVESTING FOR THE CONTINUED DIVIDEND PAYER BENEFITS GENERATIVE FUTURE DISCIPLINED CAPITAL ALLOCATION 5
Slide 6: Revenue
REVENUE • Benefit of co-production as prices diverged REVENUE CONTRIBUTION EX WORKS BASIS (US$m) • Group revenue decreased by 15.6% year on year ‒ Lower overall sales volumes Third party 10.5% Platinum ‒ Decrease in the chrome price received 19.1% • Chrome contributed US$177.9 million • PGM contribu
Slide 7: Gross Profit
GROSS PROFIT • The major factors contributing to the reduced gross margin GROSS PROFIT AND MARGIN were the lower production levels and chrome prices with 140.0 4000.0% the embedded fixed cost component 35.1 120.0 3000.0% 26.7 122.7 24.8 • An increase in the stripping ratio moving 0.7% more waste 100
Slide 8: Cash Flow
CASH FLOW • The Group generated net cash from operations of NET CASH FLOWS FROM OPERATING ACTIVITIES US$69.9 million (FY2018: US$89.8 million) (US$ m) • Taking into account capex, the free cash flow was 100.0 US$26.0 million (FY2018: US$49.3 million) 90.0 89.8 • Cash on hand amounted to US$59.2 mill
Slide 9: Production - Mining
PRODUCTION - MINING • Revised pit layout has been completed MINING ‒ Over 1.7 Mm3 extra in pit material moved (Mtpa) 6.0 15.0 • Total reef tonnes mined for FY2019 at 4.6 Mt down from the previous year’s 4.9 Mt 14.0 5.0 • Stripping ratio of 8.3 m3:m3 5.0 13.0 4.9 4.8 4.6 • Second Caterpillar 6050 fac
Slide 10: PGM Market
PGM MARKET PGMs – METALS FOR THE 2020s • Palladium and rhodium demand to remain strong PGM Pricing US$ due to structural demand changes 6600 ‒ autocatalytic demand from India, China and 5600 4600 Europe as a result of tightening emission 3600 standards 2600 ‒ Growing demand for PGM in electrical veh
Slide 11: Chrome Market
CHROME MARKET GLOBAL PRODUCTION REQUIREMENT FOR STAINLESS PRODUCTION 54 Mtpa STAINLESS GLOBAL STAINLESS STEEL CAGR STEEL +5.0% ADDITIONAL STAINLESS STEEL 13 Mtpa FERROCHROME 13.5 Mtpa 2.7 Mtpa ADDITIONAL FERROCHROME 0.7 Mtpa 35 – 39 Mtpa CHROME 35.1 Mtpa ADDITIONAL CHROME 1.8 Mtpa BALANCE OF GLOBAL
Slide 12: Delivering on Our Growth Strategy
DELIVERING ON OUR GROWTH STRATEGY DISCOVER DEVELOP DELIVER DIVERSIFY • Globally significant, diversified • Innovative approach to viable • FY2020 production targets • Multi asset, multi commodity, low cost operations mineral extraction • Vulcan Plant multi jurisdictional business • Sustainable polym
Slide 13: Appendices
tharisa APPENDICES
Slide 14: Tharisa – Adding Value Beyond Mining
THARISA – ADDING VALUE BEYOND MINING ARXO METALS ARXO RESOURCES ARXO LOGISTICS THARISA PROJECTS Rapid development of new Marketing and sales of Logistics of product from Responsible for identifying processes and technology to own and third party mine to end user and implementing projects enhance val
Slide 15: Located in the Main PGM and Chrome Producing Areas
LOCATED IN THE MAIN PGM AND CHROME PRODUCING AREAS • Mining rights over 5 475 ha • Adjacent to Sibanye Platinum, Lonmin, Impala Platinum, Samancor Chrome • Well serviced by road, rail, power and other services • Neighbouring towns are Brits (45 km) and Rustenburg (35 km) 15
Slide 16: Corporate Structure and Shareholders
CORPORATE STRUCTURE AND SHAREHODLERS Top 20 November 2019 74% Tharisa Minerals (South Africa) 1 Medway Developments Limited 41.34 2 Rance Holdings Ltd. 15.02 3 Fujian Wuhang Stainless Steel Products Co. Ltd. 10.40 4 FIL Investment Advisors (UK) Ltd. 8.28 5 Maaden Invest Ltd. 4.11 100% Arxo Resources
Slide 17: Tharisa's Journey
THARISA’S JOURNEY DISCOVERING DEVELOPING DELIVERING 2004 2006 2008 2009 2011 2012 2013 2014 2016 2017 2018 PROSPECTING PROSPECTING MINING FIRST GENESIS VOYAGER CHALLENGER LISTED ON JSE LISTED ON LSE INCREASED RECORD RIGHTS RIGHTS RIGHTS CHROME PLANT PLANT PLANT DIVIDEND PRODUCTION APPLICATIONS GRANT
Slide 18: Delivering Vision 2020
DELIVERING VISION 2020 GRADE IMPROVEMENT PGM OPTIMISATION 4th STAGE CRUSHING VULCAN PLANT • Opening full mining strike • Improving PGM recoveries • Additional crushing circuit • Fine chrome recovery plant length at Voyager Plant by at Genesis Plant to increase • Proprietary process upgrading current
Slide 19: Operational Performance – Q1 2020 Production
OPERATIONAL PERFORMANCE – Q1 2020 PRODUCTION Q1 2020 PRODUCTION • Reef tonnes mined 1 143.0 kt and tonnes milled 1 247.1 kt PGM Pricing US$ • Stripping ratio of 10.9 m3:m3 6600 • Platinum Group Metals ('PGMs') recovery at 82.2% with 5600 4600 production of 34.4 koz on a 6E basis 3600 • Chrome recove
Slide 20: Costs
COSTS • On a unit cost basis, the reef mining cost per tonne ON MINE CASH COST OF SALES increased by 17.6% from US$21.0/t to US$24.7/t ‒ This cost per reef tonne was incurred on a stripping ratio of 8.3 (m³ waste: m³ reef) Overheads Mining 21.5% ‒ In-pit material of 1.7 Mm3 excluded from stripping r
Slide 21: Industry Position - PGMs
INDUSTRY POSITION - PGMS ▪ Tharisa all in cost per PGM ounce sold – USD892.1/oz on a by product basis for FY2019 ▪ Realised price FY2019 No chrome cash cost curves are available Source: HSBC Equities Research Note October 2019 21
Slide 22: Capex
CAPEX • FY2019 capex spend focused on FY2020 CAPEX BUDGET ‒ stay in business capex (US$m) Tailing storage facility ‒ mining fleet additions to optimise the fleet 2.6 ‒ ongoing projects aimed at improving recoveries of both Land purchases PGMs and chrome concentrates 7.8 Mining • Additions to PPE amo
Slide 23: Balance Sheet
BALANCE SHEET • Total debt amounted to US$71.2 million DEBT PROFILE* ‒ Of this trade finance amounted to US$14.9 million (US$m) • Debt to total equity ratio of 24.7% 60 • Cash and cash equivalent of US$59.2 million 50 • Net debt to total equity ratio of 4.2% • There is continued focus on working cap
Slide 24: Production - PGM
PRODUCTION - PGM • Reduced ROM had a direct effect on PGM volume output PGM PRODUCTION • PGM recoveries down by 2.3% year on year (koz) 160.0 120.0% • Rougher feed grade marginally lower at 1.47 g/t (1.51 g/t) 152.2 • Post year end PGM optimisation completed 140.0 143.6 110.0% 139.7 132.6 120.0 118.
Slide 25: Production - Chrome
PRODUCTION - CHROME • Pit redesign had an effect on stockpile development and CHROME PRODUCTION thus ROM grade fed into the plant (Mt) 1.6 120.0% • Curtailed ROM had a direct effect on chrome production • Year on year production down 10.9% to 1.29 Mt 1.4 1.4 100.0% 1.3 1.3 1.2 1.2 80.0% 1.1 1.0 64.1
Slide 26: Exploration Projects
EXPLORATION PROJECTS DEVELOP Snakes Head DIVERSIFICATION PRODUCT FROM SINGLE ASSET EXPANSION HIGHLY FURTHER Salene GROWTH PROSPECTIVE AREA Hartley Platinum Mine Harare Chrome OPPORTUNITIES Resource of 28.2 Moz (4E) 4E grade of 4.03 gpt Karo Platinum Karo Platinum Ngezi Mine STRONG MINERAL RICH Resou
Slide 27: Zimbabwe Developments
ZIMBABWE DEVELOPMENTS • Tharisa owns 26.8% of Karo Mining Holdings • 238 boreholes completed – 32 400 m drilled • Drilling focused on western boundary of the Great Dyke ‒ average depths of 50 m to 150 m below surface targeted • Special Economic Zone awarded • Resource and reserve statement due Janua
Slide 28: Salene Chrome
SALENE CHROME DEVELOP • Tharisa has an option to acquire majority stake • 78 boreholes completed – 3 000 m drilled • Simple surface mining and gravity separation • Lumpy ore production with potential local offtake • Export options being explored 28
Slide 29: Mining
tharisa MINING
Slide 30: Fleet Capacity
FLEET CAPACITY DRILL BLAST LOAD HAUL • 13 OB drill rigs • Blasting is outsourced • 10 excavators and 2 face • 54 haul trucks shovels • CAT777 for IB/reef • 12 IB/reef drill rigs • Capable of loading +1.8 • CAT785/789 for OB • Capable of drilling +100 Mm3 pm km pm • Capable of hauling +1.7 Mm3 pm Cur
Slide 31: Processing
tharisa PROCESSING
Slide 32: Innovative Approach
INNOVATIVE APPROACH ~~ PRIMARY MILLING CRUSHING FLOTATION reed TAILINGS : SECONDARY . MILLING
Slide 33: Processing
PROCESSING GENESIS PLANT VOYAGER PLANT VULCAN PLANT • Nameplate capacity: 100 ktpm ROM • Nameplate capacity: 300 ktpm ROM • Under construction • Processes reef layers with lower PGM and • Processes reefs with higher PGM and • Nameplate capacity: 340 ktpm ROM higher chromite grades lower chromite gra
Slide 34: Disclaimer
DISCLAIMER These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity. Whilst the information contained herein has been prepared in good faith, neither Tharisa plc (the ‘C