Tharisa Plc · JSE:THA
Tharisa — FY2015 Earnings Presentation
30 slides from Tharisa's earnings presentation, 2015
Slide 1: FY2015 Annual Results
FY2015 ANNUAL RESULTS | PROFITABLE LOW COST CO-PRODUCER – PGMS AND CHROME
Slide 2: Disclaimer
DISCLAIMER This document has been compiled by Tharisa plc (“Tharisa”). While the information contained herein is believed to be accurate, no representation or warranty, express or implied is or will be given by Tharisa or its respective directors, employees or advisors or any other person as to the
Slide 3: Agenda
AGENDA ① Salient features – FY2015 ② Markets ③ Key differentiators ④ Value chain ⑤ Operational highlights ⑥ Financial highlights ⑦ Outlook 3
Slide 4: Salient Features – FY2015
SALIENT FEATURES – FY2015 PGM PRODUCTION REVENUE NET CASH FLOWS FROM EBITDA (6E) OPERATING ACTIVITIES ↑50.9% ↑2.5% ↑84.8% ↑75.8% 118.0 koz US$246.8m US$41.4m US$29.0m (2014: 78.2 koz) (2014: US$240.7m) (2014: US$22.4m) (2014: US$16.5m) CHROME CONCENTRATE OPERATING PROFIT NET PROFIT AFTER TAX HEADLIN
Slide 5: What You Will Hear Today
WHAT YOU WILL HEAR TODAY Tharisa offers calm amid the storm… Innovative … Co-producer of PGM and chrome concentrates Large scale open pit operation mining all 6 MG chromitite reef layers with processing flexibility Integrated mine-to-market value chain Established … We will be 10 years old i
Slide 6: Mining Industry
MINING INDUSTRY The mining industry looks very different There have been a number of unprecedented structural changes within the mining industry altering the traditional business model The global macroeconomic slowdown, driven mainly by the decline in Chinese demand and consumption of raw mate
Slide 7: Markets
MARKETS PGM CHROME Market seen as over supplied – particularly with SA producers South African UG2 miners are reliant on chrome production to coming back on line post the five-month strike in 2014 cushion impact of depressed platinum price Sentiment is negative and seen worsening post VW emiss
Slide 8: Key Differentiators
KEY DIFFERENTIATORS Strength to strength from 2006, through the financial and energy crises – identification of unique ore body – innovative development of the Genesis and Voyager Plants Mining of all six MG chromitite layers and co-production of PGM and chrome concentrates Open pit operations
Slide 9: Value Chain
VALUE CHAIN THE FULL VALUE CHAIN IS CAPTURED THROUGH THE CO-EXTRACTION OF PGM AND CHROME AND IN-HOUSE MARKETING, SALES AND LOGISTICS Mining and processing Beneficiation Marketing and sales Logistics Our customers (Tharisa Minerals) (Arxo Metals) (Arxo Resources) (Arxo Logistics) 74% 100% 100% 100%
Slide 10: Business Model
BUSINESS MODEL —. GE SPIRALS PRIMARY MILLING . CRUSHING FLOTATION oN (=) ®) g DISPATCH TAILINGS SECONDARY MILLING tharisa 10
Slide 11: Operational Highlights
OPERATIONAL HIGHLIGHTS “Our objective of mining 4.8 Mt for FY2016 is still on track and the newly empowered mining team are performing in accordance with the mine schedule and in some instances exceeding the plan”
Slide 12: Safety
LTIFR SAFETY 0.06 (2014: 0.14) FOCUS ON SAFETY Safety remains the number one priority of management and all employees - we strive for zero harm Regrettably during the reporting period there were two fatalities Section 54 and 55 instructions were issued by the DMR Renewed commitment to safety
Slide 13: Operational Highlights
PGM PRODUCTION CHROME CONCENTRATE (6E) PRODUCTION OPERATIONAL HIGHLIGHTS 118.0 koz ↑50.9% 1.122 Mt ↑3.4% (2014: 78.2 koz) (2014: 1.085 koz) KEY OPERATIONAL METRICS RECORD PGM PRODUCTION % change FY2015 FY2014 PGM plant optimisation with recoveries higher than initially planned yielding a 50.9% imp
Slide 14: Financial Highlights
FINANCIAL HIGHLIGHTS “The Group recorded a substantial turn-around in profitability, with results from operating activities of US$18.4m compared to the prior financial year of US$5.9m”
Slide 15: Income Statement
REVENUE OPERATING PROFIT NET PROFIT AFTER TAX INCOME STATEMENT US$246.8m ↑2.5% US$18.4m ↑211.9% US$6.0m (2014: US$240.7m) (2014: US$5.9m) (2014: loss US$54.9m) INCOME STATEMENT HIGHLIGHTS INCREASED PROFITABILITY US$m % change FY2015 FY2014 Revenue increased marginally partly as a result of signifi
Slide 16: Operating Cost Analysis – Ex-Works
OPERATING COST ANALYSIS – EX-WORKS Overheads 13% Diesel 15% Mining * 52% Labour 7% Steelballs 4% Reagents 3% Utilities * Including contractor labour 6% 16
Slide 17: Operating Segments
PGM GROSS PROFIT CHROME GROSS PROFIT PERCENTAGE PERCENTAGE OPERATING SEGMENTS 23.1% 14.6% (2014: 24.0%) (2014: 9.2%) PGM AND CHROME REVENUE AND COSTS PROFITABLE WITH SIGNIFICANT UPSIDE POTENTIAL FY2015* FY2014 Increased combined gross profit percentage of 17.5% compared to 13.6% in FY2014 US$m PGM
Slide 18: Balance Sheet
BALANCE SHEET CAPITAL AND FUNDING MAJOR CAPITAL INVESTMENT PROGRAMME COMPLETE US$m FY2015 FY2014 Debt to total equity ratio adjusted for fully funded DSRA 36.3% Total capital spend* 403.0 378.4 – Optimisation projects to be funded from operational cash flows and debt, may increase ratio in the sho
Slide 19: Cash Flow
NET CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOW US$41.4m (2014: US$22.4m) ↑84.8% SUMMARISED CASH FLOW STATEMENT OPERATIONALLY CASH GENERATIVE US$m FY2015 FY 2014 Net cash flows before working capital requirements of US$34.2m Cash flow from operating activities 41.4 22.4 – Depreciation of US$10.
Slide 20: Outlook
OUTLOOK “Our plans to reach steady state remains a priority and we have made positive strides towards achieving the recoveries required to attain those production levels”
Slide 21: Outlook
OUTLOOK FY2015 PGM production of 118.0 koz and 1.1 Mt of chrome concentrates PGM recoveries exceeded plan, steady state production of 144 kozpa targeted for FY2016 Chrome concentrate steady state production of 1.5 Mtpa targeted for FY2016 Impact of commodity prices – Chrome pre-pay arrangeme
Slide 22: Strategy
STRATEGY LEADING NATURAL RESOURCES COMPANY PGM, chrome and steel raw materials LEADING NATURAL Large scale, low cost projects that are in or close to production RESOURCES COMPANY PGM, CHROME AND INNOVATION OPTIMISATION INITIATIVES Growth through innovative research Maximise value extraction
Slide 23: Annexures
t H a rl SQ ANNEXuRES
Slide 24: Corporate Overview
CORPORATE OVERVIEW MARKET STATISTICS TOP 10 SHAREHOLDERS** 30 September 2015 Shareholder % Share price ZAR 5.00 Medway Developments Ltd 46.5% Number of shares m 255.9 LCC Pershing 15.8% Market capitalisation ZAR m 1 279.5 Fujian Wuhang Stainless Steel 11.0% Market capitalisation US$ m 91.2 HSBC Priv
Slide 25: Mining All Six MG Chromitite Layers
MINING ALL SIX MG CHROMITITE LAYERS GENERALISED CROSS SECTION SHOWING THE MG CHROMITITE LAYERS Steady state production of 4.8 Mtpa ROM AND PLANNED PIT DEPTH Average strip ratio of 8.5 (bcm:bcm) over Bench = 20m LOM MG4A MG4 Reef dip east: 9-12° 200m MG4(0) Reef dip west: 14-18° MINERAL RESOURCE 53 °
Slide 26: Resource and Reserve Statement
RESOURCE AND RESERVE STATEMENT DECLARATION AS AT 30 SEPTEMBER 2015 MINERAL RESOURCE Tonnes 6E + Au grade 4E grade Cr2O3 grade Contained 4E Contained 6E Contained Cr2O3 Mt g/t g/t % Moz Moz Mt Measured 48.59 1.53 1.14 21.39 1.78 2.39 10.39 Indicated 129.53 1.68 1.24 22.24 5.16 7.00 28.81 Inferred 650
Slide 27: Operating Cost Analysis – Ex-Works
OPERATING COST ANALYSIS – EX-WORKS PGM CASH COST OF SALES CHROME CASH COST OF SALES Overheads 9% Overheads 16% Diesel 16% Diesel 15% Mining * Labour 49% 5% Mining * 55% Steelballs Labour 2% 9% Reagents Steelballs 7% 5% Utilities Utilities 6% 6% * Including contractor labour * Including contractor la
Slide 28: PGMs Products and End Uses
PGMS PRODUCTS AND END USES PGM MARKETS PRIMARY USES OF PGMS Ir Largest deposits of PGMs are found in 4.4% South Africa, Zimbabwe, Russia Ru 13.7% Pt Platinum Automotive catalytic converter Jewellery Au Bushveld Complex is the largest 0.2% platinum resource in the world and accounts for 75% of an
Slide 29: Chrome Products and End Uses
CHROME PRODUCTS AND END USES CHROME ORE/CONCENTRATE MARKETS USE OF CHROME ORE/CONCENTRATE Chromite is the mineral Foundry Chemical extracted from the ore grade grade 0.4% 9.6% Chrome ore is mined from primary chromite deposits Chrome concentrates are Metallurgical •Cr2O3 – 30% to 45% •Cr2O3 –
Slide 30: Contact Details
CONTACT DETAILS Investor Relations contact: Sherilee Lakimdas D: +27 11 996 3547 M: +27 76 276 2529 [email protected] www.tharisa.com