Tharisa (JSE:THA) — Interim Results for the H1 FY2024

0:00 Good morning, and welcome to the THARISA PLC Investor Presentation. Throughout this recorded presentation, investors will be in a listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to CEO, Vivos Prullis. Good morning, sir. Good morning, everyone, and welcome to this half year twenty twenty four interim results held virtually, and we will get straight into it. So we ask the question, why mining? Why now?

0:45 And why THARISA? I think we all acknowledge that if it's not mined, it's grown. If it's not grown, it's mined. And these minerals that we mine are critical to the clean energy transition. There's a recognition that to achieve our decarbonization strategies, we need to extract these critical minerals in a sustainable and responsible manner. So mining is not an option, but the way in which we do it is, and I think that's part of our culture and our ethos. If we look at why now, we can clearly see that the demand for these minerals and metals will more than double by 2060 to meet these targets for climate change.

1:35 There are limited and finite resources, and over and above that, there's been a lack of investment in existing operations and expansion capital, new operations. And we know firsthand that it takes approximately twelve years to develop a mine from discovery into first production. So the lead times are long, the decisions are strategic, and the capital needs to be patient and to withstand the short term volatility and be able to see through the cycles, so as to bring these metals into production as demand is growing. So as THARISA, we are mine builders and operators. We understand the journey of exploration through to development and into production.

2:27 And importantly, the assets that we have under our portfolio are multigenerational and strategic. And while we do witness the volatility in commodity prices, we still have faith in the underlying demand and fundamentals of the commodities that we mine. I think one of the characteristics of our business is that we use technology and innovation to unlock value, and this is one of our key values in our business, but also has been a huge enabler for us to unlock value. To that end, our co product business model actually delivers into physical demand. We supply key strategic stakeholders that are material players within the global economy.

3:15 Both our groups PGMs and chrome are designated as critical minerals and have high economic importance and value. PGMs historically have done a wonderful job of cleaning tailpipe emissions from catalysts and now into electrolyzers and fuel cells. We see a great future in terms of the hydrogen economy, and let's not forget the hybrid drivetrain, which is becoming more of the go to solution as BEV penetration starts to weigh. Chrome is essential in terms of making stainless steel stains. Importantly, both of these commodities that we mine are 95% recyclable. So when we look at the period under review and and not much has changed actually over the last eighteen months when we look at the headwinds and the adversity that we face, operating in Southern Africa and, in particular, in South Africa, electricity and transport constraints are a daily challenge, and pleased to note that our teams navigate this exceptionally well, and the interruption is limited as can be seen from our results. There are global geopolitical complexities. I think the world is in its most volatile state it's been in since most probably World War two and lots of uncertainty.

4:37 This coupled with inflation and high interest rate environment makes it challenging with a volatile commodity price environment. Particularly in in South Africa, we have a high level of crime and corruption, which does impact the normal flow and and normal course of business. We spend a lot of time protecting our assets and our business due to those two factors amongst the others. There is the impact of climate change. We've seen adverse weather patterns, which does impact operations, whether it be logistics, freight, bottlenecks in the pipeline. And then we have fiscal and regulatory uncertainty, and this is not an African phenomenon. We've seen policy changes globally that do impact trade flows, whether it be duties imposed or restrictions on imports or exports.

5:30 And then I think key is actually the to develop mining projects. This is limited, and it is difficult to attract this long patient capital that's required to develop projects. On the flip side, the tailwinds, in terms of our business, really, the chrome product business model has been, again, proven and tested and is resilient. And this really supported by a very strong buoyant chrome market underpinned by a very strong stainless steel growth and demand in China and Indonesia. What's interesting to us is that these baskets of goods have been countercyclical for the most part, and the one has balanced the other out. And we've seen that with a 40% drop in our PGM basket price and a and a 16 odd percent increase in our chrome price and the spot prices trading well above the six month period, which Michael will touch on later.

6:29 In terms of the macro fundamentals, we've seen a strong momentum behind hybrid drive trends. I mentioned that earlier, as we see rollback on BEV, expansion, especially from European automakers. We've seen big tariffs imposed on Chinese imports into The US, and this really bodes well for a market share that was historically lost to electric vehicles, which is now being clawed back in terms of these hybrid vehicles, which are electric drivetrains that have diesel or petrol generators or engines to either charge or drive the drivetrain. And this is really starting to gain momentum. And coupled with this, we see some green shoots and investment in the hydrogen economy. As mentioned, the stainless steel outlook is extremely positive in China and trending at almost excess capacity and consumption.

7:24 This is supported by primary supply constraints, particularly in South Africa. We do have logistics constraints. And with the pressures of the PGM industry, we see potentially UG2 mine production being curtailed, and this has a direct impact on carbon byproduct that is produced. And then all of this really this sort of weaker PGM environment has seen capital investments suspended and new projects deferred in terms of future growth. We do benefit from a weaker South African rand as an offset to inflationary pressure. But all in all, I think we proved the resilience of our business model.

8:10 I think a milestone that we celebrated earlier six weeks ago or so was us being listed on the JSC for ten years. And and while it's something that, I suppose, happens in the normal course, it gave us an opportunity to reflect on the journey, and and we're extremely pleased with the progress and the maturity of our business and how we've developed into a sustainable, profitable business over over the last decade. So if I just touch on the vital numbers, revenue, almost $370,000,000, up 10.1% year from the comparable period of the half last year, and this really on the back of those strong chrome prices and increased volume of chrome production.

9:00 This generating almost flat EBITDA of $79,600,000, slightly down 2%, generating an impact of $38,800,000. This down some 29% from the prior period, and Michael will unpack this later. I think pleasingly is net cash from operating activities at $86,200,000, and this with a very big capital expenditure profile of a $114,100,000, which includes our investment in Cara Platinum of some $63,100,000. We ended the period with cash and cash equivalents of a $198,500,000,

9:46 and we generated earnings per share of 12.8 US cents. We're very pleased to have announced earlier this year our share repurchase program of some US $5,000,000, which is equivalent to a 1.7¢ per share reinvestment in our business. This with our interim dividend declaration of 1.5 US cents generates a combined net profit after tax distribution of some 24.5%. So, again, managing that capital discipline, returning value to shareholders, and taking on board the commentary and advice from our stakeholders in terms of supporting the value of our underlying share.

10:36 In terms of the commodities, we've just come out of platinum week in London. And for the first time in a while, we're seeing some positivity around the deficits, particularly around platinum, rhodium, ruthenium, and iridium. Palladium is a bit of a mixed story with potential oversupply in years to come, but depending on the battery electric vehicle uptake and the uptake of hybrid hybrid vehicles, we may see a more balanced environment. But nonetheless, all analysts showing and declaring deficits in all all of the major and minor metals for this year and going into the future potentially expanding deficits for platinum.

11:26 I think what's important is auto sales, internal combustion engine cells are looking positive and are increasing. This supported by increasing emission standards of tier four and Euro seven, which as we know from history means that there are more loadings in terms of the auto catalytic converters. Another point of interest is that hybrid solutions require more loading than conventional internal combustion engines, mainly because of the cold starting and stopping of those engines. And then we look to the future for multi decade PGM demand for the hydrogen economy. And while we're seeing momentum behind it, it still hasn't gained traction that we believe it will and certainly does provide a zero emissions solution to a decarbonization strategy.

12:20 So these metals are critical. They are unique, and they're essential and in multi applications across a wide range of industries. And we spent a lot of time talking about development and new applications. So PGMs are here to stay, and demand will be brought out of these new applications. You can see our PGM basket price dropped considerably over the last three quarters. We started to see some improvements if we compare our basket price today of $1,400, just shy of a $100 above our six month average. Moving on to chrome. Chrome is really unsubstitutable in its application in making stainless steel stainless.

13:13 As most of you are aware, China, the largest stainless steel producer, has no chrome resources of their own. They are mostly dependent or 80% dependent on South Africa for its chrome requirements. To this end, our mind, Theresa, supplies 10% of China and Indonesia's chrome demand. The Indonesian fabrication is Chinese owned, so it is housed within the same grouping. So a real key critical supplier into this growing stainless steel market. What's important to note is that we monitor port inventories in China and really look at the balance of supply and demand. And to this end, we see current levels at around 2.3 to 2,400,000 tons being only five weeks supply into the domestic ferrochrome and stainless steel market in China. And these are relatively tight levels if you consider any disruption to logistics and or supply chain issues.

14:17 And so we see a very balanced market and potentially a market growing into deficits. Today, the current spot price is well over $300, sitting around $315 per ton. That's well up on the average of $288 per ton for the first six months. And, really, this is driven by a number of factors. One, the heat pumps that are being installed, which are energy and more carbon friendly than than conventional heat heat storage and and cooling systems as well as rebar, stainless steel rebar, rust proof rebar. These are big green shoots of demand and industrial demand that are supporting a very strong stainless steel market driven by China, but

15:11 also we're seeing India starting to consume larger amounts of stainless steel. So on the whole for the next decade, we still see very strong chrome demand. And with South Africa posting 80% of the world's resources, I think we're perfectly located to take advantage of this increase in demand. Just touching on our strategy before I hand over to Michael. Our ethos and our purpose statement is really to enrich lives through innovating the resources company of the future. And how do we do that? We look at the six pillars of expanding and optimizing our existing businesses on a sustainable basis, using innovation to unlock value, looking at diversification, whether it be application of our products, geographic, or broader commodity mix, and ultimately becoming an investment of choice in our sector and leading into the ultimate objective of enriching lives for all stakeholders.

16:13 When we look at our geographic footprint, you can see we've grown. We are situated in multi jurisdictions. Our primary assets being multigenerational mineral assets enabled by technology and innovation in South Africa,

16:32 in the Southwestern part of the bushfelt bloom, and on the Great Dike in Zimbabwe. And we have this pit to port strategy, which enables us to be front facing with our customers, particularly in our chrome product deliveries. We also have spent a lot of time on technology and beneficiation, and we'll unpack that later on.

16:57 When we look at our key asset, which is the THARISA mine and THARISA minerals, we look at unlocking value through flexibility. Very pleased to report that our safety record is an industry leading record at point zero five incidents per 200,000 man hours worked. We still strive to achieve a zero harm environment. In the six month period under review, we mined 2,100,000 tons, slightly down point 8% from the prior period. But importantly, we milled at nameplate capacity at 2,800,000 tons, slightly up from the prior period. Our PGM production was down 7.7% mainly due to the blend and the type of the ore that we mixed and processed being more oxidized, and that resulted in us producing 71,100 ounces.

17:53 I think pleasingly and a focus area in light of the buoyant chrome market is our almost 10% increase in chrome production at 865,600 tons and a real focus there on our chrome production. We are importantly accelerating our underground studies in the West Pit, and, really, this is what we see as an expansion or sustainable investment in our business and to ensure the multigenerational access to these key reef horizons that we do mine. So we will be sharing more news on that front as we progress. Moving north now to the Great Dike. Again, this is a key strategic asset, long term perspective and view that we take looking through this current cycle and current lower pricing environment and investing into the future.

18:53 Again, a pleasing lost time injury frequency rate of point one one,

18:59 over two hundred thousand man hours worked. As you're aware, we've slowed down the construction, and we've matched it to smaller funding packages. But it continues steadily. And in parallel with that, we are conducting value engineering and running parallel processes to unlock more value through optimization. And taking that culture and ethos from the THARISA mine that iteratively, over a decade, we've invested and improved in processing technology to capture more value from every cube that we mine. So when you look at the current impact of the market and the fiscal regime provisions that we're finalizing, these are both having an impact on the delivery of the timeline.

19:47 So once we have certainty in terms of those fiscal provisions as well as more positive

19:56 market conditions and funding concluded, we are then in a position to accelerate and and continue to develop the project to first or enroll. We've spent a $110,500,000 to date on the project, and that's since inception. And as you're aware, THARISA has committed $70,000,000 of its final equity contribution, and the balance of the funding will come from third parties and be reinfenced to the project. So touching on our innovation and our culture and ethos of innovation, we have multiple initiatives. We have our beneficiation site where we produce PGM alloys on a commercial basis, and we have then coupled that with a unique patented PGM refining process, which we'll be commercializing later on this year. This is unique and novel and is very cost effective by comparison and gives us opportunity ultimately to refine our own metal and market our own PGMs, which currently we supply through concentrate agreements to existing refiners in South Africa.

21:07 We have our development center, which is a laboratory, which is running conjunction with the university where we do lab scale and desktop test work before we move them into the beneficiation sites, either the the pyrometallurgical site or the renewable energy center, which is really focused on storage solutions and utilizing renewable energies and technologies that we have identified and developed. One of which is Redox One, a wholly owned subsidiary, which was officially launched at the Africa Energy in Daba in 2024. And to remind the audience, this is a long duration energy storage system using Redox Flow technology, which is an iron chromium solution, which is produced from the concentrates that we mine and gives us a very strong cost advantage. This is a grid scale megawatt to gigawatt storage solution and really looks to storing renewable energy or

22:10 peak shaving of energy solutions, so managing peak and non peak energy flows and storing that energy. We are busy commercializing that with our demonstration units being installed and running on our own electrolytes. Again, a patented process. We see huge potential and huge value for shareholders in this wholly owned subsidiary and a very accelerated timeline to delivery with demonstration scale units being deployed early next year across across the globe and and really proving the viability and scalability of this technology. So with that, we talk about our strategy of mining megawatts and utilizing the technologies and the minerals that we have to look at the circularity and the circular economy, creating that decarbonization from the metals that we mine.

23:06 And we've touched on this and the various applications of those minerals and metals, and we see this as a key focus area in terms of our ultimate objective of having an underlying access to critical resources and then unlocking value through the technologies and the products that we mine. Without further ado, I'd like to hand over to Michael to touch on the important parts of the interim results, the financial update. Thank you, Fiyos, and good morning and thank you for joining us this morning for our interim results presentation.

23:43 I think we look at this last six months, our financial results have really been characterized by the financial resilience of THARISA through its co product business model. As a co product user both Patent Group Metals and chrome concentrates and benefiting from our large open pit mine, we have generated net cash flow from operations of $86,200,000 This has allowed us to continue investing throughout the cycle and particularly in technology and downstream beneficiation investment, which is progressing well towards commercialization. We continue to maintain our capital discipline and with a share repurchase program of $5,000,000 in place and in addition to that we have declared an interim dividend of $0.15 per share.

24:31 If we start looking at our overall revenue and again, it's a multi commodity revenue stream. Our revenue for the six months, 369,100,000, up 10.1% year on year. When you look at our revenue on an FCA basis, which is effectively ex mine gate, chrome, the single largest contributor at 63.2% of our revenue, and that's on the back of metallurgical grade chrome sales of 801,008 tons and an average metallurgical grade price of $2.00 $8 per ton. If we look at the composition of that in more detail, metallurgical grades approximately 84% of overall production, specialty grades, which are the higher value add foundry and chemical grade products comprising some 16%.

25:19 Notwithstanding the PGM environment that we have been trading in terms of its pricing, PGMs are still a significant contributor to our overall revenue at 26%. Given some of the numbers behind that, PGM sales were 70,600 ounces and average PGM basket price was $13.44 dollars per ounce and that's down just over 39% on the comparable period. The major constitute components of our PGM revenue platinum at just over 38% and rhodium still a significant contributor and while less than 10% of our overall pill spreads contributing just under 32% to our PGM revenue. I think the next table really depicts, I think, what's happened over the last six months quite clearly in terms of looking at the EBITDA waterfall.

26:10 So we started off with our half year 2023 EBITDA and can quite clearly see the impact of the reduced PGM volumes and reduced PGM prices on the EBITDA. This has however been more than offset by increases in the chrome volume production as well as the increase of some 17% odd in the chrome prices. We have continued throughout this period to purchase third party run of mine ore. This is just strategic decision to ensure that we maintain optimal throughput through the mills. The other item perhaps is to touch on is the selling expenses. This had a gain, a negative impact on our overall EBITDA. But the background to that is in fact that on a per unit basis, there was a reduction of some 1.4% per ton sold associated with the chrome sales and is based on the increase in the volumes, resulting in overall EBITDA of 79,600,000 I'd like to spend a little time just analyzing our unit costs. There are some significant moves in the costs.

27:18 Our cubes mined up 19.2% at 8,700,000 cubes. The cost per cube mined, a reduction of some 2.8% at $10.6 per cube and that's really as we absorb the higher fixed cost components against the increased production volumes and notwithstanding some of the inflationary pressures, particularly for example on the explosive side. Reef tons mined comparable to the prior period of 2,100,000 tons for the six month period and the cost per reef ton mined increasing by 17% to $44.1 per ton. If we look at some of the reasons for the increase in the cost per ton mine, as I mentioned earlier, inflationary pressures on items like the explosives, longer haul distances to the waste drop down, and we recently appointed a mining contractor to remove additional waste, and that cost is included in that cost per reef ton mine. So the deferred stripping included in that cost, which is capitalized for future years benefits, $31,500,000 and in the prior period it was $8,700,000 and therefore an increase in the overall cost per reef ton mined.

28:32 Tons milled very comparable to the prior period 2,800,000 tons. On mine cash cost per ton milled increasing by 17.8% to $56.8 per ton. And again, in addition to the other factors mentioned, the strategic ore purchases have been included in the calculation of the cost per tonne milled. If one looks at the graph on the right, which analyzes out the online cash costs, you can see the impact of the ore purchases at some 29% of our overall costs. We're increasing carbon and logistics and freight costs down marginally at 1.4% to $81.3 a tonne. The treated mine does operate in a weaker currency environment with its revenues denominated in dollars and its cost base largely rand driven, and we benefited from a weakening of the rand of some 6.3% averaging R18.8 to the dollar.

29:32 We do account as a co product producer, now we produce both platinum group metals and chrome concentrates. However, if we were to turn around and say, let's analyze it on a by product basis, you'll see the ordering cost per platinum ounce sold increasing to $754.6 per ounce. Let's put that in context. That is the all in sustaining cost. That's after our capital spend, and I'll touch on that later, of 114,000,000. It's after the additional stripping and the run of mine ore purchases, so it is after all those capital costs. If we then move on just to gross profits. Gross profit for the period recorded $81,400,000 and still a very pleasing 22.1% gross profit margin notwithstanding the PGM environment which we're operating or the inflationary pressures that the business faced.

30:27 We continue to invest in the future of the company. We spent $114,100,000 in capital spend in six month period. Including this $114,000,000 is $63,100,000 that was spent on Platinum and the development of that particular project and 31,500,000 on deferred stripping. Just looking forward to the year as a whole, our budgeted capital spend is $79,100,000 excluding Cora Platinum and excluding the deferred stripping. Just touching on Cora Platinum itself, we've looked at the plans for the coming six months. The budgeted spend is $38,000,000, and we are on track in terms of our budgetary spend for that project. And the Cora Platinum total capital project cost, just to remind parties, is $391,000,000 and we also provisioned an extra 10% because of the extended project development schedule.

31:25 Our balance sheet remains strong. We have $198,500,000 in cash and cash equivalents and again notwithstanding the environment which we're operating in, strong cash flow generation with cash flows from operations of 86,200,000 and net cash of $86,300,000 I'd like to just draw your attention to the graph on the top right. We have really broken down our free cash flow to give some context to how we're funding our operations. So the net cash from operations, 86,200,000. Our investment in sustaining CapEx and others in our existing operations, some $51,000,000 So free cash flow from our sustaining operations, a positive $35,200,000 for the six month period.

32:12 We invested heavily in KARA Platinum, 63,100,000 over this period, which gives us a negative free cash flow for the year of twenty seven point nine. Now if we take that in context, it is a world class asset which we're busy developing. It has significant capital costs, and it will be funded from third party debt going forward in addition to our $70,000,000 equity contribution that is still due for that particular project. Total debt, 112,300,000. Short term portion, just under $50,000,000 At the end of our last financial year, we drew down on an $80,000,000 term loan facility to use the minerals level. We had agreed to an accelerated debt repayment profile.

32:59 So at the end of this financial year, some 40% of that term loan would in fact have been repaid and therefore further strengthening our balance sheet and debt capacity. Some 90% of our debt is US dollar denominated, the rest is rand denominated. And as I mentioned, our balance sheet is extremely robust and healthy. So touching on some of the ratios, the current ratio of two to one. Net debt to EBITDA because of the net cash position, negative 1.1 times, and net debt to equity, negative 11%. So a very strong balance sheet, and we still have undrawn facilities of $80,600,000 and trade finance facilities that we have not accessed in excess of $20,000,000 We are committed to giving returns to shareholders.

33:47 Our policy is to distribute at least 15% of consolidated net profit after tax on an annual basis. Typically at the half year point, we do the calculation and apply a factor of about 40% for the full year to take into account potential changes over the next six months. And it's very pleasing that we are distributing a dividend of 1.5¢ per share. In addition to this, we have the share repurchase program of $5,000,000 and if you did that on a per share basis, that's equivalent to 1.7¢ per share. The program itself has not quite achieved what we expected over this period. We've acquired just under a 193,000 shares. And the factors behind that, Dreidel, we're in a closed period, and therefore, there was a limit on the ability to purchase or acquire shares and also driven by the increase in the share price and the formulaic approach to what you are permitted to repurchase.

34:45 Following the end of that closed period today, we expect to see much more active trading in that share repurchase program. I think a very pleasing number on this chart is accumulative distributions to shareholders over the last nine years of which we have been paying out dividends. Please note, pay consistently every single year in terms of the cycles and through the cycles, and that figure amounts to $100,600,000 That gives a very brief overview of the financial results for the six months. I'd like to hand back to Phepos. Thank you. Thanks, Michael. So when we look at our guidance for the full year, we still remain on track to achieve our stated guidance of 145,000 to 155,000 PGM ounces.

35:31 This will require a slight improvement in the second half, which is in process and in plan. In terms of chrome concentrates, we maintain our guidance of 1.7 to 1,800,000 tonnes and on track to achieve those volumes. So when we look at the value proposition in our investment case, firstly, we have to recognize the coproduction of these critical metals in PGM and chrome concentrates and the sustainable demand and supply of these commodities being challenged in in some respects, but with multigenerational shallower assets, we're able to supply into the future.

36:18 When Cara comes online, we will double our PGM output and be one of the top five, six producers of PGMs in Southern Africa, which certainly will give us a good market presence and market share. I think the fact that we have mechanized mines, we have multi pit tabular ore bodies gives us operational flexibility. And we've seen this over time where we're able to shift and move from one area to another or adapt our our strip ratios and mining methodologies to suit the environment and adapt accordingly. I think key to any strategy is the diversification and beneficiation towards the energy transition. And I think we've proven that through the innovative approaches that we've taken, whether it be Redox one providing a critical solution that the that the planet needs to store vast renewable energy that is being generated in unpredictable periods of time subject to nature, be it irradiation or wind, so that that can be stored on that grid scale basis. And I and I think that really presents a huge opportunity into the future as well as our downstream opportunities in both chrome and PGMs, which we've touched on lightly.

37:48 I think also our integrated marketing and sales and logistics platform provide the ability for us to deliver access and engage with end users, and it's something that we believe is scalable over time as we grow our business. And what I end in a sort of non sequential manner in on capital discipline. I think this is really important because we are owners of this business, and we respect the fact that we need to invest in our existing businesses. We need to provide growth as well as return value to shareholders. And I think we've proven over the last decade that we have done that, responsibly and in a measured fashion.

38:37 So when we summarize this, we see THARISA as an end to end critical metals and energy solution provider innovating the resources company of the future, and that's really what drives us. And when we look back and reflect, we've been on operations for fifteen years. We've been cash generative for ten years, unprofitable for nine years. We've returned just over a $100,000,000 to shareholders in that nine year period, and we've invested approximately $609,000,000 in our business. So with that, I'd like to thank you all for your attention and hand over now to the moderator for the q and a session. Thank you. Fevers, Michael, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

39:38 As you can see, we have received a number of questions throughout today's presentation. And, Ilya, if if I could ask you to please read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Certainly. The first question is address the macro questions, and Phoebus addressed to you our outlook on commodity prices and demand trends for the second half of twenty twenty four. And let me highlight another question here around, can you take us through the chrome market where stock levels are above ground and where the stainless steel cycle is and why prices remain stronger for longer? Know you addressed it briefly initially, but maybe some more detail on the outlook for both those commodities. Sure. Thanks, Sudha. I think let's touch on the PGMs first. So we've seen a nice move in platinum prices, some 14% over the last four weeks, trading above the thousand dollar mark.

40:33 We see continued support for pricing of platinum, rhodium, iridium, and ruthenium at current levels. Palladium has been on a downward trajectory and traded below the thousand dollar mark. We believe there is some upside potential for palladium in the short term, and that's really in terms of the million arms short position that's in the market that needs to be covered. So I think we'll see support for palladium in in the next six months. So we see stable more stable PGM basket pricing with the potential for some appreciation in the the next six months. And beyond that, we certainly are more optimistic, particularly around platinum going into the future.

41:28 Stainless steel is a very interesting demand driver for the consumption of ferrochrome and in turn, chrome concentrates. And what we've seen is that stainless steel production in China is is at high levels. Demand is there. And as I mentioned earlier, it's driven primarily by a number of sectors. So you have the traditional late cycle domestic white goods as we refer to them, which really is a byproduct of urbanization and and growth in China, whether it's your washing machines, your microwaves, air conditioners. What we've seen now as a as a boost to stainless steel production are heat pumps, which are energy efficient units and and in many places being legislated to be installed. So that's been a big driver of stainless steel. The other big driver, which is not very spoken about, is ferritic rebar, which is a typically, rebar was either galvanized or a carbon steel product.

42:35 But because of the rust resistance of rebar, we're starting to see it being utilized in in major construction and and development industries, and India has moved quite dramatically towards stainless steel rebar. So we're seeing demand that was not there historically. Secondly, we're starting to see stainless steel replacing other steels and other metals like aluminum in many respects as well as galvanized steel. So the outlook for the next decade is extremely positive in terms of these new markets that have been opened up primarily because of China's dominance and capacity and growth and cost effective production of of, let's call it, the more ferritic stainless steels, which are higher chrome content as well as the, which are the nickel bearing stainless steels. If we look at port stocks, as mentioned, around 2.3, 2,400,000 tons and declining gradually, this is only a five week supply in to China. These are chrome ore stocks we're talking about. There is a second inventory that is not publicly available, and that is ferrochrome stocks, which are extremely low in China.

43:55 So that bodes well for a very tight market and for prices above the $300 level as as mentioned. Current spot price is $315. So if I were to give an outlook for the next six months, I would see prices in the order of $300 per ton being being maintained really on the back of this demand, inventories, and supply side not being able to meet increased demands. So I hope that answers the questions, Adeer. Yep. Following up on that, there's a question here with regards to given the relatively weak PGM market, is there any appetite to look at discounted PGM acquisitions again for you, Fouad?

44:43 Yes. So certainly, the the big news is the BHP Anglo deal, which is which is really been the topic of discussion that that really occupied a lot of debate around platinum week. So, yes, I I do think there is an opportunity for consolidation in the PGM industry, and we believe this will be net positive because it will rationalize certain operations that are are loss making today and and are potentially supported by big balance sheets and potentially rightsize the supply side of the equation to support higher prices for longer into the future. So we don't rule out consolidation, and we think there will be more more of this happening in the future.

45:35 Thank you. I'm just turning to Cora now. I think there's two questions. One relates more to where do we stand on raising the external debt required for Cora and what progress we've made there. And then with in line with that, you're investing a quarter of revenues in Zimbabwe. How certain are you of that investment that will deliver satisfactory returns given the macro issues and potential major risks for the project? So I think a coral summary on where we stand maybe. Perhaps I can start on the funding side, and thank you for that question. If we have a look at the coral funding, we continue to be progressing with a project finance funding. It is an ECRC backed funding package in the order of 160,000,000 They are in the data room going through the dates of the models, environmental, and software that is progressing well, albeit it'll slow than you would have liked.

46:32 One of the changes there is ECIC is they're going back to organization, and they have a certain process that needs to go through to get those approvals. So we're busy working through that. There's no issues to date raised on that. We're confident of closing that particular fundraising. That does leave a shortfall in the overall funding. We are exploring and are actively exploring a gold and or base metal screen over some of the production going forward. Again, we have approached a number of parties. We are awaiting term sheets from them. There are a good number of parties in the data room at the moment going through that particular process. So we're confident there's been some good interest, notwithstanding jurisdiction, which limits some parties participating in Zimbabwe of getting a favorable outcome on that particular funding stream.

47:24 And then there's another African VFR that has expressed interest in participating in a mass level funding as well. So I think it's progressing well, albeit a lot slower than I think we would have liked in terms of closing out that funding. So the second part of the question was how confident are we in the investment. So I think just returning to our original strategic outlook, we believe that PGMs will be in demand for decades to come. And when we look at the supply side challenges and constraints of deep level mining in South Africa, which is a major supplier of platinum, iridium, and ruthenium, which are the three metals that are identified for the PEM electrolyzer and the hydrogen green hydrogen economy, we see through the current volatility and into future demand where we believe supply will be constrained. And bearing in mind, these minor metals are not sitting in above ground stocks that can be recycled.

48:34 So to access them, you need to mine the the platinum bearing reefs to get to the minor metals. So we have conviction in the underlying demand fundamentals. Timing is or be appear not to be ideal, hence us slowing down, but not stopping the project and ultimately giving us some flexibility of when to accelerate or potentially to slow down further. But it is a contrarian view, and we are investing out of the cycle. And we've seen mining companies buy at the peak and sell at the bottom, which is not the best return in our opinion of of capital. So, yes, while it is contrarian and it is countercyclical and counterintuitive, we do have conviction that when markets turn and when there's a realization that supply is under huge pressure, we should be in a position to deliver into a much more buoyant and stable demand for these underlying PGMs, these critical metals.

49:40 So, yes, we do take a long term strategic view and look through a quarter or six months outlook. Thank you. Michael, a two stage question regarding share buybacks and dividends. Why is it appealing for you to buy back shares despite the low share liquidity? And I think on the back of that, there's a follow-up question here saying that the dividend cut is obviously disappointing. Are we to understand that going forward, any share buyback sums will be deducted from funds available for dividends and counted towards the minimum 15% NPAT? Okay. Thank you for those questions. In terms of the share repurchase program, while there would appear to be limited share liquidity, the minute the share price starts moving, there is a share liquidity that is available in the market and we have seen active trade and improvements in the trade in both London Stock Exchange and Johannesburg Stock Exchange.

50:35 I think the management or the executive firmly believe that the share is significantly undervalued at these prices and therefore a repurchase of the shares will be value accretive to all shareholders, both those receiving the payment of the consideration and those benefiting through the purchase of those shares and holding those shares for future treasury. So I think that should address the share liquidity issue, and we'll continue to trade. I think we'd like to see a more active share repurchase program, as I mentioned before, coming out of the closed period. I would expect that the restrictions or constraints that were applied would open up the market a little bit more. In terms of the dividend policy itself, our dividend policy distributes at least 15% of consolidated profit after tax, and that dividend policy is the policy that we are maintaining unless we tell the market otherwise, we will not be offsetting the share repurchase program against those dividend payments.

51:36 So it is not perceived as one. There are two separate corporate actions that we would undertake. And and just to remind everyone, you did mention it before. This is an interim dividend, and it's not historically a full calculation on the interim impact, and it's historically made whole at the year end. Correct. Thank you. Yeah. Thank you. If you have something for you, maybe a bit closer to home. In December, we spoke at length about the export opportunities for Chrome via Mozambique. Can you update the market on how that's going? There's some comments here around whether there's some problems that we are experiencing there. And then again, with elections next week, some of our competitors have had some community unhappiness around our complexes how are our community relations going, and do we see them as a a as a risk where we where we are?

52:31 Yeah. So I'm pleased to report that our commodities have been flowing consistently and regularly through the multi port strategy that we have, which is Richards Bay, Durban, and Maputo. Approximately 35% of our exports are channeled through Maputo. And in fact, it's an exceptionally well run and efficient port, and the border system has improved immensely through an automated system. We're pleased with the current operations and and the ability for us to move our product. Bearing in mind that 80 to 85% of our product is moved by road and about the the balance is by rail. And we're looking to increase the rail component through discussions with Transnet and so forth.

53:20 In terms of the elections, yes, there's been a lot of activism, a lot of lobbying, and sort of the usual activities around our host communities, municipalities over the last six months, I would say. We have managed, navigated, engaged with these parties. And and as I've mentioned earlier, you know, been very clear that we're protecting our business and our assets and our people, most importantly, against these, call them, fringe activists extremists. But pleased to say we haven't had any disruption to our operations and or material threats to that end, and I think it really bodes. It speaks that our community liaisons and and teams have been doing over the last decade involving that trust relationship.

54:19 And bearing in mind that our host communities are beneficiaries of this mine. There is a community trust, which is a shareholder in in THARISA PLC, so they benefit from these dividends and from the funds as well as the corporate social initiatives that we undertake. And these are continuous regular engagements talking to our philosophy and ethos of upliftment of education development skills skills programs for our community as well as health awareness campaigns and so forth. So so we're we have a lifelong commitment to our doorstep communities, and and we employ approximately 30 to 35% of our labor force. So so there's a real vested interest in a semi skilled skilled workforce for stability.

55:11 So at this stage, no issues. Thank you. Back to the actual mining process, two pronged question for you, Phebez. Can you talk about the division that we have of 2,000,000 tonnes of chrome and 200,000 ounces of PGMs? What the time line would that would be? And the Vulcan recoveries, do you still see them increasing the chrome recoveries on an overall basis to to the status? Yes. So so just we lost you there, but I I got the questions. So in terms of the current recovery in terms of the current recoveries, we are seeing improvements in the Vulcan process and are forecasting and continued improvement to the 72% level going into the end of this financial year and then increasing that to get closer to 2,000,000 tons.

56:16 And in terms of the chrome, I'd like to to say that by the end of next calendar year, I think on a run rate level, we should be achieving near near to that level, which which would be sort of circa 500,000 tons a quarter. And and the the plans and processes are in place for that. In terms of the PGMs, I think it it's clear to see that we prioritize chrome over the PGM recoveries, and and that is a conscious decision, obviously, to improve our production, but also to capture the extra margin in our crop. So we have the question yesterday from one of the analysts. Is it one or the other, or can you achieve both? So if we recall historically when we processed a 100% of our own mined material, we did achieve about 80% recovery of PGMs. And really the big determining factor there is the unweaathered ore or fresh ore as we call it, an oxidized ore that is processed, as well as the consistency of that ore. And those two factors allow us in the current configuration to process and recover above 80% PGMs.

57:29 So depending on the all mix PGMs, I assume or on guided rate, I should say, to follow six months after achieving the the current recoveries. And the reason why I say that is because the blend ratios will stabilize going into calendar year 2026. Thank you. One question for you, Michael. The one relates to chrome sales. And then can you comment on chrome sales during h one f twenty four, which were higher than production? And how do we think about sales going forward? And while you answer that, I will pull up the capital slide because we do have a question here around capital expenditure that's more than doubled the significant spending on Coro. I know we talk about it in the slide. I'll pull it up, and maybe you can take the the question through with the slide up.

58:24 Thank you. I think if we look at the question on the chrome sales, we will always sell into our production. So what we use, we will sell in terms of the overall markets and looking at the size of the chrome resources. So it's not in our nature to stock chrome as such it is sold as produced. If it has been high enough, I'll just check that number now than the previous period, that is simply a timing issue of stocks that were in transit and on production over the prior period that would then have been moved in the current period. So going forward, I would very much expect that as we produce and increase our production, we would see an increase in the actual sales volumes.

59:10 I trust that answers that particular question. And the question for CapEx, Australia? The question for CapEx is the CapEx was obviously higher than what we what we had shown for the year, and that relates to, obviously, some of the CapEx spent on on Coro, but also some of the deferred stripping. So maybe take the listeners through the various stages of CapEx and how much we'll be spending for the second half of the year just to clarify the situation. Okay. Thank you. So correct. There's always a timing mismatch between the first six months, second six months in terms of either sustaining projects under construction or the purchase of large pieces of yellow fleet and kit. So it's not an equal allocation of spend between the first and second half of the year.

1:00:00 So if we look at the year as a whole, the intention to spend $79,100,000 that is our budget excluding core of platinum and excluding the deferred stripping. And core of platinum, we'll be adding on approximately $38,000,000 for that. That is in terms of the current planned spend and the commitments and package we have in place for the rest of this financial year. We have a contractor whose sole purpose at the moment is moving additional waste and that will expose the reefs towards the end of the next financial year. And therefore, we expect to see a continuation of the deferred stripping at the current rate. So for the second six months of this year, I would expect the deferred stripping to amount approximately the same as the current spend of some $30,000,000 for the second six months.

1:00:50 We get the benefit of that at the end of the next financial year when we access those reef horizons and then maintain throughput and production. And in effect, we'll also start reducing reliance on our purchase of third party run of mine ores as well as we access those reefs. Thank you. There's no more questions here. It's just a comment here. Somebody agreeing with our capital allocation policy talking about cutting back the dividend to buy shares while they are undervalued is completely logical and wise. So some support for our capital allocation program. And as we spoke, the dividend, while it is in real terms lower than last year, it is a 15% net profit after tax on an annual basis that we do do that. So with that in mind, there is no further questions here. So if you would like to end off and then we'll we'll end the session.

1:01:47 Yeah. Thank you, Adrian. Thank you everyone for attending. It's been a pleasing set of results over the past six months. The team have shown agility and adaptability in the rather adverse conditions in South Africa, lots of moving parts, lots of challenges, and I really wanna commend them for a stable set of results. I think looking forward, which is important and then something that we always focus on, is we're seeing improvements on all fronts in terms of costs, in terms of output and efficiencies. So looking into the next year ahead, we should start seeing our margins improving, profitability increasing and hopefully supported by a more buoyant PGM basket price. So with that, I'd like to thank you all for your time and wish you well today.

1:02:41 You've lost Michael. Thank you for updating investors today. Can I please ask investors not to close this session? It shall now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of management team of THARISA PLC, we'd like to thank you for attending today's presentation, and good morning to you all.