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Tharisa Minerals
Precious Metals  
10 October 2016

Tharisa Minerals predicts production increase in 2017

Platinum-group metals (PGMs) producer Tharisa Minerals is forecasting an increased FY2017 production guidance following its “excellent” fourth quarter performance.

Tharisa Minerals increased its 2017 production guidance to 147 400 oz of PGMs and 1.3 Mt of chrome concentrates, of which 300 000 t will be specialty grade chrome concentrates, which exceeds the company's FY2016 production guidance.

Tharisa Minerals expects to achieve this as it continues to focus on improving its ROM feed grades and plant recoveries for both PGM and chrome concentrates.

"FY2017 is set to be the year that Tharisa reaches its full potential and delivers exceptional value to all stakeholders,” says Tharisa CEO Phoevos Pouroulis.

This expected growth comes on the back of Tharisa Minerals' announcement of its "excellent" fourth quarter production performance for the period ended 30 September 2016, where it achieved and, in some cases, exceeded its production guidance for FY2016 - an achievement that Pouroulis noted as the company's best ever production quarter.

In the 2016 financial year, the company achieved record milling of 1.27 Mt, PGM production of 39 100 oz and PGM recoveries of 80.6%, demonstrating increased momentum at the end of the financial year.

The dual-listed open pit co-producer has also benefitted from improved commodity prices, particularly higher chrome prices in the fourth quarter of 2016

Increased production

Tharisa’s mining operations performed particularly well in the fourth quarter of FY2016 with 1.243 Mt of reef mined in the quarter.

The focus remains on grade control to improve the plant feed grades particularly for chrome.

With throughput into the plant exceeding nameplate capacity during the quarter, the current ROM stockpile ahead of the processing plants is 165 000 t.

Tharisa aims to maintain a 200 000 t ROM stockpile ahead of processing to ensure optimal reef layer blending and feed grade consistency into the plants.

Tharisa mined 4.837 Mt of reef in FY2016, which is 15.6% higher than the reef mined in FY2015.

Increased throughput

Following an exceptional quarter for Tharisa with tons milled reaching an all-time high of 1.267 Mt; records were also achieved for PGM production at 39 100 oz.

Total chrome concentrate production was 332 200 t, at a recovery rate of 63.5%, which is an 8.2% increase n the third quarter of 2016.

Of that production, 82 100 t was specialty grade material, which typically fetches a pricing premium to metallurgical grade products.

Tharisa’s Voyager Plant chrome processing circuit was modified in the first half of 2016 to facilitate an increase in the production of higher value specialty grade chrome concentrates on the back of the then depressed metallurgical grade chrome concentrate prices.

While metallurgical grade chrome prices have more than doubled since, this product diversification has enabled chrome production to be distributed to more globally diversified markets.

A total of 4.656 Mt of reef was milled in FY2016; representing a 5.8% increase year-on=year and PGM production was 12.4% higher at 132 600 oz at an average recovery rate of 69.9%.

Moreover, chrome production was recorded at 1.244 Mt which was up 10.8% despite marginally lower feed grades. Chrome recovery averaged 62.7% in FY2016.

Optimisation initiatives planned should ensure that Tharisa achieves its targeted recovery of 65% for chrome concentrates.

In addition, the average PGM basket price for the three months ended September 2016 at R11 289/oz showed a US$59/oz improvement on the R11 162/oz price achieved in the quarter ended June 2016.

Metallurgical grade chrome prices have risen approximately 50% over the quarter with an average contracted selling price of $157/t CIF main ports China achieved during the quarter.

This marked improvement on the $105/t CIF contracted selling price concluded in the June 2016 quarter is attributed to the rebuilding of stockpiles by Chinese ferrochrome producers and is driven by stronger stainless steel demand growth in China resulting in increased demand for South African ore.

Contracts for delivery in November 2016 have been concluded at selling prices exceeding $200/t CIF main ports China.

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