Slide 1: Annual Results for the year ended 30 September 2018
A N N UA L RES ULT S for the year ended 30 September 2018 Discover Develop Deliver
Slide 2: Highlights
RECORD PRODUCTION YEAR FREE CASH FLOW PER SHARE HIGHLIGHTS FOR ALL PGM AND CHROME PRODUCTS US$ 18.9 cents (FY2017: US$ 19.0 cents) REEF MINED PGM PRODUCTION CHROME CONCENTRATE PRODUCTION (5PGE+Au) 4.9 Mt 152.2 koz 1.4 Mt down 3.0% up 6.0% up 8.8% (2017: 5.0 Mt) (2017: 143.6 koz) (2017: 1.3 Mt) REVEN
Slide 3: FY2018 in Review
FY2018 IN REVIEW IMPROVED PRODUCTION INCREASED CHROME SALES increase of 6.0% in PGM production to 152.2 koz increase of 24.8% in total chrome sales increase of 8.8% in chrome concentrate production to 1.4 Mt RALLY IN PD, RH AND RU IMPROVED RECOVERIES TA I L W I N D S ¾ in our control PRICES* increas
Slide 4: Safety and Sustainability
TWO YEAR WAGE AGREEMENT BEST IN CLASS AWARD AT 4 000 FATALITY FREE SAFETY AND SUSTAINABILITY CONCLUDED WITH AMCU MINESAFE PRODUCTION SHIFTS 0.18 3 2 LTIFR YEARS FATALITY FREE SAFETY AWARDS LOST TIME INJURY FREQUENCY RATE 4 21 82 ENGINEERING LEARNERSHIPS INTERNS AND GRADUATES ADULT EDUCATION AND TRAI
Slide 5: Production
P RO D U C T I O N Discover Develop Deliver
Slide 6: Production - Mining
LOM OPEN PIT STRIPPING RATIO PRODUCTION - MINING 9.5 m3:m3 (FY2017: 9.6 m3:m3) REEF MINED [Mtpa] ▪ Reef mined decreased by 3.0% from FY2017 7 15 ▪ Stripping ratio improved year on year 6 10.6 10.7 ▪ Comprehensive maintenance programme implemented to return 10 fleet to OEM standards, which reduced av
Slide 7: Production - PGM
PRODUCTION - PGM PGM PRODUCTION [kozpa] 200 90.0% ▪ PGM production increased by 6.0% to 152.2 koz 84.1% 180 79.7% 80.0% ▪ PGM rougher feed grade of 1.51 g/t (FY2017: 1.56 g/t) 160 69.9% 70.0% ▪ Improved recoveries by 5.5% to 84.1%, against a target of 80.0% 65.8% 152.2 140 ▪ Phase 1 of PGM optimisat
Slide 8: Production - Chrome
PRODUCTION - CHROME CHROME PRODUCTION [Mtpa] 2.0 70.0% ▪ Chrome concentrate production increased by 8.8% to 1.4 Mt 66.0% 64.1% 1.8 62.7% 60.0% ▪ Cr2O3 ROM grade of 18.2% (FY2017: 17.8%) 59.4% 58.0% 1.6 ▪ Chrome recoveries improved by 3.0% to 66.0%, above the target of 1.4 50.0% 65.0% 1.4 1.3 1.2 ▪ S
Slide 9: Sales
PGM BASKET PRICE 42% CHROME CIF PRICE SPECIALTY GRADE PRODUCTION SALES US$923/oz (FY2017: US$786/oz) ↑17.4% US$186/t (FY2017: US$200/t) ↓7.0% 367.7 kt (FY2017: 323.1 kt) ↑13.8% PGM CONCENTRATE SALES CHROME CONCENTRATE SALES [kozpa] [Mtpa] 200 1200 2 250 1103 180 1.8 1000 200 200 923 186 160 885 1.6
Slide 10: Product and Revenue Diversification
REVENUE PRODUCT AND REVENUE DIVERSIFICATION US$406.3 m (FY2017: US$349.4 m) ↑16.3% REVENUE CONTRIBUTION EX WORKS BASIS ▪ Leverage business model through trusted supply chain Platinum 17.6% ▪ Direct relationships with customers and end users Third party 11.4% ▪ Diversified customers for our products
Slide 11: Markets
MARKETS Discover Develop Deliver
Slide 12: PGM Market
PGM MARKET PGM DEMAND AND SUPPLY MARKET PRICES FY2018 FY2019 3 000 ▪ Vital industrial metals largely used in automotive catalytic converters, other drivers of demand include jewellery, industrial 2 500 uses and investment 2 000 ▪ Platinum demand is expected to marginally weaken in 2018, while 1 500
Slide 13: Chrome Market
CHROME MARKET DEMAND AND SUPPLY MARKET PRICES AVERAGE MONTHLY FY2018 FY2019 ▪ Demand for metallurgical grade chrome concentrate is mainly 250 4 000 driven by its use in the manufacture of stainless steel 3 500 200 ▪ China is wholly dependent on imports of chrome ores 3 000 ▪ Spot chrome prices trade
Slide 14: Financial Review
FINANCIAL REVIEW Discover Develop Deliver
Slide 15: FY2018 Themes
FY2018 THEMES HEALTHY MARGINS WELL STRUCTURED STRONG CASHFLOW DISCIPLINED CAPITAL DIVIDEND PAYER BALANCE SHEET GENERATION ALLOCATION 15
Slide 16: Revenue
REVENUE GROUP REVENUE [US$ million] 500 ▪ Higher sales volumes for both PGM and chrome concentrates 450 ▪ Increase in specialty grade chrome concentrate sales +US$50/t 400 premium on an equivalent CIF basis 406.3 350 ▪ PGM basket price increased to US$923/oz 349.4 300 ▪ Third party agency and tradin
Slide 17: Gross Profit
GROSS PROFIT GROSS PROFIT [US$ million] 175 40.0% FY2018 FY2017 155 35.1% 35.0% Agency and Agency and Segmental analysis PGMs Chrome trading PGMs Chrome trading 135 30.0% Revenue 117.4 250.4 38.5 90.9 252.9 5.6 Gross profit 29.2 75.7 3.6 36.2 86.2 0.3 122.7 115 26.7% 24.8% 25.0% Gross profit margin
Slide 18: Costs
COSTS CONSOLIDATED CASH COST PER TONNE MILLED [US$/t milled] 54.6 50.4 50.4 100.0% ▪ Consolidated cash cost per tonne milled including logistics 95.0% 50.0 16.4 45.5 90.0% 85.0% increased by 10.8% from FY2017 12.7 40.3 12.9 80.0% 75.0% 40.0 8.4 10.6 70.0% 65.0% ▪ Mining inflationary cost pressures:
Slide 19: Profitability
NET PROFIT BEFORE TAX NET PROFIT AFTER TAX PROFITABILITY US$65.0 m (FY2017: US$91.0 m) US$51.0 m (FY2017: US$67.7 m) EBITDA HEPS AND DIVIDENDS [US$ million] [US$ cent] 150.0 40.0% 30 25% 130.0 33.1% 20.5% 20% 25 19.2% 30.0% 16.3% 25.1% 15% 15% 15% 115.6 110.0 20 22 20.0% 101.9 19.6% 10% 90.0 10% 19
Slide 20: Balance Sheet
BALANCE SHEET US$ millions FY2018 ▪ Refinanced senior debt facility Total interest bearing debt 77.4 ▪ Redeemed B Class preference shares Long term 27.3 Short term 50.1 ▪ Term loan and normal corporate facilities Cash and cash equivalents 66.8 ▪ OEM financing facilities Debt to total equity ratio 25
Slide 21: Investments
PURCHASE OF MINING FLEET DEPRECIATION INVESTMENTS US$29.9 m US$29.9 m CAPITAL ▪ Investments: ‒ Karo Mining Holdings 26.8% investment of US$4.5 million – equity accounted and commitment for exploration programme of US$8.0 million ‒ Salene Chrome 90% option – accounted for as “other financial asset”;
Slide 22: Cash Flows
CASH FLOWS NET CASH FLOWS FROM OPERATING ACTIVITIES [US$ million] US$ millions FY2018 120.0 22.0 Cash flow from operating activities 89.8 19.0 18.9 Investing cash flows (60.4) 100.0 17.0 Additions to PPE (40.5) Net business combination (21.8) 89.8 80.0 12.0 Financing cash flows (11.5) 75.7 Net incre
Slide 23: Strategy Implementation
ST R AT EGY I M P L E M E N TAT I O N Discover Develop Deliver
Slide 24: Exploration Projects
EXPLORATION PROJECTS DISCOVER 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 Estimated 96 Moz (4E) 4E grade of 3.2 gpt Pl
Slide 25: Development Permits Awarded
DEVELOPMENT PERMITS AWARDED 25
Slide 26: Vision 2020
VISION 2020 DEVELOP 2020 TA R G E T ROM of 5.6 Mtpa PGMs of 200 kozpa Chrome concentrates of 2.0 Mtpa FY2019 GUIDANCE ROM of 5.2 Mtpa PGMs of 160 kozpa Chrome concentrates of 1.5 Mtpa FY2018 ACTUAL ROM of 4.9 Mtpa PGMs of 152.2 kozpa Chrome concentrates of 1.4 Mtpa
Slide 27: Delivering Vision 2020
DELIVERING VISION 2020 DELIVER GRADE IMPROVEMENT PGM OPTIMISATION FOURTH STAGE CRUSHING VULCAN PLANT Opening full mining strike Improving PGM recoveries Additional crushing circuit Fine chrome recovery length at Voyager Plant by at Genesis Plant to plant Maintain correct multi- upgrading c
Slide 28: Research and Development
RESEARCH AND DEVELOPMENT DEVELOP ▪ Successfully increasing the metal recoveries at the Genesis and Voyager Plants through continuous improvement ▪ The development of the Challenger Plant to recover specialty grade chrome concentrates ▪ Commissioning of 1 MW PGM DC smelter and first production of PGM
Slide 29: Delivering on Our Strategy
DELIVERING ON OUR STRATEGY DELIVER LEVERAGING LEADING NATURAL OPTIMISATION INNOVATION EXISTING CAPITAL DISCIPLINE RESOURCES GROUP INITIATIVES PLATFORMS Globally significant, Innovative research and Maximise value Marketing, sales and Annual dividend policy of diversified low cost development feeding
Slide 30: Questions
QUESTIONS tharisa
Slide 31: 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