Tharisa Plc · JSE:THA
Tharisa — Investor Presentation (June 2022)
29 slides from Tharisa's investor presentation, June 2022
Slide 1: Unlock the Stock
UNLOCK THE STOCK Investing in turbulent and uncertain times June 2022
Slide 2: Why Now, Why Tharisa
tharisa WHY NOW, WHY THARISA
Slide 3: Corporate Profile
CORPORATE PROFILE (THS:LSE THA:JSE) CAPITAL STRUCTURE DIRECTORS OF THARISA SHAREHOLDER SPREAD − Loucas Christos Pouroulis (Executive Chairman) Issued shares 299.2 million − Phoevos Pouroulis (Chief Executive Officer) 2.01 1.17 Market capitalisation* GBP344.5m • ZAR6.6bn 1.48 − Michael Gifford Jones
Slide 4: Investment Case
INVESTMENT CASE Global economy under pressure: Global conflict Inflationary pressures Supply chain Political and social uncertainty Energy crisis PRICE HAS CHANGED BUT VALUE REMAINS* P/E - 4.0 NAV - 0.7 RELATIVE VALUE ABSOLUTE VALUE DIV YIELD - 4.9% EV/EBITDA - 2.1 SHAREHOLDER VALUE FINA
Slide 5: Our Values
OUR VALUES SAFETY & HEALTH The safety and health of our people is a core value We take responsibility for the effect that our operations may have ENVIRONMENT on the environment We are committed to reducing carbon emissions by 30% by 2030 CLIMATE CHANGE and have a plan in motion to be net carbon neut
Slide 6: Who We Are
854.4 Mt 40.3 Moz 171.1 Mt WHO WE ARE IN MINERAL RESOURCE * IN CONTAINED 6E* IN CONTAINED CR2O3* 1 2 3 4 5 6 INTEGRATED 10 YEAR 20 YEAR R&D PROFITABLE CONSISTENT PGM and chrome operational LOM open pit developing innovative throughout dividend payer co-producer located in track record +40 YEAR end u
Slide 7: From Greenfields to Established Producer
FROM GREENFIELDS TO ESTABLISHED PRODUCER 7
Slide 8: Long Term Production and Pricing
EXCHANGE RATE* SPOT PGM BASKET* SPOT CHROME PRICE* LONG TERM PRODUCTION AND PRICING US$:ZAR 16.11 US$2 401/oz US$295/t PGM PRODUCTION (koz) AND REALISED PRICES (US$/oz) 250 PGM production Realised prices 3500 CONSENSUS ESTIMATES 3000 200 2 854 US$2 401/oz*0 2500 150 2 160 2000 1 704 1 630 1 666 1 66
Slide 9: Strategy
tharisa STRATEGY
Slide 10: Foundations of Sustainability
FOUNDATIONS OF SUSTAINABILITY LONG LIFE MECHANISED MODERN FLEET MAXIMUM RECOVERIES CAPTURING THE VALUE STREAM DISCOVER DEVELOP DELIVER DIVERSIFY OREBODY MINING PROCESSING VALUE 10
Slide 11: Six Pillar Growth Strategy
SIX PILLAR GROWTH STRATEGY SUSTAINABLE GROWTH EXPAND AND ROLL OUT FURTHER OPTIMISING THE BUSINESS SUSTAINABLY EXISTING OPERATIONS • Vulcan Plant • LOM expansion at Tharisa Mine • Salene Chrome • Reduction of waste material due to Vulcan Plant • Karo Platinum • Further beneficiation of chrome product
Slide 12: Our Positive Impact
OUR POSITIVE IMPACT JOB CREATION EDUCATION AND WELLNESS ▪ Creation of 3 000 new jobs (employees and permanent contractors) ▪ AET programs on site for employees and communities ▪ ~700 people from immediate community ▪ 48 learners in 2022 ▪ Employees on full medical aid and provident fund ▪ Math and S
Slide 13: Navigating Challenges
NAVIGATING CHALLENGES TRANSPORT ▪ Transnet challenges have meant shift from rail to road ▪ 75% road vs 75% rail previously ▪ Re-allocation of bulk via Richards Bay and Maputo POWER ▪ Maximum requirement of 25MW of power on site ▪ Stand by capacity to withhold Stage 4 ‘loadshedding’ ▪ Modular plants
Slide 14: Our Competitive Advantages
LOWEST COST OUR COMPETITIVE ADVANTAGES QUARTILE OPEN PIT ‒ Mechanised, shallow open pit ‒ Highly skilled labour force ‒ Close to infrastructure ‒ Low user of Eskom power LONG LIFE ‒ 20 year LOM open pit ‒ Extension of ~40 year underground ‒ Proven ore body FLEXIBLE ‒ Two processing plants PROCESSING
Slide 15: Our Commodities
tharisa OUR COMMODITIES
Slide 16: Sustainable Commodities into the Future
SUSTAINABLE COMMODITIES INTO THE FUTURE Long-term fundamentals of the Hydrogen economy continues Global stainless steel market Active R&D projects have PGM industry remain robust to advance and see continued demand continues and there are advanced underpinning growth driven by continued demand inves
Slide 17: Platinum Group Metals
SPOT PGM BASKET* H1 FY2022 PGM BASKET PLATINUM GROUP METALS US$2 401/oz US$2 592/oz Primary supply growth constraints PGM PRICE CHART Deficits in Rh, Pd to remain, Pt heading towards a deficit Platinum Palladium Rhodium 24 000 ICE remains a major demand driver despite EV development 2 800 22 0
Slide 18: Chrome
SPOT CHROME PRICE* H1 FY2022 MET CHROME CHROME US$295/t US$175/t Chrome prices remain resilient due to growing stainless METALLURGICAL CHROME PRICE (US$/t) 300 steel demand 280 260 South Africa supplies 80% of China’s chrome needs 240 220 China has no chrome resources 200 180 Tharisa supplie
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 20: Financial Review
FINANCIAL REVIEW 4E PGM (US$/oz) AND METALLURGICAL CHROME PRICE (US$/t) Healthy profit margins throughout the cycle 4E PGM Met Chrome Complementary commodity profiles 5400 300 4900 4400 250 3900 3400 200 2900 2400 1900 150 1400 900 100 Nov-17 Jul-18 Mar-19 Nov-19 Jul-20 Mar-21 Nov-21 GROSS PROFI
Slide 21: Unit Costs
UNIT COSTS Overheads 11.7% Labour Units H1 FY2022 H1 FY2021 % change 19.5% Cubes mined Mm3 10.3 8.8 +17.3 H1 FY2022 ON Cost per cube mined* US$/m3 8.7 8.6 +1.2 MINE CASH Consumables COSTS Reef tonnes mined Mt 2.8 2.5 +14.8 3.8% (%) Mining Cost per reef tonne mined US$/t 31.7 30.5 +3.9 31.9% Tonnes m
Slide 22: Financial Review
DIVIDENDS PAID OUT TO DATE FINANCIAL REVIEW US$75m Ongoing investment into operations but still generating free cash Dividend policy of minimum 15% NPAT, with a 40/60 split interim vs final NET CASH FLOW OPERATIONS (US$m) CONSISTENT DIVIDEND PAYER 250.0 US cents %NPAT Dividend policy 10. 00 25 2
Slide 23: Balance Sheet and Capex
BALANCE SHEET AND CAPEX Cash and cash equivalents of US$101.5 m Total debt of US$74.3 m - US$34.3 m of short term trade finance (<90 days) Budgeted capex for FY2022 of US$80.8 m Capex spend skewed towards H1 Revolver Other Term loan US$16.7 m 4% 4% Manufacturing US$0.5 m BUDGETED CAPEX FY202
Slide 24: Karo Platinum
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Slide 25: Phase One - Key Highlights
PHASE ONE - KEY HIGHLIGHTS WORLD CLASS PGM ASSET LOM OPEN PIT ANNUAL PGM PRODUCTION (6E) Tier 1 20 years 150 koz + 0.10% Cu + 0.12% Ni MINING LEASE FOR LOM OPEN PIT, SCALABLE, LOW COST, PHASED DEVELOPMENT TIMELINE Licenced Low risk 24 months AVAILABLE IN COUNTRY TECHNOLOGY AND PROCESS PROJECT DEVELO
Slide 26: Locality & Geology
LOCALITY & GEOLOGY PHASED DEVELOPMENT PROPERTY LOCATION EXECUTION OF PHASE 1 - NEXT PHASES WILL SCALE TO EXTRACT ADDITIONAL ▪ Located in the Mashonaland West district of Zimbabwe, RESOURCES approximately 80 km southwest of Harare and 35 km southeast of Chegutu ▪ The project area covers 23 903 ha loc
Slide 27: Karo + Tharisa Combination
KARO + THARISA COMBINATION LOM OPEN PIT FROM EACH OPERATION KARO THARISA COMPARISON UNIT PHASE 1* OPEN PIT** 20 years Open pit LOM years 20 20 Reserve# Mt 35.5 94.2 REEF MINED PER ANNUM Reserve grade# 4E g/t 2.18 1.08 +7 Mt Reserve ounces 4E Moz 2.5 3.3 PGM production^ kozpa 150 200 PGMS PRODUCED PE
Slide 28: Innovating the Resources Company of the Future
INNOVATING THE RESOURCES COMPANY OF THE FUTURE DECADE PERFORMANCE = PRODUCTION AND CASH REAL PORTFOLIO OPTIONALITY Established co-producer Diversification on track OPERATIONAL KARO PLATINUM Flexibility & resilience Double PGM output BALANCED BUSINESS MODEL CORE OF THARISA’S ETHOS Growth & capital re
Slide 29: 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