Tharisa Plc · JSE:THA
Tharisa — H1 2019 Earnings Presentation
26 slides from Tharisa's earnings presentation, March 2019
Slide 1: Interim Results for the six months ended 31 March 2019
IN TERIM RES U LT S for the six months ended 31 March 2019 Discover Develop Deliver
Slide 2: Salient Features: Mining and Processing
EPS Strong Q2 performance SALIENT FEATURES mining and processing US$ 4 cents (HY2018: US$ 10 cents) REEF MINED PGM PRODUCTION (5PGE+Au) CHROME CONCENTRATE PRODUCTION 2.22 Mt 67.6 koz 614.1 kt down 9.3% down 12.2% down 16.2% (HY2018: 2.45 Mt) (HY2018: 77.0 koz) (HY2018: 732.5 kt) REVENUE OPERATING PR
Slide 3: Safety and Sustainability
SAFETY AND SUSTAINABILITY 0.24 3+ LTIFR YEARS FATALITY FREE LOST TIME INJURY FREQUENCY RATE AS AT 31 MARCH 2019 64 23 69 ENGINEERING LEARNERSHIPS INTERNS AND GRADUATES ADULT EDUCATION AND TRAINING LEARNERS 3
Slide 4: Production
P RO D U C T I O N Discover Develop Deliver
Slide 5: Tharisa Mine Pit Optimisation
ADDITIONAL MATERIAL MOVED THARISA MINE PIT OPTIMISATION 1.3 Mm3 ▪ East Pit widened and extended to optimise logistics ▪ Improved access to East Pit from north side with more regular backfill now possible on south side as pit advances north ▪ Longer benches and better drilling, blasting and hauling c
Slide 6: Production - Mining
LOM OPEN PIT STRIPPING RATIO PRODUCTION - MINING 9.5 m3:m3 REEF MINED ▪ 2.2 Mt of ore was mined at an average rougher feed grade of 1.49 [Mtpa] g/t PGMs on a 5PGE+Au basis and 18.2% chrome 7 15 ▪ Focused on access to full mining strike length; maintaining correct multi-reef layer profile to ensure s
Slide 7: Fleet Capacity
FLEET CAPACITY DRILL BLAST LOAD HAUL 13 OB drill rigs Blasting is outsourced 10 excavators 54 haul trucks 12 IB/reef drill rigs 1 CAT 6050 face CAT 777 for IB/reef Capable of drilling shovel CAT 785/789 for OB +100 km pm Capable of loading Capable of hauling +1.8 Mm3 pm +1.7 Mm
Slide 8: Production - PGM
Q2 PGM RECOVERY OF PRODUCTION - PGM 85.5% PGM PRODUCTION ▪ Unprecedented stage 4 load shedding in March 2019 introduced [kozpa] instability into processing plants ‒ Measures implemented to mitigate risk of further load shedding and 200 100.0% the impact on production with installed diesel generator
Slide 9: Production - Chrome
PRODUCTION - CHROME CHROME PRODUCTION [ktpa] ▪ Chrome concentrate production decreased by 16.2% to 614.1 kt 2000 100.0% (HY2018: 732.5 kt) 1800 59.4% 62.7% 64.1% 66.0% 60.8% ▪ Cr2O3 ROM grade of 18.2% (HY2018: 18.1%) 58.0% 50.0% 1600 ▪ Chrome recoveries of 60.8% (HY2018: 65.9%) 21.7% 24.3% 25.4% 24.
Slide 10: Financial Review
FINANCIAL REVIEW Discover Develop Deliver
Slide 11: HY2019 Themes
HY2019 THEMES CO-PRODUCTION SUPPORTS HEALTHY CASHFLOW INVESTING IN THE DIVIDEND PAYER MARGINS GENERATION FUTURE 11
Slide 12: Revenue
PGM BASKET PRICE 42% CHROME CIF PRICE REVENUE US$1 017/oz ↑ 11.9% (HY2018: US$909/oz) US$163/t (HY2018 : US$193/t) ↓ 15.5% GROUP REVENUE [US$ million] ▪ Sales PGMs 12.0% lower from 76.1 koz to 67.0 koz 450 400 ▪ Sales of metallurgical grade chrome 16.6% lower from 552.7 kt to 207.1 350 461.2 kt 174.
Slide 13: Gross Profit
GROSS PROFIT GROSS PROFIT ▪ Notwithstanding lower PGM and chrome volumes produced and [US$ million] sold gross profit margin of 19.3% ▪ PGM segment gross profit margin 20.0% (HY2018: 28.0%), shared 130 100.0% cost allocation 55% ▪ Chrome segment gross profit margin 20.4% (HY2018: 30.1%), 40.3 80.0%
Slide 14: Costs
STRIPPING RATIO DIESEL COST CHROME TRANSPORT COST COSTS 7.1 m3:m3 (HY2018: 8.1 m3:m3) ZAR14.22/l (HY2018: ZAR12.04/l) ↑18.1% US$62.8/t (HY2018: US$60.9/t) ↑ 3.1% Mining costs HY2019 HY2018 OPERATING COST ANALYSIS – Mining cost per cube US$/m3 9.6 7.9 EX WORKS Mining cost per reef tonne US$/t 22.5 20
Slide 15: Profitability
NET PROFIT BEFORE TAX NET PROFIT AFTER TAX PROFITABILITY US$10.2 m (HY2018: US$37.2 m) US$8.2 m (HY2018: US$28.4 m) EBITDA HEPS AND DIVIDENDS [US$ million] [US$ cent] 30 120 16% 19% 20% 16% 0 25 34.6 22 50.0% -5 19 100 20 47.8 33.1% -1 30.0% 15 80 25.1% 81.0 19.6% 18.1% 10 -1 6 11.8% 5 10.0% 4 4 60
Slide 16: Cash Flows
FREE CASH FLOW CASH FLOWS US$17.1 m NET CASH FLOWS FROM OPERATING ACTIVITIES [US$ million] 120 25 US$ millions HY2019 Cash flow from operating activities 41.4 20 100 19 18.9 Investing cash flows (27.1) 15 Additions to PPE (24.3) 89.8 80 Financing cash flows (13.5) 75.7 10 Net increase in cash 0.8 60
Slide 17: Investments
DEPRECIATION FLEET REPLACEMENT INVESTMENTS US$13.4 m ACCELERATED CAPITAL ▪ Capex of US$24.3 million, US$20.7 million spent on mining fleet ▪ H2 budgeted capex spend of US$14.0 million on the mining fleet remains at a higher level than the normal sustaining capex IT and systems Other Processing optim
Slide 18: Balance Sheet
TOTAL DEBT TO TOTAL EQUITY BALANCE SHEET 25.0% US$ millions HY2019 US$ denominated debt Total interest bearing debt 74.7 43% Long term 28.2 INTEREST BEARING Short term 46.5 DEBT DENOMINATION Cash and cash equivalents 66.8 Net debt 7.9 ZAR denominated debt Net debt to total equity ratio 2.6% 57% Net
Slide 19: Growth and Optimisation
G ROW T H A N D O PT I M I SAT I O N Discover Develop Deliver
Slide 20: Karo Platinum Progressing Development Opportunity
TIER ONE GROWTH KARO PLATINUM PROGRESSING DEVELOPMENT OPPORTUNITY DISCOVER ▪ 142 boreholes completed – 25 300 m drilled ▪ Drilling focused on western edge of the Great Dyke, average depths of 50 m to 150 m below surface targeted ▪ Over 70 core samples prepared for assaying ▪ Digital terrain mapping
Slide 21: Salene Chrome Sampling Underway
SALENE CHROME SAMPLING UNDERWAY DISCOVER ▪ Development permit from EMA awarded Q4 2018, while EIA report is being finalised for submission. Permit has enabled field work and exploration trenching programme ▪ Digital terrain mapping and high res airborne geophysical survey over mining location have b
Slide 22: Vision 2020
VISION 2020 DEVELOP 2020 A N N U A L I S E D TA R G E T ROM of 5.6 Mtpa PGMs of 200 kozpa Chrome concentrates of 2.0 Mtpa FY2019 GUIDANCE ROM of 5.0 Mtpa PGMs of 150 kozpa Chrome concentrates of 1.4 Mtpa FY2018 ACTUAL ROM of 4.9 Mtpa PGMs of 152.2 kozpa Chrome concentrates of 1.4 Mtpa 22
Slide 23: Delivering Vision 2020
DELIVERING VISION 2020 DELIVER GRADE IMPROVEMENT PGM OPTIMISATION FOURTH STAGE CRUSHING VULCAN PLANT AND FLEET OPTIMISATION Opening full mining strike Improving PGM recoveries Additional crushing circuit Fine chrome recovery length at Voyager Plant by at Genesis Plant to plant Fleet optimi
Slide 24: 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 25: Questions
QUESTIONS tharisa 25
Slide 26: 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