Tharisa Plc · JSE:THA
Tharisa — H1 FY2016 Earnings Presentation
31 slides from Tharisa's earnings presentation, 2016
Slide 1: H1 FY2016 Interim Results
H1 FY2016 INTERIM RESULTS | PROFITABLE LOW COST CO-PRODUCER – PGMS AND CHROME
Slide 2: Disclaimer
DISCLAIMER This document has been compiled by Tharisa plc (“Tharisa”). While the information contained herein is believed to be accurate, no representation or warranty, express or implied is or will be given by Tharisa or its respective directors, employees or advisors or any other person as to the
Slide 3: Agenda
AGENDA ① Building a global presence ② What you will hear today ③ London listing is an important milestone ④ H1 FY2016 – our achievements ⑤ Our context ⑥ Operational highlights ⑦ Financial highlights ⑧ Outlook 3 J S E : T H A L S E : T H S
Slide 4: Building a Global Presence
BUILDING A GLOBAL PRESENCE Specialty LSE: THS chrome concentrate Specialty chrome concentrate Metallurgical grade HQ chrome concentrate Specialty chrome concentrate Specialty chrome concentrate PGM concentrate TM Specialty chrome concentrate JSE: THA RBDBT J S E : T H A L S E : T H S
Slide 5: Tharisa Mine – Our Cornerstone
THARISA MINE – OUR CORNERSTONE 5 J S E : T H A L S E : T H S
Slide 6: Our Innovate Approach
Back OUR INNOVATE APPROACH J S E : T H A L S E : T H S
Slide 7: Mine to Market
Back MINE TO MARKET THARISA MINE PGM CONCENTRATE IRS supplies PGMs to: PGM off-take Automotive sector agreement with Impala Industrial sector Refinery Services Jewellery sector Investment sector ARXO LOGISTICS ARXO RESOURCES Customers include: Metallurgical grade (76.6%) Stainless steel producers Fe
Slide 8: What You Will Hear Today
WHAT YOU WILL HEAR TODAY Tharisa is … Maturing A mid-tier company mining the world’s single largest chrome resource Approaching steady state of 147.4 kozpa PGMs and 1.3 Mt of chrome concentrates* Listed on JSE and now on LSE Delivering A diversified co-producer of PGMs, metallurgical and spe
Slide 9: London Listing Is an Important Milestone
Primary listing will Market capitalisation LONDON LISTING IS AN IMPORTANT MILESTONE remain on the JSE of ZAR2.4 billion Why London, why now? European domiciled company Large international shareholder base Raising international profile Access to wider pool of investors Improve trading liqui
Slide 10: H1 FY2016 – Our Achievements
PGM PRICES 42% CIF CHROME PRICES ↓27.4% ↓32.1% H1 FY2016 – OUR ACHIEVEMENTS US$686/oz US$106/t (2015: US$945/oz) (2015: US$156/t) PRODUCTION PROFITABILITY LOW COST PGM PRODUCTION REVENUE NET CASHFLOWS FROM ALL IN COST – PGM* (6E) OPERATING ACTIVITIES ↑4.5% ↓30.5% ↑18.2% ↓10.9% 60.0 koz US$86.0m US$1
Slide 11: Our Context – 3 Years
OUR CONTEXT – 3 YEARS PLATINUM CHROME 11 J S E : T H A L S E : T H S
Slide 12: Our Context – 12 Months
CURRENT PGM BASKET PRICE CURRENT CIF 42% CHROME CONCENTRATE PRICE OUR CONTEXT – 12 MONTHS ~US$715/oz ~US$150/t (June 2015: US$854/oz) (June 2015:US$152/t) PLATINUM CHROME AVERAGE SPECIALTY CHROME PRICE (FOB) ~US$122/t (2015: US$153/t) 12 J S E : T H A L S E : T H S
Slide 13: Operational Highlights
OPERATIONAL HIGHLIGHTS
Slide 14: Safety
LTIFR SAFETY 0.30* (2015: 0.07) Per 200 000 man hours FOCUS ON SAFETY INDUSTRY COMPARISON Safety remains the number one priority of management and all employees - we strive for zero harm COMPARATIVE RATE PER MILLION MAN HOURS WORKED Section 54 and 55 instructions were issued by the DMR March 201
Slide 15: Production
PGM PRODUCTION CHROME CONCENTRATE (6E) PRODUCTION PRODUCTION 60.0 koz ↑4.5% 604.4 kt ↑7.3% (2015: 57.4 koz) (2015: 563.3 kt) PGM PRODUCTION (koz) TOTAL CHROME PRODUCTION (kt) SPECIALTY GRADE PRODUCTION (kt) 80.0 700.0 642.0 160 150.2 69.3 584.7 604.4 70.0 600.0 569.4 563.3 140 57.4 60.0 60.0 120 105
Slide 16: Operational Highlights
OPERATIONAL HIGHLIGHTS KEY OPERATIONAL METRICS OPERATIONAL FLEXIBILITY % change H1 FY2016 H1 FY2015 Annualised steady state achieved – mining and PGM production ROM mined Mt 21.1% 2.4 1.9 Change in product mix to react to market PGM rougher feed grade g/t 1.8% 1.68 1.65 Improved recoveries U
Slide 17: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 18: Segmental Analysis
REVENUE OPERATING PROFIT NET PROFIT AFTER TAX SEGMENTAL ANALYSIS US$86.0m ↓30.5% US$10.6m ↓ 12.4% US$3.1m ↓ 36.7% (2015: US$123.7m) (2015: US$12.1m) (2015: US$4.9m) H1 FY2016 H1 FY2015 US$m % change H1 FY2016 H1 FY2015 US$m PGMs Chrome PGMs Chrome Gross profit (7.5%) 21.1 22.8 Gross profit margin 6.
Slide 19: Cost Analysis
PGM UNIT COST OF SALES CHROME UNIT COST OF SALES COST ANALYSIS US$402/oz ↓12.6% US$85/t ↓40.1% (2015: US$460/oz) (2015: US$142/t) UNIT COSTS OPERATING COST ANALYSIS – EX-WORKS H1 FY2016 H1 FY2015 Overheads PGMs Chrome PGMs Chrome 9.2% Sales volume 59.1 koz 481.7 kt 58.4 koz 520.5 kt Diesel Unit cost
Slide 20: Balance Sheet
DEBT TO EBITDA MULTIPLE BALANCE SHEET 3.5 x (FY2015: 2.6 x ) FUNDING CAPITAL US$m H1 FY2016 FY2015 US$m H1 FY2016 FY2015 Total interest bearing debt 51.8 75.6 Capital expenditure 6.4 24.6 Long term 27.8 36.3 Deferred stripping* 3.1 15.2 Short term* 24.0 39.3 3.3 9.4 Debt service reserve account 9.8
Slide 21: Our Value Proposition
OUR VALUE PROPOSITION EV/EBITDA COMPARISON 17.3x 16.1x 13.5x 11.4x 8.7x 7.5x 5.5x Stillwater Northam Royal Bafokeng Amplats Impala Lonmin Tharisa **Source: BMO Capital / Factset 21 J S E : T H A L S E : T H S
Slide 22: Outlook
OUTLOOK
Slide 23: Outlook
OUTLOOK H1 FY2016 production of 60.0 koz of PGMs and 604.4 kt of chrome concentrates PGM full year 2016 forecast of 129.6 koz – Updated steady state production of 147.4 kozpa* Chrome concentrate full year 2016 forecast of 1.25 Mt – Updated steady state production of 1.3 Mtpa* including 300 kt
Slide 24: Strategy
STRATEGY LEADING NATURAL RESOURCES COMPANY PGM, chrome and steel raw materials LEADING NATURAL Large scale, low cost projects that are in or close to production RESOURCES COMPANY PGM, CHROME AND INNOVATION OPTIMISATION INITIATIVES Growth through innovative research Maximise value extraction
Slide 25: Annexures
t a a rl Sq ANNEXuRES
Slide 26: Corporate Overview
CORPORATE OVERVIEW MARKET STATISTICS SUMMARISED CORPORATE STRUCTURE ONE YEAR INFORMATION JSE – THA LSE - THS (10 JUNE 2016) THARISA Short name THARISA(THA) THS (Cyprus) Long name Tharisa plc THARISA PLC ORD Sector Mining (1770) Price ZAR9.60 GBP0.48 High ZAR9.60 GBP0.48 74% 26% BEE SHAREHOLDING Low
Slide 27: Mining MG Chromitite Layers
MINING MG CHROMITITE LAYERS GENERALISED CROSS SECTION SHOWING THE MG CHROMITITE LAYERS AND PLANNED PIT DEPTH MINERAL RESOURCE Bench = 20m MG4A 829.0 Mt at 1.56 g/t (6PGE +Au) and 20.4% Cr₂O₃ OPEN PIT MINERAL RESERVE MG4 Reef dip east: 9-12° 200m MG4(0) 87.8 Mt at 1.44 g/t (5PGE + Au) and Reef di
Slide 28: Updated Competent Persons Report
UPDATED COMPETENT PERSONS REPORT Updated competent persons report summary of findings: – Mineral resources remain at 829.0 Mt containing 1.56 g/t PGMs (6 PGE + Au) and 20.38% Cr2O3 – Mineral reserves of 106.4 Mt containing 1.45 g/t PGMs (5 PGE + Au) and 18.6% Cr2O3 – Steady state production of PGM
Slide 29: PGMs Products and End Uses
PGMS PRODUCTS AND END USES PGM MARKETS PRIMARY USES OF PGMS Ir Largest deposits of PGMs are found in 4.6% South Africa, Zimbabwe, Russia Ru 13.9% Pt Platinum Automotive catalytic converter Jewellery Au Bushveld Complex is the largest 0.2% platinum resource in the world and accounts for 75% of an
Slide 30: Chrome Products and End Uses
CHROME PRODUCTS AND END USES CHROME ORE/CONCENTRATE MARKETS USE OF CHROME ORE/CONCENTRATE Chromite is the mineral extracted from the ore Specialty products 17.5% Chrome ore is mined from primary chromite deposits H1 FY2016 Chrome concentrates are Metallurgical •Cr2O3 – 30% to 45% •Cr2O3 – >46%
Slide 31: Contact Details
CONTACT DETAILS Investor Relations contact: Sherilee Lakmidas D: +27 11 996 3547 M: +27 76 276 2529 slakmidas@tharisa.com www.tharisa.com