Tharisa Plc · JSE:THA

Tharisa — Investor Presentation (September 2016)

47 slides from Tharisa's investor presentation, September 2016

  1. Slide 1: Profitable Low Cost Co-Producer – PGMs and Chrome

    PROFITABLE LOW COST CO-PRODUCER – PGMS AND CHROME Analyst Visit - September 2016

  2. 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

  3. Slide 3: Agenda

    AGENDA ① Overview ② Mining ③ Processing ④ Mine to Market ⑤ Financials ⑥ Conclusion 3

  4. Slide 4: Overview

    OVERVIEW tharisa 4

  5. Slide 5: 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 koz PGMs and 1.3 Mt of chrome concentrates  Listed on the JSE and LSE Delivering  A co-producer of PGMs, metallurgical and specialty grade chrom

  6. Slide 6: Who We Are … Meet the Team

    WHO WE ARE …MEET THE TEAM CORPORATE STRUCTURE (1) EXECUTIVE MANAGEMENT Tharisa plc Black Economic Cyprus Empowerment (JSE:THA) (BEE) shareholders (2) (LSE:THS) Loucas Pouroulis Phoevos Pouroulis Michael Jones Michelle Taylor Executive Chairman CEO CFO COO 100% 100% 100% 74% Arxo Tharisa 26% Dinami A

  7. Slide 7: Overview

    OVERVIEW Direct access to the only JSE & Large scale Open pit mine with One of the world’s LSE listed PGM and chrome co- (828 Mt resource) 20 year LOM and largest single chrome producer with an integrated mid-tier PGM and chrome 40 year LOM resources marketing and logistics co-producer underground e

  8. Slide 8: Our Value Chain

    OUR VALUE CHAIN THE FULL VALUE CHAIN IS CAPTURED THROUGH THE CO-EXTRACTION OF PGM AND CHROME AND IN-HOUSE MARKETING, SALES AND LOGISTICS Mining and processing Beneficiation Marketing and sales Logistics Our customers (Tharisa Minerals) (Arxo Metals) (Arxo Resources) (Arxo Logistics) and agreements 7

  9. Slide 9: Mining

    MINING 9

  10. Slide 10: Safety

    SAFETY FOCUS ON SAFETY INDUSTRY TIFR Comparative Rate Per Million Hour worked June • Safety remains the number one priority of management and all 2016 employees – we strive for zero harm 30.00 • Tharisa’s TIFR remains among the lowest in the South African 25.00 PGM and chrome mining industries 20.00

  11. Slide 11: Mine Location

    MINE LOCATION LOCATED IN THE MAIN PGM AND CHROME PRODUCING AREA IN SOUTH AFRICA  Mining rights over 5 475 ha  Adjacent to Anglo Platinum, Aquarius, Impala Platinum, Lonmin and Samancor  Well serviced by road, rail, power and other services  Neighbouring towns are Brits (45 km), Rustenburg (30 km

  12. Slide 12: Mining MG Chromitite Layers

    MINING MG CHROMITITE LAYERS GENERALISED CROSS SECTION SHOWING THE MG CHROMITITE LAYERS AND PLANNED PIT DEPTH Steady Steady state state production productionof 4.8 of MG4A Mtpa ROM 4.8Mtpa average ROMstripping ration of 8.5 (bcm:bcm) over MG4 Average stripping LOM ratio of MG4(0) 8.9 (bcm:bcm) over L

  13. Slide 13: Geology

    GEOLOGY GEOLOGY MG REEF STRATIGRAPHY  The MG reef package is classified into six chromitite layers – MG0, MG1, MG2, MG3, MG4, MG4A  Partings are generally anorthosite, pyroxenite or norite  Reef package varies from 50 m in the west to 74 m in the east (incl. partings)  PGMs are concentrated in t

  14. Slide 14: East Pit Mining

    EAST PIT MINING MG1REEF MG2 REEF Ml MG3 REEF Ml MG4 REEF ©) MG4A REEF EAST MINE tharisa 14

  15. Slide 15: West Pit Mining

    WEST PIT MINING MG1REEF MG2 REEF Ml MG3 REEF Ml MG4 REEF ©) MG4A REEF FAR WEST MINE WEST MINE tharisa 15

  16. Slide 16: Processing

    PROCESSING 16

  17. Slide 17: Processing Overview

    PROCESSING OVERVIEW SPIRALS © =) DISPATCH FLOTATION <—_—_—__—. < 4 a eas J _ \ me ospares TAILINGS _ DISPATCH <— SECONDARY MILLING tharisa

  18. Slide 18: Detailed Process Flow Diagram

    DETAILED PROCESS FLOW DIAGRAM 18

  19. Slide 19: Processing

    PROCESSING KEY FACTS INDEPENDENT PROCESSING PLANTS  Process plants are owned and operated by Tharisa GENESIS PLANT  Each plant operates independently, providing flexibility  Capacity: 100 ktpm ROM and limiting potential process disruptions  Processes reef layers with lower PGM and higher chromit

  20. Slide 20: Tharisa's Concentrate

    THARISA’S CONCENTRATE PRILL SPLIT CHROME GRADES Ru Ir 13.9% 4.6% Specialty grade 250 kt Pt Au 56.1% 0.2% Rh 9.5% Pd 15.7% Metallurgical grade 1Mt FY2016 forecast Chrome production = 1.25 Mt 20

  21. Slide 21: Key Operational Metrics

    KEY OPERATIONAL METRICS 9 months to end 30 H1 H1 Recoveries FY2016 FY2015 FY2015 June 2016 ROM mined Mt 3.6 2.4 1.9 4.8 75 PGM rougher feed grade g/t 1.67 1.68 1.65 1.62 70 Chrome grade % 18.1 18.4 18.7 18.3 65 ROM processed Mt 3.4 2.2 2.2 4.4 60 PGM recovery % 66.2 65.0 63.1 65.8 55 PGM in concentr

  22. Slide 22: Our Production

    OUR PRODUCTION PGM Production (koz) Total Chrome Production (kt) Specialty Grade Production (kt) 160 1400 350 140 1200 300 120 1000 250 100 800 200 80 600 150 60 400 100 40 200 50 20 0 0 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2012 FY2013 FY2014 FY2015

  23. Slide 23: Mine to Market

    MINE TO MARKET 23 tharisa

  24. Slide 24: Mine to Market

    MINE TO MARKET THARISA MINE PGM CONCENTRATE IRS supplies PGMs to: PGM off-take agreement Automotive sector with Impala Refinery Industrial sector Services Jewellery sector Investment sector ARXO LOGISTICS ARXO RESOURCES Metallurgical grade Customers include: Stainless steel producers CHROME CONCENTR

  25. Slide 25: Global Distribution

    GLOBAL DISTRIBUTION Specialty chrome concentrate LSE: THS Specialty chrome concentrate Metallurgical grade HQ chrome concentrate Specialty chrome concentrate Specialty chrome concentrate PGM concentrate Tharisa Minerals Specialty chrome concentrate JSE: THA RBDBT 25

  26. Slide 26: Financials

    FINANCIALS 26

  27. Slide 27: Market Context – 12 Months

    CURRENT 42% CHROME MARKET CONTEXT – 12 MONTHS CONCENTRATE PRICE PLATINUM CHROME Source: Johnson Matthey Source: FerroAlloyNet 27

  28. Slide 28: Financial Context

    FINANCIAL CONTEXT GROUP REVENUE AND GROSS PROFIT MARGIN NET CASH FLOWS FROM OPERATIONS EBITDA US$ millions US$ millions US$ millions 300.0 50.0 40.0 45.0% 41.4 246.8 40.0 29.0 250.0 240.7 30.0 35.0% 30.0 22.4 215.5 20.0 16.5 20.0 13.9 200.0 25.0% 10.0 10.0 17.5% 13.5% 15.0% - 150.0 12.0% - ( 10.0) 5

  29. Slide 29: Financial Context – Funding

    FINANCIAL CONTEXT FUNDING JSE listing US$ millions Project finance 47.9 123.0 Pre listing capital 480.9 245.0 Seed capital 65.0 FY2009 FY2011 FY2012 FY2014 Total 29

  30. Slide 30: Segmental Analysis (H1 2016)

    REVENUE OPERATING PROFIT NET PROFIT AFTER TAX SEGMENTAL ANALYSIS (H1 2016) 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

  31. Slide 31: Cost Analysis

    CONSOLIDATED CASH COST PER TONNE MILLED COST ANALYSIS US$28.7/t ↓16.3% (2015: US$34.3/t) UNIT COSTS* OPERATING COST ANALYSIS – EX-WORKS change H1 FY2016 FY2015 All in cost per Pt ounce (26.8%) US$450 US$615 Overheads 9.2% All in cost per 42% chrome tonne (40.4%) US$81 US$136 Diesel 14.5% CONSOLIDATE

  32. Slide 32: Balance Sheet

    DEBT TO EBITDA MULTIPLE BALANCE SHEET 1.8 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 1

  33. Slide 33: Our Value Proposition

    OUR VALUE PROPOSITION EV/EBITDA COMPARISON* THARISA* PEER AVERAGE** EV/EBITDA 5.5 x 12.3 x Debt/EBITDA 1.8 x 1.9 x Net debt/EBITDA 1.0 x 1.0 x Net debt/Equity 0.2 x 0.2 x 17.3x EBITDA margin 17.1% 13.7% 16.1x 13.5x 11.4x Operating margin 21.2% 12.6% 8.7x 7.5x 5.5x Price/free cash flow per share* 7.8

  34. Slide 34: Conclusion

    CONCLUSION 35

  35. Slide 35: Shareholder Analysis

    SHAREHOLDER ANALYSIS MARKET STATISTICS SHARE PERFORMANCE Listings JSE code: THA LSE code: THS JSE (YTD) Listing date 10 April 2014 8 June 2016 Market cap R3.4 billion GBP188.9 million Ranges R4 – R16 (1Y) 35.00p – 93.00p (since listing) YTD return 168% 110% (since listing) LSE (since listing) Curren

  36. Slide 36: Outlook

    OUTLOOK  Q3 production of 33.5 koz of PGMs and 307.1 kt of chrome concentrates  PGM full year 2016 forecast of 129.6 koz – Steady state production of 147.4 kozpa  Chrome concentrate full year 2016 forecast of 1.25 Mt – Steady state production of 1.3 Mtpa including 300 kt of specialty chrome conce

  37. Slide 37: What Makes Us Different?

    WHAT MAKES US DIFFERENT? Innovative …  We don’t only produce platinum … we are a co-producer of PGM and chrome concentrates  We don’t mine just one mineral reef … we mine 5 MG chromitite reef layers  We don’t have underground mines … we run a large scale open pit operation  We don’t only mine …

  38. Slide 38: Why We Stand Out From Other Investments

    WHY WE STAND OUT FROM OTHER INVESTMENTS UNIQUE MINING APPROACH Mining 5 MG chromitite layers – access to both PGMs and chrome resources LOWEST QUARTILE COST CURVE One of the PGM and chrome industry’s lowest cost producers – with more room to cut costs INNOVATIVE PROCESSING Allows us to process both

  39. Slide 39: Strategy

    STRATEGY LEADING NATURAL RESOURCES COMPANY  PGM, chrome and automotive raw materials  Large scale, low cost projects LEADING NATURAL that are in or close to production RESOURCES COMPANY INNOVATION OPTIMISATION INITIATIVES PGM, CHROME AND  Maximise value extraction  Growth through innovative AUTO

  40. Slide 40: Strategy - Growth

    STRATEGY - GROWTH OPTIMISATION ACCRETIVE  From SIB  Parameters – Spiral replacement programme – Open pit, large scale complete by end FY2016 – Quick to market approach – High energy flotation at Genesis – ROI of 25% Plant complete by end FY2017 – Location/geographic diversification  Ring fenced c

  41. Slide 41: Thank You

    THANK YOU www.tharisa.com

  42. Slide 42: Annexures

    t a a rl SQ ANNEXuRES

  43. Slide 43: History and Milestones

    HISTORY AND MILESTONES THARISA PLC PRIOR TO ACQUISITION OF THARISA MINERALS APR 2008 Consent received to acquire SEP 2014 JAN 2011 FEB 2012 Commissioning of high a 74% shareholding in US$150 million Secured project finance energy PGM flotation circuit Tharisa Minerals FEB 2008 Pre-listing capital ra

  44. Slide 44: Operating Cost Analysis – Ex-Works

    OPERATING COST ANALYSIS – EX-WORKS PGM CASH COST OF SALES (H1 FY2016) CHROME CASH COST OF SALES (H1 FY2016) Overheads 3% Overheads Diesel 15% 16% Diesel 13% Labour 6% Mining * 49% Steelballs 3% Mining * 59% Labour 12% Reagents 6% Steelballs 5% Utilities Utilities 7% 6% * Including contractor labour

  45. Slide 45: PGMs Products and End Uses

    PGMS PRODUCTS AND END USES PGM MARKETS PRIMARY USES OF PGMS GLOBALLY Pt Platinum Automotive catalytic converters Jewellery  Largest deposits of PGMs are found in South Africa, Zimbabwe, Russia  Bushveld Complex is the largest platinum resource in the world Pd Palladium Automotive catalytic convert

  46. Slide 46: Chrome Products and End Uses

    CHROME PRODUCTS AND END USES CHROME ORE/CONCENTRATE MARKETS USE OF CHROME ORE/CONCENTRATE GLOBALLY  Chromite is the mineral extracted from the ore  Chrome ore is mined from primary chromite deposits  Chrome concentrates can be recovered from tailings and secondary ores •Cr2O3 – 30% to •Cr2O3 – >4

  47. Slide 47: 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

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