Slide 1: Karo Holdings – Analyst Presentation 13 June 2018
KARO HOLDINGS – ANALYST PRESENTATION 13 JUNE 2018
Slide 2: 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
Slide 3: Tharisa's Track Record
FCF PER SHARE* NET DEBT TO TOTAL EQUITY* INTERIM DIVIDEND* THARISA’S TRACK RECORD US$ 13 cents 7.0% US$ 2 cents DISCOVERING DEVELOPING DELIVERING 2004 2006 2008 2009 2011 2012 2013 2014 2016 2017 2018 PROSPECTING MINING FIRST GENESIS VOYAGER CHALLENGER LISTED ON JSE LISTED ON LSE RECORD MAIDEN PROSP
Slide 4: Tharisa's Skill Set
THARISA’S SKILL SET Securing highly prospective resources Robust business Proven ability model with to take projects capabilities from across the value exploration into chain production Experienced management, History of low technical and cost operation operational team Cash generation + dividends +
Slide 5: Acquisition Overview
ACQUISITION OVERVIEW • Tharisa acquired 26.8% of Karo Holdings for US$4.5 million, which will be funded Karo Holdings entered into an from available cash resources Investment Project Framework • Tharisa will provide an US$8 million debt facility to Karo Holdings for initial geological Agreement with
Slide 6: Acquisition Rationale
ACQUISITION RATIONALE • Improvements in the political landscape precipitated a move by Tharisa to explore geographic diversification opportunities in Zimbabwe, renowned for having the world’s largest PGM deposits A SCALABLE LARGE SCALE, outside of South Africa OPEN PIT LOW COST OPERATION PRODUCTION
Slide 7: Karo Corporate Structure
KARO CORPORATE STRUCTURE Tharisa plc* Leto Settlement 26.8% Karo Mining Holdings* 73.2% 100% Karo Zimbabwe Holdings 75% 75% 75% 50% Karo Platinum Karo Refining Karo Power Generation Karo Coal Mines 50% 10% 15% 10% 15% 10% 15% Zimbabwe Zimbabwe Employees and Zimbabwe Employees and Zimbabwe Employees
Slide 8: Karo Platinum Highlights
KARO PLATINUM HIGHLIGHTS NEXT STEPS • The special grant area has potential to host multiple 1 open pit operations with an estimated 9 year open pit Regulatory approvals including an life followed by a natural progression to underground Environmental Impact Assessment mining for a further 40 years 2
Slide 9: Location of Karo Platinum
LOCATION OF KARO PLATINUM Snakes Head Hartley Platinum Mine Harare Resource of 28.2 Moz (4E) 4E grade of 4.03 gpt Karo Platinum Ngezi Mine Resource of 72.6 Moz (4E) 4E grade of 3.34 gpt Unki Mine Resource of 30.5 Moz (4E) 4E grade of 4.19 gpt Mimosa Mine Resource of 13.9 Moz (4E) 4E grade of 3.61 gp
Slide 10: Karo Platinum Phased Development Approach
KARO PLATINUM PHASED DEVELOPMENT APPROACH Indicative timetable Special Grant First open pit Third open pit awarded 2019 2021 2023 2018 2020 2022 Exploration and Second open pit Fourth open pit BFS 10
Slide 11: Value to Tharisa Shareholders
VALUE TO THARISA SHAREHOLDERS 100 89.1 90 80 Value uplift relates only to Tharisa’s effective 13.4% 70 interest in Karo Platinum 60 US$m 50 40 30 25.6 8.0 20 10 4.5 0 Initial purchase price* Minxcon valuation* Exploration spend Indicative valuation at resource* * Based on Minxcon Fair & Reasonable 1
Slide 12: Beyond Karo Platinum
BEYOND KARO PLATINUM KARO REFINING KARO POWER GENERATION KARO COAL MINES • Potential construction of 4 x 300 • Requirement of 250 MW of • Karo Coal Mines will identify a ktpm concentrators secured power supply at steady prospective coal area with the • Smelter complex = 3 x 20 MW state for its own u
Slide 13: Valuation Principles
VALUATION PRINCIPLES Initial investment of US$4.5 million Recognised valuation methodology curve • Resources valuation discounted by 82% Exploration Evaluation Development Production Resources Reserves Valuation approach farm-in at project level • Valuation will be based on appropriate valuation met
Slide 14: Legislative Considerations
LEGISLATIVE CONSIDERATIONS • The mining sector is governed by the Mines and Minerals Act, with the Special Economic Zones (SEZ) draft Mines and Minerals Amendment Bill currently before the Parliament of Zimbabwe • Legislation promulgated, focused on increasing the level of beneficiation of the • Eas
Slide 15: Karo Shared Value
KARO SHARED VALUE Creating an industrial/manufacturing hub Assembly opportunities • Creation of approximately 15 000 direct jobs at steady state production levels and 75 000 indirect Unrelated services and manufacturing opportunities jobs through secondary and tertiary industries Services and • Deve
Slide 16: Delivering on Our Strategy
DELIVERING ON OUR STRATEGY LEVERAGING LEADING NATURAL OPTIMISATION INNOVATION MARKETING AND CAPITAL DISCIPLINE RESOURCES GROUP INITIATIVES LOGISTICS PLATFORM Globally significant Growth through innovative Maximise value extraction Marketing, sales and Dividend policy of 15% of diversified low cost r
Slide 17: Tharisa Growth Potential
THARISA GROWTH POTENTIAL FY2018 2025 VISION 2020 SALENE KARO CHROME HOLDINGS Organic ZIMBABWE growth Potential to projects Illuvial chrome develop open pit multiple open Increase operation pit operations production of and refinery PGMs of Potential to 200 kozpa and produce up to Potential ramp chrom