Slide 1: Interim Results for the Six Months Ended 31 March 2018
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 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 – An Overview
THARISA – AN OVERVIEW MID TIER OPEN PIT PGM AND CHROME CONCENTRATE CO-PRODUCER WITH AN INTEGRATED MARKETING, SALES, AND LOGISTICS PLATFORM THARISA MINERALS 74% Tharisa Minerals RESOURCE MINING PROCESSING (South Africa) 867.5 Mt resource 17 year open pit LOM 400 ktpm nameplate capacity 97.0 Mt reserv
Slide 4: H1 FY2018 Highlights
MAIDEN INTERIM DIVIDEND SPECIALTY GRADE CHROME H1 FY2018 HIGHLIGHTS US$ 2 CENTS (18.3% OF NPAT) 173.6 kt ↑ 13.8% (H1 FY2017: 152.5 kt) REEF MINED REEF MILLED PGM PRODUCTION CHROME PRODUCTION ↑ 8.3% ↑ 11.4% ↑ 15.0% 2.45 Mt 2.6 Mt 77.0 koz 732.5 kt (H1 FY2017: 2.45 Mt) (H1 FY2017: 2.4 Mt) (H1 FY2017:
Slide 5: Financial Results
FINANCIAL RESUL tharisa
Slide 6: Highlights
AVERAGE PGM PRICE 42% CHROME PRICE (CIF CHINA) HIGHLIGHTS US$909/oz ↑ 19.6% (HY1 FY2017: US$760 /oz) US$193/t ↓ 30.6% (HY1 FY2017: US$278/t) GROUP REVENUE NET DEBT CASH FLOWS FROM OPERATIONS 100 .0 US$ millions US$ millions US$ millions 400 .0 40.00% 70.0 35.00% 350 .0 35.1% 35.00% 73.2 31.7% 75.0 6
Slide 7: Highlights: EBITDA and HEPS
EBITDA ANALYSTS CONSENSUS HEPS ANALYSTS CONSENSUS HIGHLIGHTS FY2018 US$105.5m FY2018 US$ 16.4 cents EBITDA HEPS US$ millions 140 .0 35.00% 25.0 33.1% US$ cents 20.0 120 .0 30.00% 27.2% 15.0 34.6 25.00% 100 .0 10.0 22.0 80.0 19.6% 20.00% 5.0 10.0 60.0 15.00% 6.0 - 2.0 11.8% 40.0 81.0 10.00% (5 .0) 6.
Slide 8: Summary of Results
CHROME TRANSPORT COSTS DIESEL COSTS EXCHANGE RATE SUMMARY OF RESULTS US$60.9/t ↑ 21.8% (H1 FY2017: US$50.0/t) US$ 0.94 cents/l ↑ 22.1% ↑ 19.6% (H1 FY2017: US$ 0.77 cents/l) ↑ 5.9% ZAR:US$ 12.8↓ 30.6% (H1 FY2017: ZAR:US$ 13.6) INCOME STATEMENT HIGHLIGHTS SEGMENTAL ANALYSIS H1 FY2018 H1 FY2017 US$ mil
Slide 9: Segmental Analysis
PGM SHARED COSTS CHROME SHARED COSTS SEGMENTAL ANALYSIS 45.0% (H1 FY2017: 25.0%) 55.0% (H1 FY2017: 75.0%) PGM REVENUE AND GROSS PROFIT MARGIN CHROME REVENUE AND GROSS PROFIT MARGIN US$ millions US$ millions 100 .0 39.8% 40.00% 300 .0 40.00% 90.0 35.00% 35.00% 250 .0 34.1% 80.0 29.7% 30.00% 30.1% 30.
Slide 10: Balance Sheet
DEBT TO TOTAL EQUITY RATIO CASH AND CASH EQUIVALENTS BALANCE SHEET 25.4% (FY2017: 14.8%) US$59.9m (FY2017: US$49.7m) ↑ 20.5% FUNDING REFINANCING AND CAPITAL FACILITIES 31 March 30 September US$ millions 2018 2017 TERM FACILITY UTILISED Total interest bearing debt 82.6 54.2 Term loan 3 yrs ZAR400m ZA
Slide 11: Cash Flow
FREE CASH FLOW PER SHARE CASH FLOW US$ 13 cents (H1 FY2017: US$ 14 cents) EXTRACTS FROM CASH FLOW STATEMENT INVESTMENTS US$ millions US$ millions H1 FY2018 H1 FY2017 Cash flows from operating activities 52.1 44.2 21.8 Investing cash flow - Additions to PPE (17.7) (8.5) - Business combination (21.8)
Slide 12: Cost Analysis
STRIPPING RATIO AVERAGE EXCHANGE RATE COST ANALYSIS 8.1 m3:m3 (H1 FY2017: 8.4 m3:m3) ZAR:US$12.8 (H1 FY2017:ZAR:US$13.6) UNIT COSTS OPERATING COST ANALYSIS – EX WORKS By product basis H1 FY2018 H1 FY2017 All in sustaining cost per Pt ounce sold US$/oz (13.0) (1 123.4) Mining 21% Utilities All in sus
Slide 13: Operational Results
OPERATIONAL RESULTS 13
Slide 14: Safety
STRIVING FOR SAFETY ZERO HARM SAFETY AND HEALTH A PRIORITY COMPARATIVE LTIFR RATE (March 2018) per million hours worked Safety remains a priority of management and all employees 25.00 – we strive for zero harm 20.00 LTIFR of 0.12 per 200 000 man hours worked Two safety milestones achieved in H
Slide 15: Mining Highlights
MINING HIGHLIGHTS KEY OPERATIONAL METRICS H1 H1 Change FY2018 FY2017 % FY2017 Reef mined kt 2 451.3 2 449.1 0.1 5 025.1 Stripping ratio m3:m3 8.1 8.4 (3.6) 7.5 PGM rougher feed grade g/t 1.52 1.54 (1.3) 1.56 Chrome grade % 18.1 17.5 3.4 17.8 REEF MINED Mtpa 2.52.4 2.6 1.9 2.2 2.4 2.4 2.5 2.0 2.0 FY2
Slide 16: Processing Highlights
PROCESSING HIGHLIGHTS KEY OPERATIONAL METRICS GETTING MORE OUT OF EACH TONNE H1 H1 Change 79.7% 83.2% FY2018 FY2017 % FY2017 65.8% 69.9% ROM processed kt 2 597.4 2 417.7 7.4 4 916.2 PGM recovery % 83.2 78.3 6.3 79.7 PGM in concentrate PGM recoveries koz 77.0 69.1 11.4 143.6 produced FY2015 FY2016 FY
Slide 17: Production Highlights
FY2018 PGM PRODUCTION FY2018 CHROME PRODUCTION PRODUCTION HIGHLIGHTS GUIDANCE 150 koz GUIDANCE 1.4 Mt PGM PRODUCTION kozpa 74.5 72.6 60.6 39.8 69.1 77.0 57.4 60.0 38.4 FY2014 FY2015 FY2016 FY2017 H1 FY2018 CHROME PRODUCTION ktpa 694.4 639.3 515.8 558.9 636.8 732.5 569.4 563.3 604.4 FY2014 FY2015 FY2
Slide 18: Strategy Implementation
STRATEGY IMPLEMENTATION 18
Slide 19: Vision 2020
VISION 2020 Improvements in grade – Owner mining model FY2018 2020 Crusher upgrade – Genesis Plant PGM flotation upgrade – Voyager Plant OPTIMISATION Guidance – NEW PLANTS Targeting – ROM of 5.0 Mtpa ROM of 5.9 Mtpa PGMs of 150 kozpa Vulcan Plant PGMs of 200 kozpa Chrome Chrome concentrates of Apoll
Slide 20: Optimisation Projects
ESTIMATED PAYBACK OPTIMISATION PROJECTS <12 months PGM OPTIMISATION - VOYAGER CRUSHER UPGRADE – GENESIS Additional flash flotation and scavenger with high Upgrade of crushing stage at Genesis Plant energy mechanisms to further improve recovery at the Increase Genesis Plant throughput by 15%, ~
Slide 21: New Plants
NEW PLANTS VULCAN FINE CHROME RECOVERY PLANT APOLLO CHROME AND PGM PLANT Additional recovery of fine chrome from tailings Independent chrome plant with PGM flotation plant streams aimed at production of chrome concentrate from UG1 Proprietary process developed by Tharisa ore and additional MG
Slide 22: Commodity Markets
COMMODITY MARKETS 22
Slide 23: PGM Market
PGM MARKET TRENDS PLATINUM DEMAND AND SUPPLY [koz] ▪ Demand continues to be driven by the auto catalyst, industrial, 9000 8000 jewellery and investment sectors 7000 ▪ Primary supply seen decreasing with growth in secondary 6000 Scrap supply supply offsetting weak mine supply 5000 4000 Mine supply ▪
Slide 24: PGM Basket Prices
AVERAGE PGM BASKET (US$) AVERAGE PGM BASKET (ZAR) PGM BASKET PRICES US$ 909/oz (H1 FY2017: US$760/oz) ZAR11 606/oz (H1 FY2017: ZAR 10 306/oz) Gold 0.2% PGM BASKET METALS PRICES US$/oz Iridium 4.4% Ruthenium 1900 13.5% 1700 Rhodium 1500 9.2% THARISA PRILL 1300 Platinum SPLIT 56.4% 1100 Palladium 16.3
Slide 25: Chrome Market
SPECIALTY CIF EQUIVALENT BASIS CHROME MARKET +US$50/t premium DEMAND AND SUPPLY METALLURGICAL GRADE CHROME PRICE / PORT STOCK kt ▪ Demand for metallurgical grade chrome concentrate is 450 350 US$ 400 predominantly driven by stainless steel, the production of which is 300 350 estimated to grow at bet
Slide 26: Stainless Steel
STAINLESS STEEL DEMAND CORRELATION TO PRODUCE ONE TONNE OF FERROCHROME CHROME ORE FERROCHROME STAINLESS STEEL 2.5 tonnes 1 tonne 4 tonnes TO PRODUCE ONE TONNE OF STAINLESS STEEL STAINLESS CHROME ORE FERROCHROME STEEL 0.6 tonnes 0.25 tonne 1 tonne TYPICAL STAINLESS STEEL COMPOSITION USES OF STAINLESS
Slide 27: Investment Case and Outlook
INVESTMENT CASE AND OUTLOOK 27
Slide 28: Investment Case
INVESTMENT CASE FREE CASH FLOW YIELD EV/EBITDA 24.9x 14.0% 18.7x 8.3% 7.5% 7.3% 6.2% 6.0% 3.5% 7.4x 7.5x (3.3%) 4.8x (6.7%) 3.7x (22.4%) Tharisa Implats Sibanye Amplats Northam Royal Bafokeng (36.0%) EV (US$ mm) $439 $1 729 $4 107 $6 821 $2 525 $763 EBITDA (US$ mm) $118 $364 $553 $911 $135 $31 DIVID
Slide 29: Delivering on Our Strategy
DELIVERING ON OUR STRATEGY LEVERAGING LEADING NATURAL OPTIMISATION INNOVATION MARKETING AND CAPITAL DISCIPLINE RESOURCES GROUP INITIATIVES LOGISTICS PLATFORM Globally significant diversified Innovative research and Maximise value extraction Marketing, sales and logistics Dividend policy of minimum l
Slide 30: Salene Chrome Zimbabwe
SALENE CHROME ZIMBABWE HIGHLY NEW DIVERSIFICATION SPECIAL GRANT – ILLUVIAL CHROME PROSPECTIVE MINERAL RICH FROM SINGLE ASSET AREA GEOGRAPHY 9 500 ha CASH A SCALABLE LARGE SCALE, PREMIUM GENERATIVE AND OPEN PIT LOW COST PRODUCT QUICK TO OPERATION PROJECT POTENTIAL MARKET FOCUS ON VALUE ACCRETIVE ACQU
Slide 31: Transaction Structure and Asset Location
TRANSACTION STRUCTURE AND ASSET LOCATION STRUCTURE ALLOCATED GRANTS ON THE EASTERN SIDE OF THE GREAT DYKE Leto Investments Tharisa plc 10% 90% “The Great Dyke of Zimbabwe contains Royalty payable by Arxo to Leto the world’s largest known platinum group metals and high grade chrome Salene Chrome depo
Slide 32: Premium Product Potential
PREMIUM PRODUCT POTENTIAL PRICE COMPARISON TO SOUTH AFRICAN CONCENTRATE ILLUVIAL CHROME US$/tonne Illuvial chrome is found at the surface, chrome fines generated from seams as a result of weathering Typically allow for production of 48%-50% chrome 450 concentrate 400 350 300 PRODUCT FEATURES 250
Slide 33: Next Steps
NEXT STEPS 1 2 3 US$3.2 million geological Trenching programme Pilot plant to treat illuvial exploration and sampling over special grant areas chrome deposits programme 33
Slide 34: Questions & Answers
QUESTIONS & ANSWERS . 4.
Slide 35: Background
BACKGROUND tharisa
Slide 36: Share Performance
SHARE PERFORMANCE ONE YEAR PERFORMANCE ANALYST TOP SHAREHOLDING % (10 MAY 2018) JSE: THA LSE: THS COVERAGE RECOMMENDATION TARGET (10 MAY 2018) (10 MAY 2018) PRICE Price ZAR20.00 GBP104.00 BMO Outperform GBP160.00 Medway Developments 42.2 High ZAR24.00 GBP143.50 HSBC Buy ZAR27 Rance Holdings 15.5 Low
Slide 37: Sustainability
SUSTAINABILITY TRAINING AND DEVELOPMENT ▪ On mine training centre ▪ Learnerships, adult education and training ▪ Compliance to competency ENVIRONMENT ▪ Subscribe to the Equator Principles ▪ Environmental monitoring plan ▪ Environmental rehabilitation provision THUSANANG WELLNESS PROGRAMME ▪ TB progr
Slide 38: Thank You
THANK YOU 38
Slide 39: Contact
CONTACT Investor Relations contact: Sherilee Lakmidas D: +27 11 996 3547 M: +27 76 276 2529 slakmidas@tharisa.com Financial PR contacts: Buchanan +44(0) 20 7466 5000 tharisa@buchanan.uk.com 39