Tharisa Plc · JSE:THA
Tharisa — Investor Presentation (July 2016)
31 slides from Tharisa's investor presentation, July 2016
Slide 1: Profitable Low Cost Co-Producer – PGMs and Chrome
PROFITABLE LOW COST CO-PRODUCER – PGMS AND CHROME JUNE/JULY 2016
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: Corporate Overview
CORPORATE OVERVIEW MARKET STATISTICS SUMMARISED CORPORATE STRUCTURE ONE YEAR INFORMATION LSE JSE STANDARD LISTING (23 JUNE 2016) PRIMARY LISTING MAIN BOARD THARISA (Cyprus) Short name THA THS Sector Mining Mining Price ZAR11.50 GBP0.495 High ZAR11.50 GBP0.515 26% 74% BEE SHAREHOLDING Low ZAR4.00 GBP
Slide 4: Management Team
MANAGEMENT TEAM EXECUTIVE MANAGEMENT Over 50 years of experience in Over 15 years of experience in Over 18 years of investment Over 8 years of mining mining company exploration, project management in the mining banking experience in corporate management experience at the project management,
Slide 5: 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$95 million investment by Secured project finance energy PGM flotation circuit Tharisa Minerals FEB 2008 Fujian Wu
Slide 6: Building a Global Presence
BUILDING A GLOBAL PRESENCE THARISA IS THE ONLY JSE AND LSE LISTED PGM AND CHROME CONCENTRATE CO-PRODUCER WITH AN INTEGRATED MARKETING, SALES AND Specialty LOGISTICS PLATFORM chrome concentrate LSE: THS Specialty chrome concentrate Metallurgical grade HQ chrome concentrate Specialty chrome concentrat
Slide 7: 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
Slide 8: Location of Tharisa Mine
LOCATION OF THARISA MINE LOCATED IN THE MAIN PGM AND CHROME PRODUCING AREA IN SOUTH AFRICA Mining rights over 5 475 ha Adjacent to Anglo Platinum, Lonmin, Impala Platinum, Eastern Platinum Well serviced by road, rail, power and other services Neighbouring towns are Brits (45 km) and Rustenbu
Slide 9: Our Innovate Approach
OUR INNOVATE APPROACH 9 J S E : T H A L S E : T H S
Slide 10: 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 11: Chrome Products and End Uses
CHROME PRODUCTS AND END USES CHROME ORE/CONCENTRATE MARKETS USE OF CHROME ORE/CONCENTRATE Specialty products 17.5% South Africa has 72% of the (FY2015: 10.1%) worlds chrome resources China is wholly dependent on H1 FY2016 imports of chrome ore/alloy •Cr2O3 – 30% to •Cr2O3 – >46% •Cr2O3 – 45% to
Slide 12: Mine to Market
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 Ferroch
Slide 13: Market Context – 12 Months
CURRENT PGM BASKET PRICE CURRENT CIF 42% CHROME CONCENTRATE PRICE MARKET 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$153/t) 13 J S E : T H A L S E : T H S
Slide 14: Financial Context
FINANCIAL CONTEXT GROUP REVENUE AND GROSS PROFIT MARGIN NET CASH FLOWS FROM OPERATIONS EBITDA US$ 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
Slide 15: Financial Context: Funding and Capital Expenditure
FINANCIAL CONTEXT FUNDING CAPITAL EXPENDITURE* US$ millions US$ millions JSE listing Project finance 47.9 123.0 24.6 Pre listing capital 24.3 24.3 480.9 189 342.50 245.0 Seed capital 40.7 39.6 65.0 Opening FY2011 FY2012 FY2013 FY2014 FY2015 Total FY2009 FY2011 FY2012 FY2014 Total balance * Includes
Slide 16: H1 FY2016 Interim Results
H1 FY2016 INTERIM RESULTS
Slide 17: 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 – PER PT (6E) OPERATING ACTIVITIES OUNCE ↑4.5% ↓30.5% ↑18.2% ↓26.8% 60.0 koz US$86
Slide 18: Operational Highlights
OPERATIONAL HIGHLIGHTS
Slide 19: 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 20: 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) 129.3 koz 1.25 Mt 256.0 kt 80.0 700.0 642.0 160 150.2 69.3 584.7 604.4 70.0 600.0 569.4 563.3
Slide 21: 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 22: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 23: 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 24: 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$136 Diesel 14.5% CONSOLIDAT
Slide 25: Balance Sheet
DEBT TO EBITDA MULTIPLE BALANCE SHEET 1.8 x (FY2015: 2.6 x ) FUNDING CAPITAL US$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
Slide 26: 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 16.1x EBITDA margin 17.1% 13.7% 13.5x 11.4x 8.7x Operating margin 21.2% 12.6% 7.5x 5.5x Price/free cash flow per share* 7.8
Slide 27: Outlook
OUTLOOK
Slide 28: London Listing Is an Important Milestone
Market capitalisation Primary listing will LONDON LISTING IS AN IMPORTANT MILESTONE remain on the JSE of ZAR2.9 billion or GBP126.7 million ONE MONTH PERFORMANCE WHY LONDON, WHY NOW? Large international shareholder base Raising international profile %change Access to wider pool of investors
Slide 29: 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 30: Strategy
STRATEGY GROWTH OPTIMISATION ACCRETIVE From SIB Parameters LEADING NATURAL – Spiral replacement programme – Open pit, large scale RESOURCES COMPANY complete by end FY2016 – Quick to market approach – High energy flotation at Genesis Plant – ROI of 25% complete by end FY2017 – Location/geographic
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