Tharisa Plc · JSE:THA
Tharisa — H1 FY2020 Earnings Presentation
30 slides from Tharisa's earnings presentation, May 21, 2020
Slide 1: FY2020 Interim Results Presentation
FY2020 INTERIM RESULTS PRESENTATION 21 May 2020 Enriching lives through engineering the mining company of the future
Slide 2: Sustainable Polymetallic Business Model
SUSTAINABLE POLYMETALLIC BUSINESS MODEL • Discover ‒ Large scale resources ‒ Complimentary opportunities in the resource portfolio • Develop ‒ Innovative approach to mineral extraction ‒ New processes and technologies to enhance value further • Deliver ‒ Safe production growth in both PGM and chrome
Slide 3: Safety and COVID-19
SAFETY AND COVID-19 • Safety is a core value for Tharisa and the Company continues to strive for zero harm at its operations • Tharisa fully supports the Cypriot, South African and Zimbabwean government’s initiatives in dealing with the COVID-19 pandemic • The Company has at all times ensured that p
Slide 4: Safety and COVID-19
SAFETY AND COVID-19 Together with its affiliated foundation, Music for the Children, the Company, in conjunction with donations from various suppliers, directors and individuals, has delivered food and hygiene parcels for over 1 500 families, with a second consignment of 1 500 parcels in progress En
Slide 5: H1 FY2020
H1 FY2020 • LTIFR of 0.08 per 200 000 man hours worked • Tharisa has operated under an interim essential production plan, approved by the DMRE • Planned capacity was initially at 46% and then following new legislation at 50% feeding the Voyager Plant only • Since move from Level 5 to Level 4 on 1 Ma
Slide 6: H1 FY2020 in Review
H1 FY2020 IN REVIEW INCREASED 3RD PARTY PRODUCTION STABLE RECOVERIES increase of 4.0% to 117.0 kt PGM recovery at 82.9% (H1 FY2019: 80.7%) Chrome recovery at 62.5% (H1 FY2019: 60.8%) INCREASED STRIPPING RATIO increase of 63.4% of 11.6 m3:m3 (H1 FY2019: 7.1 m3:m3) TA I L W I N D S RALLY IN PGM PRICES
Slide 7: FY2020 Interim Results Salient Features
FY2020 INTERIM RESULTS SALIENT FEATURES REEF MINED PGM PRODUCTION (5PGE+Au) CHROME CONCENTRATE PRODUCTION 2.27 Mt 66.5 koz 652.6 kt up 2.3% down 1.6% up 6.3% (2019: 2.22 Mt) (2019: 67.6 koz) (2019: 614.1 kt) REVENUE OPERATING PROFIT EBITDA US$194.6 m US$22.3 m US$36.2 m up 16.9% up 55.9% up 20.3% (2
Slide 8: Production
tharisa PRODUCTION
Slide 9: Production - Mining
PRODUCTION - MINING MINING • Reef tonnes mined 2 274.1 kt up 2.3% (Mtpa) • Reef tonnes milled 2 414.1 kt milled, up 3.3% 6.0 10.7 11.6 10.0 • Stripping ratio ahead of life of open pit requirements at 5.0 7.3 7.5 7.9 5.0 11.6 m3:m3 5.0 4.8 4.9 4.7 4.0 • Fleet recapitalisation program ahead of schedul
Slide 10: Production - PGM
PRODUCTION - PGM • PGM recoveries back to tracking best performance PGM PRODUCTION (kozpa) measures 160.0 • Recovery at 82.9% versus 80.7% in H1 FY2019 84% 83% 85.0% 80% 82% 140.0 • PGM optimization projects completed 70% 152.2 65.0% 143.6 132.6 139.7 120.0 45.0% • PGM production flat as compared to
Slide 11: Production - Chrome
PRODUCTION - CHROME • Chrome concentrate production up 6.3% as compared to CHROME PRODUCTION previous interim period (Mtpa) • Mining and processing factors leading to the increased 1.6 70.0% 66% 65.0% output are 1.4 63% 64% 62% 63% 60.0% 1.4 1.2 1.3 1.3 ‒ Cr2O3 ROM grade: 18.2% vs 18.2% 55.0% 1.2 1.
Slide 12: Markets
tharisa MARKETS
Slide 13: PGM Market
PGM MARKET • Fundamentals for the platinum group metals remain robust THARISA PRILL SPLIT • Demand has slowed, but so has supply Ir Ru 4.3% ‒ Autocatalyst demand is expected to fall by at least 15% to 20% 14.0% ‒ Slowing in recycling Au • Complex recommencement of operations and COVID-19 0.2% relate
Slide 14: Chrome Market
CHROME MARKET METALLURGICAL CHROME PRICE (42%) • Increase in chrome price post March 2020 3000 190 • De-stocking at Chinese ports has commenced 2800 180 • Coupled with increased levels of output in downstream 2600 170 facilities in China post COVID-19 restrictions, leading to 2400 160 more normalize
Slide 15: Financial Review
tharisa FINANCIAL REVIEW
Slide 16: FY2020 Themes
FY2020 THEMES CO-PRODUCT AND HEALTHY CASH CONTINUED LIQUIDITY ROBUST BALANCE EXCHANGE RATE GENERATION INVESTMENT MANAGEMENT SHEET BENEFITS Enriching lives through engineering the mining company of the future 16
Slide 17: Revenue
REVENUE • Group revenue up 16.9% to US$194.6 million GROUP REVENUE • Co-product benefits: (US$ million) 450 ‒ US$99.4 million was derived from the sale of PGM 400 concentrate 406.3 350 ‒ US$77.6 million was derived from the sale of chrome 349.4 342.9 300 concentrates 250 • Revenue positively impacte
Slide 18: Profitability
PROFITABILITY • Gross profit of US$43.6 million (2019: US$32.1 million) GROSS PROFIT AND MARGIN 140.0 40.0 • Margin increased to 22.4% (2019: 19.3%) despite the 35.1 120.0 impact of a significant increase in the stripping ratio 30.0 122.7 26.7 100.0 24.8 22.4 • Benefits of weakening exchange rate by
Slide 19: Costs
COSTS • Shared cost allocation for the period: ON MINE CASH COSTS OF SALES ‒ 75% PGM Segment Overheads 18% ‒ 25% Chrome Segment Mining • Weaker ZAR and lower oil prices will lower operating costs 35% • Tax Diesel ‒ The tax charge amounted to US$5.6 million (2019: 13% US$2.1 million) ‒ Effective char
Slide 20: Cash Flow
CASH FLOW • The Group generated net cash from operations of NET CASH FLOWS FROM OPERATING ACTIVITIES US$39.7 million (2019: US$41.4 million) (US$ million) 100.0 • Investment in capex of US$47.7 million 90.0 • Cash on hand US$40.3 million 89.8 80.0 • The net debt to total equity ratio is 9.9% (2019:
Slide 21: Capex
CAPEX • Total capex spend for the period of US$47.7 million H2 FY2020 PLANNED CAPITAL EXPENDITURE (US$m) • US$20.3 million related to additions to the mining fleet Other 2.5 • Includes second CAT 6050 face shovel and supporting haul Mining vehicles TSF 5.9 1.3 • Depreciation charge amounted to US$14
Slide 22: Balance Sheet
BALANCE SHEET DEBT POSITION • Proactive response to COVID-19 with a focus on liquidity (US$m) management Discounting of letters of credit • Compliance with financial covenants Finance leases 5.6 • Three month debt repayment “holiday” agreed with key 6.8 financiers Term loan and • Major creditors agr
Slide 23: Strategy Implementation
tharisa STRATEGY IMPLEMENTATION
Slide 24: Delivering on Our Growth Strategy
DELIVERING ON OUR GROWTH STRATEGY DISCOVER DEVELOP DELIVER DIVERSIFY • Globally significant, diversified • Innovative approach to viable • FY2020 production targets • Multi asset, multi commodity, low cost operations mineral extraction • Vulcan Plant multi jurisdictional business • Exploration pipel
Slide 25: Exploration Projects
EXPLORATION PROJECTS Snakes Head DIVERSIFICATION PRODUCT FROM SINGLE ASSET EXPANSION HIGHLY FURTHER Salene GROWTH PROSPECTIVE AREA Hartley Platinum Mine Harare Chrome OPPORTUNITIES Resource of 28.2 Moz (4E) 4E grade of 4.03 gpt Karo Platinum Karo Estimated 96 Moz (4E) 4E grade of 3.2 gpt Platinum Ng
Slide 26: Zimbabwe Developments
ZIMBABWE DEVELOPMENTS • Tharisa owns 26.8% of Karo Mining Holdings • On 18 October 2019 project area was declared a special economic zone ('SEZ') • Enable the projects to benefit from fiscal and non-fiscal incentives available to SEZs • The initial phase of the exploration programme has been complet
Slide 27: Dealing with COVID-19
DEALING WITH COVID-19 • Thank you to all stakeholders for your support during these unprecedented times • Condolences to the families that have been affected • Tharisa will continue to be proactive in dealing with the pandemic and will never put the lives of its employees at risk • We are grateful t
Slide 28: Questions?
tharisa QUESTIONS?
Slide 29: Corporate Structure
CORPORATE STRUCTURE Tharisa plc 74% 100% 100% Karo Project / Salene Arxo Logistics Arxo Resources Tharisa Minerals Chrome (South Africa) (Cyprus) (South Africa) (Zimbabwe) 100% Arxo Metals (South Africa) Enriching lives through engineering the mining company of the future 29
Slide 30: 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