Tharisa Plc · JSE:THA
Tharisa — Investor Presentation (June 2024)
40 slides from Tharisa's investor presentation, Jun 10, 2024
Slide 1: This is Tharisa
THIS IS THARISA JUNE 2024 tharisa® @.
Slide 2: Why Mining, Why Now, Why Tharisa
WHY MINING • WHY NOW • WHY THARISA NOW THARISA MINING OECD forecasts that global materials Mine builders and operators “If it is not grown it is mined” demand will more than double in 2060 Multi-generational assets of strategic Critical to supply into the clean energy Significant global
Slide 3: Continued Macro Adversity
CONTINUED MACRO ADVERSITY HEADWINDS TAILWINDS COMMODITIES MACRO Co-product business model Electricity constraints in South Africa Buoyant chrome commodity market Transport infrastructure challenges Counter cyclical commodities in basket Geopolitical complexities Fundamentals for both c
Slide 4: 10 Years Listed on the JSE
10 YEARS LISTED ON THE JSE 4 enriching lives through innovating the resources company of the future
Slide 5: The Vital Numbers
US$1 344/oz US$288/t THE VITAL NUMBERS down 39.3% PGM BASKET PRICE up 16.9% MET GRADE PRICE REVENUE EBITDA NET PROFIT AFTER TAX US$369.1 m US$79.6 m US$38.8 m up 10.1% down 2.0% down 29.1% (HY2023: US$335.3 m) (HY2023: US$81.2 m) (HY2023: US$54.7 m) NET CASH FROM OPERATING ACTIVITIES CAPITAL EXPENDI
Slide 6: Commodities: PGMs
US$1 460/oz COMMODITIES SPOT PGM BASKET PRICE Ru Ir Ru 14,4% 1,9% 4,2% Au PGMS Ir 4,4% 8,0% Primary supply reduction should be main catalyst for PGM price Au Rh 4,3% increases 0,2% THARISA KARO Pt Recycling less of a supply contributor as vehicle ownership periods Rh MINERALS PLATINUM 42,0% PRIL
Slide 7: Commodities: Chrome
US$310/t COMMODITIES SPOT MET GRADE PRICE CHROME No substitution for chrome in stainless steel production METALLURGICAL GRADE PRICE AND PORT STOCKS (US$/t) and (Mt) Stainless steel demand growth for 2023 of ~5%, Chinese production increased 12.6% for 2023 310 3,5 Chrome prices remain robust on
Slide 8: Some Detail on Chrome
SOME DETAIL ON CHROME CHROME Chromium is the 14th most abundant metal in the lithosphere Other Chromite or chrome ore is the commercial name of iron chromium Finland 9% oxide 2% Global chromite resources are estimated at over 12 billion tonnes Kazakhstan 5% with reserves estimated at 470 milli
Slide 9: Supply
SUPPLY Finland Other Zimbabwe 2% 8% Global chrome production in 2022 was 39.7 Mt 3% Over the last 15 years, on average South Africa has accounted for more Turkey than 55% of global production 4% South Africa is the largest producer reporting 25.8 Mt in 2023 India 8% South Africa exported ove
Slide 10: Chrome Concentrate Products
CHROME CONCENTRATE PRODUCTS 94.7% Metallurgical grade: characterised by a Cr2O3 content of 42% to 46%, this type of chrome ore is METALLURGICAL GRADE used primarily in metallurgical applications and more specifically to create ferrochrome, which is in turn is used to produce stainless steel and ot
Slide 11: Demand
DEMAND Demand for chrome concentrates is dominated by its in metallurgical applications being ~95% 0.6 t > 0.25 t > 1t Stainless steel is the largest demand from metallurgical applications, and as such the dynamics of the stainless steel industry heavily impact the chrome market CHROME ORE FERRO
Slide 12: Ferrochrome Production
FERROCHROME PRODUCTION 9 Millions China is the largest global ferrochrome producer, having taken over from 8 South African in 2012 and since then China has doubled its ferrochrome output capacity 7 6 Ferrochrome production is centred from Asia other regions include India and Indonesia 5 4 In 2
Slide 13: Stainless Steel
STAINLESS STEEL Applicances & electronics Stainless steel demand has been driven by China, accounting for more 9% than 60% of global production, with global production being reported at Metal goods 58.5 Mt for 2023 37% Stainless steel is produced from processing ferrochrome and nickel Industrial
Slide 14: Stainless Steel Growth Projection
STAINLESS STEEL GROWTH PROJECTION Source SMR enriching lives through innovating the resources company of the future 14
Slide 15: Stainless Steel Growth Projection
STAINLESS STEEL GROWTH PROJECTION Source SMR enriching lives through innovating the resources company of the future 15
Slide 16: Stainless Steel Growth Projection
STAINLESS STEEL GROWTH PROJECTION Source SMR enriching lives through innovating the resources company of the future 16
Slide 17: Pricing and Port Stocks
enriching lives through innovating the resources company of the future at at 2.6 Mt of chrome concentrates PRICING AND PORT STOCKS Spot pricing at US$310/t – US$315/t CIF China Port stocks remain at lower levels compared to previous years 0 50 100 150 200 250 300 350 2 Jan 2020 18 Feb 2020 23 Ma
Slide 18: Tharisa in Context
THARISA IN CONTEXT Total resource of 844.8 Mt containing 166.2 Mt of Cr2O3 Total reserve of 85.1 Mt containing 15.1 Mt of Cr2O3 Fourth largest chrome producer in South Africa 1.5 Mtpa of chrome products Provides China and Indonesia with ~10% of its chrome requirements One quarter of spec
Slide 19: Strategy
STRATEGY x on, 3 - See e ete
Slide 20: Vision 2025
VISION 2025 EXPANSION expand and roll out the business sustainably OPTIMISATION optimise existing operations INNOVATION continue to invest in innovative thinking DIVERSIFICATION become a globally diversified business INVESTMENT be the investment of choice in our chosen sector ENRICHMENT responsibly
Slide 21: Security of Raw Material Supply Through Shallow Multigenerational Assets
39.4 Moz & 11.3 Moz 166.2 Mt IN CONTAINED PGMS (6E) IN CONTAINED CHROME Karo Platinum SECURITY OF RAW MATERIAL SUPPLY Redox One Tharisa Mine Arxo Metals Renewable Energy Centre THROUGH SHALLOW MULTIGENERATIONAL MINERAL ASSETS, ENABLED BY TECHNOLOGY AND Dortmund Victoria Falls Harare INNOVATION Arxo
Slide 22: Tharisa Minerals
THARISA MINERALS UNLOCKING STRATEGIC VALUE AND FLEXIBILITY LTIFR 0.05 per 200 000 man hours worked Reef tonnes mined 2.1 Mt, down 0.8% Reef milled 2.8 Mt, up 0.2% PGM production 71.1 koz, down 7.7% Chrome production 865.6 kt, up 9.9% Accelerating underground studies, ensuring sustainable
Slide 23: Karo Project
KARO PROJECT MULTIGENERATIONAL PGM DEVELOPMENT ASSET – LONG TERM STRATEGIC VIEW THROUGH THE CYCLE LTIFR 0.11 per 200 000 man hours worked Construction continues steadily with value engineering running in parallel Finalising fiscal regime necessary for a tier one project Current market condit
Slide 24: An Ethos of Innovation
AN ETHOS OF INNOVATION ARXO METALS BENEFICIATION SITE Commercial pyrometallurgical site – producing novel alloys Unique PGM refining process proven ARXO METALS TECHNOLOGY DEVELOPMENT CENTRE Facility to run laboratory and pilot scale test work – downstream focus ARXO METALS RENEWABLE ENERGY CEN
Slide 25: Mine to Megawatt
MINE TO MEGAWATT DECARBONISATION CIRCULAR ECONOMY PGMS CHROME PATHWAYS Producing lower carbon Catalytic properties Stainless steel requirement in Electrification (solar project) renewable energy generation minerals Slower BEV uptake, hybrid Circularity (use of our (solar, wind, nuclear,
Slide 26: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 27: Financial Resilience Through Our Co-Production Model
FINANCIAL RESILIENCE THROUGH OUR CO-PRODUCTION MODEL MULTI COMMODITIES CASH FLOW GENERATIVE CAPITAL DISCIPLINE CONTINUED INVESTMENT Share repurchase programme Technology and downstream Co-production model Net cash flows from operations of US$5 m beneficiation investment Polymetallic basket
Slide 28: Multi Commodity Revenue Stream
MULTI COMMODITY REVENUE STREAM Agency and Manufacturing and trading consulting… 9,8% FCA REVENUE* PGM Chrome 26,0% 63,2% US$369.1 m Revenue increase of 10.1% Benefits of co-production model PGM sales of 70.6 koz Average PGM basket price of US$1 344/oz Au Ni Cu Ru Specialty 1,5% 3,2% grade Metallurgi
Slide 29: EBITDA Waterfall
EBITDA WATERFALL 29 enriching lives through innovating the resources company of the future
Slide 30: Unit Costs
UNIT COSTS % Units HY2024 HY2023 change Overheads 10,4% Labour Cubes mined Mm3 8.7 7.3 19.2 13,6% Cost per cube mined* US$/m3 10.6 10.9 (2.8) Reef tonnes mined Mt 2.1 2.1 Consumables Mining Cost per reef tonne mined* US$/t 44.1 37.7 17.0 3,6% ON MINE CASH 24,8% COSTS Tonnes milled Mt 2.8 2.8 Electri
Slide 31: Resilient Gross Profit
RESILIENT GROSS PROFIT GROSS PROFIT AND MARGIN 300 ,0 (US$ m) 40,0% 34,8% 35,8% 35,0% 32,1% 250 ,0 245,7 30,0% US$81.4 m 200 ,0 207,4 25,0% Gross profit decrease of 13.0% 23,6% 22,1% 150 ,0 20,0% 153,3 130,4 15,0% Weakening ZAR to US$ exchange rate of 6.3% partially offset inflation 100 ,0 Stable gr
Slide 32: Investing in the Future
INVESTING IN THE FUTURE Land and buildings Other US$0,6 m US$1,8 m R+D and innovation US$2,3 m Mining fleet US$10,4 m US$114.1 m Assets and Total capital spent HY2024 CAPITAL infrastructure SPENT* US$4,3 m Sustainable operations enabled by continued investment in asset base Includes: Deferred stripp
Slide 33: Balance Sheet
BALANCE SHEET FREE CASH FLOW (US$ m) US$198.5 m Cash and cash equivalents* Cash generative despite PGM pricing environment and inflationary pressures Net cash flow from operations of US$86.2 m Net cash of US$86.3 m* US$112.3 m Leases 1,9% Total debt Bond 24,3% Short term US$49.4 m 89.4% US$ denomina
Slide 34: Returns to Shareholders
3.6% RETURNS TO SHAREHOLDERS DIVIDEND YIELD (TTM) US 1.5 cents Interim dividend 15, 0 24,5%* 24.5%* of NPAT including share repurchase programme underway 13, 0 22,0% Policy minimum of 15% of NPAT 20,5% 19,2% 18,5% 11, 0 17,8% 17,1% 17,7% 17,3% 16,3% 17,0% 9,0 US$5 m 12,0% 9,0 7,0 Share repurchase pr
Slide 35: Guidance & Value Proposition
GUIDANCE & VALUE PROPOSITION
Slide 36: Guidance
GUIDANCE FY2024 GUIDANCE PGMs (6E basis) of 145 koz to 155 koz Chrome concentrates of 1.7 Mt to 1.8 Mt 36 enriching lives through innovating the resources company of the future
Slide 37: Long Term Value Play
LONG TERM VALUE PLAY Critical commodities Diversification, beneficiation and energy transition Co-producer of PGMs and chrome concentrates, mine two commodities critical to a sustainable future Maxmising the value of our commodities by using innovation and technology 1 6 OUR Output to double at Inte
Slide 38: Tharisa Is an End to End Critical Metals and Energy Solution Provider
THARISA IS AN END TO END CRITICAL METALS AND ENERGY SOLUTION PROVIDER INNOVATING THE RESOURCES COMPANY OF THE FUTURE 15 years 10 years 9 years ~US$100 m ~US$695 m operations cash generative profitable returned to capital invested shareholders
Slide 39: Questions
QUESTIONS Kgopotso Mashiane Junior Operations Metallurgist
Slide 40: 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