Tharisa Plc · JSE:THA
Tharisa — Corporate Update (June 2014)
50 slides from Tharisa's corporate update, Jun 18, 2014
Slide 1: Analyst visit
Strictly private and confidential Analyst visit 18 June 2014
Slide 2: Disclaimer
Disclaimer This document has been compiled by Tharisa plc and its subsidiaries (“Tharisa”) and from publicly available sources. Information contained herein involves elements of subjective judgment and analysis which may or may not be correct and has not been independently verified. Certain forward
Slide 3: Presentation programme
Presentation programme Company overview Tharisa mine Mine and plant tour Lunch Research & development, optimisation and beneficiation Marketing and logistics Financial overview Sustainability Corporate strategy and outlook P 2 I Strictly private and confidential
Slide 4: Company overview
Company overview P 3 I Strictly private and confidential [Tharisa mine entrance]
Slide 5: Corporate structure
Corporate structure (1) Tharisa plc Cyprus (JSE:THA) 100% 100% 100% 74% 26% Black Economic Dinami Arxo Logistics Arxo Resources Tharisa Mineralss Empowerment (“BEE”) (Guernsey) (South Africa) (Cyprus) (South Africa) shareholders (2) 100% Arxo Metals Tharisa (South Africa) mine Notes: 1. Only major s
Slide 6: From mine to customer
From mine to customer Marketing and Mining and processing Beneficiation Marketing and sales Logistics customers (Tharisa Minerals) (Arxo Metals) (Arxo Resources) (Arxo Logistics) (Dinami and Arxo Resources) 74% owned 100% owned 100% owned 100% owned 100% owned One of the world’s largest single P
Slide 7: Management team
Management team Experienced and entrepreneurial management team Executive management Over 50 years of experience in Over 15 years of experience in Over 18 years of investment mining company exploration, project management in the mining banking experience in corporate project management, financ
Slide 8: Tharisa mine
Tharisa mine P 7 I Strictly private and confidential [Tharisa mine - open pit]
Slide 9: Salient features of the Tharisa mine
Salient features of the Tharisa mine • One of the world’s largest chromite resources • Over 23 years open pit life of mine with additional 36 years underground • 144koz PGM and 1.85Mtpa chrome concentrates annual production (steady state FY2016) • Producing PGM concentrate and metallurgical, chemica
Slide 10: Location of Tharisa mine
Location of Tharisa mine Located in South Africa’s main PGM and Chrome producing area Mining rights over 5 590ha Neighbouring mining companies include Angloplat, Lonmin, Impala Platinum, Aquarius, Samancor Situated in close proximity to national freeway and railway siding Neighboring towns a
Slide 11: MG reef stratigraphy across the Tharisa mine
MG reef stratigraphy across the Tharisa mine Thick distinctive layers The MG reef package is classified into six chromite layers (MG0, MG1, MG2, MG3, MG4,MG4A) Partings are generally anorthosite , pyroxenite or norite Reef package varies from 50m in the west to 74m in the east (inc partings)
Slide 12: The MG chromitite reef package in situ
The MG chromitite reef package in situ View from pit sidewall P 11 I Strictly private and confidential
Slide 13: Mining sequence and process route
Mining sequence and process route Tharisa mine operating procedure Unit Process MG4A Chromitite layer Sent to Genesis Plant Parting Discarded MG4 and MG4(0) Chromitite layers with mineralized parting Sent to Voyager plant Norite or anorthosite Selectively mined and discarded MG3 package comprising m
Slide 14: Mine layout
Mine layout Current mine plan to depth of 200 metres East pit West pit Central east pit Far east pit P 13 I Strictly private and confidential
Slide 15: Mining operation – key facts
Mining operation – key facts Open cast mine production plan • Open cast mining to 2031 then phase in of underground mining 6000000 14000000 • Open cast mining ends 2038 5000000 12000000 • Mining contractor MCC 4000000 10000000 • MCC employs approximately 1,100 people directly 8000000 Waste vol (m3)
Slide 16: Process operations – key facts
Process operations – key facts Simplified flow sheet • Process plants owned and operated by Tharisa • 471 employees and 1,435 contractors • RoM is crushed and screened • RoM from selected reefs sent to Challenger plant to recover coarserr Foundry and Chemical grade chrome concentrates • Coarse grind
Slide 17: Dual plants provide flexibility and optimise recoveries
Dual plants provide flexibility and optimise recoveries Genesis plant • Capacity 100,000tpm RoM • Processes reefs with lower PGM and higher chromite grades • Challenger plant recovers high value Foundry grade and Chemical grade chrome concentrates Voyager plant • Capacity 300,000tpm RoM • Processes
Slide 18: Detailed process flow sheet
Detailed process flow sheet P 17 I Strictly private and confidential Source: Tharisa information
Slide 19: Detailed process flow sheet - continued
Detailed process flow sheet - continued P 18 I Strictly private and confidential Source: Tharisa information
Slide 20: PGM concentrate
PGM concentrate • Concentrate sold to Impala Refining Services • Payment terms based on market price • Tharisa concentrate has low chrome content as bulk of chrome removed prior to PGM flotation, negates chrome penalties • High platinum content and a favourable prill split Tharisa PGM concentrate pr
Slide 21: Chrome concentrates
Chrome concentrates • Chromite is the mineral extracted from the ore • 92% of global chromite mined is metallurgical grade chrome concentrate which is used in stainless steel production (mostly via ferrochrome) • 8% of global chromite mined is higher value Chemical, Foundry and Refractory chrome con
Slide 22: Mine and plant tour
Mine and plant tour P 21 I Strictly private and confidential [Tharisa mine – Open pit operations]
Slide 23: Research & development, optimisation and beneficiation
Research & development, optimisation and beneficiation P 22 I Strictly private and confidential [Tharisa mine –magnetic separation unit]
Slide 24: Arxo Metals
Arxo Metals Challenger plant • Owns and operates the Challenger plant • Produces high value Chemical and Foundry grade chrome concentrates • Research and development arm of Tharisa • Current projects include; • Reflux classifier for fine chrome recovery • Gravity concentrator for fine chrome recover
Slide 25: Magnetic separation
Magnetic separation Significant increase in chrome concentrate yield • Fine chromite particles not recovered by spirals • Chromite is weakly magnetic (para-magnetic) • Can use high intensity magnetic field to separate chromite from other material • In line revolving drum magnets • Pilot work boosted
Slide 26: Ultra fine grind and high energy flotation
Ultra fine grind and high energy flotation Liberation and recovery of fine PGM particles • High energy flotation Flotation cell • Install in rougher and cleaner circuits • Recovers finer particles and particles with low sulphide association • Target slow floating fraction • Four units commissioned •
Slide 27: Marketing and logistics
Marketing and logistics P 26 I Strictly private and confidential [Tharisa mine – rail siding]
Slide 28: Arxo Logistics
Arxo Logistics • Integrated logistics platform • Road transport of PGM concentrate to IRS • Road and rail transport of metallurgical grade chrome concentrates to Richards Bay and Durban • Scale facilitates negotiation of favourable road haulage rates • Rail allocation from Transnet • Use of rail sid
Slide 29: Arxo Resources
Arxo Resources • Sales and marketing arm of Tharisa • Markets metallurgical chrome concentrates • Offices in Beijing and Cyprus • Large customer base for metallurgical chrome concentrates, bulk selling to; • Major stainless steel producers • Local and international ferrochrome producers • Global com
Slide 30: Dinami
Dinami • Provides marketing, sales and agency services • Chemical grade chrome concentrates • Foundry grade chrome concentrates • Third party products • Markets in Europe, America’s, Australia and Russia • Highly specialised market • Large customer base, mainly small individual orders P 29 I Strictl
Slide 31: Financial overview
Financial overview P 30 I Strictly private and confidential [Tharisa mine – Mill plants]
Slide 32: Financial highlights H1 FY 2014 JSE listing and capital raise
Financial highlights • H1 FY 2014 • Revenue increased by 22.6% to US$126.1 million • Operating profit increased by 19.2% to US$7.4 million • Net cash generated from operations of US$28.8 million • Basic and diluted loss of US$3.71 per share • Pro forma earnings of US$0.04 cents per share • JSE listi
Slide 33: Key indicators H1 FY 2014
Key indicators • H1 FY 2014 • Average PGM basket price of US$1,079 per ounce • Average CIF chrome concentrate contract price for 42% metallurgical grade chrome concentrate US$152 per tonne • Average ZAR:US$ exchange rate 10.50 • PGM revenue US$35.8 million • Chrome concentrate revenue US$90.3 millio
Slide 34: Income statement (extract)
Income statement (extract) Results for financial year end September 2013 and interim FY2014 US$m 2013 H1 2014 H1 2014 (pro forma) (pro forma) (actual) Revenue 215.46 126.14 126.14 Cost of sales (189.57) (105.91) (105.91) Gross Profit 25.89 20.23 20.23 Other income 0.05 0.03 0.03 Admin (26.60) (14.38
Slide 35: Capital raise – use of proceeds
Capital raise – use of proceeds Expenditure Pre-listing statement Revised schedule Comments ZAR million ZAR million Optimisation initiatives Magnetic separation 200 60 Discussions have commenced with an export credit agency for a portion of the funding Ultra fine grind 100 100 High energy flotation
Slide 36: Capital raise – use of proceeds (cont)
Capital raise – use of proceeds (cont) Expenditure Pre-listing Revised schedule Comments statement ZAR million ZAR million Capital projects Second tailings facility 38 30 Infrastructure projects 32 30 Land purchases 30 20 Capital structure Redemption of B class preference 165 72 Return of capital to
Slide 37: Sustainability
Sustainability [Tharisa mine – Rocasize workers] P 36 I Strictly private and confidential
Slide 38: Safety, social and labour milestones
Safety, social and labour milestones Tharisa places a high priority on employee and community initiatives and relationships Group safety management system implemented under guidance of a safety expert with over 35 years experience Commitment to excellence in health and safety Zero tolerance poli
Slide 39: Lost time injuries
Safety Comparative rate per million hours worked as at 31 December 2013 35 Lost time injuries per million hours worked 30 25 Lost time injuries 20 15 10 5 0 Source: Tharisa information, peer company information as at 31 December 2013 P 38 I Strictly private and confidential
Slide 40: Community upliftment
Community upliftment Identified and procured land Relocation of 850 families from an informal settlement within the mining footprint outside of the mining Before After footprint… …appointed a town planner to ensure suitable design… …developed new township in line with RDP standards… …develop- ment i
Slide 41: Creating sustainable jobs
Creating sustainable jobs Set up local brick and Supporting local entrepreneurs and buying local paving manufacturer … …which provides materials for new township and local market… …sewing business starts off supplying Tharisa with safety wear P 40 I Strictly private and confidential
Slide 42: Corporate strategy and outlook
Corporate strategy and outlook P 41 I Strictly private and confidential [Tharisa mine – Flotation plant]
Slide 43: Strategy
Strategy Leading natural resources Innovation company • Growth through innovative research and development projects • PGM, chrome & steel raw materials • Large scale, low cost projects that are in or close to production Capital discipline Optimisation initiatives • Dividend policy of 10% of NPAT • M
Slide 44: Competitive strengths
Competitive strengths Commitment to excellence in health Capacity to produce metallurgical, Direct relationships with its South and safety and environmental chemical and foundry concentrates African and international customers management for different markets Stable labour and community Independent
Slide 45: Outlook
Outlook Steady state ramp up on track, well positioned to benefit from strengthening PGM and chrome prices Ramp up to steady state production by FY 2016 continues as planned Production Expect production of between 80koz to 90koz PGM in concentrate in FY2014 Expect production of between 1.15Mt
Slide 46: Annexure 1 – Mineral reserves and resources
Annexure 1 – Mineral reserves and resources P 45 I Strictly private and confidential [Tharisa mine – Open pit operations]
Slide 47: Tharisa mine resources (SAMREC Code)
Tharisa mine resources (SAMREC Code) Tharisa mine - Mineral resource statement (31 December 2013) MG4A chromitite layer True Bulk Tonnage Cr2O3 Pt Pd Rh Ru Os Ir 3PGE+A 6PGE+Au 6PGE+Au Ni Thick Density Au (g/t) Pt:Pd:Rh:Au Pt:Pd:Rh:Au:Ru:Os:Ir Cr:Fe (Mt) (%) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) u (g/
Slide 48: Tharisa mine resources (SAMREC Code) (cont.)
Tharisa mine resources (SAMREC Code) (cont.) Tharisa mine - Mineral resource statement (31 December 2013) MG1 chromitite layer True Bulk Tonnage Cr2O3 Pt Pd Rh Au Ru Os Ir 3PGE+Au 6PGE+Au 6PGE+Au Ni Thick Density Pt:Pd:Rh:Au Pt:Pd:Rh:Au:Ru:Os:Ir Cr:Fe (Mt) (%) (g/t) (g/t) (g/t) (g/t) (g/t) (g/t) (g/
Slide 49: Open pit reserves (SAMREC Code)
Open pit reserves (SAMREC Code) Tharisa mine – Open pit mineral reserve statement (December 2013) Proved mineral reserve Chromitite Tonnes 3PGE+Au 5PGE+Au Pt (g/t) Pd(g/t) Rh(g/t) Au (g/t) Ru(g/t) Ir(g/t) Cr2O3 (%) Cu (%) Ni (%) Cr (%) layer (‘000) (g/t) (g/t) MG0 MG1 MG2 11,817 1.03 0.26 0.15 0.004
Slide 50: Underground reserves (SAMREC Code)
Underground reserves (SAMREC Code) Tharisa mine – Underground mine mineral reserve statement (December 2013) Proved mineral reserve Chromitite Tonnes 3PGE+Au 5PGE+Au Pt (g/t) Pd(g/t) Rh(g/t) Au (g/t) Ru(g/t) Ir(g/t) Cr2O3 (%) Ni (%) Cu (%) Cr (%) layer (‘000) (g/t) (g/t) MG2AB - - - - - - - - - - -