Tharisa (JSE:THA) — FINANCIAL YEAR ENDED 30 SEPTEMBER 2022 PRESENTATION

0:05 Good morning, ladies and gentlemen, and welcome to the THARISA Investor Presentation. Throughout this recording presentation, investors will be in listen only mode. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. I'd now like to hand over to CEO,

0:36 Phevis Perullis. Good morning, sir. Good morning, and welcome, everyone, to this full year annual result presentation for the financial year 2022. We spent some time thinking about how to capture the essence of what happened this past year, and I think the tagline that we've put on this front page really captures that essence. And it reads, growing sustainably from a robust operational base driving record financial performance. And it really touches on the sustainability, the resilience of our business and for three years in a row proving financial performance record. So really pleasing and a pleasure to welcome you all here this morning to share these results.

1:30 So in terms of highlights, safety is a core value of ours. And up until our year end, September, we had achieved seven years fatality free and 6,000,000 fatality free shifts, a really commendable performance. Unfortunately, post year end, we lost the life of one of our colleagues, Raymond. He succumbed to his injuries from a serious accident in the open pit. What this has done is really reinvigorated, reinforced our drive and focus around safety and health and well-being of our employees and a renewed energy going into that and hopefully never to be repeated again. So when we look at the sustainability of our mining and our long life Tier one assets, we can see that this, again, was a record production year for us with PGM production up 13.6% at 179,200 ounces.

2:34 This on a lower PGM basket price of $2,564 per ounce, but in rand terms, and we'll unpack that a bit later, less of a decline than in dollar terms. Chrome production was up 5.1% at 1,600,000 tonnes, and we achieved a real increase in our metallurgical grade chrome prices of $2.00 $9 up almost 35% year on year. And then we look at the open pit life of mine, still nineteen years remaining at the THARISA mine and giving guidance for this next financial year. These are the midpoint guidance numbers of 180,000 ounces and 1,800,000 tonnes. So just improving consistently on where we have come from and targeting those higher productivity numbers. And then, obviously, our very exciting Cara Platinum project with a seventeen year open pit life of mine at its steady state production targeting 190,000 ounces of PGMs.

3:44 When we look at, the two corporate actions that we undertook this year, apologies, let me go back there. Presentation is a little bit slow. Yeah. So we looked at two very transformative transactions in this in the past year. The first of which was the acquisition of the 26% minority shareholding, our BE shareholders. And this really was a landmark transaction whereby we flipped up the equity in the minority, the THSTERISA Minerals holding into THSTERISA PLC shares. And what this has done is allowed our minority shareholders at the THARISA Minerals level to participate and benefit from the broader THARISA group and, most importantly, to be the beneficiaries of a very strict dividend policy of distributing cash to shareholders.

4:41 So really value accretive on all fronts. And then when we look at our four pillars that underpin our business discovery, development, delivery and diversification. We really believe that acquiring the controlling interest in Cairo Mining Holdings to 70% ticks all those boxes, but most importantly, it diversifies our business from a single asset, the THARISA mine, into two large scale open pit producing assets in short order. I think what's pleasing to note is that construction is underway, and the funding of the project is well advanced. Touching on that capital discipline, we continue to invest in our businesses. And particularly this last year, we spent $105,000,000 on CapEx, and we ended the year in a net cash positive position of $80,400,000 a very healthy position and very pleased to share with our shareholders that we've proposed a final year $04 payment in terms of dividend to be voted at the AGM, giving a total year in dividend of $07 some $21,000,000 to be distributed back to shareholders for this financial year.

6:01 And then touching on the production guidance for this next financial year, I touched on the midpoints earlier, but between 175,185 PGM ounces and 1,750,000 to 1,850,000 tonnes of chrome concentrate.

6:21 So in a nutshell, you can see that this was a really busy year with lots of milestones being achieved and a lot of progress in terms of delivering sustainable growth, a record financial performance, but also investing in the future with multi decade operations in both countries being South Africa and Zimbabwe. Then when we look at the impact that our business has, and this is what makes us really proud, we're over a decade old. We've been listed in South Africa since 2014, in London since 2016. We've been a consistent dividend payer for the last seven years. And the biggest impact, however, is the jobs that we create. So when we add the permanent contractors to our employees and the part time contractors, we're close we're just shy of 4,000 employees.

7:14 In countries where we have such high unemployment in South Africa and Zimbabwe, this is a material contribution to society and to the broader economy. And if we take a conservative multiplier effect of five, we are impacting on a daily basis almost 20,000 people. And this is why we do what we do because we invest, we create sustainable wellness and employment for for multiple people beyond our employees. In Zimbabwe, we've created 100 new jobs, and that will grow as we ramp up the project, and 100 contractors are on-site right now as we start with the site clearing and the earthworks program. I think key here is to note that we have just over 22% female employees, and it's something we focus on in terms of diversity and and gender equality.

8:08 And, mining is obviously not the most attractive industry, particularly in the in the more labor intensive areas, but the skills skills development, the opportunities are made affordable to to a diverse group. In in the last year, we've lost no time due to industrial action. We've had no real unrest or disruption to to speak of that has impacted us. And importantly, we have very good relationships with our employees and the unions. We're in the middle, or I suppose, three quarters through our four year wage agreement, which ends in June 2024. We really focus on skills development, education and wellness, and we continue with these adult education programs not only for our employees but also for the communities around surrounding us and we enrolled 48 learners in this last year and we continue to look to repeat that. We offer leadership programs, and education, classes around maths and science and internship programs.

9:16 We also have an enterprise and development program, skills development programs for portable skills so that, we we we train people up so that they can, access the limited job market, but with pertinent skills that are required. And then importantly, and I think we've all come out of COVID, and we realize the impacts that that has had on on the well-being and the wellness of people, coupled with this, you know, above inflationary environment with costs increasing. We we take a real pride in our wellness programs and the support we give our employees, not only financial, but from an emotional health perspective as well. I think as stated before, we're committed to reducing our carbon footprint. We're looking at a 30% reduction by 2030, and there are various programs underway to achieve that and then achieving carbon net neutrality by 2050.

10:12 Pleasing to note that our 40 megawatt solar project, in partnership with Total and Chariot, is waiting for regulatory approval, from which point then construction will begin. We're hoping to see that up and synchronized with our plants within midpoint of 2024, subject to these approvals. And then encouragingly, we're also looking at the first phase, 30 megawatts solar project in Zimbabwe, of a much bigger potential project, a 300 megawatt project, again, in partnership with Total Eren in Zimbabwe. Then when we look at the impact we have on the Fiscus and the economy, the foreign currency inflows into South Africa in terms of our direct chrome exports, $285,200,000.

11:08 Significant. And then we look at the direct taxes and royalties that we paid, $56,200,000, and then indirect taxes of $20,400,000 So really contributing to the economy and to employment in a meaningful way. So when we look at the vital numbers for the year past, records on all fronts, we mined 5,500,000 tonnes, up 2.3% from the prior year. Our PGMs, as mentioned, up 13.6%, 179,002 ounces. And chrome just shy of that 1,600,000 tonnes at 5.1. I think pleasingly, and Michael will unpack the reasons why, we have a record revenue up 15% of $686,000,000 resulting in operating profit, also an improvement of $184,500,000 for the year and a record EBITDA of $237,300,000 Profit before tax, up almost 19% to $220,200,000 and then net cash from operating activities, down from the prior year, 17% down, but still at a pleasing $173,700,000 Cash and cash equivalents at the end of the year, dollars 143,300,000, resulting in our record earnings per share of $0.05 $38 up $0.04 $41 Michael will unpack later the headline earnings per

12:40 share and the impact of the Caro transaction on our EPS number. And then, as mentioned previously, our proposed annual dividend of $07 And all of this resulting in a very important metric, which is the return on the capital that we invest and a very pleasing 23.5%. Now often, we report in U. S. Dollars, and we our operations are South African based. And we thought we'd just translate these numbers into a South African context to give perspective to our South African shareholders and listeners. And when you unpack it, these are meaningful numbers in context of the South African economy, almost 11,000,000,000 revenue operating profit, 2,900,000,000 EBITDA of ZAR 3,800,000,000 profit before tax, 3,500,000,000 tax profit after tax, 2,600,000,000 net cash from operating activities, 2,800,000,000 cash and cash equivalents of ZAR 2,300,000,000.

13:44 And that really captures the rand impact of our financial year end. So moving on now to strategy. Our DNA and ethos is born out of innovation and challenging convention, doing things differently. And we are builders of mines. We take greenfield discoveries, and we develop them into sustainable mines. And and the THARISA mine is a point in case. It's the first time in the history of the Bushveld Complex that the middle group reef horizons have been mined at the scale that we mine at on a coproduct basis for both platinum group metals and chrome concentrate. And that business model has really proven its robustness.

14:33 We have a put to port strategy, and we have a disciplined investment criteria, which really supports the sustainability of our growth. When we look at the various unique projects that we've ticked the box for, we've increased our specialty chrome production to well above 22% to 25% of our chrome production, which is considerably higher than the industry in South Africa. The Voyager plant is the first of its kind integrated chrome and PGM extraction plant for coke production, the introduction of high energy flotation units to improve PGM recovery. As you can see from the photo, we've been running the first of its kind commercial DC PGM smelter successfully, whereby we're selling alloy. And this is really a pilot commercial scale. We do have the intentions of building a full scale smelter to accommodate all of THARISA's PGM production.

15:35 And then we look at new and exciting applications for our products, which we don't unpack just yet. But as they become more relevant and commercial, we'll be sharing that with our shareholders. But a lot of energy and effort going into research and development. And then the ultra fine chrome recovery plant, Vulcan, which really has been commissioned and is now moving up those recovery curves. So when we look at our portfolio of assets, we have long life, open pittable resources. If you look at the flags at the top of the page there, you'll see there are two resources, the first being THARISA, the second being KARA. So over 1,000,000,000 tonnes of mineral resource between the two open pits and underground opportunities at THARISA.

16:26 Over 50,000,000 PGM ounces, contained PGM ounces and 171,000,000 tonnes of contained chrome. That's 100% chrome. And our integrated business model has really captured value, I suppose, where others have not seen the value. Talking about those long life assets, both pits in excess of seventeen years, thereafter, at least forty year underground operations. The Cairo project will see us doubling our PGM output, and we'll to those exact numbers later. And then using technology to unlock opportunities and value that are really marginal in terms of capital cost, but give us that extra margin, which gives us the sustainability, as mentioned, profitable throughout the cycle and a consistent dividend payer.

17:21 Just waiting for the next slide to load up. And there are four pillars of discovery, develop, deliver and diversify. And this really talks to the phase one of the KARA project, which is something we did at THARISA and we're repeating again now in Zimbabwe on the Great Dike. This is a tier one world class PGM asset. As discussed on the previous slide, seventeen years open pit life. We're targeting at steady state 190,000 PGM ounces. Think of import here is the fact that we have very strong base metal credits in the form of copper, nickel, and there is even some cobalt, which we're looking to extract. This is fully permitted, fully licensed for the life of mine. So we're only accessing the open pittable resource. There is huge potential for second, third and fourth phases, which would involve either portal or shaft development in the future.

18:17 I think we've taken a very measured strategic approach replicating the THARISA model, going for a low risk, open pit, scalable, low cost phased approach. The clock has already started ticking. We said we had a twenty four month build time line. We've got twenty one months left and very pleased to report that construction has commenced. I think when we look back, we started exploration in 2018. We were impacted and delayed by COVID-nineteen restrictions and lockdowns, but we've been four years LTI free. We have our ESI approved on the mining and processing, and that is IFC compliant. And I think what's key here, very similar to what we've done at THARISA, is prioritizing local recruitment and skill development.

19:07 Pleasing to note that the skill levels in Zimbabwe are very good and very high. It is an established mining jurisdiction, and a number of our peers operate very successful operations, PGM operations on the Great Dike. And then as mentioned, Total Eren, we've signed heads of agreement for a wheeling agreement to supply up to 300 megawatts. Obviously, we don't require as much as that, but our first phase would need 30 megawatts, but they would well into the grid. So touching on the capital cost, and bearing in mind, this includes all the infrastructure supporting the project, power, water, road networks, and all the ancillary services that are required, and that comes to a capital cost to first ore in mole of $391,000,000 And there is sort of, I suppose, very decent contingency and escalation budgets baked into that number. So we're comfortable in an uncertain environment that we have headroom for potential cost creep.

20:15 When we look at the funding for this project, the multiple streams, and they advance to different degrees and different levels. When we talk about the partial leveraging of existing assets, that's THARISA assets to the tune of $130,000,000 and that will be injected into KARA Mining Holdings as equity. Then we look at your more conventional project finance syndicated senior loan, and that in the tune of $260,000,000 and that has an export credit component to it, ECRC funding out of South Africa. And that's slightly longer dated. We expect that to close in the second half of next calendar year. And sorry, the leveraging of the existing assets we anticipate closing in the first quarter of twenty twenty three.

21:03 That's calendar year, not our reporting quarters. And then as you may have picked up in the media, we've launched the VFX bond listing, targeting a minimum of $25,000,000 and optimal of $50,000,000 We've received really positive interest. We're building the book as we speak right now. We've extended the deadline to the December 9 with potential listing on the December 16 and really just giving the opportunity for institutions to participate. We are waiting for a prescribed asset status, which does open up the investor universe of those that can access and invest the bonds. So we're hoping for some positive news on that front, which would then attract more interest.

21:52 I think what's interesting because we'll unpack the pro split of THARISA, but when you look at the CARO pro split in that left pie chart, you'll see a very different composition of the platinum group metals, obviously, with a strong base metal credit. But we have a fairly significant portion of gold at 8.3%, platinum at 42.1%, palladium just below 40%, rhodium fortunately at 4.1%, iridium at 1.9% and ruthenium at 4.1%. And when we look at it in the context of THARISA, we'll see that it's a very complementary pro split, where we've got much lower palladium content in South Africa on the MGs at 16.7%, high platinum at 54.4%, negligible gold, higher ruthenium, higher iridium at 4.4%.

22:49 And most importantly, and a big economic driver for us is 9.9% rhodium on a 6E basis, 12% on a 4E basis. We're still very, very positive around the fundamentals of PGMs. We see primary supply constraints. If you look at the challenges that we face in South Africa, particularly in deep level mines and the average depth of the PGM mine in South Africa is 1.5 kilometers underground, We look at power issues, Eskom issues. We look at accessibility to all challenges around your host communities, which is not unique just to underground mines, but to all mines in South Africa.

23:35 And we see a continued deficit in rhodium and palladium. But I think what really is important to note is that there is consensus that platinum is heading towards a deficit within the next eighteen months. And we've seen platinum break through that elusive $1,000 an ounce mark, and we believe these are the early signs of a physical tightness in the market with China importing well in excess of the forecast demand of their platinum requirements, and we believe this is them hedging or taking a position for the very vast investment they're making in the hydrogen economy. The hydrogen economy is no longer

24:16 a story. It is reality. And we look at the capital and the investment that's going into it, and it's astounding. And really, the beneficiaries of that are iridium and platinum when we look at the electrolyzers and the membranes that are the most effective at this stage. But let's not write off the internal combustion engine just yet. There is a lot of pent up demand for new vehicles, and we're starting to see the chip shortage abate. And manufacturers, in spite of supply constraint issues coming in from Ukraine and Russia, we're starting to see a boost in sales of that pent up demand, importantly, with increased emission standards, which requires more loading of platinum, palladium and rhodium. So we still think strong demand for autocatalytics and PGMs in the internal combustion engine. And then importantly, the hydrogen economy, as I say, is a reality, and we'll start seeing those demand numbers kicking in to analysts' forecast going forward.

25:26 Chrome, in spite of the challenges in China with the zero COVID policies and the lockdowns, has been resilient and robust. We've seen strong demand. We've been able to move our products successfully,

25:38 again, testament to our logistics team that really manage multiple exit points for our products to end up in Indonesia and China. And with the easing as predicted or forecast in the New Year, we only see upside in terms of stimulus packages going into the Chinese economy and boosting stainless steel production and in turn growth and demand for chrome units. It's it's key that South Africa is the major supplier to, let's call it, the global engine of stainless steel production, be it in Indonesia or China, whereby we account for 80% of those imports. THARISA, this single mine accounts for approximately 10% of those imports. So a very key strategic supplier, a brand name in the stainless steel and ferrochrome space in China. I think importantly, 22% in this last financial year is what we refer to as our premium

26:39 specialty chrome products. And this is a more globally diversified product, and it allows us to access new markets, different markets. But importantly, we sell it at a premium above that $2.00 $9 price that we achieved. And you'll see current spot prices of metallurgical grade around $220 PGM spot prices at $2,312 as of Friday last week.

27:05 I think a key indicator in terms of supply demand balance in the chrome space is Chinese port stocks and we've seen them being relatively low supporting physical demand of imported chrome stocks. Currently, we see that number just hovering above the 2,400,000 tonnes, but not at a

27:30 material level that will give enough buffer to soften pricing. So we still see positive outlook in terms of chrome prices and demand, more importantly. When we look at PGM pricing, we often talk about the PGM basket price devalued by 16.6% in dollar terms. But when you look at the blue bar charts compared to the gray bar charts in the bottom right hand side, you'll see from the third and fourth quarter, the rand

28:02 prices received for our PGM basket prices were relatively flat. And this is a function of the depreciating South African rand. And we often lose the context and the perspective when we only look at the U. S. Dollar basket price. So still a very healthy PGM basket price in rand terms.

28:24 I'd like to hand over to Michael today, who is celebrating his sixtieth birthday. So Michael, wishing you all the very best and hopefully, we'll get through this with a smile. Good. Thanks very much, Phevis, and good morning. It really is a pleasure to be presenting an excellent set of financial results. And the financial results for this financial year ended 09/30/2022 are really on the back of our sustained mining, so our reef mining up marginally, but also maintaining and start increasing our stripping ratio to ensure that we can mine sustainably going forward. And while the reef tonnes milled were relatively constant, there was an increase in both Patent Group metals and chrome concentrate production.

29:12 And really, if we have a look at it and break it down further then, this delivery on this very solid operational performance supported by the multi commodities that we produce, we've used in both Pattern Group Metals and chrome concentrates, and we have benefited from overall favorable commodity price markets, has really contributed to us recording a record revenue of $668,000,000

29:36 Unfortunately, it wasn't all plain sailing. There were certain inflationary pressures during the course of this financial year and it's globally, it's not just specific to ourselves. How have we managed to offset these inflationary pressures? We've looked at increased production volumes. Our production volumes have increased. And really, a key contributor to that is the low cost chrome units from our fine chrome processing unit, the Vulcan plant. We've also benefited from a cost base perspective of the weakening rand against the dollar, a benefit there of 6.8% on our costs. When we look at our financial results for this past year, a key accounting aspect of it was the value accretive Cora transaction, and we'll spend a little bit of time analyzing what that impact has been on both the balance sheet and the income statement.

30:24 But if we look at where we are at the end of this financial year, we really are positioning ourselves for sustainable growth. Our net cash flow from operations, 173,700,000. As Phoebus mentioned, we spent $105,000,000 on CapEx. We continue to invest in the future and we also deleveraged the balance sheet net cash position of $80,400,000 positioning us well for this growth phase going forward.

30:54 If we break down the revenue, and I'm going to look at this on an FCA basis, in other words ex Gate basis, our overall platinum group metals contributing just over 62% to our overall revenue. The star performer again being rhodium. Rhodium, while comprising less than 10% of this pull split, contributed over 57% of the PGM basket followed by platinum just over 20% and palladium just over 14 If you look at the actual ounces sold, 168,003 ounces sold and a basket price of $2,564 per ounce.

31:32 We continue to produce both metallurgical grade using stainless steel and in the specialty grade chemical and foundry grade, which are the premium products, and those accounted for some 22% of our production. Just touching on the overall sales numbers. The metallurgical grade chrome sales, 1,200,000 tonnes at a average boss sorry, metal price of $209 per ton. I'm gonna spend a little bit of time unpacking some of the unit costs and really as we move forward, put into perspective the inflationary pressures that we faced. So Cube's mined was up 8.9%, benefiting from economies of scale though, overall on a unit basis reducing by 4.5%. Reef tonnes mined were up marginally and similarly the cost per reef tonne mined up marginally 1.5% at $32.4 per ton.

32:26 As mentioned, reef tons milled fairly constant to the prior period and we start seeing the inflationary pressures coming through increasing 14.1% on the online cash cost per tonne milled at $46.7 per tonne. We account for our revenue on a co product basis, we have the PGMs plus we have the chrome. If we were to say, let's do it on a by product basis and look at it from a platinum per ounce sold basis and take the credits from the other platinum group elements as well as the chrome revenue stream, we're actually in all negative all in sustaining cost of $436.7 per ounce. Just touching on the table on the right or the graph on the right, you'll see there the breakdown of our on mine cash costs.

33:13 As is normal, mining to use the diesel for the fleet comprising the bulk of those costs. We touch on royalties. We benefit from favorable commodity market prices, so the revenue authorities take their portion at some 11.3% and then labor 19.7%.

33:35 What is particularly pleasing is that notwithstanding the inflationary pressures we faced over this past year is we achieved a record gross profit $245,700,000 a gross profit margin also record at 35.8%. If we then have a look, and I'm going to just use this to illustrate inflationary pressures that the industry has been facing, is explosives, and this is really on the back of ammonia and also uses diesel in that composition as well on a per unit basis up 49.1%. Diesel, key to our mining fleets and input production, up 37.3% per liter.

34:12 Electricity, interestingly enough, was only up 2.7% and that's also benefiting from the weakening of the exchange rate. Landside logistics and there are several components to this. We've transitioned the bulk of our transport of chrome from mine to port and to road as opposed to historically rail due to infrastructure constraints, therefore, the increased cost of the fuel. We've also got a longer distance. We've also started transporting successfully via the Maputo Port. So that's up 21.9% in inland logistics. We're also all very well aware of the global supply constraint challenges that face the sea freight, up 38.6%. So again, that is why it's a particularly pleasing performance to record a gross profit margin of 35.8%.

35:03 I would like to spend a little time looking at the KARA Mining Holdings transaction. So it's a value accretive transaction. It's part of executing on our strategy of diversification. And if you look at the balance sheet part of the equation first, we have to value or attribute value to the component parts. So for the first time, we have a mining right coming through on the balance sheet, 201,800,000. The Zimbabwean government also has an option to increase its shareholding at the KARA platinum level. It currently earns 15% on a free funded carry basis. It has the right to increase that to 11%. It's a limited period of which they have the right to exercise, and it's in terms of an agreed basis on the agreements between the parties. And the liability for us coming through on the balance sheet at $16,800,000 If we then move to the income statement side, I'm going to reconcile really between our earnings per share of $0.05 $38 down to a headline earnings per share of $4.01 $1 but focusing on two lines within the reconciliation put on the right.

36:10 The first one is we had an existing shareholding of some 28.38% in Cora Mining Holdings. This needed to be revalued based on the metrics and the valuation from the purchase price and that results in a favorable fair value adjustment which has to be booked through the income statement of $33,500,000 so really a non recurring item as we've transitioned from equity accounting to consolidation. In addition, we acquired a further 37.9% and if you recall, we had a farming arrangement. THARISA funded some of the early exploration works and as a consequence was entitled to invest in the farming option at a discount and this resulted in a fair value gain of $14,900,000 a gain flowing through the income statement. So those are items that won't be repeated in the year going forward.

37:09 Right, we have remained a consistent dividend payer. As Fios mentioned, the total dividend for this financial year is going to be $07 per share. Our policy is to distribute at least 15% of consolidated net profit after tax. What we did in this particular year is we excluded the fair value adjustments from the Cara Mining Holdings transaction, the non repetitive, the non cash flowing. And if we then look at it on an adjusted net profit basis, after excluding that transaction, a payout ratio of 17.7%. So the total dividend for this year amounted to some $21,000,000 in cash payout. What is very pleasing is we are committed to financial discipline and capital discipline. And just to illustrate there, over the last seven years, our total distribution to our shareholders has totaled $82,900,000 Moving on to the balance sheet, our cash and cash equivalents are in $143,300,000 As mentioned previously, our net cash flow from operations is $173,700,000 and net cash on the balance sheet of $80,400,000 If you look at our total debt at year end $62,900,000 the bulk of that $39,800,000 is short term, most of it associated with the chrome trading book.

38:32 And then what's not evident on the balance sheet and also very pleasing outcome for this particular year is we previously had a limited recourse PGM discount facility assessed on the off take contracts, so affected off balance sheet. That contract was notice given that contract over this past financial year, so busy being unwinding that facility, so effectively bringing some $33,000,000 on balance sheet. You'll pick it up when you look at the accounts receivable number. Just looking at the graph on the right, asset backed finance facilities. This is mostly associated with the yellow fleet for mining. The majority of our spend again, 56% sorry, in terms of our debt and then our bank facilities, including the short term facilities of trading 37.9.

39:21 I think very pleasing is the strength of our overall balance sheet, current ratio 2.2, net debt to EBITDA a negative 0.3 and net debt to equity a negative 13. So as indicated previously positioning us well as we go into this growth phase. We have invested in the sustainability of operations, so we spent $105,000,000 on CapEx over this past financial year. If we look at the year ahead, some $80,000,000 budgeted and that excludes deferred stripping. Deferred stripping will add about $8,000,000 to that overall number. And as is usual, looking forward, asset backed facilities sorry, mining, dollars 38,300,000 of the total and the processing, 24,300,000.

40:11 Now this CapEx excludes Coro Mining and Coro Platinum. Coro Platinum total budgeted spend is $91,000,000 We are fast tracking that program, as Fivo said, another twenty one months to project completion and the spend over the next twelve month period or sorry, the next balance of this financial year budgeted at $260,000,000 That's a very high level overview of the financial aspects of the financial year, a very pleasing result and I'd like to hand over to PheVos. Thank you. Thank you, Michael. And just in closing, our last slide really talks to the value proposition of the THARISA PLC share. I think we've gone one too far. Let's go back.

41:03 There it is. So one of our Vision 2025 objectives is to become the investment of choice. And often, the first question that we get from existing shareholders and new shareholders is why do you trade at such a discount to fair value? And let's just unpack the comparatives here. On a price to earnings basis, we're trading at 2.8x. This is based on consensus. And you can look at our peers in the PGM space, right from close to 13% to the lowest at 5.5%. So certainly, a gap in terms of pricing there compared to earnings. I think what's most pleasing is our net asset value growth on a compounded annual growth rate of 14.8%.

41:56 So we're obviously doing something right since listing in London. Then Then you look at us on an EV over EBITDA basis, way down there at 1.8x, again, looking at the comparative universe, bearing in mind that RB Platts is the subject of a takeover bid and will be absorbed by either Impala or Northern as that transaction plays out. So the pool is becoming smaller in terms of comparatives. And then you look at price to NAV you know, at 0.5 times and that gap narrowing and where the industry on average is trading just over one times. So there is real deep value here and there is an upside investment case.

42:42 And really, it's our job to convince more people to see the resilience, the robustness, the repeatability of our financial performance and operational performance. Coupled with that, our growth strategy of doubling output and getting us to circa 400,000 ounces of PGMs and getting to that 2,000,000 tonnes of chrome, a real sustainable position within short order of getting to that point. So I think the pictures and the graphs speak for themselves. With that, I'd like to thank you all for your attention and time. And this is a photo. It's not of our runway in Zimbabwe, as someone commented. This is the clearing of the site for our processing facilities in Zimbabwe.

43:29 As mentioned, we have commenced with earthworks, early earthworks, and to be followed by civils. And obviously the infrastructure work is ongoing at the same time. So over to you, Ilya, to moderate the questions. Thank you very much. That's great. Phevis, Michael, thank you very much indeed for updating investors this morning. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of the screen. Just while the company take a few moments to review those questions submitted already, I'd just like to remind you that recording of this presentation along with a copy of the slides and the published Q and A will be accessed via your Investor Meet company dashboard. Ilya, if I may hand back to you. As you can see, you've had a number of questions from investors today. So thank you firstly to everybody for your engagement this morning. If I may, Ilya, just hand back and ask you to read out the questions and give a response, obviously, from the guys as appropriate to do so. Thank you.

44:19 Certainly. Thank you very much, and good morning. If you wish with the picture of Coro and mentioning of the CapEx number for the year, the first question here is, how confident are you that you can get the debt package agreed for Coro? And if this does not occur, what levers can you pull to keep the project progressing? Yeah. I suppose Michael is closest to this in terms of negotiations, but I can give a sort of overarching response and then hand over to Michael. I think we're confident that we're close to closing out on a number of those multipronged financing opportunities that we have. Know, Zimbabwe is binary. There are backers and investors that will finance Zimbabwe and those that won't. And so we're obviously in the camp of those that are either have existing banking facilities in the country or exposed or support the mining industry there. So when it comes to the macro environment, I think, you know, our financiers are comfortable with that.

45:27 So, yeah, I think we're confident that we can achieve that. In the event that there is a shortfall or a timing gap, we are generating strong cash. So the natural option is for us to fund that gap from THARISA cash flow pending the conclusion of those funding pipelines. Michael, any comments from your side? No, I really think that does summarize it well. I mean the two components, two key components are effectively the levering of our assets that is extremely well advanced in terms of approvals, the legals and so forth, so drawdown anticipated in the first quarter, very confident on that. Very confident on the ECRC package in terms of local content and the other partners we've got there on the $260,000,000 The challenge there is really the timing of it to ensure that you don't impact on our delivery line.

46:18 We are dealing with government to government bodies as you go through that process. I think that's a challenge to bring it in on time, but confident that it will then effectively close out. As Fiwos mentioned, very strong cash flows as well, should that be necessary. I think that answers that question, Annelia. Thank you. Fiwos, summing sort of high level here is somebody asking a question around having read reports of mines being approached by protection records in South Africa, has THARISA ever been approached by organized crime, have we been threatened? And the question relates to not just the mine operation itself, but the transport network and the port operations. Yes. So we don't have direct experience of it, but we're fully aware of what's going on within the border mining community with these procurement rackets and rings that are going on. I think we must probably got wind of it early on enough to sort of put preventative measures in place, but there's no doubt that there's a heightened activity, there's heightened unrest and invariably expectations that are created by, let's call it, unsavory groupings within communities and that does create uncertainty and unsettled environment.

47:33 We're very proactive in our engagement and we actually have set up a SMME, a small business forum and platform to support legitimate local enterprises who provide services to the mine. Have a community company owned by the community called Rocker Side that provides various services already through the Community Trust. Are now shareholders of PLC. There are various initiatives underway. But we're fully aware of what's going on. In terms of transport, I personally am not aware of any threats at this stage, but we are alive to the situation. Theft and crime is on the rise to, I would say, alarming levels.

48:19 But we do the best we can to mitigate the risks within our ambit and control. Thank you. A number of questions coming through on Vulcan and on production guidance for the following year. So let me read one out, and I'm sure it'll answer a lot of the other questions. Can you give us any guide as to how 2023 production guidance split half and half? How recoveries are performing at Vulcan? Where are recoveries currently? And what is the plan? And when do you expect to achieve full targeted run rate? Yes. I mean, it's a very important question and a relevant one. So if we look at where we've come from, 2021, Chrome recovery is at 63.3%. This financial year end, we closed at 68.3%, so a 5% improvement. And that can be attributed to Vulcan Fine Chrome recovery plant. So where we are now is we are at that current run rate as we ended the financial year.

49:20 I mentioned on an analyst call that we expect to see some marginal improvements in the next quarter, but the more material improvements coming into the second half. And that's really a function of certain equipment that's being installed and reconfigured, which takes a bit longer. So if we look at the Vulcan as a standalone, which really should look at the end to end recovery, which we're targeting across all three plants of 80%, which we believe that we'll get close to that by year end financial year end 2023 and then start getting that run rate going into 2024. We are giving ourselves a bit of a buffer and headroom here. We are currently at 50% of the required or not required targeted recovery of Vulcan as we stand today.

50:15 We will see that improving next quarter and then hopefully getting up to our stated recovery. The reason why I say you shouldn't look at it on a stand alone basis is because the target is to do an end to end or to achieve an end to end recovery of 80%. So if the front end performs exceptionally well, there's less opportunity for Vulcan to capture the remaining Chrome units. So it's a holistic approach that we really look at. And so while we're tweaking Vulcan, we're also looking at the Chrome circuits in Voyager, Challenger and Genesis at the same time to optimize the overall recovery. I hope that answers the question. Thank you. Michael, over to you. And I know you addressed some of the cost questions in the slide earlier, but there are some questions around here, one relating to what was the cost inflation in South African rand and how do you view that with regards to the numbers. But more importantly, and I know this was discussed on our call with the analysts yesterday also is, can you give some color on the cost pressures going into F twenty twenty three?

51:28 What's inflation and rand expectation built in your budget? And then obviously, again, the Coral CapEx for 2023, but I think we answered the $260,000,000 for this year, financial year coming up. But what do you expect on the cost pressures coming through for the coming year? Okay, thank you. There's a lot of questions in that front. Let's see if I'll answer them, if I do omit some. Just remind me about those. Just going to remind Fever, there's one part of the question that they weren't answered that we need to address is the split between the expectation and production, but I'll hand that back to you after after Vance, the finance ones. So if we look at the cost, know the one question that came through is on the deferred stripping, on the capitalization of that. So if you have a look at this last year, capitalized deferred stripping was some $15,100,000 in total. Look at the CapEx and the plans going forward and the mine plan, that amount will be some $8,000,000 for FY 2023.

52:27 On the inflationary front, and this has been quite a challenge in terms of the budget as to what inflation you do and what exchange rates you use going forward. So we typically use a consensus in terms of exchange rates of our main analysts to cover us, and we take a mix of those, and that's used in commodity pricing and, in fact, in our inflation in our exchange rates as well. But if we have a look at the inflationary pressures, we really seem to have peaked in terms of the, let's call it, the pricing shocks that came through on the back of the increase in oil prices, translating to steel, ammonia and so forth and sea freight. So those seem to have normalized in some cases, for example, the freight side are in fact trending downwards, steel trending downwards as well.

53:14 If I have a look at our budgeting costs on a per unit basis, we're probably looking providing for an inflationary figure of some seven to 8%, probably very much in line with expectations on global inflationary type numbers. Am I expected to be below that? I really hope we do achieve below that as we go forward, but that's what we've actually budgeted for at the moment on a per unit cost basis. Sorry, please remind me some of the other ones that I've omitted. Well, the CapEx number with regards to the question was what was And the CapEx for then just while you're on CapEx, does the CapEx guidance for Therese in particular include waste stripping? And if not, what is the guided waste stripping CapEx for 2023? I know you addressed it earlier, but maybe repeat. Yeah. I've just repeated that at the start of this, so that's fine. So that's the 8,000,000 odd dollars. That's not included in that 80,000,000 that we provided for.

54:07 The total CapEx spend or budget CapEx spend on car is $391,000,000 We have got an accelerated program and a build program. The budget CapEx spend for this financial year is sitting at $260,000,000 you. Phebeus, maybe over to you. Can you give some indication of how seaborne freight costs are trending at the moment, given your exports of chrome to China? Yes, sure. So I think what's pleasing is that the rates have come down considerably from peak pricing. I think the highest we saw was $50 a tonne depending on the modality in the port, whether it was geared or ungeared vessels. But on average, around $35 per ton.

54:54 We're seeing that normalize to to pre sort of shock levels or pre COVID shock levels and supply constraint levels. So so so sort of mid twenties and below depending on opportunistic bookings. So so, yeah, very positive events there playing out, and we see that, for the near future being at those levels. UNIDENTIFIED Thank you. Michael, back to you with regards to the financing. What interest rates are you looking for the financing facility that you addressed earlier and the $50,000,000 bond issue? The 50,000,000 bond issue is priced at 9.5 percent.

55:43 We're still doing that final pricing on those two other facilities. I would expect those definitely to be below the 9.5%. Probably looking at margin on the SAFN debt of about 300 basis points as a maximum. On the Zimbabwean one and the project financing, they're much more interesting dynamic there because on the one hand, we've got ECRC funding that comes with the African guarantees. So the banks process on the South African government bond rates and the cost of the South African government. And then, of course, you've got a third party bank, which will look for the normal returns. But again, I would not expect any of those to top up at the 9.5%. So I'd probably use that as a very good maximum. It also depends with interest rate environments going forward. All the central banks seem to be hell bent on pushing up the interest rates to stop inflation.

56:34 That would, of course, impact the overall costs. But if I can achieve an average of some 7%, I believe that in this current market would be a very good outcome. Thank you. Time is running away. So I know the question there's a lot of questions which we will answer via the system as soon as possible today. But one last question here for you, Fugos, is the impact of electricity on South Africa, where where does the operation stand? I know we addressed it briefly, but can you maybe summarize and then give us some concluding remarks before we need to log off? Yes. So I think there are two components to it. There's the security and stability of supply. And I think we made a decision three odd years ago to invest in 10 megawatts of backup generation, diesel powered generation, and that has allowed us to withstand what is referred to as level four, level five load shedding. It's different for industrial users.

57:28 It's more of a negotiated curtailment, and we've synchronized those generators with the grid. So where Eskom needs relief, we can then fire up those generators. Now bearing in mind that utilities, water and electricity are less than 7% of our online cash costs. So one of the bigger concerns is the cost of electricity going forward. So I think being a mechanized yellow fleet energy, diesel energy powered mine, we're less exposed to those increased costs that are forecast into the future. Well, what we have done, though, is we've kicked off the 40 megawatt solar project, which is awaiting approval, as mentioned, and that will give us lower cost, lower than current Eskom MegaFlex rates, daylight units where we can offset those above inflationary costs that are forecast coming out of Eskom and Nursa in the near future.

58:30 And then in terms of resilience to power cuts and things, that backup generation has served us well. I think where we do have challenges if there are peaks and troughs or spikes in the grid, it can affect ops and operations, albeit temporary, but it does create some instability. And if there are blackouts, obviously, where the grid falls over, then we're impacted. But you can tell by our production the fact that we're able to mill 5,600,000 tonnes. We were not affected in any material way by ESCOM and we see that into the future with the backup generation as well as the solar coming in 2024 onwards. That's great. Phevis, Michael, Ilya, thank you very much. And as Ilya said, we'll make all the questions that you've submitted available to the company for their review after today's call. Phevis, I know you've got meetings scheduled for today.

59:25 So and I also know that investor feedback is important to you. So I'll shortly redirect investors to give you their thoughts and expectations. But before doing so, Phevis, if I may, just ask you for a few closing comments and then I'll redirect investors for their feedback. Great. Thank you very much. Yes. So I think when we do these year end results presentation, it gives us the opportunity to reflect and look backwards. And we look at what all of us, I suppose, humans on this planet have had to withstand, whether it be COVID lockdowns, you know, losses on all fronts, and and then the challenges of global uncertainty with geopolitics playing out. It really makes me extremely proud of the THARISA team and the resilience that they've shown through all of these challenges and obstacles and this can do attitude that we have and looking for alternative solutions to problems that potentially could hinder our operations and hinder our business really, really makes me exceptionally proud to be part of this THARISA team and to deliver value to our shareholders. And really, I think I just want to say thank you to the THARISA team, to our supporters out there. Keep supporting us. I think there's a great value proposition, we will realize that value. So thank you, everyone. I wish you all a very safe year end and festive season for those that celebrate Christmas. A Merry Christmas and a safe and happy New Year. All the very best.

1:00:54 Thank you. That's great. PheVos, Michael, Ilya, thank you once again for updating investors. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order management can really better understand your views and expectations? This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of THARISA, I'd like to thank you for attending today's presentation. May I wish you all a very pleasant morning.