Tharisa (JSE:THA) — March Investor Presentation

0:03 Good afternoon, ladies and gentlemen, and welcome to the THARISA Investor Presentation. Company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. These will be available via your Investor Meet company dashboard, and we'll send you an e mail to notify you when they're able and ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, forgive me, I have just sent you a poll. Let me just do that. Right.

0:50 We've just sent a poll. If you could give that your attention, we would be very grateful. I would like now to hand over to PheVos

0:59 Perulis, CEO of THARISA. Good afternoon to you. Good afternoon, Mark. Thank you very much, and thank you to all our attendees this afternoon, some of our very loyal and hopefully happy shareholders. And hopefully, we can convince a few of you to take the plunge and invest in THARISA PLC. So really, the theme of today and the format that we'd like to run is a brief overview for those of you that don't know THARISA, followed by a fairly comprehensive Q and A session. But I think I would like to share a short video with you. And as we said, it all starts with a good blast.

1:44 So, Ilya, if you could share that for us, please.

1:51 So you can see our open pit, multi bench, multi seam open pit operation and that is one of the many blasts that we undertake on a weekly basis. So moving back to the presentation now, just a high level overview of THARISA and where we are situated, which is in the Bushveld Complex of South Africa, the largest geological formation containing two thirds of the world's platinum and chrome resources. We are a leading platinum group metals and chrome co producer. Now this is a unique phenomenon in the Bushveld Complex.

2:36 Most platinum producers produce chrome as a byproduct and most chrome producers don't generally produce platinum group metals. And this really is a unique situation in the Bushveld Complex because we mine what we refer to as the middle group reef horizons. These reef horizons are multi seams, so we mine five seams, and this allows us to unlock this long open pit life of mine of some fourteen years. Now if you compare that to the average depth of the platinum industry in South Africa, which is over one kilometer underground, it has numerous competitive sustainable advantages, one of which is the cost, two, labor intensity and importantly, we have scheduled a further forty year underground life after this open pit life of mine.

3:33 We are close to infrastructure, road, rail and power, and we run a mechanized fleet. So we have a highly skilled labor force. And importantly as well, we have a huge resource, some eight sixty million tonnes in situ with some 42,000,000 ounces of PGMs in the resource on a 6E PGM basis, plus 172,000,000 tonnes of chrome contained. So moving on now to our sustainable, low cost polymetallic business model. We have four pillars that we hit pin our business on, and the first is the discovery phase where we identify large scale resources with to low generate those margins that we enjoy, but importantly, to withstand the cyclicality of the commodity pricing cycle. And what we've done in the bottom right hand corner of the presentation is illustrate that even in challenging times, much lower PGM basket prices, we've remained profitable through the last five years, and that's a profit before tax and earnings per share. You'll see all positive.

4:58 Now when one looks at our peers, a lot of them were marginal and some not generating any free cash flow during those lower commodity cycle periods. We do believe in extracting value through the opportunities within our vast resource portfolio. And through that, the second pillar being development, where we take an innovative approach to mineral extraction and we identify new ideas, new processes and technologies to enhance that value. As I always say, we take huge effort to mine that single cube of reef. We might as well maximize the value from every cube that we mine.

5:48 Importantly, we're very focused on delivery, and in that comes our core value of safety. A safe producing asset is a healthy producing asset and we can illustrate that through the years with an excellent safety record with the delivery of both platinum group metals and chrome concentrates in material quantities. We look at our stakeholder base and returning value to all stakeholders and value to our shareholders through our various dividend policies and capital return through our growth policy. And I think it's very pleasing to note that in the areas that we operate, we have a major impact on the societies and on the upliftment of the communities, not only through direct employment, but through social contribution and education, which we'll touch on briefly later.

6:42 And we highlighted diversify at this point in time because it has been our ambition and our strategic initiative to become a multi asset, multi commodity, multi jurisdictional business. And we're at the cusp of delivering into that strategy, and we'll talk in more depth as to those opportunities.

7:07 So touching on safety and ESG, we have one of the lowest safety records in the mining industry. This last quarter, we registered an even better lost time injury frequency rate of zero point zero eight incidences per 200,000 man hours worked. And this, as I say, is one of the best in the industry. We have achieved five years fatality free, again, a very notable and commendable achievement. Safety is a core value of ours and remains embedded in everything that we do within our organization. As mentioned earlier, education is critical for us and key in terms of learnerships, bursaries and the various adult education training initiatives and courses that we provide not only to our employees, but also to the communities within which we operate.

8:06 We have set an ambitious target to reduce our carbon emissions over the next decade. We are busy working with our suppliers and OEM contractors to consider various technologies and initiatives that will allow us to reduce our carbon footprint. And as some of you may have noticed, we have started reporting on all Scope three emissions. And in that table there, you can see our current state of energy consumption emissions and the rehabilitation provisions that we provide for our environmental impact. And it is certainly a core priority of ours to minimize that impact going forward.

8:52 So if we look at THARISA in the realms of PGM producers, we are the sixth largest listed South African PGM producer. As at the end of our financial year 2020, we produced just over 142,000 PGM ounces. What does that mean in terms of global demand? It's around 1.3% of global platinum demand, 0.3% of palladium demand, but importantly, 2% of rhodium demand. And I think since the last time we spoke, prices the average PGM basket price was around $2,500 an ounce. And currently, we are trading at just above $4,000 per ounce. So a material movement in that PGM basket price.

9:45 On a 6E pro basis, you can see the distribution and the split of the various constituent elements within our pro basket or PGM basket. Platinum is still the dominant component at some 55.4, followed by palladium and importantly on a 6E basis, rhodium at 9.5% with ruthenium at 14.4% and iridium at 4.3%. I think if we just cast our eye now to the bar charts, this is a comparison with other PGM miners in South Africa, majors as well as a couple of junior miners.

10:31 And you will see that on a 4E basis, which is platinum, palladium, rhodium and gold, we have the most valuable PGM basket. And the reason for that is that we have the highest rhodium content at some 12% on a 4E basis, which shoots our current 4E basket price up at $4,700 per ounce, some $400 more than our next competitor in the PGM mining space. Moving on to chrome, we are the fourth largest chrome South African producer. We accounted for approximately 10% of Chinese chrome concentrate imports in the last financial year. So a key supplier to this very important stainless steel industry, which has been driven primarily by the growth in China.

11:22 And if you look at the graph on the bottom right hand side, you'll see that on a compounded basis, stainless steel has grown globally at 5.8%, which is most probably the best performing commodity bar none in terms of its growth of consumption. Perhaps carbon steel, in terms of the Chinese story, will match this voracious growth. In terms of South Africa's role that it plays in Chinese requirements, South Africa is a key supplier supplying some 80% or more than 80% of Chinese requirements. China is wholly dependent on the importation of chrome units. And therefore, it really is a China South Africa story with strong underlying fundamentals driven by domestic consumption of stainless steel primarily in China as well as the very strong export market of stainless steel products, be it unfinished or finished goods.

12:30 I think importantly to note, we also have a diversified product mix in terms of our chrome. We produce just under 25% of our production in the form of specialty grade products, foundry and chemical grade, which command a premium over the metallurgical grade and are geographically diversified, which is important in terms of that concentration of customer risk. You will all note that we will record and we are constructing our fine chrome recovery plant called the Vulcan Plant that is well underway and construction completion is forecast for September 2021. And what this does is really adds another 25% of our chrome production in the order of 400,000 tonnes per annum of additional chrome concentrate.

13:25 So looking at the growth of THARISA, we employ a six pillar growth strategy, which really focuses on expansion of our existing business, optimization, looking at innovation and that diversification that we spoke about. So to that end, in terms of organic opportunities, we have life of mine extension programs. You would have noticed that we extended our life of mine by an extra year, so retaining that fourteen year life of mine open pit. And that is through our annual review of the open pit, the resource update in terms of the depletion model and continuing exploration and expansion of our resources and reserves.

14:10 We've touched on the Vulcan plant, which sees our production increasing to 2,000,000 tonnes of chrome concentrate from 2023 onwards, and then fulfilling our objective of achieving those 200,000 ounces of PGM production. We're also focusing on PGM smelting and refining. In terms of our current PGM offtake agreements with the two refining houses, our contracts will be fulfilled partially next year and the year after. And it is our intention to expand our pilot PGM smelting program that we currently run to accommodate the full 200,000 ounces of THARISA PGM production to capture that additional 15% margin we estimate that we're currently losing by refining our material through a purchase of concentrate agreement.

15:10 We're also looking at opportunities in terms of downstream beneficiation in terms of chrome as well as utilizing the metals that we mine in terms of battery metal technologies, not only for our own application, but potentially to commercialize and roll out globally. We'll touch on the following slides in more detail around the external opportunities, those being Celine Chrome and Cora Platinum on the Great Dike in Zimbabwe and Celine Manganese and Iron in the Northern Cape in South Africa. So if one looks at the optimization of our business and the growth profile, it is our intention to achieve those targets of 200,000 PGM ounces and 2,000,000 tonnes of chrome. You'll see the two graphs on the right hand side are analyst forecasts, and that's the consensus forecast.

16:06 And you will see that they have us just shy of our internal targets, so we're looking forward to proving them wrong in the future. And we've touched on that PGM smelting because what that does is really just kicks those margins into the PGM downstream opportunity in terms of smelting and refining. We touched on the beneficiation of our chrome in the form of special alloys and steels, potentially carving a niche for us and value addition thereafter. Moving northwards to Zimbabwe from South Africa, we referenced the Great Daikov Of Zimbabwe, which is the second largest platinum bearing resource globally after the Bushveld Igneous Complex in South Africa.

16:56 It is 550 kilometers long and 11 kilometers wide. There are two mineralized zones, firstly, the main sulfide zone and the lower sulfide zone. Historically and currently, the main sulfide zone is the main productive zone of the Great Dike in Zimbabwe with notable peers being Zemplat, Unki, which is the Anglo Platz and Mimosa, which is the Sibanye and Impala joint venture, producing some of the lowest cost PGM ounces in the industry. And both Impala and Anglo announcing some material expansion programs on the Great Dike due to the shallow low cost nature of those resources that they have.

17:44 So the Karo Platinum opportunity comprises some 34,000 hectares in prime location on the Great Dike and has a history historical resource of some 96,000,000 ounces that was declared by Zemplatz previously. Celine Krome was awarded three special grants adjacent to the west of the Cara Platinum area and this is some 9,500 hectares and is highly prospective and productive in terms of chrome bearing reef horizons. Currently, THARISA owns 26.8% of Cora Platinum.

18:29 It has the option to increase that at a discounted valuation to a SAMRIC compliant resource code, and it's something that the team are looking at closely. In the interim, we have completed two phases of exploration, which have confirmed the results that we've seen historically from Zemplates and are leading the way in terms of feeding the import data into the prefeasibility study, which is expected later in the year. In terms of the areas that we currently operate and have the options over in Zimbabwe, these have been demarcated and declared a special economic zone, which entitles the operators within these areas to reduce taxes, duty free importation of raw materials and equipment as well as certain exchange control relaxations and provisions.

19:32 It is the intention as well to declare the project a national project status mine, which then entitles the Karo Platinum to further dispensations through negotiated statutory instruments. In terms of the option of a Celine Chrome, Theresa currently has an option to acquire 90%. Trial mining did commence in the financial year 2020, allowing the team to optimize the studies and plan for the development of that much smaller, but very lucrative and high grade chrome opportunity on the Great Dike.

20:17 Touching on saline, manganese and iron ore, THARISA has an option to acquire 70% of the shares in this producing asset and this is at a fair market valuation. And the principal activity currently at Celine in the Northern Cape is the production of manganese ore and iron ore on a direct shipping ore basis. So this is a high quality resource and asset. It is currently in operation, as mentioned, producing on an annualized basis 600,000 tonnes of manganese ore as well as 600,000 tonnes of of iron ore on an annualized basis. It is cash generative and I think for those of you that follow iron ore, we've seen very, very buoyant prices, albeit coming off in the last twenty four hours or so.

21:11 The second phase resource declaration and drilling is underway. And the intention of the Saline Manganese team is to increase production to 1,200,000 tonnes of each product, respectively, at the mine. So very complementary in terms of our markets, terminal markets being the Chinese steel and stainless steel markets, which as we all can appreciate are very liquid and very have very positive growth outlooks. So if we just take a moment and look at THS' free cash flow and cash generative ability, you will see that our PGM peers have benefited certainly from these buoyant and very high PGM basket prices.

22:03 That is that black line in terms of that free cash flow yield graph. And you will see that taking analyst forecast that we are scheduled to outperform in terms of free cash flow yield. But this really talks to the fact that our equity is really undervalued and should appreciate materially with these free cash flows that we're generating to normalize to the levels of our peers. So in essence, a doubling of our market cap should see us in line with the PGM peers. And when we look at the EBITDA margins, historically, we've had a very strong EBITDA margin, and that really talks to our low cost business model, the coproduction nature of our chrome concentrates and PGMs.

22:51 You'll note at current prices, our peers with PGM refining and smelting capacity have better margins. And this really talks to that 15% that we're losing in terms of our sales of PGM concentrates to refiners. Of interest, RB Platinum also sells their concentrates to the four majors in the center of that bar chart. But going forward from 2025 onwards, with long term pricing, you'll see that our EBITDA margins grow considerably. And this does not take into account those additional margins from the PGM smelter that we are hoping to bring to our bottom line.

23:38 Just in terms of our see, there's a poll that's popped up. I don't know what answer I'm going to give there. Hopefully, you guys share the optimism that we do, but carrying on. In terms of the PGM basket prices and chrome prices, you'll see the material appreciation on the 3e PGM chart. It's quite a challenging chart to plot because on the one hand side, you've got 30,000 as the top end and the other side, 2,500 in terms of palladium and platinum, certainly, in our view, has a strong case for a rerating on the back of the sentiment around the hydrogen economy as well as substitution in terms of the gasoline auto catalytic converter.

24:29 Again, if we look at our chrome chart, prices have recovered nicely. We're hovering around $180 per tonne with a relatively weak South African rand, very healthy margins in our chrome business as well. And there you can see the manganese and iron ore prices really with iron ore shooting up. I think this is a flat $62 price at around $160 per tonne on a CFR basis. So generally speaking, a very strong commodity pricing environment. So if we just take a look at the valuation of THARISA and the potential upside, again, this is based on Peel Hunt and RENCAP's forecasts and this compares us really to the South African PGM peers.

25:20 So at the time of publishing, which I think is a couple of weeks old, the share price upside potential at spot, we rank really well there at some 157% upside potential. But I think what's really interesting is the earnings growth and this really on the back of that strong rhodium and improved chrome PGM price, some 234% increase in terms of our earnings. And then when we take a look at that important ratio, EV over EBITDA, you will see that we're still trading at a huge discount at just some just over 2.5% to 2.2% going forward into forecast territory.

26:07 And you can compare that to the average of the South African PGM peers and our London listed mining peers. So in our view, strong case again for a rerating from this point onwards. So when we look at the PGM basket and the important 3e elements, platinum, palladium and rhodium, you'll see that platinum is forecast to move into a deficit. These are BASF numbers and exclude investment ounces. And if we look to the right, you'll see that the WPIC has declared a deficit for the last two years and is forecasting a platinum deficit going into the future. The main difference here is that BASF are looking at industrial application as well as jewelry and discount the investment sector, which comprises ETFs, bars and coin investors.

27:14 So very bullish in terms of the outlook of demand outstripping supply, supporting a much stronger pricing environment. Now Palladium is dominated by its application in auto catalysts, and you'll see on the back of slowing down of auto sales in 2020 and a marginal recovery in 2021, they show a surplus, but they're reverting back into a deficit and then moving into a surplus ten years or 2029 timeframe. Now this has changed post the publication of this with the Norilsk shutdown of 25% of the palladium capacity, and I don't think the market has factored in the impact of that potential damage due to the flooding at one of the key operations in Russia.

28:12 Rhodium is really the story that has captured the headlines with prices nearing $30,000 an ounce and is continued to be forecast at a growing deficit and that's really due to its core function of cleaning emissions out of both gasoline and diesel drivetrains. Looking at chrome, as mentioned earlier, chrome is really irreplaceable in its function to make steel stainless. It is dominated by South African supply, and we're perfectly positioned to take advantage of this huge growth in China.

28:59 Previously on the slide, we spoke about a 5% CAGR. If we equate that back to chrome units, that's an additional requirement of a producing asset like THARISA on an annual basis. So some material shortfalls potentially in the future in terms of units being supplied into the growing stainless steel market. And we also factor in to the fact that the rest of the world's economies will start recovering post COVID-nineteen, and there's been much talk about the refit of The U. S. Infrastructure, which is tied and ailing, which will require significant steel and stank steel. If we look at the chart at the bottom, some interesting information there, certainly chrome in the right space, manganese moving into the right space, palladium looks like it's fully priced at this point in time subject to supply disruptions.

30:01 But generally speaking, around the basket of commodities that we speak, positive outlook underpinned by strong demand. That concludes the overview of our business and the commodities that we operate in. I'd like to hand over to Eleonar, who will pose the questions for answer. And again, thank you for your attention and your time this afternoon. Thank you very much, Phebeus. And let me start off with the first question, something that came up recently and is obviously something close to people's hearts. What is happening with regards to South African chrome export tax and how will you and the industry deal with this? Thank you for that question. It obviously captured the headlines last year when it was announced by cabinet that they approved the proposed tax.

30:53 Subsequently, the Chrome SA grouping formed to put its voice forward in terms of the non integrated Chrome producers being the platinum producers as well as the primary Chrome producers. And really, we put our case forward to the various government departments to really air our concern as to the tool that has been proposed to support the ferrochrome industry. Now the world has changed since then. Prices have risen and all producers currently are generating decent margins and generating cash. So one wonders whether the timing is ill placed, but certainly from our view and our engagement with government, we stand firm in the belief that the tax is misplaced and if anything will provide temporary relief for an industry that is is desperately needing investment in technology and support fundamentally from the state utility Eskom in terms of developmental pricing for electricity so as to sustain its competitiveness with We are pleased that there was no mention of the tax in the budget speech by the Minister of Finance.

32:12 And by all accounts, it seems to have lost some momentum in terms of its relevance in this more buoyant commodity pricing environment. And we've noted that some of our ferrochrome peers have been calling for more support in terms of logistics and electricity and have been less vocal about chrome tax, which in effect would breach international bilateral investment agreements and treaties. So at this stage, not very little feedback from government, but we remain confident that sanity will prevail. Next question, it's a two part question with regards to rhodium. First of all is we've seen spikes in rhodium before in 1990 and 2007, which quickly saw sell off. Why do you think this time is different? And in conjunction with that, we've seen an increased production acceptance of electric bills around the world. How confident are you that rhodium demand will not decrease over the next few years?

33:19 Thank you for those questions, both very good questions. So I think the major difference between the 2007 spike in rhodium and the current spike is that a global drive to decarbonizing the economy from multiple sectors has been deployed from California to Europe to China with a six c emission standards. And while in 2007, there were some substitution of rhodium, the standards were less stringent. And I think the VW diesel gate scandal has really frightened OEMs in terms of being cute or clever in terms of thrifting or scaling back rhodium content to reduce those nitrogen oxides in the emissions.

34:09 And while there has been talk of substitution of palladium or platinum, it takes years to engineer these platforms. And if anything else, if anything, emissions are going to become more stringent. What's supporting the fundamentals for a stronger price and a sustained pricing is that supply is diminishing. So we're seeing less supply, primary supply coming out of South Africa from underground mines. We're seeing less recycled material coming back into the market because of that thrifting that we saw some fifteen or thirteen years ago with lower loadings of rhodium, some 10% to 15% lower in the auto cat. So in terms of sustainability, we see emission standards increasing from this point on not decreasing, so more loadings of rhodium supply being constrained. So it is the perfect storm in terms of higher prices.

35:05 And then the second part of the question, Ilya, was Is with regards to the electric vehicles and why Yes. And then just on on the back of that, there's a further question here. Given the high input costs with regards to rhodium into the OEMs, wouldn't they be switching sooner? I know we've done the calculations what the cost of rhodium with regards to a catalytic converter is at the moment, so maybe expand on that. Yes. So I think I did cover that in terms of the ability. It can be engineered in, in terms of substitution at a ratio, I think, of five or six to one. And so one has to then consider the supply side of palladium. If you start putting six ounces or five ounces palladium into every single ounce, yes, there would be a cost saving, but it does take a number of years to develop these platforms, which in turn need approvals on their own. So that any chemical composition on a platform requires its own approval.

36:06 And from what we understand, this is quite a laborious and lengthy process. In terms of the EV revolution and the drive to battery electric vehicles, it certainly plays a role in terms of the forecast and the dynamics. And those forecasts that have been put forward by BASF, who are the largest auto catalytic converter producer, include the BEV increase in the drivetrains globally. So I think the world is attuned to the fact that the parking lot will comprise multi drive turns and we hope we'll have a decent portion of hydrogen fuel cells as well in that parking lot.

36:57 But we I don't believe in the next ten years we will do away with the internal combustion engine in its entirety. So the demand will still remain with increased emission standards, importantly. Thank you. Moving closer to the THARISA mine, let me pose two questions to you. One is with regards to the current open pit life of mine. Can you expand on that and where the fourteen years fits in given that we had fourteen years of life of mine last year already? What have you done? And then secondly, it's a question with regards to power consumption and the reliance on Eskom and what portion power plays as part of the unit operating costs? If you can expand on how we deal with power on-site, how important it is to us, how we're dealing with load shedding and as a percentage of unit costs, what is electricity?

37:49 Thank you. So if I start with the last question first. Electricity is not a huge cost driver for us on-site. It's around 6% of our online cash cost, and that's really driven by the fact that we run a large scale open mechanized fleet, which is a diesel drivetrain. So the majority of our energy is consumed through those that yellow fleet. We run around 25 megawatts of electricity from Eskom for our processing plants. We have the two processing plants, the Voyager and the Genesis plants. And we have standby backup generation of close to 10 megawatts of diesel generators, not the most cost effective. But what that does allow us to do is operate up to a level or stage four load shedding level in South Africa, which requires 20% curtailment of power, and we can operate on those diesel gensets during any load shedding up to level four.

38:54 So electricity, not a major cost driver for us, and these double digit escalation figures are concerning for the industry as a whole, but in terms of how we operate less impactful for us. In terms of the open pit life of mine, you're correct to note that we have retained the fourteen year life of mine of Birt. We mined circa 5,000,000 tonnes of reef in the 2020 financial year. And this really is a function of us optimizing the pit. On an annual basis, we do a pit review, we do an update of our resource and reserve statement, which is declared in our annual report. And through the various initiatives, opening up additional strike length on our Far West and West mines, we have managed to increase that resource and reserve size by an additional, call it, 5,000,000 tonnes of reef, giving us that fourteen year life of mine. So it is a progressive target.

39:56 One thing we have noted is that we will mine to a 200 meter high wall. Currently, the deepest point in the pit at the moment is around 110 meters. So that talks to the additional fourteen years. Now bearing in mind that certain areas of the pit are much shallower, have a much lower strip ratio. So when we talk about the waste to reef strip ratio, it's a blend on a weighted average across the various open pits that we operate. Thank you. Moving north to the border, and I will pull up the slides while I read about it. It's a three pointed question. One is how concerned are we about the stability of the mining dispensation in Zimbabwe?

40:44 Do we have a stable and consistent power supply on-site? The second question relates to how long are the SEZs in Zimbabwe valid for that we have been awarded? And thirdly, can you expand a little bit on the potential of the Great Dyke and what makes us bullish about investing into Zimbabwe? Yes. Thank you. So historically, the mining legislation in Zimbabwe has been very stable. There have been very few issues around mining title and security of tenure. And and, I mean, we can see numerous successful cases in point on the Great Dike with the majors in Parla, Anglo and Sibanye operating there in various forms over many decades.

41:38 There have been issues around free flow of capital, we are dealing with and approaching government with in terms of our special dispensations, in terms of statutory instruments. So I think in terms of security of tenure, we're comfortable with the titles that we hold and the willingness and openness of the Ministry of Mines in Zimbabwe to support new investors and new employment opportunities for its citizens. So I think there's a complete alignment in terms of the objectives of ourselves and government in Zimbabwe to actually deliver a successful mining operation in Zimbabwe.

42:27 In terms of the special economic zone, typically, are a ten year life type of declaration, which can be expanded. The beauty of these special economic zones is it allows the benefits to suppliers and the supply chain into the mine and the mining community. So key suppliers, whether it's yellow mining fleet, chemicals, steel fabricators, etcetera, benefit from these same fiscal incentives that have been afforded to us. So really, the drive is to create an economic hub of activity so as to support employment and revenue for the government on a deferred basis in terms of reduced taxes and special dispensation for equipment and so forth.

43:21 So why are we excited about the Great Dike? Really, if you look at the developments that are happening in South Africa, the expansion programs, these are opportunities that are kilometers underground that come with massive time frames with huge CapEx numbers. And we have literally virgin territory in Zimbabwe with shallow high grade PGM ounces with very high value base metal content, nickel, copper and even cobalt in terms of those base metals on the Great Dark. And there's enough public literature and evidence from our peers to illustrate the low cost, high value nature of mining PGMs on the Great Dike. So we often refer to this tenement that we have as a Tier one resource.

44:14 It really has the scale, it has the opportunity to be a mega producer for many, many decades to come. And really, we're privileged to be able to grow this into a significant producer of PGMs. And we're very excited by the opportunity. Ilhao? Thank you. Let me talk more closely to to the existing financials. We have a number of questions around all in sustaining costs and maybe I'm best suited to answer those. We do publish our all in sustaining cost numbers. They may not be in the court lease, keeping in mind that we are a co producer and not a byproduct producer. But certainly, in all our annual results presentations and the interim results presentations, show in our cost slides, we show an all in cost per platinum ounce sold, keeping in mind bearing in mind that we are coproducers.

45:12 So this is recalculated if we were a 100% platinum producer or we also show the all in cost for chrome. And the all in cost is a cost that includes the operating cost, administration cost, deferred stripping, and capital. I'm very happy to put together the costs over the last couple of years for the shareholders who have requested this these numbers and then post them through the investor meet website and through the questions that have been there. I will certainly put them up there, and maybe I'll put them up as a separate slide on the back end of this current presentation. I will upload that as soon as I can. So we do publish those numbers, they are available on our on our financial presentations. On our The next question relates to our bid for an asset in Greece. Maybe you can expand on that.

46:04 Yes. So it was reported in the publications that we are looking at the LARCO resources in Greece, which is a nickel historic nickel mine and smelting complex, which has been plagued with various issues over many years. It has gone through a sale process. It is going through a sale process, I should say, and we've lodged our interest. At this stage, it's very early to comment, and we are bound by fairly strict confidentiality provisions. But from our perspective, why are we looking at Greece and Laco in particular? And really, we're looking at the underlying commodity, which is nickel.

46:51 We are nickel bulls in its multi application. One, in stainless steel, we are a key supplier in the stainless steel industry. And so it is complementary to the chrome that we produce. And secondly, in terms of the battery electric application and the drive to nickel metal containing batteries. So that's our interest. It is aligned with our strategy of global diversification, commodity diversification, but it's still too early at this stage to comment on its viability and strategic fit within the THARISA portfolio. But I think it just illustrates our openness to consider complementary strategic assets that may or may not fit our investment criteria, which really is fairly stringent.

47:45 And we have a number of hurdles that any opportunity is required to meet before any investment is made. Thank you. Bouncing around a little bit, we have some technical questions with regards to some of our accounting. Are the charges levied exclude are the charges levied exclusively as a percentage of sales price? And this relates to our concentrate refining charges. I think maybe expand on how we deal with both the chrome concentrate and the PGM concentrate. So and what charges do do we look at there? And I think we can talk towards the EBITDA margins that you addressed earlier. And then secondly, there is a question with regards to our corporate taxes. Should we be looking at roughly 28% for the corporate tax? And I know we do state in our financials what our average tax rate should be.

48:39 Yes. Thank you, Ilya, and thanks for those questions. So on a blended basis, the average tax rate should should average out at around 25%, and that's taking into account the separate entities as well as the South African entities. And so we forecast on average 25%. In terms of the PGM offtake agreements that we currently have whereby we sell our PGM concentrate to PGM refiners. Unfortunately, we get paid a fixed percentage of the contained metal within that concentrate. And it is kept at that and any upside in the pricing is shared obviously will get the benefit at the percentages that we paid, but the refiner will also benefit in terms of those oil prices.

49:35 And certainly, this is something we've identified early on, and we are very keen to progress our own PGM smelting and refining competencies and capacity to capture that margin that we're currently losing. It is an eighteen to thirty six month program. As mentioned in the presentation, our first ounces are available from the end of next year, followed twelve months thereafter by the balance of the ounces. We do currently run a one megawatt PGM smelter, whereby we process some of our free tons really on a pilot scale basis, but approving the commercial viability of the process that we will expand on for our own PGM production.

50:24 So derisking that process for us. In terms of the chrome concentrate, we get the full value of that price that we disclosed, the $180 CIF price. We deliver the chrome directly to our end users primarily on a China main ports basis or Indonesia main port basis. And that price that you see includes the freight and logistics cost, which last year amounted to around $60 from the mine to China main port. This year, it will vary depending on those freight charges as we go along. Following on from that, we have a number of questions with regards to what will we do with the cash. Obviously, cash is building up as these prices are elevated.

51:17 Are there any plans for share buybacks? And can you expand on your capital discipline comment? Yes. Thanks for that. So while we have no plans currently for share buybacks, we do have the authority through the resolution that was passed at the recent AGM to buy back 10% of the issued share capital in the form of a share buyback. This obviously would need to be approved by directors and follow the regulatory process that's required in terms of the LSE and the JSE. So at present, there is there are no plans, but we do have the capacity and the authorization to do so if the Board decides that, that is the best application of our free cash.

52:06 In terms of our capital discipline and the increase in the cash that we'll be generating, You would have noted that from the quarterly results, the first quarter results ending December, we moved into a net cash positive position and our debt reduced by some $20,000,000 during that quarter from the year end to December quarter end. And really, this talks to the strong cash generation and the ability for us to settle term loans and existing debt facilities. So while we are funding the Vulcan plant internally and managing the capital profile of our business, which we have shared with the investors through various presentations, we are very firm bound in terms of our capital discipline and dividend policy of distributing at least 515% of net profit after tax to shareholders.

53:10 And, you know, where we are in terms of the PGM basket prices and chrome prices, that impact should be a significant number. So in terms of the policy, a minimum of 15%. But in absolute numbers, in dollar terms, I think we should see a significant increase. We did suspend the interim dividend last year on the back of COVID-nineteen uncertainties. We did roll up the interim dividend into the final dividend, declaring just over 17% payout in terms of NPAT ratio. And it is our firm intention to declare an interim dividend at our half year results ending March 2021. Pheidos, Ilya, thank you very much indeed. I'm just obviously mindful of time. I know that given the quantum of investors that are actually on this call for every question you answer, there seems to be another one that presents itself. So thank you to all the investors that have submitted questions, and the company will review all the questions that have been submitted today, and we will publish the responses on the website as soon as that's available.

54:17 We will, as I say, send you an email to notify you when that's ready. Phevis, perhaps I could just ask you for a few words to wrap up with. I know investor feedback is important to you. As soon as you've finished, I will redirect investors to provide you feedback in order that you can understand their views and expectations. So if I can hand back to you, that would be great. Great. Thank you, Mark. And firstly, I'd like to thank all of you for your attendance and the proactive nature of the Q and A. I think really we are living in unprecedented times. I think we utilize that word ad nauseam during COVID-nineteen and the pandemic. But the positive spin of that is that the commodity super cycle, I think, has just begun and we are bullish around the commodities that we produce and the sustainability of this strong pricing environment. And I think we're perfectly positioned.

55:14 We've invested through the cycle. We have committed to growth and to our strategy. We haven't woken up today and said, PGM basket prices of $4,000 an ounce. Let's look for resources. We've been doing this throughout the cycle of low and high commodity prices. So I think we are strategically positioned to take advantage of this buoyant commodity pricing environment. We run a safe, clean operation. And importantly, we have a long life sustainable business. We can maintain these ratios and these margins for a long time through our low cost sustainable business model. So for those shareholders that have been supportive, we thank you very much.

56:00 For those of you that are on the fence, I encourage you to take the plunge because I think we're in for a very, very exciting ride on the back of our own performance as well as the commodity pricing environment. Thank you all for your time and attention. And I hope that you're well, and please stay safe. PheVos, thank you very much indeed, and thank you to Ilya as well. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide feedback? If you access this meeting via our website, then the feedback page will appear. If you access this meeting via the link sent you by email, that you'll be simply asked to be, to log back in and provide your feedback. But if you could give a few moments so the company can better understand your views and expectations, that would be, most appreciated.

56:49 On behalf of the management team of THARISA, thank you very much indeed for attending today's presentation. That now concludes today's session. Good afternoon to you all, and thank you for your attendance today.