Tharisa (JSE:THA) — Tharisa FY2021 Interim Results Presentation

0:03 Good afternoon, ladies and gentlemen, and welcome to the THARISA Interim Results Investor Presentation. Company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. We will notify you by email when that's ready for your review. I'd also like to remind you that this presentation is

0:35 being recorded. Before we begin, I'd like to submit the following poll. And if you would give that your kind attention, we'll be most grateful. And I'd now like to hand over to Phybios Perrudis, CEO from THARISA. Good afternoon to you. Good afternoon, Mark, and welcome all to this interim results presentation for our financial year 2021. And really, the title we've given this half is the half that beats the years. And I think it will be evident when we run through the financial results for this half that we really have done an exceptionally good job in performance, but really enjoying the benefits of a buoyant commodity market.

1:22 So our business really is pinned upon our core value of safety and health, and and it's not a priority. It's not on a checklist. It really is entrenched in everything that we do. And in in terms of that, we're very proud to have achieved another industry leading milestone of point zero six lost time injury frequency rates per 200,000 man hours worked as well as achieving 6,030 fatality free shifts. We've received a number of safety awards during the half and really talks to our commitment to health and safety and well-being of our employees. In terms of our COVID statistics, since the onset of the pandemic, we've had a hundred and seventy two positive cases at the THARISA operations with a hundred and sixty two recoveries and really unfortunately, the loss of two of our colleagues' lives succumbing to the disease.

2:26 Currently, at the onset of what is referred to as our third wave, we're currently recording eight active cases and pleased to say that we have now two successful vaccines being administered independently of the company, so privately done. In terms of our vaccination strategy and campaign, we are partnering with the Minerals Council in South Africa, whereby we've registered our clinic on-site as a vaccination center, and, being registered to administer vaccines not only to our employees, but also to the broader communities within which we operate. So the government is in its Phase 2b rollout and we're hoping in short order that we will receive those vaccines and be able to start the rollout program.

3:19 In terms of our responsibility around the environment, we take full accountability for the impact that our operations have. We have a large rehabilitation fund set up in order to rehabilitate the operations, and we comply with the equator principles and adhere to the principles contained within that. And we're also signed up in terms of the Paris agreement and the Paris Accord in terms of reducing our carbon emissions. We are currently setting up the road map in terms of our ten year targets and guidelines, and we'll be sharing that with our stakeholders towards the end of this year.

4:05 I think, importantly, we are committed to the upliftment of our communities and have a strong history of this upliftment and and enriching the lives of the people and stakeholders that operate within our business and the broader supply chain. We conduct ourselves with integrity and honesty. And this really comes through in terms of caring beyond the mind gate. Education is a key attribute and a key pillar of our strategy. And to that end, we offer free adult education training to community members, to our employees that are looking to receive the equivalent of the matriculation. To that end, in this half year, we have brought on 35 new learners.

4:53 We currently have 28 learnerships, which is typically your traditional apprenticeship type programs enrolled within THARISA and 55 graduate internships operating and learning through experience at the mine. We've highlighted numerous initiatives and activities that our employees and broader community liaison officers are undertaking within the broader community. But I think we shouldn't forget that our community is a 6% shareholder in the THARISA mine, and this is an unencumbered shareholding. And on the back of our strong financials over the last eighteen months, we'll now be receiving their second dividend flow from the THARISA mine.

5:45 So if we take an umbrella view of the half year and we look at the exceptional EBITDA of $124,200,000 achieved during the six months compared to the $36,200,000 the prior period, we really had tailwinds supporting this result. So firstly and foremost, we increased our mining resulting in more PGM ounces and more chrome tons. We contained our costs, and I think this is important and very topical in terms of inflation concerns around input costs. And then most importantly, we have an exceptional team. And this team have really dug deep through the COVID pandemic, the various restraints and constraints that we've had in terms of various lockdown restrictions.

6:40 And to that end, we've also signed a four year wage agreement with the three representative unions on-site, really underpinning the good relations that we have with our employees and broader community. Then I think it goes without saying that we've benefited from the 75% increase in the PGM basket price from the comparable period, really driven by those lofty palladium and rhodium prices, which have given us above $2,800 per PGM basket ounce for the six months and looking stronger going into the second half of the year. But let's not forget, we are a large producer of chrome concentrates, and we enjoyed a 5% increase in those prices.

7:26 If we look at the headwinds, and some of these are relevant for the future, we are seeing constraints in logistics bottlenecks in terms of moving our products. But I think the big the big news really is the increase in freight rates. We've seen it is a global issue, not just to South Africa or a chrome issue. Freight rates have have escalated and, you know, in the order of 10 to $15 above what we have seen in the prior period. There has been a price appreciation. Our average chrome price, particular for the first half, a $145. Current spot prices at around $155 per tonne. So there is some pass through in terms of that increased cost, but but really unknown as to how that will play out.

8:20 Then, I think I touched on it briefly. There is concern that South Africa will be going into a third wave of COVID nineteen infections. While our vaccine rollout program is very slow, it is starting to gain momentum. Hopefully, with all the measures that are in place as a country, firstly, we'll be able to manage the third wave pandemic. But as a company, you'll recall that we invested heavily in putting in preventative measures, investing in the clinic isolation centers, as well as all the precautionary measures that that are required to contain, track and trace any any infections. So I think we're we're well set up to manage any new infections.

9:09 Then in the first half of the year, we had some curtailed production due to inclement weather. We had some excessive rainfall and even some flash flooding at certain points in time, and then we had a number of lightning storms, which meant that we had to evacuate the open pit. I think the good news for the second half of the year is that it is the drier season going into our winter here in South Africa. So we've already seen in the first eight weeks of the second half of the year production improving and no disruption due to inclement weather. Then lastly, in terms of the exchange rate, we've seen the rand strengthen as an exporter of dollar based denominated commodities. We enjoy the benefits of a weaker rand. Currently, I think the rand is trading at $1,370.72, somewhere in that order compared to an average of R15.30.

10:00 I'm looking at Michael for the half. So certainly, assisting in terms of diesel cost, which is an oil denominated pricing metric and freight rates. So in dollar terms, freight maybe not as severe as would be expected in rand terms, sorry, when we that back. And then also in terms of the diesel prices on-site. Then Eskom, the perennial issue with load shedding, we have been given notice that Eskom will be load shedding during the winter. In terms of the schedule, there's nothing that exceeds level four load shedding.

10:45 And as you may know, we have standby generation up to 10 megawatts to allow us to withstand up to level four load shedding without any disruption to our operations. So if we look at the salient features for the half year, reef mine turns up 8.7% to 2,500,000 tons from the comparable period, and this resulting in our PGM production of 75,100 ounces, up 12.9%, and then chrome concentrate production up at 730,700 tonnes, up 12%. All of this resulting in these very, very exciting financial figures with revenue up 61% to $313,600,000 operating profit at $104,500,000 and importantly, operating cash flow at $104,900,000 resulting in an earnings per share almost sixfold higher than the comparable period at US0.21 dollars think importantly, we managed to deleverage the balance sheet during this period. We repaid some $36,000,000 worth of debt and sitting with $78,000,000 worth of cash, resulting in a net cash positive position of just below $30,000,000 for the period.

12:14 And I think for those shareholders on the call, we hope you are very happy and ecstatic with the announcement of the interim dividend. You will recall that last year due to COVID uncertainties, we suspended the interim dividend payout, and we're very pleased to announce that the board has approved a 4% payout, which exceeds the full year 3.5% payout of last year and really to support the confidence we have in the business. And we've started measuring our performance on a return on invested capital at a very pleasing 35.1%, up from the 10.6% in the prior period. I'd like to hand over now to Michael Jones, our CFO, who will run through more detail in terms of the financial results.

13:04 Thank you, Piyos, and good afternoon to our audience. The financial results for the six month period have really been characterized by increased sales volumes and also increased commodity prices, and together the management of the costs resulted in a record profitability being achieved. This is contributing to strong operational cash flows and an average deleverage the balance sheet and we'll touch on the Vulcan plant later to find current recovery plans, major capital expansion and we've been able to fund this internally and also declaration of a very handsome interim dividend. This is touch on our guidance for the current year as a whole. Our PGM guidance at 160,000 ounces, chrome guidance at 1,500,000 tons, that's the midpoint. And if we look at the first half, 75,100 ounces of PGM and 730,700 tons of chrome concentrate. So we're on track to achieve our particular target.

14:00 If we just have a look at the commodity pricing, I'd like to just focus on the right hand graph. It really shows the three elements of the PGM basket, the platinum palladium and rhodium and also the chrome price. The rhodium price has had a very stellar performance at up 144%, and I'm now comparing it to the comparable period six months ago. And platinum palladium also very strong and healthy performance at approximately 17 up, and as Phebe was mentioned, the chrome price up 5% over the particular period. If we just break down that revenue a bit in more detail, as Phebe was mentioned, revenue $313,600,000 for the half year. PGMs comprising 72.3 of our total revenue mix and the chrome.

14:46 And for these purposes, we've taken off the freight and logistics because for accounting purposes, we sell in a CIF main ports China basis, and those costs are shown as revenue, so I've stripped that out to make it comparable, 23.8%, and our agency and trading and manufacturing the balance. If we analyze out the PGM revenue a little further, the rhodium pulse split contributing some 9.7% to total pulse split, but really the star performer in terms of revenue contribution at some 65% of the PGM revenues, platinum at 18% and palladium at 11 We produced two real categories of chrome metallurgical grade chrome using stainless steel manufacturer and then specialty, which is a foundry and chemical grade chrome products, and their contribution to revenue metallurgical 75.5 and specialty 24.5%.

15:39 What is particularly pleasing is that the gross profits have improved to 41% compared to the comparable period of 22.4%. And each of the key segments being the PGMs and the chrome segments making very meaningful contributions to the gross profit margins, PGMs just under 50% and chrome just under 30%. There have been a number of factors contributing to the increase in this revenue, increased sales volumes. Our sales volumes for PGMs are up 11%, chrome volumes up 23, and then increase in the PGM basket price averaging for the six month period, $2,823, and up from 1,000 just at 1,600, the comparable period's up 75% in total.

16:24 But if you look at recent trading at spot prices sitting currently just below $4,000 an ounce. We also have reduced unit costs, and I'll touch on that shortly. But I'd like to draw the attention to the graph on the bottom right, which is a gross profit graph. And here, for comparative purposes, we're not comparing to the price or comparable six months. We're actually comparing to the full results for the prior year. So the gross profit margin, 120 gross profit is absolute number, a 128.6. That's for the six month period compared to a 130.4 for the full gross profit of the prior period, a really pleasing performance.

17:06 Just touching some of the profitability metrics, we are a co product producer. We do produce both PGMs and chrome, and we have been profitable throughout the cycles as shown in the graphs below. EBITDA, a $124,200,000, up 243.1%. Profit before tax, 104.6, up just under 500%, and the earnings per share 21.4, again, just under 500 percent increase. And as already mentioned, a very pleasing interim dividend of $04 per share and return on invested capital of 35.1%. Again, if you just look at the EBITDA numbers for these first six months, 124,200,000 compared to the full prior period of $113,400,000

17:56 In terms of costs, the cubes mined and reef tons mined both reflected increase of 7.6%, 8.5% in volume terms. However, the cost per reef ton mined were pleasingly down minus 1.6% as we absorb the fixed costs of the higher volumes at $30.5 per ton. The tons milled also up, they were up 14.3%. And then we had a consolidated cash cost per ton milled down 5.1 at $44.9 per tonne. This cost performance is particularly pleasing because if you look at the graph on the right, the pie chart there, you will see royalties, and these are royalties payable on the sale of the commodities to the South African government, increasing significantly to 15.1% of our total online cash cost of sales.

18:43 And that's on the back of the increasing PGM basket price and the utilization of certain capital allowances we're able claim in those calculations. The chrome inland logistics and freight costs relatively flat period on period, and Phoebe has already mentioned that there has been an increase in those costs post this reporting period. We are a co producer of both chrome and PGMs. But if we were to say we're a platinum only producer and take the byproduct credits of the other PGM element ounces and the chrome, all in cost per platinum ounces after our CapEx spend is a negative $316 per ounce. With that record profitability, we have generated very strong operating cash flows with the operating cash flows of $104,900,000 We've spent money additions to property, plant and equipment, I'll break that down in a bit more detail, of $39,500,000 and of that amount deferred stripping $13,900,000 We also took the opportunity to repay our senior debt facilities. There were term loans and revolving credit facilities in place, and we applied some $36,000,000 as we deleveraged the balance sheet further.

19:55 And the prior year dividend that had been declared, a payout of 9,400,000 so a net cash increase for the six months of $20,200,000 We have resumed the payments of interim dividend post COVID and dividend is $04 per share and as previously mentioned, compared to the full year prior dividend of three point five percent 3.5¢.

20:20 Just to remind the audience that we are a consistent dividend payer, and our dividend policy is to pay an annual dividend of at least 15% of consolidated profit after tax and look forward to an increase in that dividend at the financial year end. The payment of the dividends does ensure returns for shareholders while pursuing growth opportunities organically, such as the Vulcan project. Also at March 31, we continued our investments in Zimbabwe. We concluded the purchase of Celine Crow for $3,000,000 Our commitments to spend money in Zimbabwe in the medium term, some $10,000,000 of which $5,000,000 was spent on processing plants at Celine Chrome, and the balance of $5,000,000 really focused on further upgrading the value of the project in Cora Platinum.

21:13 With the strong cash flows, we've been able to deleverage the balance sheet and internally fund the Vulcan plant construction, and our cash and cash equivalents stood at $72,800,000 Total debt was $43,000,000 and offset $44,600,000 related to Caterpillar Finance. They financed our yellow feet in the mine. And then we've also got trade finance facilities, which is short term up to 90 days maximum for the chrome trade finance cycles accounts for 31.8%. Excluding trade finance, our dollar funding stood at 83.8% of our total funding package with the balance in ZAR. We had positive net cash of $29,800,000 and touching on a few ratios, the current ratio, a very healthy 2.5 times and a debt to EBITDA on an annualized basis of 0.17.

22:05 For the full financial year, we budgeted some $100,800,000 of capital spend. This excludes deferred stripping, of which $54,400,000 is allocated to sustaining CapEx and the Vulcan plant, 46,400,000. The spend to date for the six months, excluding the deferred stripping, 25,600,000. Dollars 13,000,000 of that has gone to fleet additions, 5,400,000 on processing and $7,200,000 on expansion capital, principally on the Vulcan plant. The Vulcan plant is a fine chrome recovery plant and is scheduled to have construction completion by the end of this financial year with commissioning flowing in into the next financial year. Of the total capital spend, you'll note that some $40,000,000 is still remaining on Vulcan. This is in terms of the cash flow plans and has always been weighted towards the second part of that project construction.

22:59 I'd like to thank you and I'd to hand back to Phebez, please. Thank you, Michael. So just touching on the Vulcan plant, you will recall we started this project pre COVID last year and had to suspend construction and the development of the project. We recommenced the project in October of last year, and we are well on track to complete the construction within this financial year, meaning the end of September of this twenty twenty one year. Just to refresh everyone's memory, the Vulcan plant is a fine chrome recovery plant. It is an in house process technology that was developed by our team. And really what it does is it captures those fine chrome particles that we are not able to recover and really the industry hasn't been able to recover through a multistage process.

23:51 So what this means for us is, THARISA, is that it should increase our production by some 20% or an additional 400,000 tonnes of chrome concentrate, allowing us to achieve that 2,000,000 tonnes per annum of chrome concentrate production. And really, had a very nominal operating cost of approximately USD 10 per tonne. All the mining cost and milling cost has been undertaken in the front end of the two processing circuits. So a safe project to date, four eighty four days lost time injury free and a very exciting development in terms of our own technology and our own research and development being commercialized. If we look at our business and then we look at the sustainability of THARISA and the long life that we have, we've really broken it down into the four pillars of what we believe are the foundations of sustainability and continued profitability.

24:53 And it all starts with the ore body. Discovering a large scale eight sixty million ton resource is the key to unlocking the value. But also the approach that we took in terms of mining the multi sea middle group reef horizons on a co production basis for platinum group metals and chrome concentrate the first time.

25:41 Ilya, think we've we've just maybe lost the the connection to your audio there, sir. If I could

26:03 if I could he if I could ask you, Eliot, just to go back onto the settings button at the top and just to connect the just connect and show that the connection is correct to the to the right device if it's plugged in just to make sure it's fully charged. If not, yeah. It might be well worth just coming back in on the link again and connecting in just whilst I hold investors in in the meantime. But we've lost your audio. Alternatively, there is a dial in backup, Ilya, on the top if you connect on the settings cog.

26:49 On the right hand side next to computer audio is dial in. You'll be able to dial in using that number in the meantime.

27:12 Ladies and gentlemen, please just do bear with us whilst we look to address the audio connection into the room. If my Could I just suggest that you click out of the main link and come back in? It will disconnect the camera, but we'll bring you back in, and and then we can continue. Thank you, sir. Very good. Just make sure when you come back in that reconnection that it does connect to the device that you have in the room.

28:02 Once again, just whilst the company are just reconnecting, just to remind investors that post this meeting, the recording, a copy of the slides and the published Q and A will be available via your Investor Meet company dashboard. And also at the end of this presentation that you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

28:27 Apologies once again just whilst we wait for that connection to come back in. Thank you, sir. I can see you connecting back in now. As I say, there is the telephone dial in option just in case you have lost, for some reason, power to your audio. And that is available by clicking on the settings button at the top and then dial in audio.

29:31 Okay. Perfect, Tony. I can see you're coming in on the phone now, so thank you very much indeed. Because I can see it's it's. Your your audio is coming back in now. So just put that phone on mute. Can hold on one second, Ilya. Could you just speak Favos, you're back in the room. Thank you, sir. Elliot, do keep that phone on in case of a further disruption, and it's on mute currently, so that's absolutely fine. So back to you, sir, and thank you very much. Yep. Apologies for that technical disruption. So I think I got cut off in terms of discovering your body and importantly extracting these co products from a mechanized low capital intensity open pit mine delivering low unit costs. Michael mentioned the all in cost after CapEx of a negative $316 per PT ounce on a byproduct basis.

30:36 And then processing, looking at unique ways of extracting the the commodities that we mine. And when we started out, you know, most people didn't, take credence to the fact that we were going to recover both PGMs and chrome at the levels that we currently process. So really through our own research development and growth, looking at specialty products,

31:03 looking at expanding and improving recoveries through various optimization initiatives. And then looking at the value proposition and the whole value chain and diversifying beyond mining. To that end, we have our own marketing and sales company, Arco Resources, our own logistics business that manages the movement and flow of the materials to and from customers, and then our beneficiation company Arco Metals, which has been responsible for the research and development terms of Vulcan and the PGM smelting work that we'll touch on in the next slide. So if we look at the the pillars of long term returns to our shareholders, I I think we've shown capital discipline in the fact that we've been returning cash to shareholders in the form of dividends over the past six years, and it's pleasing to be able to share in more of those profits as we grow and become more profitable.

32:04 But when we look at the growth aspect or the pillar of long term returns, we see opportunities within the existing footprint, extending the life of mine. We've managed to to maintain a fourteen year open pit life of mine, thereafter followed by a forty year underground extension. The Vulcan plant is well on track to being completed and commissioned by the end of this calendar year, resulting in those 2,000,000 tonnes. Thereafter, we look to delivering on the 200,000 ounce target from the THARISA open pit, and that involves a number of strategic disciplinary really operational factors, one of which is grade control from the open pit. We've cracked the volume nut. We're able to deliver the tons that are required and mill above nameplate capacity, but we are now looking at efficiencies of recovery and achieving those 200,000 ounces over the next eighteen months.

33:14 Looking further ahead, we have been running a PGM smelting facility on a pilot scale, a one megawatt facility, and that is really to take our PGM ounces and refine them to final metal. And it is part of our strategic imperative to take those answers that we currently sell to off takers at reduced terms and capture that additional 15% margin that we are currently losing in terms of our concentrate sales at the moment. We're also spending time looking at special alloys, looking at our chrome production, and and looking at smarter ways of beneficiating that stainless that chrome into potential stainless steel alloys and battery metal technologies.

34:04 In terms of our external opportunities, we're very pleased to announce the completion and the exercise of the Celine Chrome acquisition on the Great Dike. And this really allows us to get boots on the ground in Zimbabwe, start operating and enjoying some of the benefits that have been granted to us in terms of the Special Economic Zone and various statutory instruments.

34:27 We have started the construction of the chrome spiral plant that will be installed on the Great Dyke and we should see our first chrome tons being delivered before the end of this calendar year, all things going according to plan. So the intention is to produce between seven and ten thousand tons of a high grade chrome concentrate

34:52 allowing us to complement our existing chrome concentrates. In terms of Cora Platinum, which is adjacent to saline chrome, which is the large scale PGM opportunity on the Great Dike, We we currently own a 26.8% stake in that project, and we are completing the second phase of the exploration program there, declaring a resource over that area and completing a study which should very clearly delineate the progress and the program to deliver our first PGM answers out of Zimbabwe. We also have an option over saline manganese and iron ore producing open pit operation in the Northern Cape in South Africa, selling on a cash flow positive basis manganese and iron ore on a direct shipping ore basis.

35:47 I think really what differentiates us from a number of our peers is the fact that we've continued to invest in our business through the years and we will continue to do that. And really, it puts us in a good standing in terms of being able to capture additional margin in these buoyant commodity pricing environments. So just looking at the fundamentals, we've seen a little bit of a shock this week with the announcements out of China. I just want to reiterate that the fundamentals around PGMs are still robust and remain strong. Really, we talk about auto catalytic converters and the use of PGMs in the internal combustion engine.

36:33 And and this is a a slide that's been put together by BASF at the recent platinum week, and really it talks about the future of PGMs and, moving from the conventional engine into hybrid, battery electric, and the fuel cell motor, which, uses platinum, ruthenium, and iridium. And it's also used in the catalysis of water in the production of hydrogen and oxygen. So in terms of our outlook in the medium term, we see robust demand and a supply constraint in terms of meeting that demand around auto catalytic demand through auto sales. But going into the future, at the hydrogen economy, I think the future looks bright, in particular for platinum, which when you look at the prices has not really performed to the extent of the other elements, palladium and rhodium, and we still believe there's quite some upside potential.

37:37 If we look at the ten year forecast, you'll see that palladium and rhodium are forecast to be in deficit for the medium term and then growing platinum into a much larger deficit. And bearing in mind, this does not include investment grade or investment demand of platinum, which is was considerable in 2020 in terms of ETFs, bars, and coin demand. So if you bring those answers into the equation, it actually shows us a current deficit of platinum as we as we sit here today. So really, the story looks robust and and sustainable in the medium term.

38:25 In terms of chrome, really underpinned by stainless steel, and I think that graph on the bottom right hand side shows global stainless steel production and then the Chinese growth, which has really been exponential to say the least. And even through COVID nineteen showed growth growth figures capturing more than 60% of global demand. And what this means really is China is wholly dependent on the import of the chrome units and South Africa accounting for 85% of the inputs in terms of chrome ore. So just looking at that forecast compounded annual growth rate of 3.6% really puts us in a balanced market and potentially in a deficit market going into the medium term.

39:16 And this really driven by those consumer goods and catering making up 51% of the demand and driven by domestic consumption within the Chinese economy. What's pleasing to see is that the rest of the world is starting to fire up again, and those economies are starting to grow. And and these numbers don't take into account, the refit of The US infrastructure and the trillion dollars that has been allocated to that. There may be further support for more stainless steel growth. So I think we're perfectly positioned to take advantage of both of those commodity pricing environments. So again, we talk about the value proposition of THARISA.

40:03 I think what's what's evident to us is that we have a sustainable business. We've stuck to our strategic objectives, and we continue on a measured calculated approach to grow our business and look at profitability as the factor that drives our growth and importantly maintaining consistency, be it through our dividend policy, continuous payouts, and also in terms of our investment strategy. And ultimately, fulfilling our objective of enriching lives through innovating the resources company of the future. And I think the the comps on the right hand side still show a compelling value proposition in terms of our equity story.

40:53 So I'd like to thank you. Apologies for the technical disruptions, but I'd like to hand over to and Ilya for the Q and A. That's brilliant. Thank you very much indeed. I think I've already reminded investors that feedback is important to you and they'll be redirected at the end. Perhaps I could hand to Ilya just to really manage the q and a process, both those that have come in pre event and those that have come in the live event. If I could ask you just, Ilya, just to remind you to read out the questions and who they're from, and I'll pick up from you at the end. Thanks once again. Thank you, Mark. Question for Michael. Are your profit after tax inclusive or exclusive of the BEE entitlement? The profit after tax, as stated there, is the overall profit of the group, and there will be a consolidated controlling interest coming off at the bottom end. And if it's gonna be charged, this reflects an exact number of that one. That number, you will have of the total profit for the period of 75,000,000, the owners of the company, 57,400,000, and the noncontrolling interest at $18,240,000.

42:05 So that's the breakdown of that number. That's net profit after tax. Oh, that's net profit after tax. So is it quick? Which was what's? So it was are your profits after tax inclusive or exclusive of the BEE entitlement? The profits after tax are exclusive. I don't know what's the word. It then gets taken up below the line. Okay. Question for for you, Fiyos. For a company making significant cash in constant status keeping the share price deflated, are you worried about a lowball offer being tabled for the company? We're not worried about a lowball offer. I think we're sticking to our strategy and and successfully rolling out that strategy, and we believe value will will become apparent as we continue to deliver on on on our results and generate the free cash that we have demonstrated over the past six months.

43:08 And I think the reality is that fair value needs borne to out through the activities of the business, and we're confident that we'll get there. Michael, I know you had some thoughts on that question. Sure. I mean, other fact you have to look at is we have a number of very strategic shareholders, some founding shareholders who've been in this business a long time. They appreciate the value in this business. They recognize it as undervalued, and it's very unlikely if we had a lowball offer that they would accept to be persuaded to accept a lowball offer, having recognized the value and being invested in this business since its founding days for for for many years. In line with that, do you fully see any consolidation in the sector with other potentially larger players looking to reinforce their position in PGMs and chrome?

44:00 So it is a fairly concentrated pool of PGM miners. So there there is room possibly for for some northern limb consolidation with some of the development projects that are ongoing. But I think it's fairly limited in terms of the scope around that, but it is possible. Assuming more on the operational front for both of you, what impact would any serious inflation, which is spooking certain market sectors, have on the four year wage agreement? So the wage agreement is is fixed and and agreed with the unions and it has a link to the inflation at the time when when being set in it and it does have an escalation on an annual basis, but is set in terms of the rate of increase per year.

45:01 Now is there a situation where the unions could come back and say, look, inflation is out of control in the country. The agreement is is underweighted. Possibly. Do we foresee that happening in the in the short term? Not not likely. I don't know, Michael, if you want to comment on that. Sure. I don't see my views. I'm unlikely to see that inflationary pressure coming through in the short term. But I think also if we have a look at the structure of the wages that we pay, particularly to the mine workers who are part of the bargaining units, is that there's a profit element based on production and performance and so forth. So as this production performance is achieving these levels, they are participating on an ongoing basis in the, let's call it, the profitability of the company that they're contributing to. So it would also offset any of those inflationary pressures at their spending levels.

45:55 Thank you. Question around platinum and two pronged question here. So what are the key milestones to reach the 200,000 per annum PGM target and and the timetable for that? And then related to that, when will shareholders be provided with details of the proposed PGM refining plant, CapEx and also the timing on that? Yes. Two good questions. Thank you very much. So in terms of the 200,000 ounce strategy, we've set ourselves an eighteen month timeline horizon with incremental steps in terms of achieving that. And we the the key drivers for that are feed grade. In other words, the grade that comes out of the open pit, achieving a particular level, which is around 10% higher than what we 10 to 15% higher than what we've achieved in this last half. So simplistically put more ounces being put into the plant, more ounces out. We have, as mentioned previously, opened up the throughput capacity of the processing plants.

47:05 So so quality and volume are the two big levers that you see us achieving that that milestone of 200,000 ounces. Now you'll say, surely you can do that, you know, within the next financial year, and and our objective would be to do it as soon as possible. But given the nature of some of the oxidized material that we're feeding in to the processing plants, which typically have a lower recovery, we've scheduled it to a point where the West, Far West, and the East mine are all producing what we refer to as fresh ore, one oxidized ore, which allow our recoveries to get up to that 85% level. So the third aspect is the recovery of the PGMs achieving 85%.

47:53 So we've given ourselves that eighteen months. In terms of giving clarity around the PGM smelter, we have been running that pilot scale smelter, so we know the technology works. We know that the process that we are proposing is sound. And at this point in time, we're busy with updating our feasibility study. And I believe in the new financial year, we'll be giving shareholders clarity in terms of the CapEx and timeline of that facility. Now it is time specifically in terms of us having fulfilled our existing concentrate agreements with the two off takers of our concentrate. So we can't accelerate the production of metal or the refining of metal, so it has to run sequentially.

48:42 But in that, we will also have a construction period for the for the smelter. The process that we're proposing is a direct current or DC smelter, which has a relatively low CapEx and and a simple hydrometallurgical process to refine the the PGMs further. So we're not expecting a massive CapEx number and in fact on a capital intensity per ounce, I think would be very reasonable. Did I answer all those questions? Yeah, thank you. The last two questions follow the similar vein, and I think it's something that we've been discussing in various forums is the disconnect between what seemed to be the fundamentals of the business and the cash generation versus where the share price is trading. Do you have any response to that?

49:36 I'm gonna let Michael give that one a go because I'm always answering that. I think there's a different disconnect between the share price, the cash generation and so forth. I think if you look at the Johannesburg Stock Exchange, where our primary listing is at the moment, is that it is something that happens to, let's call it, the more junior mining companies as we progress up the curve to attract the proper institutional shareholders. We have seen recently increasing appetite both from institutions and particularly support from the retail industry that is starting to increase the share price. So it's slowly moving in the right direction, and there do seem to be some flaws. Some of the initial founding shareholders have been invested pre listing. In the normal course, are are exiting and realizing their investments to be expected after they've been holding investments for some considerable period of over ten years. And I think the weight of those will flow through the system in the near term.

50:32 And, yes, I'm very positive that with the dividends that we're declaring, with the strategy that we're following both here and the expansions north of ourselves, that the share price should be right to reflect those those benefits. But it is very frustrating. Perfect. I think it might be an opportune time for me just to jump in, Ida. I see that you guys have been very generous and addressed all the questions that have come in from investors. Obviously, we're coming up to the hour. I don't know if there's anything further or perhaps I could hand back to PheVos for a few closing comments before we redirect investors to give you feedback. Thanks, Mark. I'd just like to thank you all for your time and attention this evening. I think we we are very proud of our business if you consider that we started with a greenfield and explored and delivered on our promises over a decade now and, being able to publish these results really really fill us with pride. But, it it really is a team effort and we have an exceptional team at the THARISA mine and in the broader subsidiary companies all committed and driven by the the common goal of enriching lives.

51:50 And and it really permeates through through everything that we do. And we thank you for your loyalty as shareholders. Those that are on the fence, please support us. I think the value proposition speaks for itself. And and in time, I think we'll we'll be reflecting back upon these these these days and say, yeah, remember when Theresa was only one pound forty. So thank you again, and we wish you all well. THS, Michael, Ilya, thank you very much indeed for updating investors today. And on behalf of Investor Meet company, apologies for any inconvenience caused by that brief delay. Could I please ask investors not to close this session? As you'll now be automatically redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations.

52:41 This will only take a few moments to complete, and 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. That now concludes today's session. And good afternoon or good evening, should I say, to you all.