Tharisa promises “considerable” cash growth after maiden payout

Phoevos Pouroulis, CEO, Tharisa

CHROME and platinum group metal (PGM) mining firm, Tharisa, is to pay a maiden dividend of 1 US cent per share and said it had “a strong intention” to continue annual payouts.

Commenting in its full-year results announcement today, the company also said it was positive on the current financial year following a recovery in chrome concentrate prices.

The company produced 1.24 million tonnes in chrome concentrate, an increase of 10.8% year-on-year while platinum group element (5E which includes gold) production was nearly 133,000 ounces.

The prices for platinum and chrome concentrate were lower year-on-year – taking revenue down 11% – but the Tharisa mine hit the straps which improved recovery rates. The outcome was headline earnings for the year of 6 US cents/share (2015: 2 US cents/share).

Net cash from operations of $22.2m was generated (2015: $41.4m). After debt repayments, in which net debt fell marginally to $41.4m (2015: $40.7m) cash on hand totalled $15.8m. Tharisa said free cash flow for its current 2017 financial year “should grow considerably” provided the mine performed to plan and markets kept up the positive momentum of the last year.

“While the PGM basket price in US dollars seems suppressed with the weaker South African currency we still maintain healthy margins and are geared to benefit from a recovery in this market,” it said.

Production guidance for PGMs was 147,400 ounces and 1.3 million tonnes in chrome concentrates. “The management team is positive about the prospects for the year ahead and believe that it will be the definitive year where the economies of scale will be demonstrated through reduced unit costs and increasing operating margins and material profits,” it said.

Shares in the company were almost 6% higher in mid-morning trade on the Johannesburg Stock Exchange (JSE) and were last trading at R22.81 per share. This represents an improvement of more than four-fold, but still off Tharisa’s ambitious listing price of R38/share when it debuted on the JSE in April, 2014.