Tharisa consolidates mine cash flow after issuing $25.6m in shares to BEE partners

THARISA, the platinum group metals (PGM) and chrome miner, has bought a 26% stake in subsidiary Tharisa Minerals from its black economic empowerment partners in return for 13.9 million new shares worth $25.6m (R388m).

“This transaction is value accretive to the company as it simplifies our corporate structure and consolidates the cash generation from the Tharisa Mine,” said Phoevos Pourouils, CEO of Tharisa in an announcement.

Pouroulis added that Tharisa’s empowerment partners would benefit from the diversification planned by the group and receive dividends. Flipping their shares in the subsidiary to Tharisa would also create financial flexibility. The owners of the 26% in Tharisa Minerals are Thari Resources and the Tharisa Community Trust.

Tharisa has a stated dividend policy of distributing at least 15% of consolidated net profit after tax. In December, Tharisa declared a five US cents a share final dividend taking the total dividend for the year ended September 30 to nine cents per share – a record payout.

Tharisa Minerals’ principal asset is the Tharisa mine in South Africa’s North West province. The group has also built a chrome mine in Zimbabwe and is considering developing a new PGM mine, also in Zimbabwe.

The move is in accordance with a High Court ruling last year in which the principal of ‘once-empowered, always-empowered’ was supported. In terms of this, companies that complied with the Mining Charter 2004 were not required to re-empower themselves.