THARISA, the Johannesburg-listed chrome and platinum group metals miner, on Tuesday unveiled plans to buy up to $5m of its own shares.
Tharisa said it would impose no more than a 5% discount for the shares offered to it. The buy-back programme begins today and will run until February 21 next year. Peel Hunt, the UK brokerage, is administering the programme.
Michael Jones, CFO of Tharisa, said the market hadn’t recognised robust chrome pricing focusing instead on PGM price weakness.
Shares in the company gained 11.5% on the JSE reducing year-to-date losses to 9% to R13.65/share. In London, where Tharisa is primarily listed, the share is trading at 55.5 pence/share.
Chrome comprised 53% of Tharisa’s total revenue in its 2023 financial year amid a record rand price for the metal of R6,000/ton. It offset PGM price declines and yet Tharisa is more lowly rated than pure PGM counters as of its December year-end numbers. “While the PGM commodity pricing environment is challenging, chrome prices have remained firm reinforcing the strength of our co-product business model,” said Jones today.
“With PGM prices still weak, the strength in chrome prices has been a significant advantage for Tharisa,” said BMO Capital Markets in a report.
Berenberg Bank has a target price of £1.30/share for Tharisa. “We continue to like the Tharisa story, which, with the co- product nature of the Tharisa mine, generates attractive and defensive margins in challenging PGM markets, while allowing for cash to be invested in its new mine in Zimbabwe”.
Jones indicated Tharisa was pressing ahead with project finance for Karo Platinum, the Zimbabwe project, saying: “We continue on the road to delivering the necessary third-party financing to deliver the first phase into production”.
In October Tharisa delayed delivery of its $391m Karo platinum group metal (PGM) project in Zimbabweby a year to June 2025 owing to the deterioration in prices – a decision described by CEO Phoevos Pouroulis as “measured”.
Said BMO: “With respect to the Karo Platinum project in Zimbabwe, recall management had previously deferred first production to June 2025, which in our opinion was a prudent decision in the current PGM price environment. Project funding solutions are currently being pursued.”
Tharisa ended the first quarter with net cash of $94.9m down from $126.6m as of the year-end.
