Tharisa, the platinum group metals and chrome producer, said its mining volume recovery was slower than expected in the second quarter to March 31, due to bad weather impacting the open pit operations.
CEO Phoevos Pouroulis said in a statement that they continued to generate healthy free cash flow in the quarter despite the impact of the weather.
“While chrome production was up, the ore mix saw PGM output in January and February fall below expectations. With our operational improvement implemented during the quarter already delivering results, and the additional flexibility that both new equipment and the additional waste contractors will bring to the pit, the second half of our financial year will see an improvement at our flagship Tharisa mine,” said Pouroulis.
A contractor had been appointed on a short-term basis from May 1, 2023 to assist with waste mining, the mining group said in a trading statement.
Platinum Group Metal (PGM) output fell to 34.3 koz from 42.7 koz in the first quarter, on reduced recoveries due to suboptimal ore mix.
Chrome output rose 5.7% to 404.8 kt from 383.1 kt with ROM grades up at 18.4%.
Metallurgical grade chrome concentrate prices were up 20.6% quarter on quarter, and 52% up on the second quarter of 2022.
The Karo Platinum Project was on track and on budget with ground clearance and civil contractors having started work.
Cash on hand came to $205.8 million (R3.8 billion) versus $213.9m at December 31, 2022, while net cash came to$106.8m versus $101.1m at December 31.
Pouroulis said guidance for the full year had been reduced by 10% due to the challenges in December through to February. PGM production was expected to be between 175 koz and 185 koz PGMs , and 1.75 Mt to 1.85 Mt of chrome concentrates.
“The unique and unparalleled properties of our ore body were again shown to reap rewards as the chrome price reached levels as high as $300 per ton and, while the PGM prices have pulled back recently, even at these levels we continue to generate healthy margins,” he said.
The strategy to bring the Tharisa mine to sustainable production remained intact, “and we will benefit from significant progress being made at Karo, our second tier one mine – which remains on time and budget for first ore to the mill in second half 2024.”
PGM prices came under pressure in the quarter as demand softened and destocking took some shine off the strong pricing seen in the 2022 financial year.
“Rhodium and palladium prices remain the most affected, with rhodium suffering from a small, tight, illiquid market influenced by a single seller,” said Pouroulis.
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