Our opinion on the current state of THARISA(THA)Tharisa (THA) is a mining company that mines and beneficiates platinum group metals (PGMs) and chrome. The company is listed in London and on the JSE. The Tharisa mine on the south-west limb of the Bushveld Igneous Complex (BIC) is an open pit operation with an estimated life of 17 years.
The company owns a subsidiary, Arxo Metals, which beneficiates chrome to produce high-grade chrome concentrates. The company is planning to expand into the Great Dyke area of Zimbabwe.
In our view, this is one of the best mining investments on the JSE with a cost of production which is well below current metals prices and some good options for expansion. The company has been involved in the Vulcan Plant which will improve chrome recovery to 82% from 65% and cost $54,2m. The target is to reach 200 000 ounces of PGM's (platinum group metals) and 2m tons of chrome ore production using a proprietary technology. The open pit operation is relatively low cost and does not have the problems associated with underground operations.
The company is planning to build a 5MW furnace that will enable it to produce iron alloys which are rich in platinum group metals and would sell for a far better price.
On 27th March 2023 the company announced that it had raised $130m (about R2,3bn) in finance from ABSA and Soc Gen.
In its results for the year to 30th September 2024 the company reported PGM production up 0,3% and chrome production up 7,6%. Revenue was up 11% and headline earnings per share (HEPS) was down by 0,7%. The company said, "Other operating expenses increased by 15.9% to US$66.6 million (2023: US$57.4 million). The largest cost component of other operating expenses was employee related expenses of US$33.7 million which contributed 50.7% to total other operating expenses. EBITDA totalled US$177.6 million (2023: US$136.8 million), a 29.8% increase primarily due to the strengthening of chrome prices and despite the decrease in the PGM basket price."
In a production report for the first quarter to 31st December 2024 the company reported PGM production of 29,9koz – down from 37,1koz in the previous quarter. The company said, "PGM prices averaging at US$1 381/oz for the quarter (Q4 FY2024: US$1 370/oz) – Average metallurgical grade chrome concentrate prices at US$271/t for the quarter (Q4 FY2024: US$314/t) – Group cash on hand of US$175.1 million (30 September 2024: US$217.7 million), and debt of US$86.1 million (30 September 2024: US$108.8 million)".
In a production update for the second quarter to 31st March 2025 the company reported PGM production of 31,5koz up from 29,9koz and chrome production of 381 kilotons up from 374,4 in the previous quarter. The company said, "A solid quarter dampened by unprecedented rainfall and weather interruptions, which necessitated higher than budgeted in pit evacuations in line with safety protocols and thus affected mining mix and volumes."
Technically, the share is well traded with over R200 000 worth of shares changing hands on average each day. The share has been falling since July 2024 due to declining commodity prices.
The share remains a risky commodity counter dependent on the international prices of the commodities which it produces.
