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, located 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 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% at a cost of $54.2m. The target is to reach 200,000 ounces of PGMs (platinum group metals) and 2 million tons of chrome ore production using 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 rich in platinum group metals, which would sell for a far better price. On 5th October 2021, the company announced the cold commissioning of its Vulcan chrome beneficiation plant, which is expected to increase chrome recoveries by 20%. On 4th February 2022, the company announced that it had signed an agreement to implement a solar farm of more than 40 megawatts.
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 2023, the company reported PGM production down 19.3% and revenue down 5.3%. Headline earnings per share (HEPS) fell 31.1%. The company said, "The decline in reef mined primarily emanates from access restrictions to the open pit due to limitations on mining activities in close proximity to the nearby community, adverse weather conditions experienced as well as the processing of suboptimal reef horizons which were supplemented by purchased ROM ore to maintain plant throughput."
In a production update for the year to 30th September 2024, the company reported PGM production of 145,100 ounces compared with 144,700 ounces in the previous year. Chrome production was 1.7 million tons compared with 1.58 million tons in the previous year. This was the company's highest-ever chrome production. The company said, "In our efforts to reduce our carbon emissions and secure energy independence, we entered into a 15-year agreement with Etana Energy, who will be providing up to 44% of the Tharisa Mine's electricity demand via wheeled renewable energy."
Technically, the share is well traded, with over R2.6m 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.
