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Highlights:
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Tharisa PLC has reported a stronger-than-expected cash generation, closing the fourth quarter with a net cash position of $109 million, contrary to previous expectations of net debt.
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Chrome production for the quarter reached 427,000 tons, slightly exceeding estimates, while platinum group metals (PGM) output fell marginally short of projections.
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New guidance has been issued for PGM and chrome output, reflecting ongoing developments at the Karo project and fluctuations in the PGM market.
Tharisa PLC {OTC:TIHRF} a critical minerals group focused on mining in South Africa and Zimbabwe, has announced stronger-than-anticipated cash generation for the fourth quarter, ending with a net cash position of $109 million. Peel Hunt had projected a net debt of $28 million; however, the unexpected cash position is attributed to Tharisa’s likely utilization of receivables factoring and a reduction in capital expenditure at its Karo project and existing operations.
During the quarter, Tharisa achieved chrome production of 427,000 tons, which slightly surpassed Peel Hunt's estimate of 422,000 tons. In contrast, platinum group metals (PGM) output was reported at 37,100 ounces, falling short of the anticipated 37,800 ounces. The increase in chrome production was fueled by improved ore grades and enhanced processing recoveries. Despite a nearly 71% recovery rate for PGMs, the overall production was hampered by lower-quality ore.
The company has revised its guidance, projecting PGM output to be between 140,000 and 160,000 ounces, which is below Peel's estimate of 166,000 ounces. Chrome output is expected to range from 1.65 million to 1.8 million tons, aligning closely with the broker's forecast of 1.78 million tons.
Additionally, Peel Hunt highlighted ongoing discussions regarding financing for the Karo project, suggesting that its development could be delayed by six to twelve months. Given the current weak pricing in the PGM market, this delay might be perceived positively by investors.
Analysts at Peel Hunt have maintained their 'buy' rating for Tharisa, setting a price target of 200p. Tharisa shares are currently trading at 70p, reflecting a 3% increase on the day.
