Tharisa has reported higher production of both chrome and platinum group metals (PGMs) in the third quarter, however it has lowered its full-year guidance by 5%.
The group’s PGM production rose to 34,500oz in the quarter ended June from 32,500oz in the second quarter, while chrome production increased to 395,700 tonnes from 381,000 tonnes in the previous quarter.
In line with the nine months’ performance to date, production was trending towards the lower end of guidance, it said.
The group added it considered it prudent to lower guidance by about 5% off the lower end of guidance, which was set at 140,000oz PGMs and 1.65-million tonnes of chrome concentrates.
Average PGM prices increased by 10.8% to $1,574/oz for the quarter, driven by real physical demand for refined platinum and industrial buying while supply cutbacks and pipeline destocking underpinned the widening gap in the supply demand fundamentals.
Average metallurgical-grade chrome concentrate prices were 24.7% higher at $293 a tonne as pipeline inventories needed restocking. Prices retreated towards the end of the quarter, however, Tharisa believes that the supply demand fundamentals remain in balance with the current spot price of $265.
While prices were now more supportive of industry profitability, long-term sustainability of higher prices was necessary to induce wide scale project development, the group said.
“An improving quarter as our reef mining volumes trended higher as we made good progress in the east pit with remediation post the heavy rainfall in the first half of the year. Work on the phased underground transition is on track with the scheduled development timeline,” said CEO Phoevos Pouroulis.
He added that the quarter reflected recovery improvements in both its chrome and PGM circuits and they were trending towards the group’s targeted performance metrics for its integrated processing plants.
“Our head grade blend remains a challenge while overall output increased on the back of improved recoveries. The focus for the remainder of the year is to provide improved mined grades into our plants. With improved flexibility in our open pits and increased mining volume we are forecasting improving head grades,” he said.
He said the Karo Platinum operation in Zimbabwe had made significant progress in derisking the project and the team was working at concluding funding solutions to accelerate the final development of this Tier 1 asset.
“With commodity prices improving, our balance sheet continues to remain robust,” he said.
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