Tharisa : Production Report for the second Quarter ended 31 March 2022

Production Report for the second Quarter ended 31 March 2022

Tharisa plc
(Incorporated in the Republic of Cyprus with limited liability)
(Registration number HE223412)
JSE share code: THA
LSE share code: THS
A2X share code: THA
ISIN: CY0103562118
LEI: 213800WW4YWMVVZIJM90
('Tharisa' or the 'Company')


PRODUCTION REPORT FOR THE SECOND QUARTER ENDED 31 MARCH 2022(1)

Stable mining and PGM output as Vulcan Plant comes online

Tharisa, the platinum group metals (PGMs) and chrome co-producer dual-listed on the Johannesburg
and London stock exchanges, announces production and cash balance numbers for Q2 FY2022.

Second quarter highlights
    -   Lost Time Injury Frequency Rate ('LTIFR') of 0.72 per 200 000 man-hours worked
    -   Mining rates maintained with mining blend optimised for PGMs, resulting in slightly lower chrome
        grade
    -   Steady recoveries, despite secondary mill breakdowns, resulting in slightly lower quarterly
        production in Q2 compared to the record Q1:
         - PGM production of 44.1 koz, down 7.5% (Q1: 47.7 koz) at an improved average PGM basket
             price up 17.2% at US$2 806/oz (Q1: US$2 394/oz)
         - Chrome production of 374.9 kt, down 6.7% (Q1: 401.8 kt), at an improved average metallurgical
             grade chrome price up 9.9% to US$177/t (US$161/t)
    -   Gradual ramp up of Vulcan Plant production with plant commissioning
    -   Consistent production into rising commodity prices further strengthened the Company's balance
        sheet
         - Cash balance of US$101.5 million and a positive net cash position of US$25.9 million
         - FY2021 final dividend payment of US$14.1 million on 16 March 2022
    -   Announced acquisition of remaining 26% shareholding in Tharisa Minerals in a landmark BEE
        transaction
    -   Acquired controlling interest in Karo Mining Holdings with exercise of farm-in option at a discount to
        the project NPV for a purchase consideration of US$27.0 million
    -   Appointed Bernard Pryor as MD of Karo Mining Holdings post quarter end





                                           Quarter      Quarter    Quarter on     Quarter     Half year     Half year
                                            ended        ended       quarter       ended        ended        ended
                                           31 Mar        31 Dec    movement       31 Mar       31 Mar        31 Mar
                                             2022         2021             %        2021          2022          2021

Reef mined                     kt          1 419.7       1 413.9         0.4       1 233.2      2 833.6      2 467.5

6E PGMs produced               koz            44.1         47.7         (7.5)        35.8         91.8          75.1

Chrome concentrates produced   kt            374.9        401.8         (6.7)       358.4        776.7         730.7
(excluding third party)

Average PGM contained metal    US$/oz        2 806        2 394         17.2        3 290        2 592         2 823
basket price

Metallurgical grade chrome     US$/t           177          161          9.9          155          175           145
concentrate contract price     CIF
                               China



    Phoevos Pouroulis, CEO of Tharisa, commented:
    "Another safe and strong mining performance in what is traditionally our toughest operating quarter.
    Mining rates remain at record levels with production being impacted by certain secondary mill challenges
    which have since been addressed. These challenges dampened throughput and in turn production. This
    quarter's output, though slightly lower, needs to be measured against our record breaking quarterly run
    rate and our step change to higher output remains intact on an annualised basis. Despite these challenges,
    on a half year comparable basis to 2021, PGM and chrome concentrates production increased by 22.2%
    and 6.3% respectively.
    With continued focus on grade and throughput and the ramp-up of the Vulcan Plant production, we remain
    confident on achieving market guidance.
    As Tharisa maintains its growth strategy, we have taken significant strides in simplifying the Group
    structure, through the consolidation of our ownership of Tharisa Minerals in a landmark BEE transaction,
    benefiting all shareholders. We also progressed our much anticipated cross border step by announcing our
    plans for developing the tier 1 Karo PGM project, doubling our PGM production within 24 months.
    The transformation of Tharisa into a multi-asset, multi-commodity and multi-jurisdiction business,
    combined with strong PGM and chrome prices, as well as the further production upside from initiatives
    including the ramp of the Vulcan Plant at the Tharisa Mine, provide a very healthy outlook for the prospects
    of the Company in the second half of the year, and beyond."
    Health & Safety
    -    The health and safety of our stakeholders remains a core value to the Company and Tharisa continues
         to strive for zero harm at its operations
    -    LTIFR of 0.72 per 200 000 man-hours worked
    Market Update
    -    The PGM market was driven by two forces, one structural, where demand for all metals remained
         strong, pushing prices up as the market absorbed potential inventory overhangs from the last 12
    months, as the global pipeline for automobiles and computer chips grew, as economic activity was
    lifted. The second force, unfortunately, was driven by geopolitical events, that saw buyers ensuring
    access to metal supply due to uncertainty of supply from Russia. These concerns are warranted as
    the latest sanctions by the London Platinum and Palladium Market on certain refiners indicates the
    market will tighten, although demand from certain countries still trading with Russia is being met by
    that output, for now. Any operational shortfall by the major producing country, South Africa, will
    assist in the tight demand supply balance supporting prices and, unless there is a significant drop in
    economic activity, prices and the outlook for the next 24 months and the longer term remain firmly
    intact.
-   Higher chrome prices were in line with global trends for commodities. Strong demand was supported
    by lower pipeline inventories and increased consumption. Despite the continued logistical challenge,
    both inland and sea freight, Tharisa was able to deliver into its order book with inventory on hand at
    normal levels. Prices remain healthy but we are of the view there are too many headwinds to
    incentivise new production thus maintaining the current supply/demand balance, which at this stage,
    may be weighted to a slight deficit.
Operational Update
-   Total reef mined 1 419.7 kt, flat quarter on quarter
-   Stripping ratio increased 13.4% to 12.7 m3: m3 as the mine continues to enhance its in pit flexibility
    with the increased life of the open pit
-   Tonnes milled reduced as a consequence of secondary mill issues since resolved
-   H1 PGM production up 22.2% to 91.8 koz and down 7.5% at 44.1 koz QoQ due to lower milling and
    lower recoveries due to secondary mill by-passing
-   H1 chrome production rose by 6.3% to 776.7 kt and fell almost 7% QoQ to 374.9 kt due to the lower
    milling and lower feed grade
    Vulcan Plant ramp-up slower than forecast, however reaching higher levels in March 2022, with the
    daily target output due to be reached within this quarter
Zimbabwe update
-   As previously announced, Tharisa has increased its shareholding in Karo Holdings to 66.3% and this
    was completed post quarter end
-   Implementation study at Karo Platinum proving the robust economics of the first phase of the project
    while still presenting significant growth opportunities
    Salene Chrome plant commissioning underway, production due to commence in Q3 FY2022
Cash balance and debt position
-   Tharisa had a cash balance of US$101.5 million (31 December 2021 US$79.1 million) at the end of
    the quarter and debt of US$75.6 million (31 December 2021 US$54.7 million) after a final FY2021
    dividend payment of US$14.1 million. The increased cash has resulted in a positive net cash position
    of US$25.9 million (31 December 2021 US$24.4 million).
Guidance
-   FY2022 production guidance of between 165 koz to 175 koz PGMs (6E basis) and 1.75 Mt to 1.85 Mt
    of chrome concentrates is maintained.
                                           Quarter   Quarter   Quarter on   Quarter   Half year   Half year
                                            ended     ended      quarter     ended      ended      ended
                                           31 Mar     31 Dec   movement     31 Mar     31 Mar      31 Mar
                                             2022      2021            %      2021        2022        2021

Reef mined                      kt         1 419.7   1 413.9         0.4    1 233.2    2 833.6     2 467.5

Stripping ratio                 m 3 : m3      12.7      11.2         13.4      11.8       11.9        11.5

Reef milled                     kt         1 362.2   1 432.1        (4.9)   1 345.2    2 794.3     2 758.9

PGM flotation feed              kt         1 045.7   1 069.3        (2.2)   1 023.9    2 115.0     2 104.2

PGM rougher feed grade          g/t           1.74      1.75        (0.6)      1.41       1.74        1.42

PGM recovery                    %             75.4      79.3        (4.9)      77.1       77.4        78.1

6E PGMs produced                koz           44.1      47.7        (7.5)      35.8       91.8        75.1

    Platinum produced           koz           24.3      26.5        (8.3)      19.8       50.8        41.3

    Palladium produced          koz            7.4       7.5        (1.3)       5.4       14.9        12.2

    Rhodium produced            koz            4.2       4.6        (8.7)       3.5        8.8         7.2

Average PGM contained metal     US$/oz       2 806     2 394        17.2      3 290      2 592       2 823
basket price

    Platinum price              US$/oz       1 026      997          2.9      1 164      1 011       1 063

    Palladium price             US$/oz       2 312     1 941        19.1      2 399      2 125       2 374

    Rhodium price               US$/oz      17 023    13 522        25.9     21 521     15 189      18 354

Average PGM contained metal     ZAR/oz      42 784   36 897         16.0    49 273      39 721      43 051
basket price

Cr2O3 ROM grade                 %             17.1      18.1        (5.5)      18.0       17.6        17.8

Chrome recovery                 %             67.8      65.6         3.4       62.4       66.7        62.6

Chrome yield                    %             27.5      28.1        (2.1)      26.6       27.8        26.5

Chrome concentrates produced    kt           374.9     401.8        (6.7)     358.4      776.7       730.7
(excluding third party)

  Metallurgical grade           kt           295.0     305.3        (3.4)     272.8      600.3       551.3

  Specialty grades              kt            79.9      96.5       (17.2)      85.6      176.4       179.4

Third party chrome production   kt            53.4      49.2         8.5       49.5      102.6       112.4
Metallurgical grade chrome   US$/t            177        161         9.9          155         175     145
concentrate contract price   CIF
                             China

Metallurgical grade chrome   ZAR/t           2 700      2 471        9.3        2 304        2 670   2 203
concentrate contract price   CIF
                             China

Average exchange rate        ZAR:US$          15.2       15.4       (1.3)        15.0         15.3    15.3


Footnote:
(1) Tharisa's financial year begins 01 October and ends on 30 September.
    Key Operating Numbers
    Paphos, Cyprus

    12 April 2022


    JSE Sponsor
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    Investor relations contacts:
    Ilja Graulich (Head of Investor Relations and Communications)
    [phone]
    [phone]
    [e-mail]

    Financial PR contacts:
    Bobby Morse / Ariadna Peretz / James Husband
    [phone]
    [e-mail]

    Broker contacts:
    Peel Hunt LLP (UK Joint Broker)
    Ross Allister / David McKeown / Alexander Allen
    [phone]

    BMO Capital Markets Limited (UK Joint Broker)
    Thomas Rider / Pascal Lussier Duquette / Nick Macann
    [phone]

    Berenberg (UK Joint Broker)
    Matthew Armitt / Jennifer Lee / Detlir Elezi
    [phone]

    Nedbank Limited (acting through its Corporate and Investment Banking division) (RSA Broker)
    Carlyle Whittaker
    [phone]

About Tharisa
Tharisa is an integrated resource group critical to the energy transition and decarbonisation of economies.
It incorporates mining, processing, exploration, and the beneficiation, marketing, sales, and logistics of
PGMs and chrome concentrates, using innovation and technology as enablers. Its principal operating asset
is the Tharisa Mine located in the south-western limb of the Bushveld Complex, South Africa. The
mechanised mine has a 20-year open-pit life and the ability to extend operations underground by at least
an additional 40 years. Tharisa also owns Karo Mining Holdings and Salene Chrome, development stage,
low-cost, open-pit PGM and chrome assets respectively, located on the Great Dyke in Zimbabwe. The
Company is committed to reducing its carbon emissions by 30% by 2030 and the development of a
roadmap is continuing to be net carbon neutral by 2050. Tharisa plc is listed on the Johannesburg Stock
Exchange (JSE: THA) and the Main Board of the London Stock Exchange (LSE: THS).

Date: 12-04-2022 07:05:00
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