HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"
NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)
Message: Tharisa to put debt ahead of dividend
Tharisa to put debt ahead of dividend
The producer faces a ‘definitive year’ with the steep rise in the chrome ore price
12 January 2017 - 06:33 AM Allan Seccombe
Picture: ISTOCK
Chrome and platinum group metals miner Tharisa would target debt and perhaps raise dividend payments to shareholders, taking advantage of a steeply higher chrome price, CEO Phoevos Pouroulis said on Wednesday.
Tharisa, which is on the cusp of paying a maiden dividend, faces a "definitive year" with the steep rise in the chrome ore price as Chinese stainless-steel demand rises, said Pouroulis.
In the year to September, the Johannesburg-and London-listed firm more than doubled its profit to $15.8m from $6m the year before. It declared its first dividend of $0.01 a share.
In the first quarter of 2016, chrome ore prices fell to about $80 a tonne, forcing a number of ferrochrome producers in SA, the largest source, into business rescue and compelling ore suppliers to be far more disciplined in the amount of material they were selling, he said.
By the fourth quarter, spot prices for chrome ore had shot to more than $350 a tonne. Tharisa recorded an average price in the December quarter of $250/tonne, more than double for all of its 2016 financial year.
"While we were profitable in 2016, this additional margin will go straight to our bottom line, so in terms of profitability this is potentially a definitive year for us, provided prices don’t fall off a cliff," he said.
"We have a modest dividend policy … so the board would look at whether we have excess
cash beyond working capital [needs] and for some new business development.
"We could potentially increase that distribution to shareholders. We would also retire some debt early. Our priority would be to minimise debt and then meet the existing dividend policy.
"If there were excess cash we would look at additional distribution," he added.
In the December quarter, Tharisa’s first in its 2017 financial year, chrome production was 322,200 tonnes, of which 77,100 tonnes were high-value concentrate. Output of six platinum group metals was 34,800oz.
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