Tharisa plans $547 million investment in underground mining expansion

Tharisa, the JSE and London stock exchange listed mining and metals company, said transitional capital for its dual underground development project over 10 terms would likely come to $547 million (R9.42 billion).

The company said on Friday in an update of its underground mining expansion plans for its flagship Tharisa open-pit mine near Rustenburg, that this capital was expected to be financed by internal cash and external funding lines, utilising balance sheet flexibility. The update was provided as the basis for a presentation to investors on the day.

“The phased approach to portal development enables early access to reef, with the bord and pillar design supporting safe, cost-effective ramp-up and long-term operational efficiency. As we continue to innovate with purpose, we are setting the benchmark for multiple generations to come,” said the CEO Phoevos Pouroulis in a statement.

The underground expansion offers “a high confidence, low geological risk opportunity to sustain Tharisa Mine for in excess of 50 years,” he said.

Tharisa Mine is the company’s flagship asset, a co-producing open-pit mine for platinum group metals and chrome concentrates. There are plans for a phased transition to underground mining, through the Apollo Complex (West Mine) development and the Orion Complex (East Mine) project.

The company said that Tharisa Mine “is poised to enhance operational efficiency, environmental stewardship, and long-term value creation.”

Existing processing facilities had a capacity of 5.6 Mtpa (million tons per year) of run of mine (ROM), “ensuring production scalability and operational flexibility.”

The life of mine (LOM) schedule provided for the open-pit operations to be depleted by the 2035 financial year.

The addition of underground mined ore from West Mine (Apollo Complex) and East Mine (Orion Complex) from 2031 would ensure that the nameplate processing capacity of 5.6 Mtpa was achieved and exceeded, said Pouroulis.

Both the Apollo and Orion complexes, which would be developed sequentially, were designed to mine 255 ktpm, with a combined production rate of 510 ktpm, capped at the plant feed capacity of 5.6 Mtpa.

This would maintain current PGM and chrome concentrate output, with growth opportunities due to smarter mining and less dilution. A mining contractor model would be deployed.

“Our proven co-product business model will continue to deliver value as we embark on a modern smart mine, future-proofing our ability to unlock long-term value through a more efficient, flexible, and lower-cost mining model covering multiple generations,” he said.

The shallow ore body enabled on-reef mechanised development, delivering cleaner ROM and significantly reducing waste, capital intensity, and environmental impact, he added.

“The underground project is the natural progression for our operations and has been established to access the multigenerational mineral resource base, enhance operational efficiencies, while maintaining our world-class standards of health, safety, environmental stewardship, and further enhancing our track record of long-term value creation,” he said.

In a third-quarter production report to June 30, the company said cash on hand stood at $164.6m, with debt at $121.5m, bringing net cash to $43.1m. At the time, production was trending towards the lower end of guidance.

In May, half-year headline earnings per share were reported 78% lower at US 2.9 cents, “with Tharisa continuing its track record of generating profits, albeit at a lower level, enabling the company to continue to invest in the sustainability and growth of its operations… we are now in our tenth year of returning capital to shareholders, and we are also embarking on our second share buyback.”

Tharisa's share price fell 1.64% to R24 on Friday, a price that has appreciated by 34% over a year.

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