Condensed Consolidated Financial Statements H1FY19

Tharisa plc

(Incorporated in the Republic of Cyprus with limited liability)

(Registration number HE223412

JSE share code: THA

LSE share code: THS

ISIN: CY0103562118

("Tharisa" or the "Company")

 

 

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 MARCH 2019

 

 

 

Salient features

 

REEF MINED   2.22 Mt down 9.3% (2018: 2.45 Mt)	PGM PRODUCTION (5PGE+AU) 67.6 koz down 12.2% (2018: 77.0 koz)	CHROME CONCENTRATE PRODUCTION 614.1 kt down 16.2% (2018: 732.5 kt)
REVENUE US$166.5 m down 16.4% (2018: US$199.2 m)	OPERATING PROFIT US$14.3 m down 64.6% (2018: US$40.4 m)	EBITDA US$30.1 m down 44.4% (2018: US$54.1 m)
PROFIT BEFORE TAX   US$10.2 m down 72.6% (2018: US$37.2 m)	EARNINGS AND HEADLINE EARNINGS PER SHARE US$ 4 cents down 60.0% (2018: US$ 10 cents)	INTERIM DIVIDEND   US$ 0.5 cents 16.2% of NPAT

 

 

Group statistics

 

	Unit	H1 FY2019	H1 FY2018	Change %
Reef mined	kt	2 223.5	2 451.3	(9.3)
Stripping ratio	m3 waste: m3 reef	7.1	8.1	(12.3)
Reef milled	kt	2 337.5*	2 597.4	(10.0)
PGM flotation feed	kt	1 751.6	1 895.6	(7.6)
PGM rougher feed grade	g/t	1.49	1.52	(2.0)
PGM recovery	%	80.7	83.2	(3.0)
PGM ounces produced	5PGE+Au koz	67.6	77.0	(12.2)
Average PGM basket price	US$/oz	1 017	909	11.9
Average PGM basket price	ZAR/oz	14 382	11 606	23.9
Cr2O3 ROM grade	%	18.2	18.1	0.6
Chrome recovery	%	60.8	65.9	(7.7)
Chrome yield	%	26.3	28.2	(6.7)
Chrome concentrates produced (excluding third party)	kt	614.1	732.5	(16.2)
Metallurgical grade	kt	466.0	558.9	(16.6)
Specialty grades	kt	148.1	173.6	(14.7)
Third-party chrome production	kt	112.5	106.2	5.9
Chrome concentrates sold (including third party)	kt	703.7	811.2	(13.3)
Metallurgical grade chrome concentrate contract price	US$/t CIF China	163	193	(15.5)
Metallurgical grade chrome concentrate contract price	ZAR/t CIF China	2 289	2 436	(6.0)
Average exchange rate	ZAR:US$	14.2	12.8	10.9
Group revenue	US$ million	166.5	199.2	(16.4)
Gross profit	US$ million	32.1	55.7	(42.4)
Net profit for the period	US$ million	8.2	28.4	(71.1)
EBITDA	US$ million	30.1	54.1	(44.4)
Headline profit	US$ million	10.5	25.7	(59.1)
Headline earnings per share	US$ cents	4	10	(60.0)
Earnings per share	US$ cents	4	10	(60.0)
Interim dividend	US$ cents	0.5	2
Gross profit margin	%	19.3	28.0	(31.1)
EBITDA margin	%	18.1	27.2	(33.5)
Net cash flows from operating activities	US$ million	41.4	49.2	(15.9)
Net debt	US$ million	7.9	22.7	(65.2)
Capital expenditure	US$ million	24.3	17.7	37.3
* Includes the processing of 99.0 kt of commissioning tails.

 

 

 

Management report

 

Dear Stakeholder

Safety is a core value and Tharisa continues to strive for zero harm at its operations. Tharisa achieved a lost-time injury frequency rate ('LTIFR') of 0.24 per 200 000 man hours worked at 31 March 2019. This is among the lowest LTIFRs in the PGM and chrome industries in South Africa.

 

The Group reported revenue of US$166.5 million and a profit before tax of US$10.2 million for the interim period with net cash flows from operating activities of US$41.1 million. Earnings per share amounted to US$4 cents and an interim dividend of US$0.5 cent a share was declared. These results were achieved against lower chrome concentrate prices and lower PGM and chrome sales volumes.

 

Key production statistics for the six months ended 31 March 2019:

·      PGM recoveries decreased to 80.7% from 83.2%, remaining above the targeted 80.0%.

·      PGM production at 67.6 koz, down 12.2% from 77.0 koz.

·      Chrome recoveries declined to 60.8% from 65.9%.

·      Chrome production at 614.1 kt, down 16.2% from 732.5 kt.

 

Tharisa's average PGM contained metal basket price benefited from the increases in palladium and rhodium prices, contributing to an increase of 11.9% to US$1 017/oz from US$909/oz in the comparable period.

 

Average contracted metallurgical grade chrome concentrate prices decreased to US$163/t from US$193/t reported in H1 FY2018. Current metallurgical chrome spot prices are trading at US$170/t. Global growth in stainless steel production remains robust.

 

Specialty chrome concentrates, which comprise 24.1% of chrome concentrate production, are sold into the chemical and foundry markets globally and these grades continue to attract a significant premium above the metallurgical chrome concentrate price.

 

Operational overview
	Unit	31 March 2019	31 March 2018	Change %
Reef mined	kt	2 223.5	2 451.3	(9.3)
Reef milled	kt	2 337.5	2 597.4	(10.0)
On-mine cash cost per tonne milled	US$/t	35.2	32.7	7.6
Consolidated cash cost per tonne milled (excluding transport)	US$/t	39.1	36.4	7.4

 

Mining

The Tharisa Mine is unique in that it mines multiple mineralised layers with defined PGM and chrome contents. The mine is a large-scale, highly mechanised open pit with a life of mine of up to 15 years and the potential to extend mine life by a further 40 years by mining underground.

 

During the six months under review, 2.2 Mt of ore was mined, with an average head grade of 1.49 g/t PGMs on a 5PGE+Au basis and 18.2% chrome reporting to the processing plants.

 

In the past six months, Tharisa focused on the pit redesign, which is opening up access to the full mining strike length and the maintenance of the correct multi-reef layer profile to ensure stable feed grades for processing. The pit redesign will achieve the following:

·      The extension and widening of the East Pit to optimise logistics.

·      Improve access to the East Pit from the north side with more regular backfill now possible on the south side as the pit advances to the north.

·      Longer benches and thus better drilling, blasting and hauling continuity as access roads previously ran north to south are now running parallel to the pit as the pit advances.

·      Longer benches will also ensure more optimal product mix and grade control to be delivered to both the Genesis and Voyager plants, which have a chrome and PGM bias respectively.

 

The Tharisa mining division moved an additional 1.3 Mm3 of in-pit material over the six-month period as part of the pit redesign. While the stripping ratio was 7.1 on a m3:m3 basis for the six months, if the additional material is included in the stripping ratio calculation, the stripping ratio tracked the LOM average of 9.5.

 

The transition to a 24-hour continuous operation in the East Pit was completed in the latter part of the six months after a slight delay, resulting in a mining capacity increase of 15%.

 

Processing

Tharisa has two processing plants - the Genesis and Voyager standalone concentrator plants. The Genesis Plant incorporates the Challenger Plant on the feed circuit for the extraction of specialty grade chrome concentrates principally from natural fines.

 

During the six-month period, 2.3 Mt of reef was processed through the two plants, which included 99.0 kt of commissioning tailings. This material supplemented the reduced level of ROM material, however it negatively impacted the overall production and recoveries. For the six months, 67.6 koz of contained PGMs on a 5PGE+Au basis and 614.1 kt of chrome concentrates were produced. Of the 614.1 kt of chrome concentrates produced, 148.1 kt or 24.1% of the chrome concentrate production was specialty grade chrome concentrates.

As a consequence of the pit redesign, the optimal reef mix was not mined and impacted on the PGM rougher feed grade which declined by 2.0% to 1.49 g/t with the Cr2O3 ROM feed grade increasing marginally by 0.6% to 18.2% for the period.

 

While the processing operations are largely insulated from load shedding stage 1 to 3 in South Africa, the unprecedented stage 4 load shedding in March 2019 introduced instability into the processing plants and, at times, necessitated the stopping of certain processing circuits including the crusher circuits and part of the mill circuits, thereby impacting on overall production. Subsequently measures have been put in place to mitigate the risk of further load shedding and the impact on production with alternative standby diesel generator capacity.

 

Overall PGM recovery was 80.7% and the average chrome recovery was 60.8% for the six months, both being impacted from the processing of the commissioning tailings. In the second quarter, PGM and chrome recovery improved to 85.5% and 62.9% respectively. 

 

 

Vision 2020

The Vision 2020 projects are targeting an increase in Tharisa Minerals' production to 200 koz pa of PGMs and 2.0 Mt pa of chrome concentrates in 2020, on an annualised basis.

 

Commodity markets and sales
	Unit	31 March 2019	31 March 2018	Change %
PGM basket price	US$/oz	1 017	909	11.9
PGM basket price	ZAR/oz	14 382	11 606	23.9
42% metallurgical grade chrome concentrate contract price	US$/t	163	193	(15.5)
42% metallurgical grade chrome concentrate contract price	ZAR/t	2 289	2 436	(6.6)
Exchange rate	ZAR:US$	14.2	12.8	10.9

 

The PGM basket price has traded higher compared to H1 FY2018, with the average PGM contained metal basket price increasing 11.9% and ZAR basket price increasing 23.9% following the weakening of the South African rand ('ZAR') against the US$.

 

PGM production continued to be sold to Impala Platinum under the offtake agreement as well as to Lonmin under a research and cooperation agreement. A total of 67.0 koz was sold during the period.

 

The Tharisa Mine's PGM prill split was as follows:

	31 March 2019	31 March 2018
Platinum	54.9	56.4
Palladium	17.4	16.3
Rhodium	9.5	9.2
Gold	0.2	0.2
Ruthenium	13.6	13.5
Iridium	4.4	4.4

 

Contracted metallurgical grade chrome concentrate prices decreased over the period to an average US$163/t from the average US$193/t achieved in H1 FY2018. Spot metallurgical chrome prices as quoted by FerroAlloyNet traded between US$155/t and US$185/t during the period. This compares to the US$162/t and US$245/t range in the comparative six months.

 

The demand for chrome concentrate is driven by the increasing demand for stainless steel, which fundamentally remains robust. In CY2018, global stainless steel production increased by 5.5% year on year with Chinese production up 3.6% year on year to 26.7 Mt, according to the International Stainless Steel Forum. The fundamentals of the global stainless steel market remain sound further supporting strong demand for chrome units in the form of ferrochrome and chrome ores.

 

Chinese chrome port stocks were approximately 2.7 Mt at the end of April 2019. With domestic Chinese monthly requirements of approximately 1.2 Mt, this equates to 9 weeks' supply assuming all stocks are immediately available.

 

Tharisa's chrome concentrate sales for the period totalled 618.0 kt, a decrease of 14.8% compared to H1 FY2018 sales of 725.6 kt. Inventory levels totalled 62.6 kt as at end March 2019. Third-party sales totalled 85.7 kt, an increase of 0.1% from 85.6 kt.

 

Third-party sales comprise the sales of the UG2 chrome concentrate produced at Lonmin's K3 UG2 chrome plant, which is operated by Tharisa subsidiary Arxo Metals.

Logistics
	Unit	31 March 2019	31 March  2018	Change %
Average transport cost per tonne of chrome concentrate - CIF China basis	US$/t	62.8	60.9	3.1
Chrome concentrates shipped	kt	461.2	552.7	(16.6)

 

The chrome concentrate destined for main ports in China is shipped either in bulk from the Richards Bay Dry Bulk Terminal or via containers from Johannesburg and transported by road to Durban from where it is shipped. The economies of scale and in-house expertise have ensured that Tharisa's transport costs, a major cost to the Group, remained competitive.

 

China remains the main market for metallurgical chrome concentrates and the metallurgical grade chrome concentrates produced by the Tharisa Mine were predominantly sold on a CIF main ports China basis. Almost all material was shipped in bulk with a negligible quantity being shipped in containers.

 

Arxo Logistics has sufficient storage capacity at both the Richards Bay Dry Bulk Terminal and the Durban container port to manage the full production capacity of the Tharisa Mine and the third-party production.

 

 

Zimbabwe projects

Karo Mining Holdings

The Karo Platinum project has achieved several key milestones in the last few months, including approval of the Environmental Prospectus by the Environmental Management Agency ('EMA') of Zimbabwe. Stakeholder consultations have been concluded by the environmental consultant over the mining location and the final environmental impact assessment ('EIA') and management programme has been submitted to EMA for approval, post the interim reporting period.

 

Karo Platinum has also been awarded a development permit from the EMA, enabling Karo Platinum to initiate field work and the exploration drilling programme.

 

Drilling of 142 diamond core boreholes totalling over 25 100 m has been completed. The drilling campaign focuses on the western edge of the Great Dyke on the mining location, with boreholes targeting average depths of 50 m to 150 m below surface. The digital terrain mapping and high resolution airborne geophysical surveys have been completed. The quality assurance and quality control programmes are running concurrently with the drilling programme and adhere to industry best practice.

 

Core samples from approximately half of the boreholes are being prepared and assayed, to inform the resource declaration.

 

The shallow depth of the Main Sulphide Zone ('MSZ') of the Great Dyke allows for initial open-cast mining before developing the shallow underground workings. The results from the assay work and metallurgical test work will be used as the basis of the next phase of the project. Subsequent stages would include ongoing drilling, resource estimation and feasibility studies for the mine design, infrastructure and beneficiation plants.

 

Karo Power Generation

Tharisa also has an option to participate in the other downstream projects associated with Karo through discounted farm-in arrangements at a later stage. These include the establishment of a number of solar power sites totalling 300 MW.

 

Karo Power have appointed a technical consultant to conduct the feasibility studies and an environmental consultant to submit the environmental prospectus to the EMA and to complete the necessary EIA on the identified sites. The environmental prospectus for the first site has been approved by EMA.

 

Karo Power had initial engagements with the Zimbabwean Energy Regulator ('ZERA') around the power purchase agreement and independent power producer ('IPP') licence. Substantive negotiations regarding the IPP and power purchase agreement will commence with ZERA in the third quarter of 2019.

 

Salene Chrome

In the last quarter of 2018, Salene Chrome was awarded a development permit from EMA, while the EIA report is being finalised for submission. The development permit has enabled Salene Chrome to initiate field work and the exploration trenching programme.

 

The digital terrain mapping and high resolution airborne geophysical survey over the mining location have been completed. The geophysical data has been interpreted. The first 11 trenches have been completed, totalling over 4 000 m. The trenches have been rehabilitated and the next trenching and pitting targets are being identified.

 

The samples from the first trenches have been prepared and logged and sent for assay. The quality assurance and quality control programme is being carried out concurrently with the exploration programme and adheres to industry best practice.

 

FINANCIAL OVERVIEW

The financial results of the Group were characterised by the pricing metrics for both commodities reflected opposing trends. The overall PGM basket price increased by 11.9% to US$1 017/oz with the Group basket price benefiting from the prill split favouring palladium (at 17.4%) and rhodium (at 9.5%). There was pressure on the metallurgical grade chrome concentrate price which averaged US$163/t (on a CIF main ports China basis) against the prior period average of US$193/t (a decrease of 15.5%).

 

A weak domestic economy and emerging market contagion with uncertainty prior to the national elections held on 8 May 2019 was reflected in the weakening ZAR, being the base cost currency for the Group's mining operations in South Africa, from an average of ZAR12.8 to ZAR14.2 against the US$, an average weakening of 10.9%. The country's foreign debt avoided a further credit downgrading with Moody's retaining an investment grade rating changing the outlook to "stable". The South African domestic interest rate (as measured by the repo rate) remained unchanged at 6.5%. The Group's commodities are priced in US$ and the cost base is mainly in ZAR and therefore the Group is positioned as a rand hedge stock.

 

Group revenue totalled US$166.5 million (2018: US$199.2 million) of which US$58.0 million was derived from the sale of PGM concentrate and US$93.8 million was derived from the sale of chrome concentrates. The agency and trading segment contributed US$14.7 million. This is a decrease in revenue relative to the comparable period of 16.4%. Speciality grade chrome concentrates, comprising 25.4% of overall chrome sales, continued to trade at a premium of approximately US$50/t.

 

On a segmental basis, the movement in revenue is as a result of:

·      A reduction in the unit sales of PGMs by 12.0% from 76.1 koz to 67.0 koz largely offset by the increase in the PGM basket price of 11.9% from US$909/oz to US$1 017/oz.

·      A reduction in the unit sales of metallurgical grade chrome concentrate by 16.6% from 552.7 kt to 461.2 kt. The metallurgical grade chrome concentrate price decreased by 15.5% from US$193/t to US$163/t.

·      A decrease in the unit sales of specialty grade chrome concentrates by 9.3% from 172.9 kt to 156.8 kt.

·      Increase in third-party trading and logistics, which contributed US$14.7 million to revenue.

 

Gross profit amounted to US$32.1 million (2018: US$55.7 million) with a gross profit margin of 19.3% (2018: 28.0%). The gross profit margin was also impacted by the reduced volumes of both commodities produced and sold with the fixed costs inherent to the operation impacting on the unit cost of sales. In addition, diesel cost, a significant component of the mining cost comprising approximately 14% of on-mine cash costs, increased at above inflation on average by 18.1% per litre from ZAR12.04/ℓ (US$0.94/ℓ) to ZAR14.22/ℓ (US$1.00/ℓ). Costs incurred with the transport of the metallurgical grade chrome concentrates from the mine to the customer increased marginally by 3.1% from US$60.9/t to US$62.8/t, the majority of this increase related to an increase in the freight costs.

 

As a co-producer of PGMs and chrome concentrates, the shared costs of production for segmental reporting purposes are based on the relative contribution to revenue on an ex-works basis, allocated 55% to the PGM segment and 45% to the chrome segment. This is in accordance with the accounting policy of the Group and IFRS. The comparable period was allocated 45% to the PGM segment and 55% to the chrome segment. The change to the basis of allocation of the shared costs is, in effect, a 22.2% increase in respect of the allocation to the PGM segment and a 18.2% decrease in respect of the allocation to the chrome segment.

 

The segmental cost of sales and gross profit contribution, as extracted from the condensed consolidated interim financial statements, is as follows:

	31 March 2019				31 March 2018
US$ millions	PGM	Chrome	Agency and trading	Total	PGM	Chrome	Agency and trading	Total
Revenue	58.0	93.8	14.7	166.5	55.5	130.3	13.4	199.2
Cost of sales
Costs of sales excluding selling costs	(46.2)	(44.2)	(6.7)	(97.1)	(39.8)	(56.3)	(7.2)	(103.3)
Selling costs	(0.2)	(20.7)	(3.9)	(24.8)	(0.2)	(24.4)	(3.7)	(28.3)
Freight services	-	(9.8)	(2.7)	(12.5)	-	(10.4)	(1.5)	(11.9)
Gross profit contribution	11.6	19.1	1.4	32.1	15.5	39.2	1.0	55.7
Gross profit margin (%)	20.0	20.4	9.5	19.3	28.0	30.1	7.5	28.0
Sales volume	67.0 koz	618.0 kt	85.7 kt		76.1 koz	725.6 kt	85.6 kt

 

The PGM segment gross profit margin of 20.0% (2018: 28.0%) is lower than the previous year notwithstanding the increased revenue due, in part, to the revised basis of allocating shared costs.

 

The chrome segment gross profit margin of 20.4% (2018: 30.1%) is lower than the previous year following the weakening of the selling prices for the chrome concentrates notwithstanding benefiting from the revised basis of allocating shared costs.

 

The agency and trading segment contributed US$1.4 million (2018: US$1.0 million) to the Group gross profit at a margin of 9.5% (2018: 7.5%).

 

On a unit cost basis, the reef mining cost per tonne mined increased by 9.8% from US$20.5/t to US$22.5/t. This cost per reef tonne mined was incurred on a stripping ratio of 7.1 on a per cubic metre basis. On a per cube mined basis i.e. including both waste and reef, the cost increased from US$7.9/m3 to US$9.6/m3 (the prior period stripping ratio being 8.1 on a per cubic metre basis).

 

The consolidated cash cost per tonne milled (i.e. including mining and processing but excluding transport and freight) increased by 7.4% from US$36.4/t to US$39.1/t.

 

Administrative expenses decreased from US$20.4 million to US$16.3 million mainly in respect of salary costs, which included discretionary bonuses paid in the prior period and due to the benefit of the weakening of the exchange rate with the administration cost being mainly in ZAR. After accounting for the administrative expenses, the Group achieved an operating profit of US$14.3 million (2018: US$40.4 million).

 

EBITDA amounted to US$30.1 million (2018: US$54.1 million).

 

Finance costs (totalling US$4.5 million) principally relate to the balances owing on the bank facilities and original equipment manufacturer finance for the purchase of the mining fleet, and the Group trade finance facilities.

 

The tax charge amounted to US$2.1 million, an effective charge of 20.2%. The cash tax paid amounted to US$2.9 million. The Group has fully utilised its tax losses. However, as at the period end, the Group had unredeemed capex for tax purposes of US$104.9 million. The net deferred tax liability amounted to US$24.8 million.

 

Foreign currency translation differences for foreign operations arising where the Company has funded the underlying subsidiaries with US$ denominated funding and the reporting currency of the underlying subsidiary is not in US$, amounted to an unfavourable US$3.8 million following the weakening of the ZAR.

 

Basic and diluted earnings per share for the period amounted to US$ 4 cents (2018: US$ 10 cents) with headline earnings per share of US$ 4 cents (2018: US$ 10 cents).

 

Total debt amounted to US$74.7 million, resulting in a debt-to-total equity ratio of 25.0%. This exceeds the long-term targeted debt-to-total equity ratio of 15% principally due to the leveraged purchase of the mining fleet. Group cash and cash equivalents amounted to US$66.8 million resulting in a net debt-to-total equity ratio of 2.6%.

 

The capex spend for the period amounted to US$24.3 million of which US$20.7 million related to the mining fleet and US$3.6 million related to the processing plants including optimisation initiatives. The depreciation charge amounted to US$13.5 million. The mining fleet replacement programme has been accelerated to ensure the optimal mining fleet with the necessary availabilities with the installed capacity to meet the Vision 2020 mining targets is in place. For the second six months the budgeted capex spend on the mining fleet remains at a higher level than the normal sustaining capex at US$14.0 million. Capex for the next six months on the processing plant and additional generators to further derisk the business operations from the risk of load shedding is budgeted at US$15.6 million.

 

The Company committed to spend an amount of up to US$3.2 million on exploration on the special grants held by Salene Chrome. As at 31 March 2019, US$0.9 million had been incurred. The Company has an option to acquire a 90% shareholding in Salene Chrome. In addition, the Company undertook to provide funding of US$8.0 million to Karo Mining Holdings, in which the Company has a 26.8% shareholding, to fund the exploration and development of its exploration rights and project obligations e.g. solar power. As at 31 March 2019, US$2.7 million of this amount had been drawn down. The Company also paid the balance of US$2.0 million for the purchase of its shareholding in Karo Mining Holdings.

 

The Group generated net cash from operations of US$41.4 million (2018: US$49.2 million) and after taking into account the capex, a free cash flow of US$17.1 million. Cash on hand amounted to US$66.8 million.

 

There is continued focus on working capital management with the current ratio at two times.

 

From time to time the Group concludes transactions with related parties. These transactions are concluded on an arms' length basis and are disclosed in the ensuing interim condensed consolidated financial statements (refer to note 16).

 

INTERIM DIVIDEND

In accordance with its dividend policy of distributing at least 15% of annual net profit after tax and following the introduction of an interim dividend, the Board has declared an interim cash dividend of US$ 0.5 cent per ordinary share. The interim dividend will be paid on Wednesday, 19 June 2019. Shareholders on the principal Cyprus register will be paid in US$, shareholders whose shares are held through Central Securities Depositary Participants ('CSDPs') and brokers and are traded on the JSE will be paid in ZAR and holders of depositary interests traded on the LSE will be paid in Sterling (GBP).

 

The timetable for the dividend declaration is as follows:

Declaration and currency conversion date	Tuesday, 14 May 2019
Currency conversion rates announced	Thursday, 16 May 2019
Last day to trade cum dividend rights on the JSE	Tuesday, 4 June 2019
Last day to trade cum dividend rights on the LSE	Wednesday, 5 June 2019
Shares will trade ex dividend rights on the JSE	Wednesday, 5 June 2019
Shares will trade ex dividend rights on the LSE	Thursday, 6 June 2019
Record date for payment on both JSE and LSE	Friday, 7 June 2019
Dividend payment date	Wednesday, 19 June 2019

 

No dematerialisation or rematerialisation of shares within Strate will be permitted between Wednesday, 5 June 2019 and Friday, 7 June 2019, both days inclusive. No transfers between registers will be permitted between Thursday, 16 May 2019 and Friday, 7 June 2019, both days inclusive.

 

Tax implications of the dividend

Shareholders are advised that the dividend declared will be paid out of income reserves and may therefore be subject to dividend withholding tax depending on the tax residency of the shareholder.

 

South African tax residents

South African shareholders are advised that the dividend constitutes a foreign dividend. For individual South African tax resident shareholders, dividend withholding tax of 20% will be applied to the gross dividend of US$ 0.5 cent per share. Therefore, the net dividend of US$ 0.4 cent per share will be paid after US$ 0.1 cent in terms of dividend withholding tax has been applied. Shareholders who are South African tax resident companies are exempt from dividend tax and will receive the dividend of US$ 0.5 cent per share. This does not constitute legal or tax advice and is based on taxation law and practice in South Africa. Shareholders should consult their brokers, financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.

 

UK tax residents

UK tax residents are advised that the dividend constitutes a foreign dividend and that they should consult their brokers, financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.

 

Cyprus tax residents

Individual Cyprus tax residents are advised that the dividend constitutes a local dividend and that they should consult their brokers, financial and/or tax advisers with regard to how they will be impacted by the payment of the dividend.

 

Shareholders and depositary interest holders should note that information provided should not be regarded as tax advice.

 

PRINCIPAL BUSINESS RISKS

Tharisa regards principal business risks as the issues that may, if they materialise, substantially affect the Group's ability to create and sustain value in the short, medium and long term.

 

These risks determine how the Group devises and implements its strategy since each risk has the potential to impact the Group's ability to achieve its strategic objectives. Each risk also carries with it challenges and opportunities. The Group's strategy takes into account known risks, but risks may exist of which the Group is currently unaware.

 

An overview of the risks, which could affect the Group's operational and financial performance, was included in the Group's 2018 Annual Report, which is available on http://www.tharisa.com. The following risks have been identified which may impact the Group over the next six months:

 

Regulatory compliance

Tharisa Minerals' right to mine is dependent on strict adherence to legal and legislative requirements. There remains some uncertainty on the proposed amendments to the South African Mineral and Petroleum Resources Development Act ('MPRDA') and the accompanying Mining Charter. The Minerals Council of South Africa in March 2019 filed an application for judicial review and setting aside certain clauses of the 2018 Mining Charter.

 

Unscheduled breakdowns

The Group's performance is reliant on consistent mining and the production of PGM and chrome concentrates from the Tharisa Mine. Any unscheduled breakdown leading to a prolonged reduction in either mining or production may have a material impact on the Group's financial performance and results. The Group has purchased additional mining fleet to optimise the fleet. Long lead items for the fleet and the plant are kept in stock and preventative maintenance programmes are in place for both the fleet and the plant.

 

Global commodity prices and currency risk

The Group's revenues, profitability and future rate of growth depends on the prevailing market prices of PGMs and chrome. A sustained downward movement in the market price for PGMs and/or chrome may negatively affect the Group's profitability and cash flows. The Group's reporting currency is US$. The Group's operations are predominantly based in South Africa with a ZAR cost base while the majority of the revenue stream is in US$ exposing the Group to the volatility and movements in the ZAR. Fluctuations in the US$ and ZAR may have a significant impact on the performance of the Group. To counter this, the Group continues to work on reducing costs and increasing operating efficiencies.

 

 

 

 

Financing and liquidity

The activities of the Group expose it to a variety of financial risks including market, commodity prices, credit, foreign exchange and interest rate risks. The Group closely monitors and manages these risks. Cash forecasts are regularly updated and reviewed including sensitivity scenarios with reference to the above risks.

 

OUTLOOK

Tharisa's business model is robust and cash generative throughout the commodity cycle. The unique co‐product mix, coupled with an open-pit mine ensures we remain consistently at the low end of the production cost curve and, while we believe commodity prices will remain stable, we are well insulated against price volatility.

 

That said, fundamentals for the global stainless steel market support stable demand for chrome concentrates. Our specialty chrome products are in demand and given the premium pricing of this product, we benefit from strong margins.

 

The Group expects a strong operational performance for the remainder of the year with a focus on increasing its production through the continual improvement processes and delivery of the first of its Vision 2020 optimisation projects. The benefits of the pit redesign should become evident in the second half of the financial year and Tharisa is on track to achieve its FY2019 guidance of at least 150 koz PGMs and 1.4 Mt chrome concentrates, of which 350 kt will be specialty grade. The Vision 2020 projects aim to take production to 200 kozpa of PGMs and 2.0 Mtpa of chrome concentrates in 2020, on an annualised basis.

 

Our expansion plans and a strong focus on the performance of the mining division and our yellow fleet, will enhance economies of scale, reduce unit costs and improve operating margins.

 

Tharisa would like to thank its staff, management and directors for their continued support in achieving these interim results.

 

STATEMENT BY THE MEMBERS OF THE BOARD OF DIRECTORS AND THE COMPANY OFFICIALS RESPONSIBLE FOR THE PREPARATION OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ACCORDING TO THE CYPRUS SECURITIES AND EXCHANGE COMMISSION LEGISLATION

In accordance with sections 10(3)(c) and 10(7) of Law No. 190(I)/2007, as amended, providing for the transparency requirements of issuers whose securities are admitted to trading on a regulated market ('the Transparency Law'), we, the members of the Board of Directors of Tharisa plc, responsible for the preparation of the interim condensed consolidated financial statements of Tharisa plc for the period ended 31 March 2019, hereby declare that to the best of our knowledge:

(a) The interim condensed consolidated financial statements for the period ended 31 March 2019:

·      Have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting and as stipulated for under section 10(4) of the Transparency Law.

·      Give a true and fair view of the assets and liabilities, the financial position and profit or losses of Tharisa plc and its undertakings, as included in the interim condensed consolidated financial statements as a whole.

(b) The adoption of a going concern basis for the preparation of the financial statements continues to be appropriate based on the foregoing and having reviewed the forecast financial position of the Group.

(c) The interim management report provides a fair review of the information required by section 10(6) of the Transparency Law.

Loucas Pouroulis	Executive Chairman
Phoevos Pouroulis	Chief Executive Officer
Michael Jones	Chief Finance Officer
David Salter	Lead independent non-executive director
Antonios Djakouris	Independent non-executive director
Omar Kamal	Independent non-executive director
Carol Bell	Independent non-executive director
Roger Davey	Independent non-executive director
Joanna Ka Ki Cheng	Non-executive director
Zhong Liang Hong	Non-executive director

 

Paphos, Cyprus

14 May 2019

 

 

REPORT ON REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

TO THE SHAREHOLDERS OF THARISA PLC

Introduction

We have reviewed the interim condensed consolidated financial statements of Tharisa plc (the 'Company'), and its subsidiaries (collectively referred to as the 'Group') contained in the accompanying interim report, which comprise the interim condensed consolidated statement of financial position as at 31 March 2019 and the interim condensed consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the six-month period then ended and selected explanatory notes. Management is responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Accounting Standard 34 Interim Financial Reporting. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review.

 

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements do not present fairly, in all material respects, the financial position of the entity as at 31 March 2019 and of its financial performance and its cash flows for the six-month period then ended in accordance with International Accounting Standard 34 Interim Financial Reporting.

 

Stavros Pantzaris

Certified Public Accountant and Registered Auditor

 

for and on behalf of

 

Ernst & Young Cyprus Limited

Certified Public Accountant and Registered Auditor

 

Nicosia

 

14 May 2019

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

for the six months ended 31 March 2019

 

	Notes	Six months ended 31 March 2019 Reviewed US$'000	Six months ended 31 March 2018 Reviewed US$'000	Year ended 30 Sept 2018 Audited US$'000
Revenue	5	166 519	199 179	406 268
Cost of sales	6	(134 384)	(143 436)	(297 782)
Gross profit		32 135	55 743	108 486
Other income		478	2 072	2 432
Net foreign exchange (loss)/gain		(2 030)	3 004	852
Administrative expenses	7	(16 322)	(20 422)	(39 232)
Results from operating activities		14 261	40 397	72 538
Finance income		798	695	1 279
Finance costs		(4 475)	(5 130)	(10 189)
Changes in fair value of financial assets at fair value through profit or loss		132	1 204	1 262
Changes in fair value of financial liabilities at fair value through profit or loss		322	-	155
Share of loss of investment accounted for using the equity method		(816)	-	(62)
Profit before tax		10 222	37 166	64 983
Tax	8	(2 067)	(8 753)	(14 011)
Profit for the period/year		8 155	28 413	50 972
Other comprehensive income
Items that may be classified subsequently to profit or loss:
Foreign currency translation differences for foreign operations, net of tax		(3 772)	35 422	(10 663)
Other comprehensive income, net of tax		(3 772)	35 422	(10 663)
Total comprehensive income for the period/year		4 383	63 835	40 309
Profit for the period/year attributable to:
Owners of the Company		9 488	25 960	48 433
Non-controlling interest		(1 333)	2 453	2 539
		8 155	28 413	50 972
Total comprehensive income for the period/year attributable to:
Owners of the Company		7 095	49 433	41 790
Non-controlling interest		(2 712)	14 402	(1 481)
		4 383	63 835	40 309
Earnings per share
Basic earnings per share (US$ cents)	9	4	10	19
Diluted earnings per share (US$ cents)	9	4	10	18
The notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 March 2019

 

 

	Notes	31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
ASSETS
Non-current assets
Property, plant and equipment	10	269 048	308 534	264 311
Goodwill		785	961	804
Investment accounted for using the equity method	11	3 622	-	4 438
Other financial assets		6 141	5 791	5 012
Deferred tax assets		2 408	2 445	1 880
Total non-current assets		282 004	317 731	276 445
Current assets
Inventories	12	26 411	26 903	23 043
Trade and other receivables		66 727	78 173	86 202
Contract assets		1 059	-	2 229
Other financial assets		656	901	986
Current taxation		597	108	228
Cash and cash equivalents		66 817	59 930	66 791
Total current assets		162 267	166 015	179 479
Total assets		444 271	483 746	455 924
Equity and liabilities
Share capital and premium	13	282 791	280 409	280 806
Other reserve		47 245	47 245	47 245
Foreign currency translation reserve		(82 597)	(50 088)	(80 204)
Retained earnings		80 932	58 399	77 025
Equity attributable to owners of the Company		328 371	335 965	324 872
Non-controlling interests		(29 250)	(10 655)	(26 538)
Total equity		299 121	325 310	298 334
Non-current liabilities
Provisions		11 917	11 114	12 634
Borrowings	14	28 164	35 053	27 281
Deferred tax liabilities		27 227	33 297	29 892
Total non-current liabilities		67 308	79 464	69 807
Current liabilities
Borrowings	14	46 538	42 119	50 138
Other financial liabilities		1 044	-	1 000
Current taxation		390	827	1 013
Trade and other payables		28 811	36 026	33 403
Contract liabilities		1 059	-	2 229
Total current liabilities		77 842	78 972	87 783
Total liabilities		145 150	158 436	157 590
Total equity and liabilities		444 271	483 746	455 924
The interim condensed consolidated financial statements were authorised for issue by the Board of Directors on 14 May 2019.
Phoevos Pouroulis				Michael Jones
Director				Director
The notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months ended 31 March 2019

 

				Attributable to owners of the Company
	Notes	Share capital US$'000	Share premium US$'000	Other reserve US$'000	Foreign currency translation reserve US$'000	Retained earnings US$'000	Total US$'000	Non- controlling interest US$'000	Total equity US$'000
Balance at 30 September 2018		261	280 545	47 245	(80 204)	77 025	324 872	(26 538)	298 334
Total comprehensive income for the period
Profit for the period		-	-	-	-	9 488	9 488	(1 333)	8 155
Other comprehensive income:
Foreign currency translation differences		-	-	-	(2 393)	-	(2 393)	(1 379)	(3 772)
Total comprehensive income for the period		-	-	-	(2 393)	9 488	7 095	(2 712)	4 383
Transactions with owners of the Company
Contributions by and distributions to owners:
Issue of ordinary shares	13	3	1 982	-	-	-	1 985	-	1 985
Dividends paid	20	-	-	-	-	(5 276)	(5 276)	-	(5 276)
Equity-settled share-based payments		-	-	-	-	(975)	(975)	-	(975)
Deferred tax on equity-settled share-based payments		-	-	-	-	670	670	-	670
Contributions by owners of the Company		3	1 982	-	-	(5 581)	(3 596)	-	(3 596)
Total transactions with owners of the Company		3	1 982	-	-	(5 581)	(3 596)	-	(3 596)
Balance at 31 March 2019 (reviewed)		264	282 527	47 245	(82 597)	80 932	328 371	(29 250)	299 121
The notes are an integral part of these interim condensed consolidated financial statements.

 

				Attributable to owners of the Company
	Notes	Share capital US$'000	Share premium US$'000	Other reserve US$'000	Foreign currency translation reserve US$'000	Retained earnings US$'000	Total US$'000	Non- controlling interest US$'000	Total equity US$'000
Balance at 30 September 2017		260	280 082	47 245	(73 561)	42 877	296 903	(25 057)	271 846
Impact of adopting IFRS 16		-	-	-	-	(15)	(15)	-	(15)
Balance at 1 October 2017		260	280 082	47 245	(73 561)	42 862	296 888	(25 057)	271 831
Total comprehensive income for the period
Profit for the period		-	-	-	-	25 960	25 960	2 453	28 413
Other comprehensive income:
Foreign currency translation differences		-	-	-	23 473	-	23 473	11 949	35 422
Total comprehensive income for the period		-	-	-	23 473	25 960	49 433	14 402	63 835
Transactions with owners of the Company
Contributions by and distributions to owners:
Issue of ordinary shares*	13	-	67	-	-	-	67	-	67
Dividends paid	20	-	-	-	-	(13 010)	(13 010)	-	(13 010)
Equity-settled share-based payments		-	-	-	-	2 072	2 072	-	2 072
Deferred tax on equity-settled share-based payments		-	-	-	-	515	515	-	515
Contributions by owners of the Company		-	67	-	-	(10 423)	(10 356)	-	(10 356)
Total transactions with owners of the Company		-	67	-	-	(10 423)	(10 356)	-	(10 356)
Balance at 31 March 2018 (reviewed)		260	280 149	47 245	(50 088)	58 399	335 965	(10 655)	325 310
*The value of the issue of ordinary share capital is less than the reporting amount and amounts to US$182.
The notes are an integral part of these interim condensed consolidated financial statements.

 

				Attributable to owners of the Company
	Notes	Share capital US$'000	Share premium US$'000	Other reserve US$'000	Foreign currency translation reserve US$'000	Retained earnings US$'000	Total US$'000	Non- controlling interest US$'000	Total equity US$'000
Balance at 30 September 2017		260	280 082	47 245	(73 561)	42 877	296 903	(25 057)	271 846
Impact of adopting IFRS 16		-	-	-	-	(15)	(15)	-	(15)
Balance at 1 October 2017		260	280 082	47 245	(73 561)	42 862	296 888	(25 057)	271 831
Total comprehensive income for the year
Profit for the year		-	-	-	-	48 433	48 433	2 539	50 972
Other comprehensive income:
Foreign currency translation differences		-	-	-	(6 643)	-	(6 643)	(4 020)	(10 663)
Total comprehensive income for the year		-	-	-	(6 643)	48 433	41 790	(1 481)	40 309
Transactions with owners of the Company
Contributions by and distributions to owners:
Issue of ordinary shares	13	1	463	-	-	-	464	-	464
Dividends paid	20	-	-	-	-	(18 214)	(18 214)	-	(18 214)
Equity-settled share-based payments		-	-	-	-	3 638	3 638	-	3 638
Deferred tax on of equity-settled share-based payments		-	-	-	-	306	306	-	306
Contributions by owners of the Company		1	463	-	-	(14 270)	(13 806)	-	(13 806)
Total transactions with owners of the Company		1	463	-	-	(14 270)	(13 806)	-	(13 806)
Balance at 30 September 2018 (audited)		261	280 545	47 245	(80 204)	77 025	324 872	(26 538)	298 334
Companies which do not distribute 70% of their profits after tax, as defined by the special contribution for the defence of the Republic Law, during the two years after the end of the year of assessment to which the profits refer, will be deemed to have distributed this amount as dividend. Special contribution for defence at 17% will be payable on such deemed dividend to the extent that the ultimate shareholders at the end date of the period of two years from the end of the year of assessment to which the profits refer are both Cypriot tax residents and Cypriot domiciled entities. The amount of this deemed dividend distribution is reduced by any actual dividend paid out of the profits of the relevant year at any time. This special contribution for defence is paid by the Company for the account of the shareholders. These provisions do not apply for ultimate beneficial owners that are non-Cypriot tax resident individuals. Retained earnings is the only reserve that is available for distribution.
The notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

for the six months ended 31 March 2019

 

	Notes	Six months ended 31 March 2019 Reviewed US$'000	Six months ended 31 March 2018 Reviewed US$'000	Year  ended 30 Sept 2018 Audited US$'000
Cash flows from operating activities
Profit for the period/year		8 155	28 413	50 972
Adjustments for:
Depreciation of property, plant and equipment	10	13 517	14 369	29 858
Loss on disposal of property, plant and equipment		15	13	37
Gain on bargain purchase		-	(1 884)	(1 884)
Share of loss of investment accounted for using the equity method	11	816	-	62
Impairment loss/(reversal) and net realisable value write down of inventory	12	799	(13)	117
Impairment and write off of property, plant and equipment		1 909	894	3 897
Changes in fair value of financial assets at fair value through profit or loss		(132)	(1 204)	(1 262)
Changes in fair value of financial liabilities at fair value through profit or loss		(322)	-	(155)
Net foreign exchange loss/(profit)		2 030	(3 004)	(852)
Interest income		(798)	(695)	(1 279)
Interest expense		4 475	5 130	10 189
Tax	8	2 067	8 753	14 011
Equity-settled share-based payments		1 047	1 978	4 019
		33 578	52 750	107 730
Changes in:
Inventories		(4 715)	(1 736)	(2 456)
Trade and other receivables and contract assets		19 368	576	(18 639)
Trade and other payables and contract liabilities		(2 892)	(2 702)	2 979
Provisions		(1 027)	2 454	5 614
Cash from operations		44 312	51 342	95 228
Income tax paid		(2 880)	(2 108)	(5 457)
Net cash flows from operating activities		41 432	49 234	89 771
Cash flows from investing activities
Interest received		746	636	1 172
Additions to property, plant and equipment	10	(24 348)	(17 670)	(40 454)
Net cash outflow from business combination		-	(21 840)	(21 840)
Proceeds from disposal of property, plant and equipment		42	55	119
Additions to investments accounted for using the equity method		(2 000)	-	(2 500)
Additions to other financial assets		(1 563)	(3 951)	(4 008)
Refund of long-term deposits		-	7 609	7 110
Net cash flows used in investing activities		(27 123)	(35 161)	(60 401)
Cash flows from financing activities
Net (repayment)/proceeds from bank credit facilities	14	(12 816)	(8 134)	114
Advances received	14	19 673	62 191	68 220
Repayment of borrowings	14	(9 150)	(41 109)	(48 503)
Lease payments	14	(3 101)	(4 608)	(6 463)
Dividends paid		(5 276)	(13 010)	(18 214)
Interest paid		(2 832)	(2 550)	(6 619)
Net cash flows used in financing activities		(13 502)	(7 220)	(11 465)
Net increase in cash and cash equivalents		807	6 853	17 905
Cash and cash equivalents at the beginning of the period/year		66 791	49 742	49 742
Effect of exchange rate fluctuations on cash held		(781)	3 335	(856)
Cash and cash equivalents at the end of the period/year		66 817	59 930	66 791
The notes are an integral part of these interim condensed consolidated financial statements.

 

 

 

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

for the period ended 31 March 2019

 

1.	REPORTING ENTITY
	Tharisa plc (the 'Company') is a company domiciled in Cyprus. These interim condensed consolidated financial statements of the Company for the period ended 31 March 2019 comprise the Company and its subsidiaries (together referred to as the 'Group'). The Group is primarily involved in platinum group metals ('PGM') and chrome mining, processing, trading and the associated logistics. The Company is listed on the main board of the Johannesburg Stock Exchange with a secondary listing on the A2X Exchange as well as a secondary standard listing on the main board of the London Stock Exchange.
2.	BASIS OF PREPARATION
	Statement of compliance
	These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and the Listings Requirements of the Johannesburg Stock Exchange and the A2X Exchange. Selected explanatory notes are included to explain events and transactions that are significant to obtain an understanding of the changes in the financial position and performance of the Group since the last consolidated financial statements as at and for the year ended 30 September 2018. These interim condensed consolidated financial statements do not include all the information required for full consolidated financial statements prepared in accordance with International Financial Reporting Standards ('IFRS'). The interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended 30 September 2018, which have been prepared in accordance with IFRS.
	These interim condensed consolidated financial statements were approved by the Board of Directors on 14 May 2019. These interim condensed consolidated financial statements for the six months ended 31 March 2019 have been reviewed by the Group's external auditors, not audited.
	Use of estimates and judgements
	Preparing the interim condensed consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
	In preparing these interim condensed consolidated financial statements, significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements at and for the year ended 30 September 2018.
	Functional and presentation currency
	The interim condensed consolidated financial statements are presented in United States dollar (US$) which is the Company's functional and presentation currency. Amounts are rounded to the nearest thousand.
	The following US dollar: ZAR exchange rates were used when preparing the interim condensed consolidated financial statements: ·      Closing rate: ZAR14.48 (31 March 2018: ZAR11.83 and 30 September 2018: ZAR14.14) ·      Average rate: ZAR14.16 (31 March 2018: ZAR12.80 and 30 September 2018: ZAR13.08)
	Going concern
	After making enquiries which include reviews of current cash resources, forecasts and budgets, timing of cash flows, borrowing facilities and sensitivity analyses and considering the associated uncertainties to the Group's operations, the directors have a reasonable expectation that the Group has adequate financial resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the interim condensed consolidated financial statements.
	New and revised International Financial Reporting Standards and Interpretations
	The Group has early adopted IFRS 9 Financial Instruments, IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases with effect from 1 October 2017 and the consolidated financial statements for the year ended 30 September 2018 have been prepared in accordance with these standards.
	The Group has adopted the following new and/or revised standards and interpretations which became effective for the six months ended 31 March 2019:
	·      IFRS 2 Share-based Payment Transactions (amendment). ·      IFRIC 22 Foreign Currency Transactions and Advance Consideration.
	The adoption of these new/or revised standards and interpretations did not have a significant impact on the results of the Group.
	A number of standards, amendments to standards and interpretations have been issued but are not yet effective for annual periods beginning on 1 October 2018. Other than IFRS 16 Leases, the Group has elected not to early adopt any of these standards, amendments to standards and interpretations.
3.	SIGNIFICANT ACCOUNTING POLICIES
	The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those applied in the preparation of the Group's consolidated financial statements for the year ended 30 September 2018.
4.	OPERATING SEGMENTS
	For management purposes, the chief operating decision makers of the Group, being the executive directors of the Company and the executive directors of the subsidiaries, report its results per segment. The Group currently has the following three segments: ·      PGM segment ·      Chrome segment ·      Agency and trading segment
	The operating results of each segment are monitored separately by the chief decision makers in order to assist them in making decisions regarding resource allocation as well as enabling them to evaluate performance. Segment performance is evaluated on a PGM ounce production and sales basis and on chrome concentrate tonnes production and sales basis. Third-party logistics, third-party trading, third-party chrome operations and external consulting services are evaluated individually but aggregated together as the agency and trading segment.
	The Group's administrative costs, financing (including finance income and finance costs) and income taxes are managed on a group basis and are not allocated to a segment.
	The accounting policies used by the Group in reporting segments internally are the same as those contained in the consolidated financial statements.
	Due to the intrinsic nature of the Group's PGM and chrome concentrate production processes, assets are reported on a consolidated basis and cannot necessarily be allocated to a specific segment. Consequently, assets are not disclosed per segment in the following segmental information:
		PGM US$'000	Chrome US$'000		Agency and trading US$'000	Total US$'000
	Six months ended 31 March 2019 (reviewed)
	Revenue	57 960	93 840		14 719	166 519
	Cost of sales
	Manufacturing costs	(46 212)	(44 239)		(6 690)	(97 141)
	Selling costs	(182)	(20 643)		(3 923)	(24 748)
	Freight services	-	(9 803)		(2 692)	(12 495)
		(46 394)	(74 685)		(13 305)	(134 384)
	Gross profit	11 566	19 155		1 414	32 135
	Six months ended 31 March 2018 (reviewed)
	Revenue	55 458	130 296		13 425	199 179
	Cost of sales
	Manufacturing costs	(39 711)	(56 235)		(7 252)	(103 198)
	Selling costs	(205)	(24 408)		(3 677)	(28 290)
	Freight services	-	(10 419)		(1 529)	(11 948)
		(39 916)	(91 062)		(12 458)	(143 436)
	Gross profit	15 542	39 234		967	55 743
	Year ended 30 Sept 2018 (audited)
	Revenue	117 381	250 351		38 536	406 268
	Cost of sales
	Manufacturing costs	(87 745)	(106 485)		(21 695)	(215 925)
	Selling costs	(399)	(48 343)		(9 711)	(58 453)
	Freight services	-	(19 836)		(3 568)	(23 404)
		(88 144)	(174 664)		(34 974)	(297 782)
	Gross profit	29 237	75 687		3 562	108 486
	The shared costs relating to the manufacturing of PGM and chrome concentrates are allocated to the relevant operating segments based on the relative sales value per product on an ex-works basis. During the six months ended 31 March 2019, the relative sales value of PGM concentrate increased compared to the relative sales value of chrome concentrates and consequently the allocation basis of shared costs was amended to 55.0% for PGM concentrate and 45.0% for chrome concentrates. The allocation basis of shared costs was 45.0% (PGM concentrate) and 55.0% (chrome concentrates) in the comparative period while for the year ended 30 September 2018, shared costs were allocated equally.
	Cost of sales includes a charge for the write off/impairment of property, plant and equipment totalling US$1.9 million (six months ended 31 March 2018: US$0.9 million and year ended 30 September 2018: US$3.6 million) which mainly relates to mining equipment. The write off/impairment has been allocated to the PGM and chrome segments in accordance with the allocation basis of shared costs as described above.

 

	Geographical information
	The following table sets out information about the geographical location of: ·      The Group's revenue from external customers. ·      The Group's property, plant and equipment, goodwill and the investment accounted for using the equity method ('specified non-current assets').
	The geographical location analysis of revenue from external customers is based on the country of establishment of each customer. The geographical location of the specified non-current assets is based on the physical location of the asset in the case of property, plant and equipment and the location of the operation to which they are allocated in the case of goodwill.
	Revenue from external customers
				PGM US$'000		Chrome US$'000		Agency and trading US$'000		Total US$'000
	Six months ended 31 March 2019 (reviewed)
	South Africa			57 960		20 842		715		79 517
	China			-		29 482		286		29 768
	Singapore			-		6 163		13 352		19 515
	Hong Kong			-		37 353		-		37 353
	Other countries			-		-		366		366
				57 960		93 840		14 719		166 519
	Six months ended 31 March 2018 (reviewed)
	South Africa			55 458		28 484		379		84 321
	China			-		42 518		4 800		47 318
	Singapore			-		532		1 656		2 188
	Hong Kong			-		58 762		6 590		65 352
				55 458		130 296		13 425		199 179
				PGM US$'000		Chrome US$'000		Agency and trading US$'000		Total US$'000
	Year ended 30 Sept 2018 (audited)
	South Africa			117 381		62 464		969		180 814
	China			-		86 866		9 894		96 760
	Singapore			-		10 942		17 088		28 030
	Hong Kong			-		89 733		9 453		99 186
	Other countries			-		346		1 132		1 478
				117 381		250 351		38 536		406 268
	Revenue represents the sales value of goods supplied to customers, net of value added tax. The following table summarises sales to customers with whom transactions have individually exceeded 10.0% of the Group's revenues:
		Six months ended 31 March 2019 Reviewed			Six months ended 31 March 2018 Reviewed				Year ended 30 Sept 2018 Audited
		Segment	US$'000		Segment		US$'000		Segment		US$'000
	Customer 1	PGM	49 099		PGM		48 757		PGM		101 560
	Customer 2	Chrome	21 328		Chrome		28 585		Chrome		62 583
	Customer 3	Chrome	19 079		Chrome		22 659		Chrome		46 186

 

							31 March 2019 Reviewed US$'000		31 March 2018 Reviewed US$'000		30 Sept 2018 Audited US$'000
	Specified non-current assets
	South Africa						269 786		309 451		265 042
	Zimbabwe						3 622		-		4 438
	Cyprus						47		44		73
							273 455		309 495		269 553
	Non-current assets includes property, plant and equipment, goodwill and the investment accounted for using the equity method.
5.	REVENUE
				PGM US$'000		Chrome US$'000		Agency and trading US$'000		Total US$'000
	Six months ended 31 March 2019 (reviewed)
	Revenue recognised at a point in time
	Variable revenue based on initial results			53 372		63 223		10 435		127 030
	Quantity adjustments			263		41		558		862
	Revenue based on fixed selling prices			-		20 773		1 034		21 807
	Revenue recognised over time
	Freight services*			-		9 803		2 692		12 495
	Revenue from contracts with customers			53 635		93 840		14 719		162 194
	Fair value adjustments			4 325		-		-		4 325
	Total revenue			57 960		93 840		14 719		166 519
	Six months ended 31 March 2018 (reviewed)
	Revenue recognised at a point in time
	Variable revenue based on initial results			55 689		92 625		11 526		159 840
	Quantity adjustments			(257)		(1 231)		(10)		(1 498)
	Revenue based on fixed selling prices			-		28 483		380		28 863
	Revenue recognised over time
	Freight services			-		10 419		1 529		11 948
	Revenue from contracts with customers			55 432		130 296		13 425		199 153
	Fair value adjustments			26		-		-		26
	Total revenue			55 458		130 296		13 425		199 179
	* During the period 31 March 2019, revenue from freight services of US$2.2 million was recognised which was classified as a contract liability at 30 September 2018.
				PGM US$'000		Chrome US$'000		Agency and trading US$'000		Total US$'000
	Year ended 30 Sept 2018 (audited)
	Revenue recognised at a point in time
	Variable revenue based on initial results			110 619		169 092		33 957		313 668
	Quantity adjustments			254		(1 041)		42		(745)
	Revenue based on fixed selling prices			-		62 464		915		63 379
	Revenue recognised over time
	Freight services			-		19 836		3 622		23 458
	Revenue from contracts with customers			110 873		250 351		38 536		399 760
	Fair value adjustments			6 508		-		-		6 508
	Total revenue			117 381		250 351		38 536		406 268

 

		Six months ended 31 March 2019 Reviewed US$'000	Six months ended 31 March 2018 Reviewed US$'000	Year ended 30 Sept 2018 Audited US$'000
	Variable revenue recognised
	PGM revenue recognised in preceding period/year based on initial results	(29 743)	(28 994)	(28 994)
	PGM revenue based on final results	30 211	30 823	30 823
	PGM revenue adjustment recognised in current period/year	468	1 829	1 829
	Chrome revenue recognised in preceding period/year based on initial results	(48 460)	(41 197)	(41 197)
	Chrome revenue based on final results	48 682	41 177	41 177
	Chrome revenue adjustment recognised in current period/year	222	(20)	(20)
	The six months ended 31 March 2019 includes PGM revenue of US$31.3 million (six months ended 31 March 2018: US$28.7 million and year ended 30 September 2018: US$29.7 million) and chrome revenue of US$31.0 million (six months ended 31 March 2018: US$46.2 million and year ended 30 September 2018: US$48.5 million) that was based on provisional results as final prices and surveys  were not yet available at the date of this report.

 

6.	COST OF SALES
		Six months ended 31 March 2019 Reviewed US$'000	Six months ended 31 March 2018 Reviewed US$'000	Year ended 30 Sept 2018 Audited US$'000
	Mining	49 550	55 349	105 376
	Salaries and wages	6 843	7 816	15 124
	Utilities	4 419	4 770	10 319
	Diesel	377	310	650
	Materials and consumables	5 774	5 605	11 174
	Reagents	2 123	2 287	4 471
	Steel balls	2 454	3 773	6 715
	Overhead	3 112	3 375	4 117
	State royalties	1 277	1 595	2 916
	Depreciation - property, plant and equipment	13 139	16 273	29 008
	Cost of commodities	6 841	7 252	18 644
	Impairment and write off of property, plant and equipment	1 909	894	3 630
	Change in inventories - finished products and ore stockpile	(677)	(6 101)	3 781
	Total cost of sales excluding selling costs	97 141	103 198	215 925
	Selling costs	24 748	28 290	58 453
	Freight services	12 495	11 948	23 404
	Cost of sales	134 384	143 436	297 782

 

7.	ADMINISTRATIVE EXPENSES
		Six months ended 31 March 2019 Reviewed US$'000	Six months ended 31 March 2018 Reviewed US$'000	Year ended 30 Sept 2018 Audited US$'000
	Directors and staff costs
	Non-executive directors	313	295	612
	Employees: Salaries	6 310	8 121	15 459
	Bonuses	1 171	2 650	3 262
	Pension fund, medical aid and other contributions	933	843	1 707
		8 727	11 909	21 040
	Audit - external audit services	143	313	490
	Audit - other services*	5	-	90
	Consulting	932	697	2 611
	Corporate and social investment	55	30	157
	Depreciation	378	500	850
	Discount facility and related fees	380	432	701
	Equity-settled share-based payment expense	1 047	1 978	4 019
	Internal audit	39	39	206
	Listing fees and investor relations	85	-	461
	Health and safety	495	419	1 019
	Impairment and write off of property, plant and equipment	-	-	267
	Insurance	380	377	697
	Legal and professional	206	236	634
	Loss on disposal of property, plant and equipment	16	13	37
	Office administration, rent and utilities	443	315	1 296
	Security	695	1 193	1 776
	Telecommunications and IT related	1 425	793	1 374
	Training	169	150	504
	Travelling and accommodation	397	214	410
	Sundry	305	814	593
		16 322	20 422	39 232
	* Other services paid to the external auditor relates to tax and accounting services as approved by the Audit Committee.
		31 March 2019 Reviewed	31 March 2018 Reviewed	30 Sept 2018 Audited
	Number of employees	1 787	1 723	1 758

 

8.	TAX
		Six months ended 31 March 2019 Reviewed US$'000	Six months ended 31 March 2018 Reviewed US$'000	Year ended 30 Sept 2018 Audited US$'000
	Corporate income tax for the period/year
	Cyprus	1 089	1 457	2 913
	South Africa	785	1 300	3 002
		1 874	2 757	5 915
	Special contribution for defence in Cyprus	3	2	5
	Deferred tax
	Originating and reversal of temporary differences	190	5 836	7 933
	Dividend withholding tax	-	158	158
	Tax charge	2 067	8 753	14 011
	Reconciliation between tax charge and accounting profit at applicable tax rates
	Profit before tax	10 222	37 166	64 983
	Add share of loss of investment accounted for using the equity method	816	-	62
	Tharisa plc and subsidiary companies' profit before tax	11 038	37 166	65 045
	Notional tax on profit before tax, calculated at the Cypriot income tax rate of 12.5% (31 March 2018 and 30 September 2018: 12.5%)	1 380	4 646	8 131
	Tax effects of:
	Different tax rates from the standard Cypriot income tax rate	542	3 485	4 978
	Tax exempt income
	Gain on bargain purchase	-	-	(230)
	Interest received	-	(8)	(12)
	Other	(2)	-	-
	Non-deductible expenses
	Investment related	78	411	856
	Interest paid	4	2	5
	Capital expenses	33	58	63
	Other	-	134	152
	Tax losses not recognised	(3)	-	-
	Recognition of deemed interest income for tax purposes	35	25	68
	Income tax charge for the period/year	2 067	8 753	14 011
	Tax is recognised on management's best estimate of the weighted average annual income tax rate expected for the full financial year applied to the pre-tax income of the period/year.
	Under certain conditions interest income may be subject to defence contribution at the rate of 30.0% in Cyprus. Such interest income is treated as non-taxable in the computation of corporation taxable income. In certain instances, dividends received from abroad may be subject to defence contribution at the rate of 17.0%.
	The Group's consolidated effective tax rate for the six months ended 31 March 2019 was 20.2% (six months ended 31 March 2018: 23.6% and year ended 30 September 2018: 21.6%).
	At 31 March 2019, the Group's unredeemed capital balance available for offset against future mining taxable income in South Africa amounted to US$104.9 million (31 March 2018: US$124.0 million and 30 September 2018: US$111.1 million).
	Other than Cyprus and South Africa, no provision for tax in other jurisdictions was made as these entities either sustained losses for taxation purposes or did not earn any assessable profits.

 

9.	EARNINGS PER SHARE
	The calculation of basic and diluted earnings per share and headline and diluted earnings per share have been based on the profit attributable to the ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding. Treasury shares are excluded from the weighted average number of ordinary shares outstanding. Vested share appreciation rights ('SARS') issued to employees at award prices lower than the current share price, results in a potential dilutive impact on the weighted average number of issued ordinary shares and have been included in the calculation of dilutive weighted average number of issued ordinary shares. Vested SARS issued to employees at award prices higher than the current share price, were excluded from the calculation of diluted weighted average number of issued ordinary shares because their effect would have been anti-dilutive.
	Basic and diluted earnings per share
		Six months ended 31 March 2019 Reviewed	Six months ended 31 March 2018 Reviewed	Year ended 30 Sept 2018 Audited
	Profit for the year attributable to ordinary shareholders (US$'000)	9 488	25 960	48 433
	Number of shares in issue at the end of the period ('000)	265 000	261 000	265 000
	Less: Treasury shares	(1 196)	(806)	(4 098)
	Number of shares in issue at the end of the period ('000)	263 804	260 194	260 902
	Weighted average number of issued ordinary shares for basic earnings per share ('000)	262 358	260 141	260 329
	Weighted average number of issued ordinary shares for diluted earnings per share ('000)	264 171	261 782	264 531
	Earnings per share
	Basic (US$ cents)	4	10	19
	Diluted (US$ cents)	4	10	18
	Headline and diluted headline earnings per share
		Six months ended 31 March 2019 Reviewed	Six months ended 31 March 2018 Reviewed	Year ended 30 Sept 2018 Audited
	Headline earnings for the year attributable to ordinary shareholders (US$'000)	10 513	25 722	49 134
	Weighted average number of issued ordinary shares for basic headline earnings per share ('000)	262 358	260 141	260 329
	Weighted average number of issued ordinary shares for diluted headline earnings per share ('000)	264 171	261 782	264 531
	Headline earnings per share
	Basic (US$ cents)	4	10	19
	Diluted (US$ cents)	4	10	19

 

	Reconciliation of profit to headline earnings
		Six months ended 31 March 2019 (Reviewed)						Six months ended 31 March 2018 Net Reviewed US$'000		Year ended 30 Sept 2018 Net Audited US$'000
		Gross US$'000	Tax US$'000	Non- controlling interest US$'000		Net US$'000
	Profit attributable to ordinary shareholders					9 488		25 960		48 433
	Adjustments:
	Gain on bargain purchase	-	-	-		-		(1 394)		(1 394)
	Impairment of property,   plant and equipment	1 909	(535)	(357)		1 017		477		2 076
	Exchange loss on net   change in investment in   foreign subsidiary	-	-	-		-		672		-
	Loss on disposal of   property, plant and   equipment	15	(4)	(3)		8		7		19
	Headline earnings					10 513		25 722		49 134
10.	PROPERTY, PLANT AND EQUIPMENT
					31 March 2019 Reviewed US$'000		31 March 2018 Reviewed US$'000		30 Sept 2018 Audited US$'000
	Cost				369 603		396 139		353 201
	Accumulated depreciation				(100 555)		(87 605)		(88 890)
	Net book value				269 048		308 534		264 311
	Reconciliation of net book value
	Balance at the beginning of the period/year				264 311		232 559		232 559
	Adoption of IFRS 16				-		1 166		1 166
					264 311		233 725		233 725
	Recognition of right-of-use asset				2 220		5 214		7 701
	Additions				24 348		17 670		40 454
	Business combination				-		29 879		29 879
	Remeasurement				17		-		-
	Disposal				(57)		(68)		(156)
	Depreciation				(13 517)		(14 369)		(29 858)
	Impairment and assets written off				(1 909)		(894)		(3 897)
	Exchange adjustment on translation				(6 365)		37 377		(13 537)
					269 048		308 534		264 311
	There were no additions to the deferred stripping asset during the six months ended 31 March 2019. During the six months ended 31 March 2018 and the year ended 30 September 2018, additions to property, plant and equipment includes additions to the deferred stripping asset of US$1.0 million and US$1.3 million respectively.
	The estimated economically recoverable proved and probable mineral reserve was reassessed at 1 October 2018 which gave rise to a change in accounting estimate. The remaining reserve that management had previously assessed was 97.0 Mt (at 1 October 2017) and at 1 October 2018 was assessed to be 92.9 Mt. After taking into account depletion of the reserve during the year ended 30 September 2018 (4.9 Mt), the remaining reserve increased by 0.8 Mt at 1 October 2018.
	As a result the expected useful life of the plant increased. The impact of the change on the actual depreciation expense, included in cost of sales, is a reduced depreciation charge of US$0.2 million.
	Included in mining assets and infrastructure are projects under construction of US$21.4 million (31 March 2018: US$25.3 million and 30 September 2018: US$20.5 million).

 

	Securities
	At 31 March 2019, US$11.4 million of the carrying amount of the Group's mining fleet was pledged as security against the equipment loan facility (31 March 2018: US$6.1 million and 30 September 2018: US$11.4 million).
	Assets written off/impairment
	During the six months ended 31 March 2019, the Group impaired and scrapped assets totalling US$1.9 million (six months ended 31 March 2018: US$0.9 million and year ended 30 September 2018: US$3.9 million). The impairment and assets written off relate to mining fleet identified as no longer fit for use and premature component failures.
11.	INVESTMENT ACCOUNTED FOR USING THE EQUITY METHOD
	During the year ended 30 September 2018, the Group acquired 26.8% of the issued share capital of Karo Mining Holdings Limited ('Karo Holdings'), a company incorporated in Cyprus, for a total cash consideration of US$4.5 million from the Leto Settlement, a related party.
		31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Investment in Karo Holdings
	Opening balance	4 438	-	-
	Shares acquired	-	-	4 500
	Share of total comprehensive loss	(816)	-	(62)
		3 622	-	4 438
	Total share of comprehensive loss	(816)	-	(62)
	Summarised consolidated financial information of Karo Holdings
	Summarised statement of financial position
	Non-current assets	484	-	122
	Current assets	174	-	3
	Non-current liabilities	(2 250)	-	(264)
	Current liabilities	(1 684)	-	(91)
	Net deficit (100%)	(3 276)	-	(230)
	Summarised statement of comprehensive income
	Operating expenses	(2 986)	-	(290)
	Tax	(60)	-	60
	Total comprehensive loss	(3 046)	-	(230)
	Carrying amount of investment
	Group's share of net deficit (26.8%)	(878)	-	(62)
	Purchase consideration	4 500	-	4 500
	Carrying amount	3 622	-	4 438
	Karo Holdings entered into an Investment Project Framework Agreement with the Republic of Zimbabwe in terms of which Karo Holdings, through any of its Zimbabwean incorporated subsidiaries (refer to note 16), has undertaken to establish a platinum group metals mine, concentrators, smelters, a base metal and precious metals refinery as well as power generation capacity for the operations. The functional and presentation currency of Karo Holdings and its subsidiaries is US$.
	Contingencies and commitments
	The Group has undertaken to provide funding up to US$8.0 million to Karo Holdings as a repayable debt facility. This will be utilised to undertake initial geological exploration and sampling work to determine a compliant mineral resource which will enhance the value of the investment in Karo Holdings.

 

12.	INVENTORIES
		31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Finished products	8 808	8 853	7 199
	Ore stockpile	1 186	4 798	1 338
	Consumables	17 216	13 239	14 623
		27 210	26 890	23 160
	(Impairment)/impairment reversal of consumables	(19)	13	(117)
	Net realisable value write down of finished products	(780)	-	-
		(799)	13	(117)
	Total carrying amount	26 411	26 903	23 043
	Inventories are stated at the lower of cost or net realisable value. During the period ended 31 March 2019, the Group impaired certain consumables and spares as the operational use became doubtful with no anticipated recoverable amount or value in use. The impairment charge is allocated 55.0% to the PGM segment and 45.0% to the chrome segment (31 March 2018: impairment reversal allocated 45.0% to the PGM segment and 55.0% to the chrome segment and 30 September  2018: allocated equally between the PGM segment and chrome segment).
	PGM finished products were written down to the net realisable value during the period ended 31 March 2019. The net realisable value write down amounted to US$0.8 million (31 March 2018 and 30 September 2018: no net realisable write downs) and is allocated to the PGM segment.
13.	SHARE CAPITAL AND PREMIUM
	Share capital and premium
	The Company did not issue any ordinary shares during the period ended 31 March 2019 and 31 March 2018. Allotments during the year ended 30 September 2018 were in respect of 4 000 000 ordinary shares issued as treasury shares to satisfy the vesting of conditional awards and potential future settlement of appreciation rights of the participants' of the Tharisa Share Award Plan.
	During the period ended 31 March 2019, 2 901 430 (period ended 31 March 2018: 181 074 and year ended 30 September 2018: 889 703) ordinary shares were transferred from treasury shares to satisfy the transfer of vested conditional awards and the exercise of appreciation rights by the participants of the Tharisa Share Award Plan.
	At 31 March 2019, the Company had 265 000 000 (31 March 2018: 261 000 000 and 30 September 2018: 265 000 000) ordinary shares in issue of which 1 196 141 (31 March 2018: 806 200 and 30 September 2018: 4 097 571) were held in treasury.

 

14.	BORROWINGS
		31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Non-current
	Facilities	8 937	21 865	13 711
	Equipment loan facility	9 742	4 114	1 931
	Finance leases	6 466	9 074	7 505
	Loan	3 019	-	4 134
		28 164	35 053	27 281
	Current
	Facilities	17 212	10 860	9 104
	Equipment loan facility	6 064	5 370	5 564
	Finance leases	4 841	4 951	4 299
	Loan	1 986	-	1 928
	Bank credit facilities	16 435	20 938	29 243
		46 538	42 119	50 138
	Finance leases
	Minimum lease payments due:
	Within one year	5 810	6 103	5 284
	Two to five years	7 759	10 190	8 930
		13 569	16 293	14 214
	Less: Future finance charges	(2 262)	(2 268)	(2 410)
	Present value of minimum lease payments due	11 307	14 025	11 804
	Present value of minimum lease payments due:
	Within one year	4 929	4 951	4 293
	Two to five years	6 378	9 074	7 511
		11 307	14 025	11 804
	During the six months ended 31 March 2019, a financial covenant relating to the facilities of Tharisa Minerals Proprietary Limited was reset with the EBITDA to interest cover being reduced from greater than 4.0 times to greater than 3.0 times as at the 31 March 2019 and 30 September 2019 ratio measurement dates. All other financial covenants remained unchanged.
	At 31 March 2019, 31 March 2018 and 30 September 2018 the Group complied with all financial covenants associated to the borrowings.
	The Group had unutilised borrowing facilities of US$19.3 million (ZAR280 million) available at 31 March 2019 (31 March 2018: US$33.8 million (ZAR400 million) and 30 September 2018: US$28.3 million (ZAR400 million)).

 

14.	BORROWINGS continued
		31 March 2019 (reviewed)			31 March 2019 (reviewed)			31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
		Facilities US$'000	Equipment loan facility US$'000	Finance leases US$'000	Bank credit facilities US$'000	Loan US$'000	Total borrowings US$'000
	Balance at the beginning of the period/year	22 815	7 495	11 804	29 243	6 062	77 419	49 401	49 401
	Adoption of IFRS 16	-	-	-	-	-	-	1 205	1 205
		22 815	7 495	11 804	29 243	6 062	77 419	50 606	50 606
	Changes from financing cash flows
	Advances: bank credit facilities	-	-	-	75 569	-	75 569	90 243	192 834
	Repayment: bank credit facilities	-	-	-	(88 385)	-	(88 385)	(98 377)	(192 720)
	Net (repayment)/proceeds of bank credit facilities	-	-	-	(12 816)	-	(12 816)	(8 134)	114
	Advances received	8 476	11 197	-	-	-	19 673	62 191	68 220
	Repayment of borrowings	(4 709)	(3 504)	-	-	(937)	(9 150)	(41 109)	(48 503)
	Lease payments	-	-	(3 101)	-	-	(3 101)	(4 608)	(6 463)
	Repayment of interest	(1 371)	(335)	-	(273)	(314)	(2 293)	(2 550)	(4 433)
	Changes from financing cash flows	2 396	7 358	(3 101)	(13 089)	(1 251)	(7 687)	5 790	8 935
	Foreign currency translation differences	(615)	(366)	(268)	-	(120)	(1 369)	5 545	(3 285)
	Liability-related changes
	Lease agreements entered into	-	-	2 237	-	-	2 237	5 214	7 656
	Business combination	-	-	-	-	-	-	7 003	7 003
	Interest expense	1 553	414	644	281	314	3 206	4 184	6 021
	Revaluation of foreign denominated loan	-	905	(9)	-	-	896	(1 170)	483
	Total liability-related changes	1 553	1 319	2 872	281	314	6 339	15 231	21 163
	Balance at the end of the period/year	26 149	15 806	11 307	16 435	5 005	74 702	77 172	77 419
	Non-current borrowings	8 937	9 742	6 466	-	3 019	28 164	35 053	27 281
	Current borrowings	17 212	6 064	4 841	16 435	1 986	46 538	42 119	50 138
	Total borrowings	26 149	15 806	11 307	16 435	5 005	74 702	77 172	77 419

 

15.	FINANCIAL RISK MANAGEMENT
		Fair value level	31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Financial assets measured at fair value
	Investments in equity instruments	Level 1	22	37	40
	Investments in money markets, current accounts, cash funds and income funds	Level 2	6 141	5 791	5 012
	Discount facility	Level 2	-	676	-
	Forward exchange contracts	Level 2	-	188	804
	Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited	Level 3	634	-	142
	Trade and other receivables measured at fair value
	PGM receivable	Level 2	24 326	18 261	25 355
	Financial liabilities measured at fair value
	Discount facility	Level 2	662	-	1 000
	Forward exchange contracts	Level 2	382	-	-
	Financial assets at amortised cost
	Trade receivables		24 997	44 634	38 645
	Contract assets		1 059	-	2 229
	Cash and cash equivalents		66 817	59 930	66 791
	Financial liabilities at amortised cost
	Borrowings		74 702	77 172	77 419
	Contract liabilities		1 059	-	2 229
	Trade payables		14 003	30 131	18 363
	There were no transfers between level 1 and level 2 fair value measurements during the reporting periods.
	The Group considers that the fair values of the financial assets and financial liabilities approximate their carrying values at each reporting date.
	Fair value hierarchy
	All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole, as follows:
	·      Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical financial instruments (highest level).
	·      Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation methodologies in which all significant inputs are directly or indirectly based on observable market data.
	·      Level 3: fair values measured using valuation methodologies in which any significant inputs are not based on observable market data.

 

16.	RELATED PARTY TRANSACTIONS AND BALANCES
	In the normal course of the business, the Group enters into various transactions with related parties. Related party transactions exist between shareholders, directors, directors of subsidiaries and key management personnel. Outstanding balances at each reporting period are unsecured and settlement occurs in cash. All intergroup transactions have been eliminated on consolidation.
		31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Transactions and balances with related parties:
	Other financial assets
	Option to acquire shares in Salene Chrome Zimbabwe (Private) Limited	634	-	142
	The Company has been granted a call option to acquire a 90.0% shareholding in Salene Chrome Zimbabwe (Private) Limited ('Salene') a company incorporated in Zimbabwe from the Leto Settlement, a related party. Salene holds certain special grants under the Zimbabwe Mines and Minerals Act which entitles it to prospect/mine the minerals thereon. The call option is exercisable upon completion of an initial exploration programme.
	In consideration of the call option, the Group will undertake the initial exploration programme including the costs thereof up to an amount of US$3.2 million. The decision to exercise the call option is at the Group's election.
	At the reporting dates, insufficient information was available to accurately determine the fair value of the call option, more specifically the value of the net assets of the special grants or the profits attributable thereto. The Group believes this may only be possible once the initial exploration programme has been completed. As a result, the fair value at each reporting date represents the aggregate of the initial exploration programme costs.
		31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Trade and other receivables
	The Tharisa Community Trust	5	5	1
	Rocasize Proprietary Limited	61	103	71
	Karo Mining Holdings Limited	61	-	20
	Karo Zimbabwe Holdings (Private) Limited	505	-	254
	Karo Platinum (Private) Limited	1 998	-	40
	Karo Power Generation (Private) Limited	164	-	-
	Salene Chrome Zimbabwe (Private) Limited	265	-	12
	Salene Technologies Proprietary Limited	-	-	4
	Salene Mining Proprietary Limited	16	-	15
		3 075	108	417

 

		31 March 2019 Reviewed US$'000	31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
	Trade and other payables
	The Leto Settlement	-	-	2 000
	The Tharisa Community Trust	-	5	-
	Rocasize Proprietary Limited	1	103	31
		1	108	2 031
	Amounts due to directors
	A Djakouris	22	21	22
	JD Salter	26	24	31
	OM Kamal	15	14	16
	C Bell	24	20	25
	R Davey	19	17	20
	J Ka Ki Chen	11	11	11
	ZL Hong	11	-	19
		128	107	144
	Total other payables	129	215	2 175
	Interest-bearing - accrued dividends payable to related parties
	Arti Trust	-	2 852	-
	Ditodi Trust	-	245	-
	Makhaye Trust	-	245	-
	The Phax Trust	-	488	-
	The Rowad Trust	-	245	-
	MJ Jacquet-Briner	-	245	-
		-	4 320	-

 

	Acquisition of 26.8% of Karo Mining Holdings Limited from:
	The Leto Settlement				-		-		4 500
					Six months ended 31 March 2019 Reviewed US$'000		Six months ended 31 March 2018 Reviewed US$'000		Year ended 30 Sept 2018 Audited US$'000
	Cost of sales
	Rocasize Proprietary Limited				155		101		234
	Consulting fees received
	Rocasize Proprietary Limited				16		13		32
	Salene Chrome Zimbabwe (Private) Limited				21		-		-
	Karo Mining Holdings Limited				16		-		-
	Karo Platinum (Private) Limited				181		-		-
	Karo Power Generation (Private) Limited				5		-		-
	Karo Zimbabwe Holdings (Private) Limited				229		-		128
	Consulting fees paid
	Rocasize Proprietary Limited				-		-		234
	Salene Mining Proprietary Limited				-		15		17
	Interest expense
	Arti Trust				-		135		514
	Ditodi Trust				-		14		47
	Makhaye Trust				-		14		47
	The Phax Trust				-		27		93
	The Rowad Trust				-		14		47
	MJ Jacquet-Briner				-		14		47
					-		218		795
	Compensation to directors and key management
	Six months ended 31 March 2019 (reviewed)	Salary and fees US$'000	Expense allowances US$'000	Share- based payments US$'000		Provident fund and risk benefits US$'000		Bonus US$'000		Total US$'000
	Non-executive directors	313	-	-		-		-		313
	Executive directors	800	4	1 144		38		145		2 131
	Other key management	459	14	745		49		93		1 360
		1 572	18	1 889		87		238		3 804
	Six months ended 31 March 2018 (reviewed)	Salary and fees US$'000	Expense allowances US$'000	Share- based payments US$'000		Provident fund and risk  benefits US$'000		Bonus US$'000		Total US$'000
	Non-executive directors	295	-	-		-		-		295
	Executive directors	703	5	-		27		652		1 387
	Other key management	489	16	-		40		366		911
		1 487	21	-		67		1 018		2 593

 

	Year ended 30 Sept 2018 (audited)	Salary and fees US$'000		Expense allowances US$'000		Share- based payments US$'000		Provident fund and risk benefits US$'000		Bonus US$'000		Total US$'000
	Non-executive directors	612		-		-		-		-		612
	Executive directors	1 361		9		760		83		700		2 913
	Other key management	932		31		1 222		107		420		2 712
		2 905		40		1 982		190		1 120		6 237
	Awards to directors and key management
	Six months ended 31 March 2019 (reviewed) Ordinary shares		Opening balance		Allocated		Vested		Forfeited		Total
	LTIP - executive directors		1 605 423		-		-		-		1 605 423
	LTIP - key management		1 099 439		-		-		-		1 099 439
	Six months ended 31 March 2018 (reviewed) Ordinary shares		Opening balance		Allocated		Vested		Forfeited		Total
	LTIP - executive directors		1 808 316		-		-		-		1 808 316
	LTIP - key management		1 202 153		-		-		-		1 202 153
	Year ended 30 Sept 2018 (audited) Ordinary shares		Opening balance		Allocated		Vested*		Forfeited		Total
	LTIP - executive directors		1 808 316		697 206		(900 099)		-		1 605 423
	LTIP - key management		1 202 153		483 348		(586 062)		-		1 099 439
	Six months ended 31 March 2019 (reviewed) Ordinary shares		Opening balance		Allocated		Vested		Forfeited		Total
	SARS - executive directors		1 118 547		-		-		-		1 118 547
	SARS - key management		765 744		-		-		-		765 744
	Six months ended 31 March 2018 (reviewed) Ordinary shares		Opening balance		Allocated		Vested		Forfeited		Total
	SARS - executive directors		1 362 327		-		-		-		1 362 327
	SARS - key management		924 136		-		-		-		924 136
	* At 30 September 2018 the vested shares had not yet been transferred to the respective employees.
	Year ended 30 Sept 2018 (audited) Ordinary shares		Opening balance		Allocated		Vested		Forfeited		Total
	SARS - executive directors		1 362 327		697 206		(940 986)		-		1 118 547
	SARS - key management		924 136		483 348		(641 740)		-		765 744

 

	Relationships between parties
	The Tharisa Community Trust and Rocasize Proprietary Limited
	The Tharisa Community Trust is a shareholder of Tharisa Minerals Proprietary Limited and owns 100% of the issued ordinary share capital of Rocasize Proprietary Limited.
	Arti Trust, Phax Trust and Rowad Trust
	A director of the Company is a beneficiary of these trusts.
	Ditodi Trust and Makhaye Trust
	Certain of the non-controlling shareholders of Tharisa Minerals Proprietary Limited are beneficiaries of these trusts.
	MJ Jacquet-Briner
	MJ Jacquet-Briner is a director of Tharisa Minerals Proprietary Limited and is a shareholder in the non-controlling interest of Tharisa Minerals Proprietary Limited.
	The Leto Settlement
	The beneficial shareholder of Medway Developments Limited, a material shareholder in the Company.
	Salene Chrome Zimbabwe (Private) Limited
	This company is a wholly owned subsidiary of the Leto Settlement, the beneficial shareholder of Medway Developments Limited, a material shareholder in the Company.
	Salene Mining Proprietary Limited and Salene Technologies Proprietary Limited
	A director of the Company is a director of these entities.
	Karo Mining Holdings Limited, Karo Zimbabwe Holdings (Private) Limited, Karo Platinum (Private) Limited and Karo Power Generation (Private) Limited
	The Company owns 26.8% of the issued share capital of Karo Mining Holdings Limited. The controlling shareholder of Karo Mining Holdings Limited is the Leto Settlement.
	Karo Mining Holdings Limited owns 100% of the issued share capital of Karo Zimbabwe Holdings (Private) Limited, Karo Platinum (Private) Limited and Karo Power Generation (Private) Limited.
17.	CONTINGENT LIABILITIES
	At 31 March 2019, the Group had certain unresolved tax matters. Included in trade and other receivables is an amount of ZAR120.9 million (31 March 2018: ZAR104.4 million and 30 September 2018: ZAR141.3 million) that relates to diesel rebates receivable from the South African Revenue Service ('SARS') in respect of the mining operations. SARS is disputing the refundability of this amount. The Group is strongly of the view that it fully complies with all the regulations to be entitled to this refund and is opposing SARS' dispute. The Group will take the necessary action to recover the amount due.
	As at 31 March 2019, there is no litigation (31 March 2018 and 30 September 2018: no litigation), current or pending, which is considered likely to have a material adverse effect on the Group.
18.		CAPITAL COMMITMENTS AND GUARANTEES
						31 March 2019 Reviewed US$'000		31 March 2018 Reviewed US$'000	30 Sept 2018 Audited US$'000
		Capital commitments
		Authorised and contracted				4 804		10 841	4 929
		Authorised and not contracted				1 284		1 718	1 091
						6 088		12 559	6 020
		The commitments are with respect to property, plant and equipment and are outstanding at the respective reporting period.
		The Company has made a commitment to Karo Mining Holdings Limited to fund the initial exploration programme, feasibility study and development of the projects in Zimbabwe not exceeding US$8.0 million (refer to note 11).
		Guarantees of ZAR266.1 million (31 March 2018: ZAR236.8 million and 30 September 2018: ZAR266.1 million) have been issued by third parties and financial institutions on behalf of the Group consisting mainly of guarantees issued to the Department of Mineral Resources in respect of future environmental rehabilitation amounting to ZAR234.7 million (31 March 2018: ZAR205.4 million and 30 September 2018: ZAR234.7 million).

 

19.	EVENTS AFTER THE REPORTING PERIOD
	The Board of Directors is not aware of any matter or circumstance arising since the end of the reporting period that will impact these interim consolidated financial statements.
20.	DIVIDENDS
	During the period ended 31 March 2019, the Company declared and paid a final dividend of US$ 2 cents per share in respect of the financial year ended 30 September 2018.
	The Company declared and paid an interim dividend of US$ 2 cents per share during the year ended 30 September 2018.
	During the period ended 31 March 2018, the Company declared and paid a final dividend of US$ 5 cents per share in respect of the financial year ended 30 September 2017.

 

 

CORPORATE INFORMATION
THARISA PLC	JSE SPONSOR
Incorporated in the Republic of Cyprus with limited liability	Investec Bank Limited
Registration number: HE223412	Registration number: 1969/004763/06
JSE share code: THA	100 Grayston Drive, Sandown, Sandton 2196
LSE share code: THS	South Africa
ISIN: CY0103562118
	AUDITORS
REGISTERED ADDRESS	Ernst & Young Cyprus Limited
Office 108 - 110	Registration number: HE222520
S. Pittokopitis Business Centre	Jean Nouvel Tower 6 Stasinos Avenue
17 Neophytou Nicolaides and Kilkis streets	1060 Nicosia, Cyprus
8011 Paphos, Cyprus
	JOINT BROKERS
POSTAL ADDRESS	Peel Hunt LLP (UK joint broker)
PO Box 62425, 8064 Paphos, Cyprus	Moore House 120 London Wall EC 2Y 5ET
	England United Kingdom
WEBSITE	Contact: Ross Allister/James Bavister/David McKeown
www.tharisa.com	+44 207 7418 8900
DIRECTORS OF THARISA	BMO Capital Markets Limited (UK joint broker)
Loucas Christos Pouroulis (Executive Chairman)	95 Queen Victoria Street London EC4V 4HG
Phoevos Pouroulis (Chief Executive Officer)	England United Kingdom
Michael Gifford Jones (Chief Finance Officer)	Contact: Jeffrey Couch/Thomas Rider
John David Salter (Lead independent non-executive director)	+44 020 7236 1010
Antonios Djakouris (Independent non-executive director)
Omar Marwan Kamal (Independent non-executive director)	Joh. Berenberg, Gossler & Co. KG (UK joint broker)
Carol Bell (Independent non-executive director)	60 Threadneedle Street London EC2R 8HP
Roger Davey (Independent non-executive director)	England United Kingdom
Joanna Ka Ki Cheng (Non-executive director)	Contact: Matthew Armitt/Detlir Elezi
Zhong Liang Hong (Non-executive director)	+44 20 3207 7800
JOINT COMPANY SECRETARIES	Nedbank Limited (acting through its Corporate and Investment Banking division) (RSA broker)
Lysandros Lysandrides	135 Rivonia Road, Sandown, Sandton 2196
26 Vyronos Avenue, 1096 Nicosia, Cyprus	South Africa
	Contact: Shabbir Norath/Mlaoli Tonise
Sanet Findlay	+27 11 294 3537/+27 11 294 5382
The Crossing 372 Main Road
Bryanston Johannesburg 2021, South Africa	JSE SPONSOR
Email: [email protected]	Investec Bank Limited
INVESTOR RELATIONS
Daniel Thöle/Ilja Graulich
The Crossing 372 Main Road
Bryanston Johannesburg 2021
South Africa
Email: [email protected]
FINANCIAL PUBLIC RELATIONS
Buchanan, 107 Cheapside London EC2V 6DN
England United Kingdom
Contact: Bobby Morse/Augustine Chipungu
+44 020 7466 5000
TRANSFER SECRETARIES
Cymain Registrars Limited
Registration number: HE174490
26 Vyronos Avenue, 1096 Nicosia, Cyprus
Computershare Investor Services Proprietary Limited
Registration number: 2004/003647/07
Rosebank Towers 15 Biermann Avenue
Rosebank 2196, South Africa
Computershare Investor Services PLC
Registration number: 3498808
The Pavilions Bridgwater Road Bristol BS13 8AE
England United Kingdom

 

 

 

LEGAL DISCLAIMER

Some of the information in these materials may contain projections or forward looking statements regarding future events, the future financial performance of the Group, its intentions, beliefs or current expectations and those of its officers, directors and employees concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies and business. You can identify forward looking statements by terms such as "expect", "believe", "anticipate", "estimate", "intend", "will", "could", "may" or "might" or the negative of such terms or other similar expressions. These statements are only predictions and actual results may differ materially. Unless otherwise required by applicable law, regulation or accounting standard, the Group does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.

 

Many factors could cause the actual results to differ materially from those contained in projections or forward looking statements of the Group, including, among others, general economic conditions, the competitive environment, risks associated with operating in South Africa and market change in the industries the Group operates in, as well as many other risks specifically related to the Group and its operations.

 

A Pdf of this announcement is available on the company's website www.tharisa.com.

 

RNS users, please cick on, or paste the following link into your web browser, to view the associated pdf document. www.tharisa.com

 

Paphos, Cyprus

15 May 2019