THARISA has delayed delivery of the $391 million Karo Project in Zimbabwe by a year to June 2025 due to plummeting prices.
Tharisa CEO Phoevos Pouroulis said in today’s fourth quarter and full-year production update that the decision was “appropriate” and that the project’s revised timeline was “consistent with the availability of funding.” If prices rise again, project schedules could accelerate again.
Pouroulis said the project is “progressing well” and will increase Tharisa’s PGM production to approximately 400,000 ounces per annum upon completion.
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Platinum group metal prices have fallen more than expected this year, while uncertainty and volatility remain in the precious metals market. The average price of the PGM basket fell 21.5% in the fourth quarter to $1,331/oz. Tharisa said this “accelerated” an annual price fall of 26.1%, with prices averaging $1,893 an ounce, compared with an average of $2,564 an ounce last year.
Tharisa also announced a modest PGM production forecast of 145,000 to 155,000 ounces for fiscal 2024, well below the 175,000 to 185,000 ounces forecast initially set for this year. In April, Talisa lowered its forecast by 10% due to difficulties in waste disposal due to high levels of oxidized ore in Talisa’s open-pit mine due to heavy rains.
Earlier this year, the company hired a contractor to assist with waste disposal. Pouroulis said today that contractors were now “firmly in place” but remained “cautious” about the company’s production prospects.
Despite the rebound in the quarter, full-year platinum group metals production remained below adjusted guidance of approximately 144,700 ounces, compared with 179,200 ounces in the same period.
Fortunately for Tharisa, chrome concentrate production from the Tharisa mine was unchanged from the same period last year at 1.58 million tonnes, while mineral prices increased by 26%.
“The divergence in commodity prices is even more pronounced than last quarter, when we had chromium hitting a new 52-week high on the back of solid fundamentals,” Pouroulis said.
Tharisa’s chrome concentrate production ranges from 1.7 to 1.8 million tonnes.
Noah Capital analyst René Hochreiter is optimistic about Tharisa’s prospects as platinum group metal prices, led by rhodium last week, start to recover. “Hence, we may soon see Tharisa firing with both Cr (Chrome) and PGM cylinders as both PGM and Chromite provide good shot guidance,” he said in a report.