The price of chrome concentrate and the basket price of platinum group metals should recover in 2015, which could mean fourth-quarter profit for the JSE-listed Tharisa Minerals should it achieve its number-one priority of steady state production.
Tharisa CEO Phoevos Pouroulis told Mining Weekly Online in an interview on Monday that price recovery plus steady state production growth should see the company emerge from the red and go into the black before this time next year.
The Cyprus-domiciled company's gross margin on platinum group metals was 24% in the 12 months to September 30 and 10% on chrome concentrates because of the chrome price drop over the last year.
“The fact that we’re a low-cost producer is the key differentiator,” Pouroulis commented to Mining Weekly Online.
The company has a 23-year-life openpit from which it coproduces platinum group metals and chrome concentrate, enabling to split mining and overhead costs and put itself into the lowest cost quartile for platinum and chrome concentrate production at steady state levels.
“Generally, we foresee an increase in commodity prices coupled to a weaker exchange rate,” Pouroulis said.
Also noted was China’s stocks of chrome concentrates being at their lowest in years, which pointed to the likelihood of restocking in 2015.
Domestic ferrochrome prices in China were also increasing or rolling over.
Tharisa’s revenue rose 11.7% to $240.7-million and net cash generated from operations was $22.3-million.
An operating profit of $5.9-million eclipsed the loss $0.7-million in the prior period and platinum group metals production increased to 78 226 oz from 57 421 oz.
Metallurgical grade chrome concentrate production fell to 1.085-million tons but foundry and chemical grade chrome concentrates of 148 000 t were introduced for the first time.
Some 3.9-million tons of run-of-mine ore was mined at an average grade of 1.63 g/t for platinum group metals and 19.4% chrome.
The company’s newly installed high-energy flotation cell lifted platinum group metals recoveries above 65% from 48% before, with its ultra fine grind project holding out the promise of one day recovering the fine particles currently lost in traditional spiral gravity separation.
On the chrome side, the company is doing test work with a number of European universities on a chrome alloy that will use gases and reductants rather than scarce electricity, in what could potentially be a game-changer for the ferroalloy business.
Tharisa’s biggest growth in the short-term is expected to come from production, better recoveries and yields in both chrome and platinum concentrates.
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