Tharisa to rerate when it solves funding for Zimbabwe project

THARISA has been largely ignored by the market, which is hunting for the best exposure to platinum group metals (PGMs) now that the metal prices have bottomed out after a long, cold winter.Last month Investec was the latest bank to forecast supply deficits for all three main PGMs over the next three years. It also commented that palladium would drive the basket’s price recovery in the short term, and this has happened. Palladium is about 9% higher over three months.Despite Investec upgrading Tharisa as part of its PGM thesis (preferring Northam Platinum Holdings, Impala Platinum and Anglo American Platinum), the stock is unchanged over the past month.Evidence for a share rerate may come when the company reports its full-year numbers soon. Analysts were heartened by the company’s $109m net cash position as of its fourth quarter (end-September) production report. It’s better than $14m in net debt, remarks Richard Hatch, an analyst for Berenberg bank. He also says there’s a chance Tharisa may unveil a still more gradual approach to expansion.Referring to Karo, Tharisa’s PGM project in Zimbabwe, Hatch says: “We think there is some scope for softer investment in Karo capex, and potentially in other capex phasing and/or working capital movements, as well as [the possibility of] better prices.”Scoped at $391m in outlay, and producing up to 400,000 ounces a year of PGMs, Karo was slowed in May as metal prices cratered. At the time, Tharisa CEO Phoevos Pouroulis said: “A measured decision was taken to slow the project timeline and continue with smaller work packages, aligned with funding availability.”While Karo was still in need of a complete finance package as of the fourth quarter, the improvement in the metal basket may well throw attention back on sources of new production.However, the momentum behind an improved 2025 financial year may come from chrome, which Tharisa also produces as a specialist metallurgical concentrate. Hatch calls it the surprise element in Tharisa’s numbers, though, to be fair, Pouroulis has never strayed from Tharisa’s central premise of polymetallic production.The average metallurgical-grade chrome concentrate price in Tharisa’s 2024 financial year was $299 a ton, 13.7% higher than last year’s average price. It has softened somewhat since then to $260/t-$270/t now.But analysts Peter Mallin-Jones and Alex Gorman at UK stockbroker Peel Hunt, say that even assuming spot PGM prices, a long-term chrome price of $200/ton and management “immediately walking away from Karo”, Tharisa is worth 89p a share.“We think the shares are mispriced and are poised to rerate with better PGM sentiment, helped also by strong chrome prices,” says Hatch, who has a target price of £1.20 a share, compared with 67p a share at the time of writing. “We reiterate our buy recommendation,” he says.The post Tharisa to rerate when it solves funding for Zimbabwe project appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com