Tharisa plc

Good morning and welcome to the Teresa PLC Results Investor Presentation. Throughout your recorded presentation, investors will be in listen-only mode. Questions are encouraged and they can be submitted at any time via the Q&A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to make the following poll. I'd now like to hand it over to CEO, Fivos Peroulis. Good morning, sir.

Good morning and welcome everyone to this, our year end results for the financial year ending 2025 September. I'd like to start off with our mission statement or benevolent intent, which is clearly articulated on the slide. which states that we look to redefine resources, we innovate with purpose, and we look to empower futures. And really, this is the theme that I'd like to carry through while we run through this results presentation. This is the agenda for this morning, running through primarily the financial highlights, but also looking at our business as a whole and the strategic imperatives in the Vision 2030. So if we look at our business as We believe that we are resilient today. We are future ready. We have a strong balance sheet that supports our vision 2030. And what is our vision 2030? It's to deliver on our expansion and growth plans and opportunities and to commercialize the technologies and solutions that we've been working on through our novel processes, which we'll unpack later on in this presentation. So when we talk about empowering futures responsibly, it really is core to our values and underpinning this is safety. We're an integrated resources group that covers the full value chain of exploration, mining, processing, beneficiation, marketing, sales and logistics for both platinum group metals and chrome concentrates. Our commitment to sustainable growth and impactful investment not only returns value to shareholders, but lifts performance, strengthens community relationships, and builds long-term sustaining partnerships. And with this comes our disciplined growth strategy, which ultimately leads to disciplined returns, ensuring that we have sustainable multi-generational value. So we just touch on our key highlights for the financial year 2025. Safety as our core value really excelled. We had a lost time injury frequency rate at the Theresa mine of 0.03 incidents per 200,000 man hours worked and zero incidents at the Kara platinum mine site, which is a hive of activity which we'll share with you later in the presentation. We were also acknowledged at two events, the MindSafe Awards here in South Africa for the best improved safety performance for open-cast mining over the past three years, and a double silver award at the 2025 NSSA Safety and Health Workers Award in Zimbabwe, Harare. Also very pleasing to note is that the Teresa mine is the first level nine compliant mine in South Africa, and in fact is a test site and a role model for other open cast miners to come and see technology and the advantages that it does provide in terms of safety and well-being and general efficiency improvements. Later on, we'll unpack in a lot more detail the developments that we've undertaken during this financial year. To highlight them, we've commenced and begun our transition to underground at the Teresa Mine. We've committed a massive $547 million worth of investment over the next decade. This is underpinned by a new facility of the $130 million that was signed at Standard Bank and Absa Bank, and our Cairo Platinum Mine site is developing in line with the capital that we've allocated, and we continue to de-risk that project. So when we talk about redefining resources, it really talks to our co-production model, which is unique in its inception and in its origination. And that is the co-production of platinum group metals and chrome concentrates from the middle group reef horizons. But to set the context for the year, we averaged a PGM basket price of some $1,615 per ounce for the year, which was up 18.6%. from the prior year. Contrary to that, our metallurgical chrome grey price was down some 11% to $266 per tonne. So this set the scene then for our revenue which came in at $602.9 million, EBITDA at $187.3 million, with a net profit after tax of $80.8 million for the year. Pleasing to note is net cash from operating activities at some $94 million, with a vast and extensive capital expenditure for the year of some $118.5 million, which includes $33.5 million invested into Cara Platinum. We ended the financial year with cash and cash equivalents of $175.1 million, All of this resulting in headline earnings per share of some 27.5 US cents. And we're pleased to note that the board have approved and recommend to the shareholders an additional 1.5 US cent final year in dividend, coupled with a half year one and a half cent already paid out to a total of three US cents for the year. And this, including the share buyback, is a return of 17.2% of net profit after tax to shareholders. I think Michael will unpack in some detail the favorable mining royalty credit that we achieved in a landmark victory in terms of the reversal of our mining royalty at some $67.3 million. When we look at the impact we have and the jobs that we create through our investments, which have a major impact, our group employees and contractors amounted to some 4,483 people for the financial year, of which 27% of those were female employees. We provided 35 adult learnership bursaries and internships for the year. And this is something very close to our heart where we look to share, educate and allow upliftment in terms of adult education for those that are interested from our communities and our employees. In terms of our impact to the fiscus, currency inflows of some $430.5 million, that's direct and indirect inflows, with global direct, indirect taxes and royalties of some $31.7 million. I think an astounding number and something we're very proud of is the amount of money we spend on BE historically disadvantaged individuals, women, and triple BE compliant procurement of some $331.1 million, a significant contribution to these up-and-coming growing enterprises. We spent on local and host community suppliers some $2.6 million. And also we attract most of our employment from the host communities in excess of 40% of our employees come from the host communities. Included in that is our commitment to our SLP programs and CSI initiatives where we spend some $1.1 million during the financial year. So moving on to our commodities and really what underpins our investment case. And we look at the spot prices today of the Teresa PGM basket, which sits at $2,215 compared to a price for the financial year of just over $1,600. a pleasing improvement in terms of that PGM basket price, as well as the CARA PGM basket price at some $2,024. And we'll unpack the pearl splits and the differences between the Bushveld complex, particularly on the MG reefs and the main sulphide zone of the Great Dyke in Zimbabwe. But ultimately, you can see here the fundamental nature of PGMs and the role they have played and they will play in decarbonizing the planet. And if we look at the catalytic properties and applications, they are vast and varied. But what's really supported platinum and palladium demand is really the rollback of battery electric vehicle penetration, the tightening of global emission standards, and the pivot to hybrid vehicle production and demand. And this has really supported the baseloads demand of those very key and fundamental platinum group metals, including rhodium. But also we've seen resilient industrial demand from the chemical and petrochemical electronic sectors, fiberglass and glass sectors, supporting rhodium amongst platinum and palladium as well. We're very optimistic. heartened by future technologies, particularly hydrogen electrolysis fuel cells, which have a strong outlook for demand for platinum and iridium. Ruthenium is an interesting test case because it has always been used in hard disk storage. And with the advent of data centers proliferating and the investment that we see going into artificial intelligence has been the big demand driver for data storage. And rhodium has a massive role to play. And we've seen that with the price appreciation over the last 12 months. And we believe there's a lot more upside potential for that. I think what really shocked the market and really supported platinum was the investment demand and jewelry demand primarily coming out of China. And we continue to see continuous supply deficits and what this means that above ground infantries are being destocked and we're starting to see tightness in the market supporting the higher PGM basket prices that we're seeing. So if we come closer to home now and we look at the favorable Teresa minerals pearl split on a 6E basis, you'll see that patinum constitutes almost 53%, palladium at just under 16%, but quite remarkably, rhodium at 10.5%. And Michael will talk about the impact of that 10.5% in terms of our revenue. Very little gold, very nice ruthenium at 16%, iridium at 4.5%. Moving to the Great Dike, you'll see that there's quite a different makeup with platinum at 43.5%, palladium at 38.3%, rhodium at 3.8%, gold significantly more at 8.6%, ruthenium at 3.8%, and iridium at 1.9%. So a very nice blend and basket across both jurisdictions. Moving on to our other key commodity, which is chrome, which is really pivotal to decarbonizing the planet. Again, if we look at the applications in terms of construction steels, white good manufacturing and infrastructure, special alloys, special steels application, heat and corrosion resistant applications, we see continued growth in terms of stainless steel which is surprised always to the upside in terms of manufacturing as well as demand and this is not just an Asia centric story it is a global growth phenomenon and we start seeing applications in renewable energies as well in the desalination plants solar wind hydro redox flow which will unpack later one of our key investments and and huge upside potentials. Electrolysis, storage of energy, as well as pollution control. And what makes stainless steel and chrome hugely environmentally friendly is that it's 100% recyclable. So South Africa plays a vital role. As we know, the Bushveld Complex contains more than 72% of the world's resources. And what's really been interesting to note is that we've had a fantastic growth story in terms of our South African chrome manufacturing of concentrates and chrome ores at some 9.6 compounded annual growth rate over the last decade. And this is in the context of a struggling ferrochrome industry. And there's been a lot of talk and noise around intervention from government in the form of either a quota or a tax. And ultimately, we, along with our peer group, believe that any intervention is most probably misguided and really doesn't talk to the root cause of the challenge, which is the cost of electricity. We know that electricity prices over the last decade have gone up some 900%. And really the answer to enable the sustainability of the existing ferrochrome producers whom we support and really look to find a solution for their current challenges is really the cost of electricity. And that not only will enable and support existing capacity, but will also stimulate beneficiation. And as you'll see later on, we have a very clear beneficiation strategy which looks at some unique and novel approaches to beneficiation of both PGMs and chrome concentrates in South Africa and the region. I'd like to hand over now to Michael, who will run through the financial highlights of the year. Michael, over to you.

Thank you, Phivos, and good morning and well-doos to all those who have joined for our financial results presentation for this financially-earned activity September 2025. I want to reflect back on this year. I think one of the key themes to me was our continued investment, not only in sustainability of operations, but also in the growth of our projects for multi-generations to come. And that includes underground transition at the Trees and Minerals Mine, the Carro Platinum Project, and the commercialization of the R&D at Arco Metals. Again, our co-product business model has reinforced our resilience effectively, with the PGM basket price, as few of us mentioned, strengthening by some 18.4% year-on-year, and the chrome price, while staying basically range-bound, reducing by some 11%. We have continued to be net cash flow generative with cash growth and operations of $94 million and our cash and cash equivalents standing at $175.1 million as of 30 September. We have continued to maintain our capital discipline, and we've invested, as mentioned, beyond 2030 with multi-generational sustainability. And to support this, and we'll touch on it in more detail later, we have secured an additional $130 million of term loan and revolving credit facilities, principally to fund the underground transition and the mining fleets. Final proposed dividend for the year, 1.5 cents, which matches interim dividend and aligns with our dividend policy, and in the process of successfully concluding our second $5 million share repurchase program, which as of 30 September was 87% complete. Looking at revenue for the year, the revenue for the year is $602.9 million. Again, key contributor being the chrome at 57.2%. And this is an FCA basis. In other words, we strip out the costs of inland logistics and freight, which is the prime destination for that chrome is the Chinese market. Just touching on the graph in the bottom right, you'll see the major production output is on the metallurgical grade. just under 87%, and the balance of specialty grade at 11.3%, which is a higher value item. Just doing some of the actual numbers themselves, the sales just under 1.4 million tonnes at an average price of $266 per tonne, and that's on a CIF Main Ports China basis. The PGMs contributed just under 40% to our overall revenue, And if you look at the graph on the bottom left, you will see that platinum remained the major contributor, 38%. And while rhodium comprises less than 10% of our pearl split, the very strong price performance has resulted in it contributing in excess of 36% to our overall revenue from PGMs. Numbers again, 137.5 thousand ounces sold. That's an average Fijian basket price of $1,615 per ounce. If you look at the squat price today, this morning it was trading at $2,215, so that's continued, it's upward trend. This is quite a busy slide. I'm just going to touch on some of the numbers on it. I think very pleasing is the reef tons mined, up 15.3% at 5.3 million tons. And if you look at the graph along the side, you'll start seeing the benefit of that from the cost side. All purchases were only less than 4% of our on-mine cash costs, and that's a direct consequence of the improvements in our reef tons mined. Cost per reef ton mined, very well maintained from a cost perspective, up 3.5% at $41.7 per ton. Tons milled, relatively flat at the 5.5 million tons. And then the on-mine cash cost per ton milled increasing 12.9% to $59.7 per tonne. Our logistics team has done a remarkable job over the year and well managed on our inland logistics and freight costs and with a slight reduction year on year at $83.2 per tonne. We do operate in a random environment for trees and minerals and normally benefit from a weakening of the exchange rate. We had no such benefit over this past year with, in fact, a marginal strengthening in the average exchange rate to 18.1 rand to the dollar, a strength of some 2.4%. We are a co-producer of both platinum group metals and chrome concentrates. If we just say, what is the oil and cost per platinum ounce sold? So in other words, we take the credits from chrome and all the other platinum group elements, including the palladium and rhodium and such like, you get a negative $445 per platinum ounce. When we calculate that sustaining cost, we do take out the cost of the transition to underground mining, as well as a corridor platinum project. If we then turn around and say, let's do it on an all-in cost per PGM ounce sold, that's on a 6E basis, we apply the same metrics and calculations, you get a cost of $571 per ounce. I really like this graph because I do believe that it reflects very nicely the history of the company over the past year. We started for the EBITDA of 2024, and that was $177.6 million dollars. You'll see the favourable impact of the PGM prices offset by reduction in chrome volumes, and then the impact of the chrome price, fairly significant, but taking into account the overall volume sold, and that is a reduction in price of 11%. Increase in absolute mining costs, and you would have seen on the previous slide the increase in the reef tons mined, and that really offsets a lot of the mining commodities, which is a purchase and run of mine ore, so there's almost an offset on that basis. And then savings on the processing costs and selling expenses, and we'll touch shortly on the mining royalties. Resulting over an increase in our EBITDA by 5.5% to $187.3 million. Our gross profit for the year amounts to $191.3 million and a gross profit margin of 31.7%. If, however, we do offset the mining royalty credit, it does impact on the gross profit percent, reducing it to 20.6% year-on-year. It's still a very healthy gross profit percentage in those circumstances. I'm going to touch briefly on the mining royalty credit, but I think before we start, really just to touch on the accounting side of it, the mining royalty itself is not a tax. It is a lease charge paid for the consumption of the resource to the government, and therefore it is a charge to the cost of sales on the income statement, and not on the tax charge. The matter at hand relates to a 2015 and 2017 dispute with the South African Revenue Services on the interpretation application of the Mining Royalty Act. This eventually ended up in a tax court. We were very pleased to get a favourable ruling from the tax authorities and also engaged with the South African Revenue Services thereafterwards and we have agreed the basis of implementing the court judgment. And this is resulting in a reversal of a previous provision that we had of some $67.3 million, which is a credit to cost of sales. As a consequence, you have a royalty receivable of some $13.6 million. And, of course, an increase in income tax and income tax impact of some $18.2 million. But a very favorable outcome and one that is going to stand us in good stead in the years to come. In effect, what it did is it reduced the mining royalty payable to the minimum percentage over this period to 0.5%. Over this past year, we've spent $118.5 million in our capital expenditure, and that is both in sustaining operations as well as growth projects. I'm just touching some of the key numbers there. $33.5 million invested in Cara Platinum, $12.6 million is a fairly nominal amount to date on the underground development as we commence that transition, and then $9.8 million on the deferred stripping. The prior year was some $65 million on deferred stripping. Group capital commitments as of 30 September, $79.6 million, of which CARO Platinum comprised $25 million. Just look at the year ahead, capital budget of $165.9 million. This excludes Cairo Platinum. We'll touch on Cairo Platinum in more detail in the presentation. But effectively, once the funding is closed, there'll be a strong acceleration in the spend on Cairo Platinum. And we also excluded the deferred stripping to really focus on the actual capital items that we're investing in. You'll notice there on the charts on the right that the largest expenditure at the moment is underground development at $76.7 million as we accelerate that capital spend. There's also an increase in assets and infrastructure, and importantly, the R&D and innovation as we start commercializing some of the downstream research results from the ARCO metals. Our balance sheet has remained strong through this period with cash and cash equivalents of $175.1 million, generation of cash from operations, $94 million, and net cash of $69.8 million. The table on the right, I think, really reflects it quite nicely if you have a look at the depiction there. So net cash from operations, $94 million, sustaining capital of $77 million, so free cash flow after investing in sustaining operations of $17 million. The $44 million on the growth projects and a marginal negative free cash flow for the year of $27 million. Total debt is $105.3 million, of which short-term is $74 million. The notes on the pie charts on the bottom right, that's the bond of 26.2%, is a large portion of that. Subsequent to the financial reporting period, we have negotiated and agreed with the bondholders to extend that bond by a further three years with redemption 1 December 2028, so that will be transferred back into a long-term debt facility. Our commodity prices are dollar-based, that's both patent group methods and chrome concentrates, so if you have a tendency to have a bias towards dollar-based debt, 67.4% is US dollar denominated, it does have a natural hedge element. As mentioned, our balance sheet remains healthy, current ratio of two times and a net debt to equity of a favourable 8.2%. We do have undrawn facilities as of 30 September of $76.6 million and that excludes the trade finance facilities. We pride ourselves on our commitment to capital discipline, in particular the return of funds to shareholders. We have proposed interim dividend of 1.5 cents per share. It aligns with the, sorry, final dividend of 1.5 cents per share. It aligns with interim dividend and is after due consideration for the mining royalty credit, which is to a large extent a non-cash flow item. If we include the share repurchase program, it is a payment of 17.2% of our consolidated net profit after tax. Over the past 10 years, we have distributed $119.8 million as distributions to shareholders. This excludes the two share repurchase programs. The one completed, I think it was last year, $5 million, and we're 87% complete, as at the end of the financial year on the second one, which is, again, has been a very successful outcome overall. I'd like to now hand over back to Fivos. Thank you.