In some ways, Talisa’s stock chart looks bleak.
Platinum and chromium production were affected after unprecedented levels of rainfall hit the company’s South African operations last year.
During the same period, initial concerns about supply restrictions in the metals market following the Russian invasion of Ukraine have since eased.
Talisa’s stock price rose and then fell.
Talisa’s stock price has been at its current level over the past six months
Stocks have been hovering at their current levels for the past six months or so, below their five-year highs during the start of the Ukrainian war, but 2.5 times higher than where they plummeted at their worst. . of covid devastation.
At current levels, the market values Talitha at just over £300m, which is decent. The company has a proven track record of production at the eponymous Talisa mine that dates back several years and hasn’t made many mistakes.
But what has been really lacking so far is growth. This year looks like it will be the year that Talisa starts to change that.
As a baseline, production guidance for the Talissa mine this year is set at 175,000 to 185,000 ounces of platinum group metals and 1.75 to 1.85 million tonnes of chromium, not far from 2022 figures.
Also, the bank has more than $200 million in deposits. But Talisa’s drive to develop new assets in new jurisdictions appears to be transforming the company.
The first to drop out of this growth strategy is Zimbabwe’s Karo Platinum mine, which is held through a 70% stake in Vehicle, which owns 85% of the project. The remaining 15% is owned by the Zimbabwe government and is a free carry.
The project is already well underway and various ceremonies have already been held.
Construction began in December 2022 and is currently under construction following the raising of $38 million in undiluted bonds on the new Victoria Falls Stock Exchange.
Talisa hopes to extract platinum and other materials from Zimbabwe’s Karo mine
Tarisa has no hesitation in calling Karo a world-class asset, based on an assessment that the project holds nearly 10 million ounces of platinum group elements with an average grade of just over 2 grams per tonne.
The main elements are platinum, palladium, rhodium and gold, with additional benefits from copper and nickel.
The plan is to develop a mine with a 20-year life and to produce approximately 150,000 ounces of platinum group metals per year in concentrate.
This is a very high level for a platinum project and something not seen in many other parts of the world.
In fact, Zimbabwe’s Great Dyke in Mashonaland West, about 80 kilometers south of Harare, is probably second only to South Africa’s Bushveld region in terms of platinum group metal potential.
The only other region worthy of comparison is Norilsk, Russia, which is primarily a nickel producing business, although pgm production is clearly very important.
Either way, Karo is big and has a proper geographical address, and from Talisa’s point of view, it also has a proper geographical address.
This development will move the company away from its original country of operation, South Africa, to a country not too far away, where mutual ties are strong and mutual interests are well understood.
Mining is one of the few industries that has sustained Zimbabwe’s economy over the last 10 to 20 years, and the new Mnangagwa government is quick to recognize that.
At a groundbreaking ceremony in December, attending Zimbabwean Minister Winston Kitand spoke of the 1,000 permanent jobs the project could create and the 7,000 jobs created by construction.
Karo’s environmental potential was also mentioned. This is because much of the electricity will come from new solar facilities that are also under construction.
Getting Karo up and running requires more funding, but the economics are compelling.
With a net present value of just over $770 million, the after-tax internal rate of return could be just over 47%.
It’s not hard to see why Tarisa is committed to Karo. It’s also not difficult to understand what success means.
Not only does it add a significant amount of production to the company’s annual output, but it sets an important metric.
This is a company with the desire and ability to scale at every level.
First production is scheduled for Karo in 2024, but it wouldn’t be surprising if the stock started to move long before that.
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