Berenberg has set a price target of 220p for Tharisa (THS ), the platinum and chrome miner with operations in Southern Africa. 

The valuation follows on from Tharisa’s  pricing of a US$300 million five-year senior secured Nordic bond, the potential issuance of which was initially flagged earlier in the month. 

“The bond was issued at 98% of principal, with a semi-annual coupon of 11% pa (against our 9% per annum estimate)”, wrote Berenberg. 

“The company notes that the offering was oversubscribed, attracting demand from a broad investor base. Settlement of the bonds is expected on 24 September (subject to customary conditions), and the bonds will be listed on the Euronext Oslo Børs (or another exchange) within 12 months of the issue date.”

Tharisa will use the proceeds of the bonds to complete the development and construction of its Karo platinum group metals project in Zimbabwe, with any remaining proceeds to be used for general corporate purposes. 

“The company expects first ore to mill from Karo in Q4 of CY 2027, which is encouragingly earlier than our Q2 of CY 2028 forecast,” continued Berenberg. 

“We view the news as positive for Tharisa, with the issuance of the Nordic bond financially de-risking one of its key growth projects in Karo, while first volumes are also positively projected to come in earlier than our forecasts. Tharisa had recently announced a further two major de-risking milestones for Karo, having signed a 25-year special mining lease with the Zimbabwean government on 24 August, and a five-year PGM and base metals concentrate offtake agreement with Valterra Platinum on 27 August. We think the US$300 million funding received from the Nordic bond covers the project’s remaining initial capex requirements, enabling Tharisa to fund its construction and positioning the company to become a multi-mine operator by the end of 2027.”

 

View from Vox

 

Berenberg derives its valuation using a blend of 1x NAV and 3.5x 12-month forward EBITDA, which looks eminently reasonable, given the long track record of the company in operations and cash generation. The broker also said it would update its model in due course, presumably to take account of the growing certainty that Karo will now go into production.