Tharisa Plc Lifts PGM Output 11% but Swings to US$51M Net Debt

Tharisa Plc lifted platinum group metals (PGM) output by 11% to 153,700 oz in the year to September 2026, yet it closed the year carrying US$51.0 million of net debt. Three months earlier, the Johannesburg and London-listed miner held US$10.7 million of net cash.

The production report, published on 13 October 2026, showed both PGM and chrome concentrate volumes landing inside guidance. PGMs are a group of six precious metals, including platinum, palladium and rhodium, used heavily in vehicle catalytic converters.

Volumes were not the main driver of the year. Tharisa’s average PGM basket price rose 61%, although prices eased in the final quarter.

Here is what the figures tell you about whether the South African operation can keep paying for the Karo Platinum build in Zimbabwe, and which risks could knock that plan off course.

How did a 61% PGM price surge shape Tharisa’s year, and what happened in Q4?

Volumes

On output alone, the year looked solid. PGM production reached 153,700 oz on a 6E basis (six elements measured together), up from 138,700 oz in FY2025. Chrome concentrate held broadly flat at 1,563,800 t.

The fourth quarter finished strongly. PGMs rose 3.5% to 41,000 oz from Q3’s 39,600 oz, while chrome climbed 5.8% to 416,700 t.

Broker Peel Hunt said output broadly matched its forecasts, helped by better-than-expected PGM recoveries and a mix tilted toward higher-value rhodium and iridium.

Prices and what drives them

The real tailwind: Tharisa’s average PGM basket price rose 61% to US$2,607/oz, against US$1,615/oz in FY2025.

That price move did far more work than the 11% volume gain. Chrome added a smaller lift, up 9% to US$290/t.

Then Q4 turned. The basket slipped to US$2,535/oz from US$2,681/oz, and chrome fell to US$285/t from US$306/t, even as volumes rose.

The drivers are part structural, part cyclical. Johnson Matthey expects platinum demand to exceed supply for a fourth consecutive year, while S&P Global Ratings warns that automotive demand stays exposed to policy and technology shifts. For you, the read is that FY2026’s earnings strength rested on prices, so it is not a guaranteed baseline for next year.

Persistent supply shortfalls have embedded higher PGM risk premiums into prices, though those premiums can unwind quickly, which is the scenario S&P’s normalisation path effectively assumes.

What do the South African operations and FY2027 guidance say about the cash engine behind Karo?

Operations and guidance

The Tharisa Mine kept executing through the fourth quarter:

• Reef mined rose 8.5% quarter-on-quarter to 1.34 Mt
• Reef milled rose 7.3% to 1.43 Mt
• Underground development advanced 450 metres, with 52,000 t mined

FY2027 guidance is 150,000-170,000 oz of PGMs and 1.50-1.65 Mt of chrome, covering South Africa only. Karo is excluded entirely.

The midpoint of 160,000 oz sits only modestly above this year’s result. That leaves little volume growth to lean on if prices keep easing.

Balance sheet and credit view

The swing to US$51.0 million net debt (borrowings minus cash) reflects the initial draw on Karo-related financing, not operating weakness. Still, the pressure is real.

S&P rates Tharisa B with a stable outlook and expects adjusted debt to EBITDA (earnings before interest, tax, depreciation and amortisation) to peak at 3.2x in FY2026.

S&P’s cash-flow forecast: negative free operating cash flow of about US$107 million in FY2026, deepening to a peak deficit of about US$213 million in FY2027.

S&P’s base case also assumes the basket normalises from about US$2,633/oz to about US$1,969/oz by FY2028. Add South African risks around electricity, labour, logistics and the underground transition, and the cash engine faces strain just as Karo needs it most.

Can Karo Platinum deliver the growth Peel Hunt is pricing in?

What is secured

On paper, Karo has moved from plan to build. Chief Executive Officer Phoevos Pouroulis described the year as a shift from planning to construction.

A Nordic bond is a corporate bond issued under Scandinavian market rules. The proceeds sit in escrow, meaning they are held by a third party until conditions are met.

Bond proceeds held in escrow only reach the project once escrow release conditions are met, and those conditions have not been publicly itemised, which leaves the pace of Karo’s construction drawdowns hard to track on a calendar.

Berenberg kept a buy rating with a 220p target in September, citing first ore earlier than its previous Q2 2028 expectation. Later coverage cited about 230p, and the sources conflict.

What could still go wrong

Karo has already slipped once. Reuters reported in August that first production was expected in 2027, about three years behind the original schedule, though that account has not been independently confirmed. The main open risks:

• Zimbabwe policy: reports, not independently confirmed, say miners must convert 30% of US-dollar earnings into local currency. Mitigant: the 25-year lease and offshore debt-service accounts.
• Cost overruns and ramp-up: any slippage against the US$516 million estimate. Mitigant: a detailed 2027 construction sequence already under way.
• Funding release: escrow drawdowns and the unfinished US$75 million facility. Mitigant: ring-fenced bond proceeds.
• Price: an S&P-style normalisation would compress returns. Mitigant: the Valterra offtake improves revenue visibility.

Zimbabwe’s Zimplats shows large PGM operations can work there, but it is a mature platform. Mimosa’s expansion was reportedly deferred in 2024 amid weak prices and tax concerns (also unverified).

Peel Hunt estimates Karo plus the South African underground expansion could lift group EBITDA by about 80% over two years. You should treat that as a conditional outcome, dependent on on-time commissioning and sustained PGM prices, not a baseline.

What Tharisa’s year changes, and what it leaves open

The operating year was solid but price-assisted, and the balance sheet has already moved into net debt. Karo’s value now hinges on timely commissioning and PGM prices holding above S&P’s normalised path.

Three markers will show whether the plan is holding:

1. The first bond drawdowns from November 2026
2. Finalisation of the US$75 million Zimbabwean facility
3. Construction progress against the July-October 2027 commissioning window

Past performance does not guarantee future results. Financial projections and analyst estimates are speculative and subject to market conditions and various risk factors.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.