WEEKEND COMPARISON
#CAML vs #THS

I am holding both mining companies, but would like to highlight Tharisa to the community as it seems to be unnoticed at the moment.

Grab a coffee and enjoy the thread

1/12

BASICS #CAML

Mcap £398m
Share price 226p

Cash $55m (Sept 30th)
Gross Debt $99m (June 30th)

Last FY operational figures (31st Dec 2019):

Revenues $180m
Profit before tax $68m
EBIDTA $108m
FCF $70m

2/12

BASICS #THS

Mcap £254m
Share price 94.5p

Cash $49m
Gross Debt $70m

Last FY operational figures (30th Sept 2020):

Revenues $406m
Profit before tax $76m
EBIDTA $113m
FCF $73m

3/12

As you can see, both are quite similar in all aspects, but #CAML valuation is 57% higher than #THS.

Now lets take a closer look at last FY reported production levels and commodity prices TODAY; as we are all interested in the outlook for 2021.

4/12

Production Outlook for 2021:
#CAML

Cu 14k t (13,771 t 2019)
Zinc 24k t (23,369 t 2019)
Lead 32k t (29k t 2019)

More or less stable - similar y-on-y. But I will use the rounded numbers for further calculations (14k+24k+32k)

5/12

Production Outlook for 2021:
#THS
Increase in Chrome output should equal out FX changes (1.34m t 2020). I will focus in this thread purely on Platinum Group Metals (PGM), as chrome becomes less important throughout 2021.

PGM 142.1 k oz 2020
Assumed same production in 2021

6/12

#CAML
Last reported commodity prices (2019 FY):

CU $6011 /t
Zinc $2497 /t
Lead $2001 /t

Current commodity prices:

CU $7700 /t (+28%)
Zinc $2800 /t (+12%)
Lead $2050 /t (+2.5%)

7/12

Hope you are not bored by now

8/12

#THS
Last reported commodity prices (2020 FY, 30th Sep):

Chrome $140 /t
PGM Price $1704 /oz (realized price was $1538)

Current commodity prices:

Rhodium (9.5%) $16350 / oz
Palladium (16.2%) $2320 /oz
Platinum (55.4%) $1010/oz
Other (18.9%) $85 (5% of basket price)

9/12

Calculating current PGM basket price for #THS

9.5% x 16350 + 16.2% x 2320 + 55.4% x 1010 + 85 = 2573$

13% discount to official PGM prices = $2239

Current commodity price premium to 2020 average = $701 / oz

142.1k oz x $701 = $99.6m straight into profit

10/12

Summary outlook for 2021 with current commodity prices:

With the simplified assumption that all other cost lines remain the same,
#CAML will generate $32.4m extra profit (before tax)
#THS will generate $99.6m extra profit (before tax) !!!!
DO YOU SEE WHAT I SEE ??

11/12

Implications for 2021
If we assume a fair valuation for #CAML at ~300p (+33% from current level) , #THS would have to trade at 200p (+100%) to have a smiliar Mcap. With forecasted profits at least 50-70% higher than #CAML, a more reasonable val. would be circa 300p (+200%)

12/12