Analysts at Berenberg raised their target price on mining outfit Tharisa from 200.0p to 220.0p on Thursday, stating the group’s recent acquisition of its Black Economic Empowerment partners’ 26% stake in Tharisa Minerals would be accretive to its net asset value.
Berenberg, which stood by its ‘buy’ rating on the stock, noted that Tharisa currently owns 74% of Tharisa Minerals, which in turn owns the Tharisa platinum group metals and chrome mine in South Africa. BEE partner Thari Resources currently owns 20% of Tharisa Minerals and the Tharisa Community Trust owns 6%.
However, Tharisa has agreed to acquire the combined 26% interest in exchange for 13.9m new ordinary shares in the firm, for a total consideration of ZAR 390.0m (£19.11m).
The transaction for the 20% holding from Thari Resources was unconditional and effective from 16 February, while the transaction for the 6% from the Tharisa Community Trust was subject to obtaining certain statutory approvals specific to the trust but the German bank expects the transaction to close on 31 March.
“The company says that the transaction is consistent with the Minerals and Petroleum Resources Development Act of 2002 as well as the recent court ruling in South Africa which clarified the ‘once empowered always empowered’ position for mining companies, meaning that Tharisa will not be required to re-empower its holding,” added Berenberg.
