Jupiter Mines Limited

The conference is now being recorded.

Good afternoon and thank you for waiting. I would like to welcome everyone to the Jupiter Mines Q1 call. Today we have Jupiter Chief Executive Officer Priyank Sathya to provide a brief update on the first quarter of the 2021 financial year and then we will open up to questions from callers. Thank you Priyank. Please go ahead.

Thank you and welcome everyone to the Jupiter Mines Q1 call. As I think all of us are aware, this first quarter has largely been around the COVID-19 pandemic and how Jupiter has tried to mitigate and maneuver around those restrictions. And the results which we have presented today are largely a reflection of what we have been able to achieve. So as we announced around 27th of March, South Africa went into lockdown. All the mines were basically put into the shutdown mode, and that lasted for around three to four weeks. And around the middle of April, all the open pit mines were allowed to come back into production at around 50% of the capacity, which was then increased to 100% of capacity around the 1st of May for the open pit mines. And around the last week of May, that restriction was lifted for the underground mines to come to 100% of the production. So with that as the backdrop, the Jupiter management came up with a comprehensive COVID management plan. And as part of our control regime, testing regime, we basically from the production side, which is the mining, the processing side, came into 100% of production mode around the first week of May. But that was largely what was in our control, as all of us are very much aware. The primary mode of shipment for the Chippy product is largely through the MECA allocation through Transnet. And Transnet, while they have done a very good job of coming back into production, they are still not at 100% production. They are operating somewhere around 60% of the capacity. And that has largely to do with the fact that some of the train operators on Transnet are classified in the vulnerable group. If something happens on one of the lines, all the production on that line is halted, and it takes around two days for it to come back into full production. So that has likely been the reason why we have, compared to our business plan, moved a substantial amount of tons on the trucks. which is reflected in our cost of production. As I've said time and again, and I want to remind everyone that our cost of production on the rail versus the road, the cost differential is roughly 300 rands per ton, which translates to about 30 Australian dollars per ton. So that is the reason why our cost is a little bit higher because of the lockdown again, the transnet, the shipment, everything is going to take time to come back to 100% of production. We anticipate that to happen sometime over the course of, I would probably say July and August. That is what Transnet is aiming for when they will come back into their 100% production mode. So that was again one of the reasons why although we produced and we considered sales for close to 470,000 tons, approximately 150,000 tons was moved from May to June. So I think the overall impact of the coronavirus If we don't see any further impacts and Transnet comes back to full production around, as I said, July and August, it's going to be that we will probably be on a yearly basis losing around 300,000 tons of sales because of what has happened in the first quarter. From the Transnet perspective, compared to 100% rate allocation with, again, the hiccups on the rail side and the fact that they will only come back to full production around July and August. Our allocation will probably be around 75% of our legal contract. And the rest we will basically be supplementing through the trucking channel. So we have the capacity to go up to 120, 130 trucks per day. So compared to our business plan, We anticipate that we will be transporting around 1.4 million tons on the trucks, primarily through South Africa, but the remaining will be through our port of Lodritz. As I said, we truck to the border, and then from the border we rail to the port of Lodritz. So that, in a nutshell, is going to be our plan if – We don't see any further impact from the ongoing pandemic. We would try to achieve around 2.7 million tons against that 3 million tons target. And the cost will be slightly higher, largely because of us moving substantial amounts on the trucking channel compared to the railing channel. But that said, we have in the past always achieved more than what we have targeted on the rail, and that still remains the plan for the rest of the year. So that's largely what I wanted to say in terms of what we have achieved in the first quarter and what our plan is going forward. As the report says, we are still profitable. The foreign exchange is favorable, and our target of trying to produce manganese at or below $2.20 still remains the focus, despite these hiccups. So with that, I'm more than happy to take any questions.