Jupiter Mines Limited

The conference is now being recorded.

Welcome to the Jupiter Mines quarterly update call. I would now like to introduce your host, Scott Winter. Please go ahead, Scott.

Thanks very much, Erica, and welcome to all those that have dialed in. I look forward to taking you through today the Jupiter Mines quarterly update for the operation and what Jupiter's been up to. I'm going to take you through just a few highlights and then a little bit of detail around the operation itself, how it's performed, the production, some logistics, a little bit of a marketing outlook, and then talk about what we're doing from a corporate sense in regard to the board and executive roles plus strategy. I look forward to your questions, so we can do that near the end. that I'll kick off with some of the highlights for the business. Obviously, we've had a pretty solid quarter. No LTIs for the quarter, which is terrific, and that brings the business for no LTIs for a year to date. Tremendous result. The business achieved around 255,000 cubic metres of grade at all for the quarter, which is on target and going well. Somewhat less waste movement but we'll get into the detail around that when I talk through that in a moment. Logistics is slightly behind but as expected there are some issues we're managing with planned outages on the rail network and I'll talk to you about some of the road transport that we're bringing back online to assist with that. We've got a solid cash balance attributable to Jupiter, both in Jupiter and our share of Chippy. So we're sitting at about 76 million by the end of the quarter. And I suppose what we've been through from a corporate sense, we've obviously had a change to the board with Peter North joining, myself joining, and Patrick Murphy joining with Peter acting chairman, myself as acting CEO. and we're really getting our hands into the business at the moment. So I'd just like to take you through some of the detail now. As I said, graded ore production was on target for the month, slightly behind, but we're happy with where we're heading and we will be by the end of the year. We have had a really good look at the mine and the mine plan through to the end of the year. The contractor performance which we've highlighted before, we're working with them on some performance issues that we seem to be getting on top of now. But we have done a review of the medium term mine plan that has dropped some of the waste out of the operation and that has meant two of the fleets have been stood down. We did have a particularly wet October but November's results are showing ahead of target and that stands us in a really good position for the next quarter going forward. We did implement some operational efficiency measures with Moomins earlier in the quarter and they seem to be paying dividends with availability and some of the utilisation of the equipment which is terrific. You'll see in the results again that you'll continues to be one of the, if not the lowest cost producer in the region with a cost of production around $1.75 US per DMTU. Again, low cost, long life asset which is terrific for Chippy and certainly going forward when we start to talk around strategy and consolidation of manganese in the region. It has been a focus on the barrier pillar, which has brought about a few bonuses. So we have brought forward some production there to help. That has reduced the strip ratio. It's actually helped with lowering some of the waste costs, again, and bringing forward some of the graded ore, which is really helping us. It has meant more high-grade ore and less low-grade ore. I'll talk about that in a moment. in regard to low-grade and low-grade sales. But we did see some slightly higher fines come through just because there's a higher fines content in that particular part of the oil body. So mining all round is heading in the right direction. We're happy with Normans. I suppose their performance improvements are recent and we expect those to continue going forward. Logistics and sales, the railing over the quarter has been lower than expected and that is primarily a result of some planned maintenance and some other infrastructure delays in the area. There was a derailment which has caused some delays but mainly the planned maintenance. There are expected to be some further maintenance going through in the next quarter so we've looked at how we can ensure sales are achieved and we get tons to the port. So we will be bringing through some more road transport to make sure that those tons move from site to the port. With low-grade ore really being, I wouldn't say sub-economic, but really pushing the economics, we have reduced the low-grade ore sales into the market. That's freed up some of that road transport to really make sure the hydro gets through to port and we can get it onto the ships. So we're happy with where that's going. As you'll see, we achieved a shift pricing around $4.64 to quarter. That has certainly moved around From the start to the finish, we're starting to see a softening at the back end of the quarter. Just a little bit on the market. It's quite interesting. Obviously, the market is influenced heavily by the crude steel production in China. We are seeing China holding firm on their expected production for their year. They don't want to exceed 2020 levels and we're seeing that that's absolutely occurring and they're managing those levels. And that obviously flows through to the federal alloy market and for a lower demand in that particular area. Interestingly, the federal alloy market was affected by some of the power constraints that that China put on the back end of this year. So again, some of those federal alloy producers, some of them even stopped producing because of the high costs of power and they had marginal production. So you did see earlier in the quarter some price improvements for the manganese ore, obviously, but it has softened at the back end of the quarter. I suppose a slight linking to expected forecast of of price for manganese into the future. The silica manganese price has plateaued. We've seen it over the last three months, I suppose, in that window come down significantly, but in November it's actually plateaued, which is a good sign for manganese itself. And I suppose into the future we're expecting China to come out of their... those constraints put on the crude steel production and start to increase that again. And we're seeing the rest of the world have buoyant sort of steel production. So we see that as a positive for the manganese price going forward. That steel will increase. Ferro alloys will start to increase and we can start to see a slight improvement in price. But it's just linking to also freight, which obviously has been a significant impact to everyone. We have seen it quite volatile, but of recent, over the last few weeks, we've seen that freight rates actually starting to come down. Ships are freeing up. Some of the ships are being allowed to hit berth and unload cargoes, and that's freeing ships up in the market for us to use. So we do see freight coming off going forward and again looking forward at freight we can only see that being a slight positive for margins for Chippy. That's pretty much a wrap on the operational side of Chippy and let's look at the corporate As I said, we hold about 76 million of cash which is great. As I mentioned earlier in the highlights, the board is somewhat changed obviously with Peter and Patrick and myself joining and I suppose what we are actively doing at the moment is and have engaged Korn Ferry but we're actively looking for a chairman for the business and a new CEO for the business. That is progressing exceptionally well. We've engaged a little while ago and we're working through that process. I will say we're not going to rush to make sure that we put a chair and a CEO in place just for the sake of that. We will look at the right person to fit what Jupiter is today and where we want it to go in the future. and we need the right people to do that. But that's working quite well going forward. The piece around what the board is currently working on at the moment is obviously the strategy. I'm sure you're very keen to understand where we're going there. As we mentioned, the focus of the board has currently been on making sure, I suppose, The board is stable, the business is well led and we set it up for the right leadership going forward and leadership and governance going forward. But at the same time we are looking at the strategy of the business and how we can optimise that going forward. So some of the things that we are looking at is obviously how we can bring operational excellence through into the chippy operation at the moment and I mentioned part of that before with the discussions we're having with Millmans. We will be looking and reviewing the feasibility study that we had put through to the market a while ago around the expansion of chippy but we're also looking at the opportunities out there with consolidation of ownership in the Kalahari with some of the other manganese producers and even partners. So that's quite exciting. We see that as a priority and we've started that work already. There is a lot of opportunity there for us to investigate and work through. Similarly we have got open eyes as to how we can diversify the business as well. We are looking at other commodities out there and in particular how we may participate in the battery mills supply chain. But again, it's a big wide world out there and we're certainly doing a lot of investigation and we'll be sort of getting some expert advice as to where we point the business and how we do participate. But certainly initially our priority is around operational performance, Chippy. settling down the board and making sure we've got that right support and looking at the partners and your neighbours in the Kalahari about growing the manganese business. And with a low cost, long life asset that Shippy is, we stand in a very good position to do that. Certainly being listed and in Australia we have a great position going forward. That's my summary of where Jupiter currently sits. I'm really open now to any questions that you may have, so please feel free. Thank you.