Jupiter Mines Limited

morning, and I would like to welcome everyone to the Jupiter Minds Q3 call. Today, we have Jupiter Managing Director and Chief Executive Officer, Brett Rogers, and Chief Financial Officer, Melissa North, to provide a brief update on the third quarter of the 2025 financial year, and then we will open up to questions from callers. Thanks, Brad. Please go ahead.

Thanks very much and good morning, everyone. Thanks for joining us. You will no doubt have seen our March quarterly activities report that was released to the market this morning. You'll see in that report that this is a business performing very well and that's reflected in that quarterly activities report. As usual, I'll just give some overview comments touching on the key outcomes and themes that are summarised in that report and then I'll turn the line over to any questions that you may wish to ask. So just starting with sales and production levels, sales were up 14% on last quarter, and overall, if we're looking at the financial year track, we're on track to deliver the 3.4 million tonnes for the full financial year that we typically seek to target. So nine months in, we're on track for that, and that was supported by that strong sales quarter that we just delivered. Similarly, production was up 15% on last quarter, and that's enabled us to build quite strong stockpiles, more than three months of high-grade ore at normal sort of 3.4 million tonne per annum run rate levels are sitting in stockpile currently. So good sales, but even better production. Realised prices quarter-on-quarter were 8% higher, and I'll come back to what's going on with Anganese prices and the market more generally later on in my comments. And you'll also have noted that cost of production decreased by 15% quarter-on-quarter, so that's quite material. Cost of $2.06 US per DMTU is much lower than we've seen for the last few quarters. What's going on there is mostly about strip rate ratio. We're in a section of the PID that has a lower strip than what we've been in for the preceding quarters. And we expect to be in this section of the PID till at least the end of the June quarter. So we should see lower than average levels of unit costs in the June quarter as well. The FX ratio has helped a bit. So if we look at that, the US dollar cost of production was down about 15%. In RAND, we were down about 12.5%. So there was a bit of assistance from the FX rate, but the underlying RAND costs were down in real terms as well. All of that, higher sales, improved pricing and lower unit costs led to a very pleading profit result. You'll see that EBITDA and NPAT were both up by about 65% on the prior quarter. Mining during the quarter was impacted by wet weather. We flagged that in our last quarterly. It wasn't more than you would usually expect. It is the quarter of our financial year that is impacted by rain, and as you'll note from my comments in relation to both production and sales and stockpiles, it won't impact our target for the full year. But if you look at mining, both graded ore and waste mining, both down 8% and 17%, respectively, on the previous quarter, But if you compare to the preceding quarter, to make my point, rather the prior year comparative quarter, quarter three FY2024, the quarter just finished saw much higher mine volumes across both graded ore and waste volumes. So again, notwithstanding there were some wet weather impacts, there was still a strong quarter when you compare it to the most comparable quarter in the preceding financial year. As I mentioned in this detail where we set out mining and production volume in further detail, the high-grade ore processing was 15% higher than the previous quarter. Not surprisingly, there was no low-grade ore process, although manganese prices came up a bit. They didn't incentivise us to produce more low-grade, notwithstanding we've got some sitting on the stockpile that are low-grade, produced or sold during the quarter. Logistics, not surprisingly, were stronger as well, up 26% on the last quarter, where we saw a return of South African road haulage in order to meet the level of sales that we delivered in the quarter, and as was already covered, export sales increased materially, and that was both an intention to remain on track for our full-year targeted sales audience, but also to capitalise in quarter on some better manganese prices that we saw In terms of cash, if you look at the total attributable cash, it went down slightly for two main reasons. Both of them were dividends. The Chippy number is down because of the $300 million interim dividend that was paid by Chippy during the quarter. Jupiter's own cash is down slightly as well. Obviously, we had our normal operating costs, but we also, during the quarter, contributed some of our own cash, over two million Australian dollars, to that interim dividend that was paid to shareholders during the quarter. If you strip out the impact of that 300 million interim dividend that was paid by Jupiter, site-generated positive cash, net cash of 147 million rands, And if you take out the impact of working capital, operating cash generation was quite strong at R564 million. So if you look at the detail in our quarterly activities report, there was a working capital met accounts receivable bill and also an inventory bill for the reasons we mentioned before in the quarterly activities report. So notwithstanding, there was something of a worsening capital investment during the quarter and an increase quarter cash generation, both operating cash and net cash flow, if you back out that interest dividend was quite strong. I'll also point out here that the chippy cash on hand 100% level is 60 million Australian dollars better than at the same time last year. So again, this is a site that is performing well, strong sales and production, unit costs were pleasing, all of that resulted in good profitability and cash for the quarter. If we turn to the manganese market, you'll see that at quarter end, the 31st of March, manganese prices were 10% higher than they were at the end of December. And this is really reflective of during the quarter, fairly moderated levels of delivered manganese ore from the supply side. And that was reflecting lower manganese prices at the back end of last calendar year that was subsequently selling and then delivering into the March quarter, fairly moderated levels of supply. demand through the March quarter was steady and maybe even a bit better than expected. And so both of those factors combined to support the manganese price that was higher during the quarter on a realised basis. And also resulted in stock at Chinese ports being very much lower than average levels. You'll see that in the quarterly activities report as well. With higher manganese prices through the quarter, you have seen some elevated levels of manganese supply towards the back end of the quarter and into the current quarter that we're in currently, and that has resulted in a moderating of manganese prices to the level that you can see in the quarterly activities report, FOB, about $3.23 US per DMTU, and that's about About 5% lower than four-year average level, so not great, but not bad. Really, this is a market today that is being driven by sentiment. There's really no new factors. There's an absence of downstream momentum, but that's nothing new that's been prevailing for the last few years. There was elevated manganese supply but not drastically so, not as high as it got to last year and given where manganese prices have moderated to now that supply will again moderate so that'll be a fairly short-lived increase in manganese supply. And Chinese stocks, while they'll come up a bit from the level that we reported at the end of April, 3.7 million tonnes, that's very significantly lower than the last few years' average of, call it, 5.7, 5.8 million tonnes. There's a lot of headroom in that level there. So overall, it's a market that's sort of waiting for inspiration. Stocks are low. Demand is sideways. Nothing new there. But it is a market that's obviously also impacted by sentiment around global trade wars and those sorts of things. So inside the negative markets, there's really similar factors driving the price than we would be used to and we would expect, and really it's been all about manganese supply, and we think that will continue to both support the manganese price in the short term, given the manganese price has run off a little bit. Through this period of time, freight rates have remained quite low compared to what we've seen over the last few years. So they were marginally lower quarter on quarter, and they remain about that level today, around $21, $22 per tonne for the sort of shipping that KIPI uses. So in summary, from an operational standpoint, Every respect, sales were up, production was up, unit costs were down, profit was significantly up, and cash generation from an operating perspective and also a net cash perspective backing out the dividend were all strong and better than run rate and expectation. Manganese prices during the quarter were up on a realised basis and quarter end to quarter end compared to the December quarter, and that was really supported by what was going on with manganese supply in the back end of last calendar year. Manganese supply was low. Conversely, manganese supply increasing a bit in response to those slightly elevated manganese prices has caused the manganese price to come down a bit but Chinese stocks are still low. The level of manganese price today will mean that manganese supply should moderate again and so notwithstanding post-quarter end, the manganese price has reduced a bit to a level that's Around 5% lower than last year's average. We think, looking forward, we should expect to see support at around about these levels. We do expect Genco to come back in based on South32's comments ramping up through the coming quarters, but we think that that's largely priced into the market that we're seeing today. So hopefully that overview is helpful. I'm happy to turn the call over to any questions that might be out there.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. The first question comes from John Schultz from Argonaut. Please go ahead.

Hi, Brad and team. Good result, like where the EBITDA is going here, and obviously, of course, as well for the dividend in the full year result. But just a question on GEMCO and its impact. So with it out to the market, I mean, we obviously would have seen an impact to that high-grade supply globally. Could you give some insight into where high-grade versus that mid-grade sits at the moment in terms of stocks and maybe demand? in China and sort of what you see Genco doing over the next few periods and how that could impact the market?

Yeah. So I'll answer your first question last, if that's okay, John. I think the most relevant thing for us is what the reintroduction of Genco supply does to the manganese prices that we sell into. And my view is that we're sitting today at, you know, Demand that's unexciting, but it's been unexciting, that status quo for the last few years. And hopefully that changes at some point in time. But we've been in this sort of sideways demand situation for the last few years. And we're sitting slightly below average manganese prices that we've seen for the last few years. For most of those last few years, Gemco has been producing and supplying into the market. And so that's what I mean when I say I personally think that Gemco is priced into the current market, which is being driven by sentiment, you know, negative supply going up and down on a prospective expected basis. And we've seen that moving the market from South Africa to all volumes. We think that Gemco is priced in, but we'll see. Yeah, I think the question about what we've seen in the last few years and what supply and demand side of the maintenance market has learnt about high-grade versus semi-carbonate should be type 4. There traditionally is a grade premium of about $0.50 per DMTU between 36.5% benchmark semi-carbonate ore and the high-grade ore that Aramit, Genco and some others sell into. That in the early days of the Genco disruption widened and that's not surprising. Obviously that was the tighter section of the market and so we saw the grade premiums blow out. And then subsequently something interesting happened, which was Chinese aloe plants and traders being nimble and responding to that shortage. And in part that benefited semi-carbonate ore. They increased the usage from what they would ordinarily do of tippy-type ores. But they also processed high-grade ore slag that was in China already, so waste essentially containing manganese, and increased the use of some ores like Ghanaian ores that typically don't go into the seaborne steel market. They would go into the production of electrolytic manganese metal, for example. So that actually resulted in a narrowing of that premium and we've now seen sort of a moderation back to more and more type premium levels, John. So it is something where I think the market's demonstrated that it can respond to high-grade ore shortages and in part that benefits demand for our ore. I think, though, there are trade-offs in terms of that substitution, in terms of what it costs to produce alloys, and the market would prefer while it's available to use Genco-type ores. So I think that premium probably goes back to about where it was, and we're seeing indications of that now, John.

Thanks for that. And maybe just one more. In the Kalahari, how we've seen the M&A and consolidation of of GP, maybe what's happening with Anglo and South 32 next year goes, what's happening up the road with some of the other operations and is Xaro still knocking on the door of everybody? Maybe you can give some insight into that.

Good question. Obviously difficult to answer that given kind of what we're working on and obviously it's part of a public strategy but we're interested in driving value and we believe that there is value to be driven through consolidation within the Kalahari for all the reasons that are set out in our strategy and that's ongoing work from Jupiter and there are many aspects to that and yes there are Parties who are interested given the quality of these assets including Chibi and getting involved in that consolidation, the strategy of consolidation and the idea that it will drive incremental value through being able to operate and grow these assets more efficiently than you can under joint control structures is common logic and you can see from the quarterly result we reported today, how valuable Chippy is as we think the best asset in the Kalahari. So that's a very roundabout way of answering a question without really answering it, John. There's confidential work going on. We're very focused on that as part of our strategy. I think South32 and Anglo have both made somewhat public comments about their intentions for their assets there. Everyone, including all those parties, believe that consolidated ownership of these assets so that they can be operated and controlled in a more direct and efficient way will be a better answer than how they're set up currently. And so there's work going on with different parties involved involving different assets, I'm sure, and Jupyter is part of that in terms of our own scope of influence.

Excellent.

Thanks for that. Looking forward to updates. I'll toss it on.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone. Your next question comes from Mark Fisher from Foster Soft Broking. Please go ahead.

Yeah, hi, Brad. Just a question on the low-grade or what price would you need the high-grade manganese price to be for you to contemplate starting shipping low-grade oil?

Yeah. Thanks, Mark. So overall, what we're trying to do is hit 3.4 million tonnes and maximise the proportion of high-grade within that 3.4 million tonnes. So it's not as simple as saying at a certain price we're looking to put low-grade out if we've got good stockpiles and we do want to maintain at least three months' worth of high-grade ore in stockpiles. The moment we've got more than that, then we'll look at maximising the amount of high-grade ore we're putting out, even if we've got some low-grade. If you're in a market like we were in briefly last year, June, July, where the market is hungry for more material, everyone knows we've got low-grade ore on stockpile, then that certainly does incentivise putting some low-grade ore out there. We have at other times also put some low grade into the market just to generate a bit of cash notwithstanding. It was just basically washing its face and sitting there on stockpile. We've got several million tonnes of that material and so clearing a bit of stockpile space and generating a bit of cash notwithstanding at not very exciting prices is something we can occasionally do. So if you look at the prices that prevailed through the March quarter, given everything I've just said, that didn't kind of incentivise to put any low-grade oil out there. But I'd say somewhere between where we were in March and where we got to in June, July last year, all other things being equal would be sort of more moderated markets that we've seen, but we also want to be thoughtful around supporting the high-grade ore price and not putting low-grade ore in unless there's a really good return in doing it, particularly if we can hit our run rates as we have done through the March quarter with 100% high-grade ore.

Okay, thanks. And just a final question. Just on the high-purity magnesium sulfate study, I understand We're looking to complete the PFS this year. How's that progressing, I guess, in light of also the demand for critical minerals, especially in the US? Thanks.

Thanks, Mark. Yeah, so we are progressing that. The work that we're doing in relation to the PFS is focused on the technical side of that PFS study and the customer side, and we think that that's... uh proven in a situation that we have which is that Battery makers and vehicle makers are still doing their work in relation to the future that they see for electric vehicles. One of the biggest drivers across the supply chain is reducing the cost of electric vehicle batteries and manganese has a really important role to play in that because it's cheaper and more available than other cathode battery metals and so that's why regardless of whether it's LFP looking to move to LFMP, the sort of more typical Chinese cathode chemistry that we think will become more prevalent in the world, or other MMC and LMO Western-type cathode chemistries looking to either introduce or increase the amount of manganese. That's an ongoing trend. So we believe in the thematic and that's why we're continuing to do the work. But the way that we're doing the work is to focus on what we think will benefit from effort right now, and that is building a pilot plant, sharing some material with customers, All of that goes to proving up off-take demand and that's what's important before we will move into the definitive feasibility study phase. That phase will cost more money. Ultimately what we need to do, what we think is important and prudent is to get to a stage where we can underwrite through committed off-takes 100,000 tonnes per annum of HPMSM demand for at least five and ideally seven years. The payback in our study is about three and a half, four years. And so what we're looking to do is de-risk the capital investment and we think that will place us in quite a strong investable position. And the market isn't there yet. Notwithstanding, this is a growing market and we can see real moves towards greater manganese use, as I mentioned. If you go out to non-Chinese buyers of HPMSM today and ask them to commit to a number that they will put in writing both price and volume and call it 2028, they can't do it yet. They'll say, keep talking to us. But this is a market that is going to grow rapidly. And so, yes, if you look at our strategy update, we say BFS this year, BFS next year. And that's kind of a square bracket of intention. If we get to the stage of being able to move into a DFS but we still don't see the market there ready to stand behind the volumes in terms of the people we're talking to, then we'll keep talking to them because Whilst the returns are attractive and we believe in the thematic and there are many ways to monetize this opportunity, we think Jupiter is competitively well positioned. We don't think it's prudent to move ahead of where the customer market is and we don't think it's prudent for Jupiter to take volume risk on this very new market.

Okay, thanks.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone. We'll now pause a moment without any final questions to register.

There are no further questions at this time. I'll now hand back to Brad for closing remarks.

Okay, great. Thank you very much for joining the call today, and I hope you had time to read the quarterly, but if not, I've provided the key comments here today and just leaving you with the key takeaways, which was sites performing well, sales, production, unit costs, earnings, cash generation, all strong and above trend in a market where we saw improved Manganese prices and towards the tail end some moderation there. But we think the kind of risks that are driven by that moderation of price in Manganese supply should pull back a bit and that should support prices around current levels and hopefully a bit better through the coming quarter. Thanks again for your time and look forward to talking to you next quarter.

Thank you. That does conclude our conference for today. Thank you for participating.

You may now disconnect.