Jupiter Mines Limited

Thanks, Janelle, and good morning, everyone. Thanks for joining the call this morning to talk about what was a really strong June quarterly activities report that we released this morning. And since Jupiter is a 30-June financial year company, it also marks the conclusion of the FY26 financial year. As usual, I'll just run through some of the highlights from that activities report that I think bear mentioning, and then at the end of that brief overview, there'll be time for questions. So starting with safety, there were no lost time injuries during the June quarter at Tippie and at the end of the June quarter, TRIFA remained stable at 0.37, which was the same TRIFA that it had in the last quarterly that we reported. Operationally, as I mentioned, this was an extremely strong quarter for the mine and starting with sales, we had 943,740 tons of manganese ore sold for the quarter that was 12% up on the prior quarter and when you add that in with the previous quarters for the financial year Chippy delivered a little under 3.5 million tons for the full year you will recall that our target for the moment at Chippy is to sell 3.4 million tons in each financial year and Chippy has achieved that target for every year that Jupiter has been listed with our investment in the mine since 2018. So we again conclude another year having exceeded our target in that regard. Production in the quarter was also very strong, 966,183 tonnes of manganese ore produced and that was 14% up on the prior quarter. That marks a 3.9 million tonne per annum run rate and when you think about the sales target for the year that I mentioned a moment ago of 3.4. That run rate in production for the quarter was very strong and sets us up for a good start to this new financial year that's already commenced. Noteworthy in that production number is that it was overweight to high-grade ore. Within that number we had very strong high-grade ore production of 820,642 tonnes. So again, when we're coming into the mix of tonnes that we're looking to always prioritise to the greatest extent possible high-grade ore in our overall target of sales. That production number in the June quarter set us up well for a good start to this financial year in terms of grade mix as well. Mining of growthy ore increased 22% and waste mining increased 14% from the previous quarter. That high-grade mining number, the big step up on the previous quarter, was benefited from the fact that there was a greater mix of barrier pillar mining during the quarter. From a logistics perspective, we were up 3% on the previous quarter in terms of our overall logistics volumes. The June quarter again saw no South African road haulage and as I've discussed on previous calls, that's a factor of benefiting from greater Mecca rail allocation than we had anticipated because smaller miners not taking up their capacity on the Mecca Rail. So that's something that other large miners, not just Tibia, have been reporting. That's a benefit in the overall mix of costs on the logistics side, and that was pleasing to see. We continue to haul by road into Namibia through the port of Luderitz. So when I talk about no road haulage in South Africa, that is talking about road haulage to South African ports. The only road haulage that we conducted in the June quarter was over the border into Namibia, where we then get onto rail for the rest of the journey to the Luderitz port. Our costs of US$2.48 per DMTU FOB were slightly down on the March quarter. You'll recall we've talked about a key factor here, and it is continuing, which is US dollar weakness against producer currencies in the manganese oil world, including the RAND. In the quarterly, you'll see that there hasn't been a big movement quarter on quarter, but this ongoing feature of US dollar weakness means that US dollar reported costs tend to be inflated. And this is the case here compared to what they would otherwise do. So I haven't done the conversion for this quarter, but I think I guided it. last quarter that costed around $2.50 if they were like for like with exchange rates that we saw prior to the US dollar weakness becoming a feature you'd be $2.20, $2.25 and so that's bang on trend for where Tippie is with its costs we should expect whilst the exchange rates remain around the levels that they are right now that Tippie's costs will be around the level we've just reported more or less and and that's fine, provided we understand that FX is driving that. What's most important here is not the US dollar reported cost, it's how we are comparing to other manganese ore miners. You'll recall our strategy is to be what we call fittest in the field, i.e. one of the cheaper, more cost-efficient producers of manganese ore in South Africa, and notwithstanding these movements in the US dollar-rand exchange rate to be at $2.48, as just reported, is absolutely in that position. Other large, efficient, important producers of manganese ore from South Africa are reporting FOB costs more around $3 per DMTU FOB and so cheapy at $2.48. Has a nice defence margin compared to the field and we should just bear in mind the effective FX rates on US dollar reporting costs for the moment while US dollar weakness compared to historical levels is a feature. From a cash position, Tippie's cash was stable quarter on quarter. We had strong operating cash flow during the quarter but we also had to pay year-end taxes and royalties and when you have a look at reconciliation in the quarterly activities report that is naturally a key feature whereas at the end of June we have to pay a true up for the year both the taxes and royalties for the six month period concluded but also a top up for the full year and the way the royalties work in particular and so that was a key feature there Jupiter cash while we're on the topic you'll note that quarter on quarter Jupiter's own cash was down 2.6 million Australian dollars 31 March to 30 June this was entirely because of the 2.8 million dollars of Jupiter's cash that we could which was actually paid on the 2nd of April, so slightly after the March quarter end. And so if it wasn't for that, Jupiter's cash would have been slightly up. Chippy's cash was basically stable. I would expect in the March quarter we'll start to see a bit of a net accounts receivable unwind. There wasn't much of a movement quarter on quarter. We should look out for that in the next quarterly. From a manganese market perspective, we started the quarter and the discussion in our quarterly activities report last time was around elevated manganese oil prices that were driven by costs and concerns surrounding the Iran war. So actually high diesel costs, high freight costs, but also concern forecast around potential interruptions to supply, concern also forecast to elevated freight costs that went beyond the level that we were seeing. As we move through the quarter, those costs and concerns somewhat abated. We have seen and we are still seeing obviously elevated diesel costs and elevated freight rates. They haven't necessarily gone as high as people anticipated. And particularly through the month of June, we saw some abatement of both of those levels. The concern for the moment at least that there could be interruptions to manganese ore supply and some of that was feeding into the elevated manganese ore prices that we saw at the beginning of the quarter has certainly abated and so with that naturally manganese ore prices that were being driven substantially by those factors have also abated through the course of the June quarter. Downstream demand as we note in the quarterly activities report, so this is demand for manganese ores for the production of alloys, in particular in China. through the quarter was unexciting, but I would say that that has been the case for recent years. The manganese oil market, as we all know, on this call and its prices really have been driven over recent years since about 2021, much more so by supply factors than demand. You have pockets of Better or worse demand than you expected, but really what we're going through is a multi-year remaking on the demand side where India hasn't yet risen to prominence, although they are growing strongly in the background in their demand for alloys and their manufacturing and demand for steel, and China's going through a gentle deflation, and so notwithstanding in the activities report we talk about Downstream weakness, which is true, that's actually nothing new and the major factor going on in the June quarter with respect to manganese oil prices, frankly, as always, is more factors and concerns around supply. Anytime you have a concern or a disruption to supply, given how concentrated the supply side of manganese ore is around major producers that does tend to go to price and that's something we've seen many times in the last few years and that's really all that's going on here with the manganese ore price as well. So We continue to be in that We remain stable sales around our target of 3.4 million tonnes and we remain focused on being one of the more cost efficient producers and that will deliver outcomes that we continue to see and that we've seen in this quarter as well to be as profitable and cash generative and to the extent that supply needs to moderate in order to stabilise prices that will come from other producers who are higher cost than Chibi having to moderate their supply and so as the quarter ended and we had prices that whilst they were lower than at the start of the quarter they're actually still around average or even slightly above in terms of SIF prices recent year average levels so lower than at the start of the quarter no doubt but fine for Chippy when you compare the FOB price at around $3.34 which I actually think is factoring in a higher shipping rate than we're seeing in our business at the moment but taking that as an observation as against our cost of $2.48 for the quarter we're still making a good margin but others aren't and so what we started to see at the end of the June quarter and into the current month is a reduction in supply. Shipments coming out of South Africa were lower than they had been for much of the last financial year. And that naturally will start to moderate the market. And so in the near term, we would expect, based on what we're seeing in the market, prices to stabilise around these levels and lower shipments starting to arrive in key markets, in particular in China. And whenever that happens, prices start to stabilise. So that's what we're seeing right now. Chippy of course with its cost position is focused on again achieving 3.4 million tonnes for this current financial year and remaining focused on the key items of operation including unit cost which was well demonstrated in the June quarter. From a dividend perspective, we will now, having concluded the financial year, move into discussions around a dividend from Chippy. You will see in our published calendar that that's expected to be announced along with our preliminary financial accounts at the end of August, so in about a month's time. So those are the key points I wanted to cover off in overview. In summary, this was a great quarter. Sales up, production up, targets hit for full year, costs slightly down, stable, which is good in a market that has a lot going on in terms of movements in cost inputs. So a great outcome from the team. Safety was good, no lost time injuries for the month. against the manganese market that has seen you know a bit of price volatility but ultimately coming down to a level which from SIF price perspective is about six percent above current year average levels and relative to Chippy's good ongoing performance from a cost perspective sees us as we always have been producing cash throughout the cycle and that's resulted in a healthy level of cash remaining at Chippy at Portorin notwithstanding the payment of royalties and taxes at the year end. So those are the key comments I wanted to make in overview. Happy to take any questions that may be on the call now.

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. Your first question comes from Mark Fischera with Foster Stockbroking. Please go ahead.

Yeah, hi Brad. Just a couple of questions. Firstly, can you remind us what the shipping capacity is annually from Luderitz? Thanks.

Yeah. Yeah, thanks for the question, Mark. So we tend to ship around 700,000 to 800,000 tonnes per annum. uh we would like to do more than that pending cost and there's an ongoing effort to look at improvement of that channel both in terms of capacity and cost uh Luderitz is a bit closer to Tippie than Port Elizabeth is which is our major mecca port in South Africa and so you would think for that reason and also because part of the channel is rail that it should be cheaper um but there are currently inefficiencies which count away some of that natural advantage with literates. Low draft, you have to move intermodally, road and then rail, old gauge rail, and you have to top up ships that are loaded in literates with ore at other South African ports because of the low draft there. So this is an ongoing continuous improvement. We would like to see that potentially being higher than that, a million tonnes or higher. But at the moment, not so much a capacity issue. It's a blending of cost and continuous improvement. We tend to put out 700, 800,000 tonnes through that channel. It could be higher even on existing capacity.

Right. And then I guess a related question. With Exiro now in the JV, Is there any, and this sort of indicated potential synergies or saving costs in terms of like logistics using their existing sort of operations and networks. I was just wondering, are Xero bringing any sort of ideas or initiatives to lower costs or improve logistics? Thanks.

Yeah thanks Mark and I suspect you have seen but others on the call may not have seen that Exaro since we last spoke had a capital markets day and if anyone's interested go to Exaro's website and you will see a presentation which touches on some of these matters in Exaro's view so that could be interesting reading for people on this call. To answer your question Exaro does have plans about how they can bend logistics advantages into Chippy. Obviously, that would benefit Jupiter as a co-investor in the mine through the joint venture. It's worth noting that Transnet over the last 18 months or so has been working on establishing private-private partnerships. where they will allow private participants to use their rail line to carry their own private rolling stock trains and Exaro is one of the parties I would say on the coal side of the network not on the manganese line for now that has been given a concession to do that there is another party who has been given a concession to operate on the manganese ore line Meantime, Transnet is actually working really well, including with us at Chippy on business improvement initiatives themselves. And so we have been expanding the East London channel, which is unique to Chippy as an example of the collaboration between Chippy and Transnet. And East London is giving Luderitz a run for its money on a cost basis. And so it's good to have that tension there. So to answer your question, yes, Exaro has that aspiration. That obviously has to be done through the context of the current joint venture where Jupiter would need to agree to that. But we're all in favor of things that would vend in a lower cost and lower risk of delivery. And so that's something in the Exaro's capability. It's something they're actively looking at doing on the coal side, and that is something that would be their plan for any manganese ore investment that they're in as well. And some of that is mentioned from memory in the Capital Markets Day presentation that I referred to a moment ago.

Great. Thanks.

Thanks, Tom.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from John Schultz with Argonaut. Please go ahead.

Hello. Just a quick one on the dividend coming up. I mean, I think we've probably kept a bit of cash at the interim. What's your current thinking going into the negotiations with Exaro? And I mean, it's tough to speak for them, but do you think they have any different views on paying out dividend than the previous JV partners had?

Thanks, John. Yeah, it is a bit early for me to comment on that and I'd be pre-empting the process. I would say Exaro is a public company like we are and has made an investment here into a great cash generative company. And if you look at the reasons stated for that investment, page one is... a history of Chippy's dividend record and Exaro also is a dividend paying company and so they would with that in mind look at these things the same way that we do. They're obviously also a responsible company that wants to ensure that we're being prudent here but they are aligned with Jupiter as a public company that wants to provide good returns and has provided very good returns to their shareholders. including through dividends from their operating mines, and that's been part of their rationale. So that's a good political answer to your question, John. The punchline is we haven't yet started, but we're on that now, having concluded the end-of-year financials. But, yes, you will have seen at the end of the quarter as well a good level of cash, as there always is at Chippy, and so that's a function of another successful quarter, and we're about to start that conversation. Perfect, thanks. Thanks, Joel.

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

Thank you all for dialling in. Hopefully you've taken away the key themes that I tried to emphasise through this conversation. Very strong quarter, great end to the year across sales, production, mining and cost performance. This mine continues to perform well and that's added up to a good outcome in terms of quarter-end cash as well. And also in terms of the production and mining outcomes, particularly around high-grade oil, we should be well set up to start this new financial year and to continue this proud record of predictable success from the mine. So thanks very much for dialling in. Look forward to talking to you all again next time.

That does conclude our conference for today. Thank you for participating. You may now disconnect.