African Rainbow Mnrls Ltd

Good afternoon ladies and gentlemen and welcome to the African Rainbow Mineral's interim results for the six months ended 31 December 2025. All attendees will be in listen-only mode. There will be an opportunity to ask questions when prompted. If you should need assistance during the call, please signal an operator by keying in star and then zero. Please note that this event is being recorded. I will now hand the conference over to Dibang Clarku. Please go ahead.

Dibang Clarku Thank you very much. Good afternoon, everyone. So we're all together in the room here. We've got the entire management team. We've got Philip Tobias , Mike Schmitz , , and . So the entire management team is kept on for all your polls. We're not going to do an introduction. We're going to go straight into Q&A. So we'll just give them some time. Thank you.

Ladies and gentlemen, we will now be conducting the question and answer session. If you'd like to ask a question, please key in star and then 1. and your telephone keypad. A confirmation turn will indicate that your line is in the question queue. You make a key in the star and then 2 to exit the question queue. Just a reminder, if you like to ask a question, you're welcome to key in the star and then 1. We will pause a moment. Our first question comes from Tabukhung Sahoni of Investec. Please go ahead.

Hi, team. Just a quick one. Can you guys hear me? Yes, we can hear you, Tabukhung. Oh, perfect. I think my question is quickly on Tandoor, well, to Tandoor, in relation to the AMCO. I mean, I see domestic sales were down 15% year-on-year at GGV, and then PCB also was down 3%. And then I also see also on the revised guidance, particularly around those local sales volumes going forward, they've been revised downwards. Could you please just provide some guidance on the contracts and then the revision of that core business and how we should then be looking at it, particularly on the local sales side? And then in relation to Mudigwa, I just wanted to understand. So I saw that, like, so times mold were up 5% year-on-year, but the PGM concentrate did go down by 3% due to that planned recovery. how does the recovery's outlook profile with OpenPIT combined look like for Moduqua? And if you could maybe speak more around that focusing unit cost reduction at Moduqua and how we should also look at it going forward.

I'll leave it there for now. Tommy. Yeah. When we come to the domestic sales, those in the main are supplies to ESCOM. As you probably know, the in terms of ESCOM and power generated from their side has been reducing. So we are having a bad impact on our domestic sales. The positive thing I thought that obviously and they're timed out with the improved performance from TFR. And some of that call we do to the export market at opportunity prices. So in terms of our contract with ESCOM, we are contracted for HGV. It's about 2.5 million times the time for the full year. of sales, but yeah, we all depend on whether they are responsible for the entire logistics as well in terms of getting . But from time to time when they don't use or take that call into the export market. I hope that kind of answers your question.

Yes, thank you.

And the water accumulation there in the coal business there with Mpunzah, how will that impact production going forward?

Yeah, that's very important. Maybe a bit of that used to be an old underground mine where we're mining now, so we are mining those as an open cast method. and we had a combination of coal. We have, that has been, I would say, the ones of matter. We have since revised it there, and we added additional pumping capacity. Having said so, though, across all our business, I think the range that we have been experiencing in the last three years has been somehow more than the normal range. So those have impact from time to time, but in the main challenge of the has been addressed for now.

Thank you.

Thank you.

question.

Certainly. Good afternoon. I must state that the open cost is not the preferred source of all for . We're putting that through the concentrator while we are building up the reserves underground in the UG2. The 6E grades for the underground UG2 is 4.76 grams per ton, while for the opencast it's higher. It's anything between 5.2 grams a ton and 6.5 grams a ton. The terms are ever such with the recovery. Typical recovery for normal underground UG2 is sitting at about 84.5, 85%. While the open cast closer to surface, highly oxidized, can be sitting between 50, 54%. The benefits of the open cast is that it's a much lower cost operation. UG2 cost per 60 ounce comes in underground 20,200 grams per 60 ounce. or the open cost comes in at $16,000. So although you lose some ounces, you're seeing the benefit in terms of the cost. We are going deeper with the open cost. So as you are proceeding deeper, it all becomes less oxidized and your recovery goes up. So we are confident in the outlook for the open cost as a temporary gap filler at Mediqua. Thank you.

Thank you.

Thank you.

Thank you. Yes, it does, for now. Thank you.

Okay. Ladies and gentlemen, just a further reminder, if you'd like to ask a question, you're welcome to key in star and then one to place yourself in the question queue.

Okay.

He's just been cleared, and we do have a next person in the queue, which is Tim Clark of SVG Securities. Please go ahead.

Thanks, everybody. Can you hear me?

We can hear you, Tim.

Thank you. All right. I've got a few questions. I'll sort of roll through them slowly. Let's start with the finished stock that you've agreed to sell, the 1.2 million tons. Can you give us an idea, please, of just the sort of timeframe over which you'll sell that, what the offtake is, what the contract is?

Hi, Jim. Yes, so the contract has been concluded for 1.2 million tonnes over a 12-month period, which started in February. So the intention is to offtake 100,000 tonnes per month for 12 months.

Thank you. That's very helpful. Thanks very much. Let's talk about just how we should think about Nkomati going forward, just in terms of spend. You've got this chrome plant which is going to give some kind of revenue credit. How should we think about it? You've got the liability outstanding. Can you give us some kind of sense or guidance just for our models for the next two, three years of what we should model in terms of how we should think about in Kamati in terms of the plant and then upsetting and the spend on On rehab, please.

Tim, thank you for that. I will also ask Sue to help in terms of the rest of the rehab, but to an extent, this , as you pointed out, this subsidizes the cost of fair maintenance, which, as we have indicated in the past, could then combined, I think we're going to be generating between 20 and 25 million of revenue that will come and subsidize that cost. Yeah, so on the RAHEP side, did you ask on the RAHEP in terms of modeling? We are currently not really undertaking major RAHEP because we are completing this feasibility study in terms of looking at optionality going forward. As we have indicated, we have quite advanced on that, and I think it's very and we're confident When we take it forward to the board, it will get approved and they will make an announcement in due course. So there's no in nature and may have that same for the water treatment plant, which we have located in the past. So is that going back to the commission?

Okay, so that feasibility study, is that another version of the nickel? Sorry, is there a feasibility study just to open up another nickel mine effectively, a new in some different form? Sorry, I don't know much about it.

Yeah, that's what it will entail. It will entail really recommissioning the mine and obviously in a much more, let me say, at a maybe smaller scale than previously, and that's what we are looking at. But, yeah, we'll be able to share the details in terms of the actual volumes and so on after we've finalized the study and taken and told the board. But I think that gives a good indication. And in line with that, obviously, also with the very encouraging current prices, we are looking at a potential a bigger co-production than what we are currently doing.

To add on the rehab liability. Thanks, . So that rehab liability . Sorry, Tim. Just giving more color ones on the rehab liability. I can go back to you. I can go back to you now. Thank you. So just to, yeah, thank you. Just to let you know, so that we have, as of 31 December, FOMCOMAC is just over $2 billion. So it's $2011 million, or $2.0 billion. Again, just remember that we did receive the $325 from the RILSC, which was a contribution as part of the transaction to us that we had water specific, water rehab. I want to ask additional questions on your behalf so we can just clarify some things. So current monthly production of crows, where are they now and who are we planning to sell?

Around eight and a half thousand times per month is what we are achieving. The steady state. With the current project. Okay. Yeah. Okay. The bigger the stage, we're still finalizing a few items related to the . And that's when we will communicate those volumes. But they are much higher than the current project.

When do you expect to get to 11,000 tons per mile?

I will get to 11,000 tons per mile .

And what kind of profit margins are we seeing with the production more or less?

It costs us about 10 million. So I just want to check . It costs us just under 10 million per month to produce. I think maybe just to come in, overall, just correct me if I understood well, I think in the next 12 months we should be able to make at least a profit of 100 million with this 500,000 tons. That's correct. Delta would be 100 million positive. Yeah.

Just to add, with regards to the broader information question, I think it's too early for us to give too much information. As you can imagine with the geopolitical changes that have been happening, There are some home takers who've been looking for nickel supply out of Indonesia because of their relationship with China. As a result, has become a little bit more attractive to, you know, to other nickel producers. But it's still early stages. We're doing the study, and we're only sort of going to go for board approval later in the year. And once we do have the details, we'll come back and guide the market accordingly.

Thank you very much. I'll ask one last question, please. Just on two rivers, I was just reading your commentary about being impacted by sympathetic geological structures. Never heard of those before. Can you just chat to how long it's going to take before your productivity improves as the geology improves? You sort of spoke about it improving over time. Now that you're getting past the dikes, maybe you can just give us some timing. Thank you.

This is Johan Janssen. What we encountered was a fault parallel to the advancing faces. So about 18 months ago we started intersecting the fault. We've done redevelopment, went through the fault. We've established the faces on the other side of the fault, which was quite an effort. And at this stage we are busy bringing the supporting infrastructure up to date, the conveyor belts, moving them back to within 60, 80 meters from the face. We've already seen an improvement in the productivity, and we will continue to see that over the next quarter. And by the start of the next financial year, we will be back on 320,000 tons per month. I think Tim, that's what I said. Tim, that's what I said. Our focus for F27 will be an improved output because we'll be moving towards strength out of these geological features.

Thank you, Philip. Thanks.

Thank you. Ladies and gentlemen, just a final reminder, if you'd like to ask a question, you're welcome to key in the star and then one. Our next question comes from Dubella of NetBank. Please go ahead.

Hi, good afternoon, everyone. I did get cut off a few times. Please forgive me if I do ask questions that have been asked already. Earlier on during the webcast, Maruki talked about the value in use model when I asked a question about the realized pricing on the manganese. Could you just expand some more what is meant by value in use model? How does that potentially improve your realized pricing? And it did seem as though she was... Hello?

Can you guys hear me?

And it did seem as though she wasn't just talking about just sort of the Manganese operation, but this perhaps could be applied in other divisions. Can I just get courage on that as well? So that's my first question, and then I'll ask my second question later.

Yes, I would like to expand on that. So, what is value in these models is that you take your specific oil, and you are correct with carbon to neutral manganese at Blackrock as well as IMO and it is tested in various applications. So, where it would be used in different smelters and for what purpose in those smelters. And you develop a model to determine the intrinsic value of your oil type to the customer buying it. And through having that value, you can maximize the economic value you get back in your pricing. And to just further explain it, obviously in a smelter, they don't only use your specific type of oil. They would use different suppliers' type of oil. which has got different grades and contaminants. And we know BlackRock, as well as Gowan, has got a very high grade reserves. And we are doing this work in specific to ensure that we get the net back per product on maximizing economic value. So it would mean that we would receive above an index price realization for premiums for our specific product. based on our product's value.

Okay. Okay. No, that's .

Go ahead. Go ahead, Siobhan.

It's for both.

Okay.

Yeah, maybe just to follow up on that is would that then maybe mean that your sales volumes perhaps, you know, because you may, I mean, would your sales volume remain the same in terms of how you are focusing currently or would this value in use, you know, kind of affect your sales potentially given perhaps you may have to change your products back there and there?

No, it would not have any impact on your volumes. The only impact that it would have is on your revenue line. The thing is to see if we can get better prices due to the specific oil type and we can engage on that. So no, volumes will remain the same both for BlackRock and Kamoni, which is currently in the five-year plan.

Okay. And then my second question is around the domestic sales in the I&O division. I think my question, I guess, is you've talked about having signed a new contract to sell for domestic sales. Where would those, given that BESUC was the one that you supply to your domestic markets, So I'm guessing Kumani will be now the one supplying into that. And is that, I mean, my understanding was that your export sales, you know, you derived better revenue there versus perhaps on the domestic side. Could you just clarify as to why perhaps go via this route? Thanks.

But then for clarity, the contract on Biosuc was signed with AMSA, and it was for 1.2 million tons. We're sitting with a stockpile of 1.48 million tons. The only reason why we signed the contract with AMSA, and it is not at a brilliant rank, it's 800 rands per ton, where our previous rank per ton on Biosuc was 1221. So you can imagine it's 25% lower than our previous base price. That's the best option we could get to get some value for the stocks currently lying at Biasuk. The intent is never to supply the domestic market from Kumani, no. Kumani is an export mine and our revenue receiving from exports is much better. So yes, the domestic market will definitely not be supplied by Gmoni. This is an isolated matter in specific pertaining to BASIC being on clear maintenance and we having that 1.48 million pounds of stockpile.

And maybe just to come in together, I mean, just a bit of background. You remember that at some stage we said we don't have a long-term contract with our sole customer. that we were still busy in negotiation with them. And then the last basically delivery of oil was done in July, during which period we were still negotiating. And that was at the back of the November 24, where they announced the potential shutdown of the long-steel business. So that being announced November, they were still taking some product for us. And with us being in the mining, so that we can really, you know, deliver whatever quantities that are required. So we, at the back of hope that we were going to end time-to-time agreement, we still carried on and mining. We only drew the line on the same, you know, end of October. We said we cannot carry on. At that time, we've already accumulated 1.486 million tons. So we just have to basically sell this and then clean up everything and just go.

Okay. No, that's helpful. I have my one last question on two rivers. I think if I recall well in terms of your ramp-up profile prior to the Marineski project being put on K and maintenance, it was quite significant just in terms of what was anticipated then. And then if I look at the current ramp-up profile with the Moresky project being sort of pulled back again into production, this one, this ramp-up profile seems a bit softer. Could you just explain, you know, what's the thinking now versus before you put that particular project on KNMEC?

On the marine speed project, like we communicated earlier today, we started the decline development in October last year, a limited development, while finishing the feasibility study to recommence with the project. And we plan to complete all of that work as well as the review work and third party work by May. and we'll take it to the partners for approval with plans for restart date of the 1st of July. The current, we have, we've done the whole life mine model and optimized the mining cuts, et cetera, to get the best value out of the project and extracting the resources at the maximum grade. And with this latest ramp up schedule, the schedule that we've done, we ramp up to 200,000 tons per month over a three-year period. And so it's from July, three years forward, we have seven-state reduction. We are obviously now, obviously, from the fact that we've already got three levels developed, and we are proceeding down towards level four, of which two are already put. And so we do have quite a big head start compared to the original feasibility study.

Yeah. Tavena, two just actually made me aware. When you're looking at our PGM phone cards, The Murensky numbers are not there. So you can't compare this to the numbers, say, that we gave you in 2024, because we're still to include that once going through the government. Yes, once the governance process is done, then the Murensky guidelines.

I'm actually looking at the year before that, 2023, where at the time the Murensky project was due to come in online. And then if I look at your ramp up profile then, I have it right in front of me. I think from 23 to, let's say, well, from 24 to 25, you're going to move from 313 cores to 485 cores, or kilo ounces. So that's that big jump versus perhaps, I guess, the current softer profile.

Yeah, but that's because those numbers didn't choose the Marensky estimate and these ones don't.

Okay. I think we haven't disclosed in the current . We haven't disclosed in the current numbers the Marensky like the say that we still deliver that governance process. I can share that the work that we've done with the mining shed, that ramp-up is over a three-year period. I think it's substantially still in line with what we've got at the time before.

Okay.

So in the... And just to help you, I mean... Go ahead. Just to help you, just to clarify, I mean, remember what Jack said. Where we stopped in August 24, we were already at level three. And this is going to be a five-level operation, delivering 25,000 tons per half-level. So we need to develop to level four and to level five. And that is basically going to take us about two years to do that. And the third year that Jack is referring to is when we ramp up to steady state. So which is basically from the beginning, it will be a total of three years to get to steady state.

Okay, because I guess my understanding was that the bringing back of the Mariinsky project would take a lot less time than what I'm hearing now. I guess that's where the misunderstanding would have been. Thanks.

thank you you know i could maybe also just add to bellow that obviously um with the concentrated plant finished we could um sequence now and see exactly when it's the optimal part of the soil that costs very long um you know with a combination of building stockpile up front maybe for the first six months or a year and then only starting that so it doesn't mean that um if it's three or and but we're only going to start seeing ounces to do incremental additional ounces from rings can three years time you could as quick as within about a 12-month period, there's still actually additional ounces coming from Marines.

Okay. Thank you.

Thank you.

Thank you. We have a follow-up question from Tabohan of Investec. Please go ahead.

Thank you again, team. Just a quick one. On the two rivers production currently, yes, there were like some geological challenges faced in One Edge. I just want to just quickly confirm as to going forward, is the 3.09 head grades that was reported for One Edge sustainable going forward? Or if you could maybe guide us more on how we see that head grade improving as then the geological issues improve. And then in relation to the Two Rivers Marinski project, I mean, my understanding is that there's around 2.6 billion rand of working capital that needs to be put for it to then be able to get back online. With the current planning, I don't know if it's fair for me to ask if you could maybe provide with just some form of color in terms of how you're going to be spending that 2.6 over the next two years, if it is then what is approved. and then i think my second last question or my last question is mainly around uh project uh priority i just want you to have some like a greater character around your growth projects i mean you've got um you've got buconi you've got two rivers marinski project are you able to or even other mla and then there's also search also as well as part of your growth projects right are you able to explicitly rank those growth projects in an order of capital priority for us Yeah, I'll leave it there.

Yeah, do you want to comment on the grade? Yes, if I can go first on the grade, please. Thank you for the question. The grade of 3.09 is a fair outlook of what we could expect going forward. We've moved into an area with split reef, so the grade would no longer be as high as it had been in the initial phases of the project. But the monitoring of the quality of the mining is excellent, and I expect to see the greatest mining awareness. Thank you. Thank you very much. And then in terms of the project, yes, you are correct. I mean, we've got the trade-off studies that is currently underway in Gomati. recovering chrome, you know, from the 500,000 tons of coal that you mentioned. And there's another study as well on the chrome side that is taking place, a study basically to restart NACL. So that is basically complex. And you come to two rivers. Obviously, the project there that still needs to be concluded is the Merensky. And as Jack says also, we're basically at the tail end of completing that study. the numbers should be put on the table to see what are the returns, confirm the capital that is required, confirm everything, and basically the contributions that that project is going to bring to the river's mind. And then we also mentioned that we already completed the DFS at Bukoni. We're doing the independent review, the party review. We do the value engineering, sum up the numbers, And these three will have to be ranked in the order of priority, and a investment decision will be made at the right time in terms of how we stagger them. The search, where we are, the most probably say one can say maybe the best guess is come end of June, we should really have the outcome of the pre-facility study, where after that will really transition to the definitive facility study with some regulatory approval process. We see that process. being concluded most probably the best case towards 2029. And then if everything else worked well, that mine should really go into execution around 2030. So if you look at the project staggering, the surge is still about, last year we used five years. It's about four years now from execution, unless if things are really expedited, you know, in terms of approval and cost. We've also seen the response from the, from the Canadian government in as far as expediting some of these critical mineral projects.

I would also just add to the point that I gave on the capital. I would just in reference to the commodity, the volumes that we are looking at from the mining is less than what we did before. And also the fact that the mine was a producing mine and it was placed on care and maintenance, would require to put that mine back into operation. It's not as substantial as some of the PTAs we have available in the greenfields mine. So it's certainly, I think, a lot more affordable and depending on how the economics take up, because it's an open pit, it ramps up production very quickly. It should become potentially a cash positive generator. in a much shorter period of time compared to when you have a coning project where there's a new concentrated plant that needs to be involved in substantial underground development. And with regards to marine scheme, I think the biggest amount of money that would have to be spent is on the mining, specifically building working capital and stockpile to consistently be able to feed them all. And with two of this is substantially from a balance sheet, All policies have said two of us would be able to fund the full capital required to complete and ramp up marine scheme from the strength of its balance sheet and from its cash flow generation without requiring additional funds from the two partners. And that then really just leaves the company that we would have to see, and we're busy with finalising that work, but we've also said as we are looking at a much smaller study, I mean 20,000 funds, We believe this is the right size, which strikes the right balance between capital required as well as sufficient volumes to ensure sustainability and cash competitiveness from a unit cash cost point of view. And we would be able to provide further guidance on that cash flow required to support that project in the next results issue.

Is your question answered?

The ranking part is the one that's not answered.

Yeah, that's the things that I got. We're sort of giving you detail on what we're doing as a project, but we're not ranking. But if I had to summarize what I think Philip and Jacques are trying to say is that if you look at the current project pipeline, part of these projects are actually still in study phase. And until they're completed and you've got board approval, it's very difficult for us to say, you know, we're going to prioritize project A over project B, right? So that's number one. And I think Jacques was also just trying to illustrate to you that some of the projects are actually going to be able to self-fund because they'll be generating some cash themselves. And some bigger projects like Bukoni and Surge, Only once we've got the information in front of us will we be able to make a decision going forward. Because remember, your capital allocation model is continuously evolving, and it would be very premature for us to say we're prioritizing this now, when in two, three years' time, once the studies are done and we've got board approvals, the world has changed. So yeah, so we can't give an explicit project ranking right now specifically because a lot of these are still in study phase and don't have board approval.

And as Judd said earlier on, most probably when we come to the next reporting cycle, we will be having, you know, detailed outcome, and the decision will have been made to be able to update the market in terms of where we are.

I will also just add, as part of this analysis, we're obviously doing very detailed cash flow schedules for all of these projects. And then we also look at it on a portfolio view, where we look at from an arms point of view, what is the full cost? cash flow coming in from the operations, what would be the cash required to finance each one of these projects, as well as our other commitments, you know, with regards to returning money back to the shareholders in the form of dividends that we are committed to. So we will be making a very prudent decision in terms of which project will start first, and also maybe we don't do all of them at the same time, just because of our affordability point of view that we do stagger them. And then maybe just one last point It's absolutely no decision made at this time. We're also busy with the study book, and we will review the results as well as the cash flow response and portfolio review very carefully before a recommendation or decision is made.

Thanks, Steve. Maybe to finish off, which is my question is maybe around balance sheet, right? So your balance sheet has strengthened to now currently with net cash of around 8.4 billion. And then I'm also then taking into account of the how many hedge collar. So one can possibly consider that I'm not an accountant, but like a lazy balance sheet. So I'm trying to understand with the excess cash that you guys have, because of my view, what is management thinking around using that cash for future growth? So that's what I'm trying to understand. in your projects, the ranking, and also the prioritization in terms of capital allocation? I don't know if I'm making sense.

No, thanks, Deva, for that question. No, so, yeah, I might have a different view from yourself in terms of it being a lazy balance sheet, but be that as it may, that's okay. So I think, so I mean, you're quite right, our balance sheet has strengthened from June, where we are now, you know, sitting, you know, still in a relatively strong net cash position. But the question you're asking, that was actually quite valid and quite, you know, one that we actually deliberate, you know, amongst ourselves with. And specifically knowing that, you know, we've got these projects, we've got this project pipeline, We have, you know, ammunition in terms of, you know, raising additional funds through using Harmony Color and, you know, but, you know, at the same time, still looking at the projects that are in the pipeline and seeing those that can, you know, generate cash as quickly as possible because at the same time, you do not wish to be strained or find yourself in distress in terms of, you know, having to, on a commitment and you don't have enough cash. So as, you know, Jacques was saying that, you know, you really do need to look at it from a portfolio perspective. Yes, you're sitting on cash currency, but there is a pipeline. But, you know, there are also other moving parts where, you know, we're looking at the cash coming in from SMAIN, you know, in the form of management fees as well as dividends and, you know, all the other commitments. And then it's really just quite a tight balancing act that, you know, we're going to have to make. So, you know, that's also the balance sheet will also be informing, you know, the decisions that we make, you know, in terms of which project we're actually going to proceed with, what is palatable for us, and, you know, what we can comfortably deliver on without straining the balance sheet. And again, if we find ourselves in a place where, you know, where, you know, we decide not to go with any projects, then, you know, instead of sitting there on the cash, we would definitely look at returning that cash to the shareholders. Because remember, we look at the cash and we say, okay, how can we generate a return more than, you know, that cash that's sitting in the bank? And that's where they will deploy that cash towards sustainability and get you as a shareholder a better return than our weighted average cost of capital. But if not, then the default then say, okay, then let's rather then return to shareholders. I hope that helps a little bit.

Thanks, Sue.

Thank you. Our next question comes from Andrew Snowdown of 91. Please go ahead.

Hi there, guys. I am seeing you next week, but I thought I'd ask this question now anyway, and it's just really following on on the previous question. The capital allocation slide that you showed, was that the order of priority in which you're looking at things, or were you just saying these are all the things that are considered? Because it is quite an interesting ordering which is displayed. I guess that's the first question. And then the second one, maybe you can talk me through why you put the collar in place in the first place if you're not actually using it. Again, to the previous point, you're sitting on... I'm in the same camp. It's a lazy balance sheet. 18% of your market cap is now sitting in cash. You're also sitting with significant value for your harmony stake. And yet there doesn't seem to be any real... initiative by management to try and unlock any of that value. So maybe you can just talk me through some of that, and again, in line with that, just looking at where you're ranking things like share buybacks, and maybe you can just remind us just how much you're allowed to buy back at this point. Thank you.

Thanks. So we just, the first question around the capital allocation guidelines. So the way they are documented, it's not in order of priority. I think we do have a footnote at the bottom of the slide where we do say that. And then secondly, the question around . I can speak to that.

I think that all of us put in place the time and the strategic intent behind it, which I'll share now. But at that point in time, specifically on our PGM and basket prices, we're a lot more depressed. We're talking about March, April, last year. Even though it was our view that the metals were in deficit, it was due to the stocking which was substantially above surface. We haven't seen the metal prices. We're not reflective of the fundamentals of the three metals, specifically platinum, palladium and ruby. So the authenticity contained behind the colors, there was at that time even a strong rally up in the gold price. Harmony and share price responded quite positively. And we said, given those growth ambitions that we do have, the uncertainty around the PGM prices, how long it will take before it starts to recover, It may be good to just try and strengthen the balance sheet by having some fixed security in place that if we want to, for instance, in the future, deploy some of our cash on some of these growth projects that could be value created and generate cash above our own weight to damage causal capital, we don't want to get into a position where you draw down your available cash on the balance sheet and then the commodity price weakness continues and you start to come under balance sheets in a stress. So in that case, it's good if there's a facility available, maybe linked to a revolving credit facility that you do have access to. So it's really just capitalising at the time on the liquid, how many prices that we saw. And the benefit of my side, it's sort of rallied even further beyond that. But in the context of where we were with the commodity prices and not knowing exactly how long it will take specifically for the PGM prices to respond, Where we are now, we still think it's a good facility because that strategic intent hasn't fallen away. So if we do receive some of these projects, it might still be good to put a revolving credit facility in place. We will obviously use the cash first because that's a lower cost of interest compared to paying interest on the RCF. But at least you've got access to that liquidity on a very short period of time. if you need it. Because as a holding company and a commodity producer, especially in today's world, commodity prices are very volatile, you know, and you need a bit of headroom to make sure that you've got, you can cover yourself in any eventuality that may happen. I hope that sort of provides a bit of clarity. And the only reason why we haven't used the collar yet is because we haven't finished the studies yet. And we will do that over the next couple of months. And as soon as we make a decision, Then we will look at what is the most appropriate way to utilise that strategically to protect the balance sheet.

Maybe just a very quick follow-up on that, because your actions and the outlook comment don't seem to be marrying up at the moment. Talking about a much stronger second half versus the one you've just reported, and if we look at what the basket price, in particular for PGMs, has done since I know I think there's a consensus for you to be lower, but it's still holding up. The RAND, yes, was stronger, but it's now been weakening a little bit with the events in the Middle East. The sense is you should be generating very significant free cash flow over the next six months, which puts you in an even stronger position. um so maybe you could you know do you agree with that view first off you know what are your concerns at this point because the actions by the company don't seem to be marrying with the outlook you know just how good an output do you need before you start utilizing that significant cash balance i guess that's the question if i can answer that the um you're quite right i think our outlook is also uh

is very much in line with some of our peers in the industry that has made with reducing. In the context at least of the PGM prices, the prices will remain stronger for a longer period of time, which is positive, and that the world, specifically from our two operations, two reverse as well as midi-cross, should be, at least current Boston prices, quite strongly cash-generated. However, we've seen also quickly things can change. with the volatility. I mean, we have been wrong in the past where what we've got and all that outlook and it doesn't transpire. So that's why we do think that it is prudent to, you know, keep a certain amount of cash or, you know, access the cash in the form of RCA available and that you don't overextend yourself. But the intent is once these projects are completed, if they are properly evaluated, to make a decision on going forward work then or not, and at that point in time, you know, we've been in a much better position to see what resources do we need from the balance sheet to be able to support those projects.

Sorry, carry on. No, I just wanted to add something to what Jacques said. I think Someone said it on the podium earlier. Yes, you know, the platinum operations will be generating cash, but, you know, that won't necessarily come through to the center. That cash will be used to fund the requirements of those businesses. On TrueRivers specifically, on Merensky, so they, you know, depending on what that deal is, you know. We'll go towards that, and then we'll do what, as well, is, you know, increase TPEX requirements that, you know, that cash, the line as it is, as it's generated, that cash will go towards funding that. I just wanted to add that.

And, Andrew, the last question was on the issue of the shared biobits. If you did ask a question as to whether we consider doing another share buyback, I mean, as you mentioned, it's part of the thing that we consider whenever we have a capital allocation, you know, review decisions to say which ones come first. You know, where we are now, as Jack mentioned, in the next two months, there's some serious decisions that we have to make in terms of.

and we do take note of what you raise when we call Super maybe one last one as you can tell we're going to have an interesting meeting next week can you maybe give me a sense because I'm sure you've done the calculations at current spots the sort of free cash flow that you'd expect to generate or is that not a number you're willing to share

No, is that free cash flow in CGM or in group labor?

Either way, just an indication because, again, from what we've seen so far and what things have done, if anything, the one number that surprised everybody is just how strong cash generation is. My worry is that management is coming across a little bit too conservative given the current market conditions. Hence the question.

We have to get that information, so can we give it to you when we see you next week?

100%.

Or we can drop you an email once you have the number.

Great. Thank you. We have a follow-up question from Tebohong of Investec. Please go ahead.

Sorry, guys. Just a quick one, right? So if the cash flow from the PGM business will be funding these projects, now my question is around dividends going forward. I mean, your dividend policy is based on dividends received. Ferris outlook seems muted, so you're not expecting as much dividends received from Ferris as historic levels. And then now the cash from the PGM business, all of all, essentially, I'm assuming that now, because we'll be funding this project, it will then not be going to dividends to then African Rainbow Minerals. So how should we then look at dividends going forward for ERI?

We are committed to basically giving cash back to our shareholders, and it's a capital allocation decision, but it's a commitment that we have made in the bigger scheme of things. As we weigh this project that we need to advance, we also basically take into consideration the dividend payment as well.

Maybe I can add in general. So our dividend policy remains that 40 to 70% of the dividends are received from the underlying operations. So as you point out, you know, we might not be expecting and we're not expecting actually before this rally in the PJM market price, we're not expecting dividends coming through from those operations for the next three years. So thankfully we're in a better place. But if, you know, those operations are able to fund their requirements and there's anything that's left over, that will obviously be given up to and to our partners. But I think what you can, you know, model if you need to model is, you know, work with that 40 to 70%. You know, in a couple of years, we have gone above that range, and that is when, you know, we, you know, looking at, you know, the cash that we're actually sitting on, we say, okay, actually, we can afford to go beyond that range, and we made that decision. We've made it a few times quite often. So that's just to be on the conservative side, still use that 42% to 70% as a guideline for the dividends that are within the .

I think also, maybe just to add on that, That just sort of links into the question that Andrew asked before. At current spot prices, and we'll run the numbers, but sort of my assessment is that if a current spot price prevails in the budget, the cash generated, cash amount of cash that will be generated about as well as in the before was quite substantial. And I think that most likely will be more than what the surplus cash available in the up to the form of dividends to our .

Yeah. And equally, as Ferris is facing challenges due to pricing and cost, and while we try to turn around this business, we can .

Thank you.

Ladies and gentlemen, with no further questions in the question queue, we have reached the end of the question and answer session. I will now hand back for closing remarks.

Thank you everyone for dialing in. We appreciate the participation. We will be on the road next week. If you've got any more questions or you see that we maybe didn't answer some of your patients to your satisfaction, please feel free to call me and send an email and we'll endeavor to give you accurate answers as soon as possible. But thank you very much, everyone.

Thank you. Ladies and gentlemen, that concludes today's event. Thank you for joining us. Anyone else, connect your lines.