Jupiter Mines Ltd

Good morning. I would like to welcome everyone for the Jupiter Mines Q2 call. Today with Jupiter Managing Director and Chief Executive Officer Brad Rogers and Chief Financial Officer Melissa North to provide a brief update on the second quarter of the 2026 financial year and then we will open up questions from callers. Thanks Brad. Please go ahead.

Thank you very much. Good morning. Thanks for joining the call this morning. So we released our December quarterly to the market this morning and I'll just provide as usual a few overview remarks trying to tease out what I think are the key points that are contained within that quarterly activities report and then at the end of the remarks I'll turn the line over to any questions. So those who have had the opportunity to review our quarterly will see that the second quarter of the 2026 financial year reflected another strong operating result. Sales and production both up quarter on quarter and in line with our full year targets. Unit costs in US dollars slightly better as well quarter on quarter and that was a great result particularly because the rand against the longer term trend actually continued to strengthen in this December quarter which was obviously a headwind for USD reported costs. Cash also was steady quarter on quarter at quite healthy levels, notwithstanding we had the usual semi-annual payment of taxes and royalties in the December quarter, so that was a good result as well. From a safety perspective, we unfortunately had two minor lost time injuries in the quarter. Both of those injuries were in the nature of slips and trips. One worker tripping over an exposed rock and sprained his ankle and the cleaner sustaining some lower leg injuries whilst flipping as well, whilst conducting her duty. Both of them, as I said, lower leg soft tissue injuries and our team at site, as you'd imagine, is responding with appropriate medications and communications around those injuries which unfortunately remain a risk in any mining environment and so a lot of that is about remaining diligent about those risks and having proper lighting and those sorts of things. From an operations perspective our sales for the quarter were 867,619 tonnes sold and that figure was four percent up on the previous quarter and 27% up on the prior corresponding period in the previous financial year. Production also was quite strong 840,688 tonnes and that was slightly up quarter on quarter and 13% up on the prior corresponding But there was a lean towards high-grade oil production. So less low-grade oil production in the quarter, more high-grade oil production. Obviously, that sets us up for a good mess of sales in the forward-looking quarters. The high-grade oil production was actually 10% up quarter on quarter, whilst the overall production was about 1% up quarter on quarter. Operating costs, as I mentioned a moment ago, were good. We're sort of in range and the costs were $2.24 USD FOB per DMTU for the quarter. That's about where we were sort of guiding that we expected to be. However, we have had a strengthening RAND, which is a major factor in reported US dollar costs. And so actually being slightly down as we were quarter on quarter with our costs is a particularly good result in view of the strengthening RAND. Land logistics were basically flat quarter on quarter. Mining was slightly down, 5% down quarter on quarter, and part of that was seasonal rain that we expect to see in the December quarter, and we usually see it around this time of year. Manganese prices and market prices more broadly were quite supportive during the December quarter. As we sit here today, FOB's spot for the grade of ore that SIPI sells is $3.68. per DM to you and at the end of the December quarter it was $3.46 so we improved spot 30 September $3.36 to 31 December $3.46 and today $3.68 so we've seen the strengthening of Manganese market prices through that period of time and that's continued post quarter end and I'll come back to why that has been the case for the moment. You'll see in the quarterly activities report that average realised prices were 6% up for the December quarter compared to the September quarter. Trade rates also slightly lower, $25 per tonne USD on 31 December 2340. Today we've been range trading for the last sort of three or four months in a reasonably tight range of about $23.5 to $26 a tonne and that's where we'd expect to be or hope to be in this sort of market, so also quite favourable. Manganese ore stockpiles in China which we've talked about are a good leading indicator for where prices might be going hence why we included tracking of that particular metric in our coordinate activities report. Remained at around 4.4 million tonnes of manganese ore at Chinese ports in stockpile today. We have been around that level for much of the last six or nine months or so and so you'll see in our quarterly activities report averaging around that number and it's still that number today at the end of January. You'll also recall in some of our previous communications that we have called out that the port five-year average proceeding the last nine months or so has been about 5.8 million tons of manganese ore at Scottpile at port in China and so that 4.4 million tons remains quite a bit lower than the recent average that we have tended to see and that's also supportive given manganese prices have been a bit higher and given over the last few months exports of manganese ore have been reasonably elevated from some countries that ore has been consumed by downstream alloy demand which has been relatively robust for this last period of time. There's a few things going on there. The stronger Chinese yuan against the US dollar, obviously, is supportive for USD reported nascent ease prices, so that's part of what's going on. There's also some newer... renewable energy powered alloy plants in China that have greater levels of efficiency and that's also been supportive and we think why there's been quite robust downstream alloy demand recently and then very recently there's the usual pre-Chinese year stocking perhaps going on. So even though prices have been up and from Chippy's cost position we think reasonably supportive. We're quite happy with the trend and where they sit today. And at times overall market supply has been reasonably elevated as well. That all has been consumed in the market and that's quite evident when you have a look at the levels of manganese or its stockpile in China. So I think you'd say a balanced market at the moment. My understanding prices have picked up quite nicely, albeit fairly gradually over the last month or so. The trend is pleasing. Onto financials, Chippy's EBITDA was down 19% quarter-on-quarter and that was mostly due to FX losses with the strengthening rand, as you can imagine. Whilst it's down quarter-on-quarter, the actual dollar figure isn't that material. If you have a look at the EBITDA dollars, it's sort of within the range of where Chippy trades in this sort of pricing environment cash at chippy as I mentioned earlier on basically steady quarter on quarter and at healthy levels around 137 million Australian dollars at the end of December and that's down 2% from the from the end of the September quarter but we did have to pay taxes and royalties in the period. It's a semi-annual payment so there was good operating cash generation and that resulted in a good ending cash that typically notwithstanding the payment of taxes and royalties in the period and cash at the Jupiter level also basically steady quarter on quarter. You will have also seen this morning perhaps that we updated the market referencing a market announcement by Exaro yesterday in South Africa that Exaro is now unconditional in respect of the acquisition of certain Mangleese interests from InstaBitly Holdings and from OM Holdings. What that means, according to the XARO announcement, as reflected in our announcement this morning, is that XARO expects to complete the acquisition of those interests on or before the 23rd of February, so a little under a month away. On that date of completion, what that means from a Jupiter perspective is that XARO will join Jupiter as our co-investor at ChipX. under the same shareholders agreement that's always been in place there. Exaro is buying into the same shareholders agreement and taking out the existing shareholders and subsequently an OM holding. So that's what it means. At an asset level Jupiter continues with Exaro from that date to exercise joint control over the asset and the way that the asset has been governed very successfully over the period of this operation will continue to be the case. At Jupyter what it means as summarized in our announcement is that Exaro will join Jupyter as our largest shareholder. They will be acquiring 19.99% of Jupyter's shares from Incidentally Holdings and that trade will complete on that same date, 27th of February or earlier. That's also unconditional. The price that Xero has agreed with incidentally to pay for those Jupiter shares is in rands, 3.69 rands per share. and obviously it's exposed to the foreign exchange rate but as an indication the Australian dollar price today is a little over 33 cents a share and that compares to our trading share price today on our last list of about 28.5 cents per share. So in summary, just bringing it back before I open the line for questions, strong operating results from Chippy, sales up, production up, unit costs slightly down and cash at steady healthy levels. Our interim dividend 31 December will be decided in the next month. You'll be familiar that it goes through a two-step process of Chippy first, recommending a dividend to shareholders and once we have that Jupiter will communicate that to the market so that's also to come in the next month. We have seen and we continue to see a relatively supportive market in terms of Manganese prices levels of manganese ore at stockpile in China and also strike rates. So support is here for the December quarter relative to the preceding quarter end and continuing that trend post quarter end. And then finally Xaro communicating that important news yesterday and relevant for Jupiter in the ways that I've mentioned a moment ago that in a little under a month say we'll be joining Jupiter as a co-investor at Chippy and also joining Jupiter as our largest shareholder and as we continue to say Jupiter is very welcoming of that development we see that as being really supportive in terms of value of growth at TIPI, but also we share a view with Exaro around growth rate consolidation in the Kalahari, and so we're looking forward to welcoming Exaro as a co-investor and working to give them that shared view strategically. Hopefully that overview's been useful. I'll turn the call over and see whether there are any questions on the line.

Thank you. If you wish to ask a question, 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 hand to ask your question. Your first question comes from John Schultz with Argonauts. Please go ahead.

Hi, Brad and team. Quick question on TIPI. Obviously, it has its own management structure within place. With Xaro coming in, has there been a change to that management structure, or is it all running as per normal?

Morning, John. Thanks for the question. No change at all. The same team that's been in place there will continue. And there is, as I mentioned, no change in the shareholders' agreement and the way that Chippy is governed and that also pertains to key management appointments. So the way that it is run where both shareholders at Chippy need to agree on important matters like key management personnel will continue to be the case. So there are ways that we absolutely foresee that Exara can add value to Chippy's operation and Jupiter will be absolutely supportive of that and an obvious one is around group procurement prices, things like that. But the key point here is that the partners need to agree that's been the case to date and will continue to be the case and to answer your question directly, there's no change in the management personnel, and there's no change that we're anticipating. There will obviously be a change at the board level, with ISARO people coming in at completion, replacing previous, incidentally, appointments. As you'd also imagine, in anticipation of this change coming, we'll provide some more information at completion. We're working closely and well, both with Biddley and with HRO, to make sure that's a smooth change. But the operation itself will continue to be led by Ezekiel Luluhare, who's been doing a great job up until now, and with his team, they will be continuing unchanged.

Excellent. And then I guess I get the keys at the end of Feb, but there's a board meeting before that to discuss the distributions, which will lead into Jupyter's first half Divi as well. So that will all be in the existing structure with Mac and VLA instead of Exaro. Is that correct?

That's correct. Yeah. So that's, as I think I might have mentioned when we first talked about this deal in May of last year, Dividends, as is ordinarily the case in this sort of situation, are a permitted linkage, and so since any dividend that's declared by Chippy will be a 31 December pre-completion matter, that will be something that's decided within for Bitly, just as every other dividend per se.

Thank you very much. Thanks, John.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone. The next question comes from Adam Baker with Macquarie. Please go ahead.

Hi, Brad. John, I've got a couple more questions there, but I'm wondering if you could just touch on the Manganese market at the moment, noting that you're seeing spot prices increase to $4.32 towards the end of January. As you noted, the stockpiles in China are pretty low at the moment. Do you think this positive momentum can continue throughout the year and what else are you seeing on the market side of things?

Yeah, morning Adam. Thanks for your question. So I'd say that downstream demand has been a bit more robust than market participants probably anticipated so that's been a good thing that it's meant that as I made in my opening remarks that even though supply times from major market participants including ourselves has been quite high through that period of time the market's received better and the clear evidence of that is that the stockpiles have traded in this very tight range of 4.4 million tons from about April May of last year. So most of the forecasts that I look at our forecast is the usual sort of ups and downs that you might see and I mentioned that right now you would typically see some restocking or stocking ahead of Chinese New Year and that's a temporary demand factor for example and then you can have that easy off post Chinese New Year as the market consumes that manganese oil. It's an open question around whether that's actually going on right now. It is a typical seasonal effect but I think if you take out those normal seasonalities, most forecasts that I'm looking at have been revised upwards from where they were previously. And part of that is the factors that we've mentioned. Stronger Chinese UR is supportive. Lower manganese or stockpiles in China, also supportive. There has also been some supply impacts, which has lowered supply out of certain countries over the last six months or so. So that's an open factor. There's some conjecture about downstream silica manganese alloy stocks, although we don't have any data on that. I think some people think that there is unidentified, unquantified stocks of alloys downstream beyond the plants themselves, perhaps in factories. So that's a potential downside factor. But I think if I boil all of that up and have a look at the market analysts' forecasts for the next six months or so, they're higher than they were previously. And that's partly informed by the factors that I've mentioned. And partly informed, I'd say also, that prices that have prevailed and have continued to tick up have outperformed those previous 4,000. So I think people have gone back and reviewed that. We, with our level of costs, are pretty happy with where things are right now. SIF and FOB prices have gone up and although there's been certain months where ore supply has been higher. It hasn't gotten overall on average out of control. So it feels reasonably balanced both on the supply and the demand side and you've got some FX factors factoring in. And then shipping rates have been quite good as well. They've traded in a you know, in a desired range, I'd say, but in a fairly tight range as well. So, yeah, we like the trends. We like where it sits right now. And I'd say there's, on balance, probably supporting factors for around about where we are right now, but also noting you do have some temporary factors of pre-Chinese year, post-Chinese year, et cetera, but the overall trend is more positive than perhaps people would have thought six months or so ago.

Thanks, Brad. I don't have any other questions. Thank you. Thank you, Ellen.

Thank you. Once again, if you wish to ask a question, please press that one on your telephone. We'll now pause a moment to allow for any final questions to register. There are no further questions at this time. I'll now head to Brad for closing remarks.

Thank you very much. Thanks all for your participation today. Hopefully those remarks have been helpful and we've received a very strong operating quarter for December. Helpful market, as we've just discussed, and important development that we've all picked up on in relation to Xaro as a sort of near-term conclusion as communicated by that company yesterday. So thanks again for your time. Of course, we'll talk to you soon.

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