Matt Jarvis: Good morning and good afternoon to all investors and analysts, and welcome to all other participants who have joined the Jupiter Mines quarterly call today. As you will now be aware, I have taken over from Brad Rogers as the Interim Chief Executive at Jupiter Mines. Brad will remain as Managing Director until the Jupiter AGM later next month, and thereafter, he will continue to advise on strategic initiatives for a period of time. I personally have been involved with Jupiter since 2022 and joined the company on a full-time basis in 2024. I do have a long-standing history in mining, ostensibly with De Beers, BHP Billiton, and South32, and have been extensively involved in the manganese industry for over 16 years.
Matt Jarvis: Tshipi é Ntle Mine, as you know, is the world's single largest manganese mine globally, one of the single largest globally, rather, and consistently produces around 3.4 million tons of direct ship manganese ore annually. For those of you who had the opportunity to review the quarterly report released this morning, will see that the first quarter of the FY27 financial year has again proven to be a solid period of production and performance for Tshipi, as well as Jupiter.
Matt Jarvis: However, I would like to take the opportunity to summarize some of the key outcomes and highlights contained in the report for the period ending 30th September 2026, after which we will provide the opportunity, as mentioned, for some questions and answers that you may require or have. On the safety side, Tshipi recorded two minor lost time injuries due to injuries sustained during an isolated storm event at the mine.
Matt Jarvis: These were minor lacerations, but did, however, result in some medical attention and time off work being required. However, the nature of these incidents did not materially impact the overall total recordable injury frequency rate, which is an industry standard measure of the total number of recordable injuries per million man-hours worked, which remained stable at a low 0.37. On the production front, for the first quarter, approximately 238,000 cubic m or roughly 875,000 tons of graded ore was mined from the pit. Although this was about 9% below the prior quarter, it was above expectations and 19% higher than the previous corresponding period quarter.
Matt Jarvis: This enables operations to continue to build on the run of mine and product stockpiles, which are strategically important and kept to ensure both smooth and continuous processing, blending, and shipments of ore, and continued processing in the event of unforeseen disruptions at the mine, such as prolonged or extreme weather events. This positions the mine strongly going into the next quarter. From that processing perspective, the mine produced 820,000 tons of predominantly high-grade ore for the quarter, which was a little lower than the previous Q4, but in line with the prior corresponding period, Q1 of FY26. It is important to highlight that quarterly production, however, and sales forecasts will vary on a quarter-to-quarter basis in line with operational planning, which takes into consideration key aspects such as mine and plant maintenance schedules, seasonal and weather expectations, and end customer demand patterns, et cetera.
Matt Jarvis: The ore processing was well ahead of the plan and enabled Tshipi to continue to utilize and benefit from additional available lower-cost rail export capacity we have. To this end, 880,000 tons were transported to ports utilizing the ore processed, as well as excess product stock at the mine. This is in line with the previous quarter and 2% higher than prior corresponding period quarter, and again, well above plan, which Tshipi capitalized on available excess rail capacity not utilized by other industry participants. Approximately three-quarters of our ore was transported to and shipped from South African ports, and one-quarter to our Lüderitz export channel in Namibia. No roading volume was required for this quarter to any South African ports.
Matt Jarvis: To that end, 850,000 tons of high-grade ore was sold, which was 1.3% higher than the prior corresponding period, but 10% lower than the previous quarter, and again, well over expectations. From an operating cost perspective, unit costs were slightly higher on a quarter-on-quarter basis at $2.51 per dry metric tonne unit on a free on board basis. This, however, was driven largely by weakness in the US dollar over the time. Over that period, the South African rand strengthened over 5% from around ZAR 16.40 at the start of the quarter to below ZAR 16 per dollar during the quarter, but averaging 2% stronger at around ZAR 16.25 over the period. Other impacts on costs were generally inflationary in nature, and with direct mining cost per ton being 1.7% lower than prior corresponding period, in line with FY26 unit costs we saw last financial year.
Matt Jarvis: Tshipi remains well-positioned from a cost perspective and is optimally designed with streamlined operations and processing, as well as rapid rail load-out facilities. This enables Tshipi to continue to produce consistently and efficiently throughout the year, which helps ensure operating costs remain well-controlled. Where input costs are largely outside the management's control, including areas such as logistics and freight, Tshipi management ensure that broad logistics optionality is maintained as far as practically possible, and that the most optimal logistic routes are favored and utilized to derive the maximum value from these channels. Tshipi management also continue to seek cost-efficient and beneficial opportunities in the logistics sector. On the macroeconomic front, manganese prices of around $3.57 free on board were realized for the first quarter, which was encouragingly 12% higher than the $3.18 achieved in the prior corresponding period, Q1.
Matt Jarvis: However, this was 12% below the Q4 FY26 prices of $4.05. It is important to note that manganese prices are relatively cyclical in the year, with notably strong buying and increasing price trends during the first half of the calendar year, and softer prices in the second half. Encouragingly, unlike the second halves of 2023 and 2024, manganese prices have not materially softened to around or below the $3 per DMTU level, but have subsequently held well, remaining above the $3 per DMTU level for 2025 and 2026. This does indicate that there is likely an industry-wide cost floor support being reached at these levels, and higher-cost mines, particularly in South Africa, are unable to profitably operate below these levels. This removes marginal supply from the CIF market and supports the price at these levels.
Matt Jarvis: On a CIF basis at the ports in China, prices averaged about $4.44 for the quarter, which is up 15% from the prior corresponding period of FY26 Q1, of $3.86, but are below the $4.95 for the Q4 of the last financial year. It is important to see that current spot prices are around $4.28, and the current FOB prices are around $3.24, and these have remained stable at this level since early August. Historically, since 2023, notionally, manganese price floors have climbed 16% from a low of $2.75 to what we are seeing about $3.18 today. We have seen some pressure in freight rates due to the oil price climb, and these have climbed from $33 in June to about $34.14 in September.
Matt Jarvis: While the increase in freight rates has been shared between consumers and producers, the increase in freight rates has kept the manganese prices within a tight range. Freight rates are currently sitting around $37.40 per ton in October, with the high oil price persisting. Financially, Tshipi continues to fare well, given its robust cost structure and position in the global manganese cost curve. EBITDA of around $22.6 million was generated for the quarter, and while this was lower than the previous quarter, it was due, for the most part, to lower manganese prices and compared to sales volumes in the previous quarter of FY26, as well as increased freight rates that we have experienced.
Matt Jarvis: Total cash attributable to Jupiter, which is cash held by Tshipi and by Jupiter, decreased by $21 million between Q4 and Q1 to $53 million, following the payments of at least a 0.75 cent dividend, as well as cash consumed by working capital at Tshipi mine. The total cash for Tshipi stood at just under ZAR 1 billion. In all, this rounds off a really good operating quarter for the company, and we look forward to moving into the Q2 on a similar footing, and producing strongly as we have planned and have done in the last couple of years. I will leave it at that, and I will open the floor for questions, if I may, from anyone who may seek some clarity on the results we have presented today. Thank you.
Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. We will now pause a moment to allow for questioners to register. Once again, if you wish to ask a question, please press star one on your telephone. We do have a question from Chris Noronha with Noronha Family Trust. Please go ahead.
Chris Noronha: Good morning. My name is Chris Noronha. We are shareholders through our family trust. I am calling you from Perth. I was wondering whether you would be kind enough to elaborate. I understand the significant increase in mining throughput. Could you elaborate on any other value-added applications to the output? For example, LMR batteries, which are being developed in the US. Let us have your thoughts on value-added pathways which the management is thinking about.
Matt Jarvis: Chris, thank you very much for that question. Indeed, as you may have seen in some of our releases, we have essentially been looking at a battery project for a couple of years, particularly around manganese sulfate. We have identified this as a potential value-add to the business, albeit the volumes of ore that would be required for batteries is around 100,000 tons versus the 3.4 that we sell. What we are seeing at the moment is a fairly limited drive in the manganese space for batteries. I think the automakers are again facing sort of unusual challenges between what types of batteries they use and how quickly the EV industry grows. So, what we have done is we have developed a manganese sulfate pilot plant that has successfully treated our ore to produce manganese sulfate.
Matt Jarvis: But we have continued to monitor the industry in terms of its growth and development. As we will note, when there is a large uptick or a sort of increased demand for manganese sulfate, we will continue to progress that project. But we are unfortunately not seeing that in the industry at the moment, where there seems to be a fairly muted demand for EVs going forward at the moment.
Ian Murray: Chris, if I can add to that for you. On our website, there is a page on EV batteries. As Matt said, we have done a lot of study work. We know that effectively our byproduct, the low-grade material that gets stockpiled and not sold to go into the steel business-
Matt Jarvis: Yeah
Ian Murray: that product is perfect for EV batteries, for the manganese sulfate. We have done all the test work. We know we can do it, but we are not going to spend our shareholder dollars on doing further work. We are looking for partners in the industry who will come in and use their balance sheets. We have got the product, we have got the know-how, but we do not want to spend our shareholder dollars in chasing that. We would rather partner with the people in the industry. Up to now, the industry is getting sufficient product, because the volumes are quite very small relative to what goes into the steel mills. But we are ready to move should we find the right partner.
Chris Noronha: Okay. Thank you. As a follow-up, I know we are talking in broad strategic terms, but would you be kind enough to elaborate on any either organic or inorganic opportunities to scale up production, either through internal mechanisms or through joint ventures, and your thoughts on valuations?
Matt Jarvis: Chris, that is always an interesting path to sort of look at in terms of Tshipi, and we have put this as part of our strategy that we would like to continue to grow organically and through potential acquisitions of operations or businesses in the future. Keep in mind, as you are aware, Tshipi is a fairly large resource, and it has got over sort of what they say 100 years, rather, of life at current production levels. So, we have a fairly substantial resource that we can work on. One of the challenges we do face in the organic growth in a mine like Tshipi is our equipment is designed for around 4 million tons of ore. So, we can easily grow sort of another half million tons without much capital costs or expenditure to do so.
Matt Jarvis: That is something that I think the mine continues to look at and monitors, especially from an industry perspective. The challenge is obviously the logistic side down to port, where there is a limited rail export capacity, and any use of surplus ore would have to go by truck, unless, as we pointed out, there is opportunistic rail that we can get for that. So, we certainly are looking at ways of incrementally increasing our production at the mine, which is easy to do from an operations perspective. We are just working with the forces that we have to deal with in terms of logistics to ports. Again, in South Africa, the Tshipi Mine is located next to a large South32 mine called Mamatwan, which is of equal sort of scale and size.
Matt Jarvis: And in fact, we shared a recently sort of interesting agreement a couple of years ago to mine the barrier pillar between those two mines. That has been strategically very successful in that it has provided additional ore, which otherwise would have been sterilized in terms of our Minerals Act, and has enabled a cheaper access to lower stripping ore. Those are the sort of initiatives that I think we are trying to focus on organically in the mine to develop value, and we will continue to work with companies like South32 and Mamatwan to leverage those value opportunities.
Matt Jarvis: From an M&A and organic growth perspective, as you are aware, we have just recently completed the transaction with Exxaro acquiring incrementally our previous shareholders' apartment share, and we will continue to work with Exxaro on those strategic initiatives and potential acquisitions, particularly in the Kalahari, where we are very interested in growing. That is something I think we will be focusing on as opportunities as and when they come up to be identified. Brad, I am not sure if you have got any further comments on that one from a strategic point of view.
Brad Rogers: Yeah. Thanks, Matt. I think, Chris, Matt has covered the organic opportunity quite well. How we look at that opportunity, as Matt said, there is an opportunity given our long mine life, given that it is an open pit, given that the rate-constraining step is our crushing facility, which has a nameplate of 4 million tons per annum. We could step up that production, and actually, we may well amortize our unit cost in doing so. The consideration there, though, is that because Tshipi is such a significant producer in the world of manganese already, that in a balanced market, if we were to increase our production, we may see a negative trade-off in the manganese price.
Brad Rogers: Our work there as Jupiter and in concert with our partners and the team at Tshipi has been not just scoping out what level we could go to and what that would look like, but also thinking what market would we like to do that step-up in production to. The best time to do that would be when other manganese mines in the world are coming to end of mine life or running off grade, and some of that is going to happen elsewhere in the world of manganese away from Tshipi in the next five years or so. When there are more manganese units needed, Tshipi is able to step up to that level, and that will be the best time to maximize margin from that increase in production when we do that.
Brad Rogers: From an M&A perspective, we have an M&A strategy that is on our website. There are opportunities that we have been pursuing for all of Matt's and my time in the business. Obviously, they are confidential in nature. There are also opportunities in consolidation at Tshipi itself. So, there are opportunities that we have long been looking at beyond Tshipi, but we have also been of the view and continue to be of the view, and it is a shared view with Exxaro, that the best value to be had from Tshipi itself is through someone having consolidated ownership and therefore maximizing the value rather than operating through the minority control joint venture structure that we have.
Brad Rogers: Obviously, all of these matters are confidential, so we cannot provide too much more than that other than to say the strategy that we have been focused on and continue to progress, and that is my responsibility here with Matt in his interim CEO role. I am remaining on board to focus on strategic outcomes, covered those matters, and we have an aligned strategy. If you have a look at Exxaro's view, which is positive as we are on the outlook for manganese, but is also founded on consolidation in the Kalahari, and that applies across the Kalahari, but it certainly also applies to both of our views of the ownership of the Tshipi mine. I hope that is helpful.
Ian Murray: Okay. Thank you very much.
Brad Rogers: Pleasure. Thank you.
Operator: Thank you. Your next question comes from Hayley with ACE. Please go ahead.
[Analyst] (ACE): Morning, Brad. Do you guys have any updates on the discussions at the Tshipi level in regards to potentially going to owner miner at Tshipi? I know the Exxaro guys have been talking about that. They are an owner miner themselves. My understanding is the contract at Tshipi turns over or expires around June or July next year.
Brad Rogers: No, I can.
[Analyst] (ACE): If you were supportive of that position, how much of the existing, I guess, billion rand sitting within Tshipi would be required for the fleet?
Brad Rogers: Yeah, we are not considering that high. I can answer that one pretty quickly. The mine has operated for all of the time of Jupiter's investment in it on a contract miner model. You are right to say that the existing contract term is coming to its end, and in the ordinary course of considering that maximizing value and minimizing risk, the team at Tshipi have been considering options to continue. Those options are contract miner in nature, so I know Exxaro's had questions on that point. Any decision to change from contract miner to owner miner would require the agreement of Jupiter through the joint venture agreement there, and that is not something that is currently being considered by the parties. So, we are not looking at making that change.
[Analyst] (ACE): Thanks, Brad. To confirm, is that Jupiter's position or is that the combined position of Jupiter plus Exxaro?
Brad Rogers: It is Jupiter's and the combined position. We are both on the board of Tshipi. It is a matter that is being discussed by shareholders of the board, and we are not considering moving to owner miner.
[Analyst] (ACE): Understood. You previously said there is about 3 million tons of low-grade stockpiles sitting at Tshipi, about 31% to 36%. Is that still the case?
Brad Rogers: Matt, what did you do on that current number?
Matt Jarvis: That is indeed, yes. That is about 3 million. Sorry, yeah, it is just under 3 million tons, about 2.5 million tons in the stockpile at the moment, yes, and that is 30% grade material.
[Analyst] (ACE): Great. Thank you.
Operator: Thank you. There are no further questions at this time. I will now hand back to Ian for closing remarks.
Ian Murray: Thanks, Mel. Thanks for that update, Matt. I would like to thank Brad for his service over the last three years, and as he goes into his last month as Managing Director, and as Matt had said, Brad stays on as a consultant for us for a few months, which is great. I look forward to seeing all of you or hearing you all at our AGM on 26 November. Please attend. Matt will be there in person, and we will have the normal presentation to shareholders in that forum. So, thank you very much for attending our quarterly update. Keep well. Thank you very much.
