Good morning, and I would like to welcome everyone to the Jupiter Mines Q1 call. Today, we have Jupiter Independent Non-Executive Chair, Ian Murray, Managing Director, Brad Rogers, Interim Chief Executive Officer, Matt Jarvis, and Chief Financial Officer, Melissa North, to provide a brief update on the first quarter of the FY 2027 financial year. Then we will open up to questions from callers. Thanks, Ian. Please go ahead.
Thanks very much, Mel. I would like to welcome all of you to our quarterly call. I would also like to welcome Matt as our Interim CEO to his first quarterly call that he is presenting. Matt will take us through the quarterly results, and then we will go into Q&A after that. As you have heard, Brad is online as well, and so is Melissa, so we are all available to answer your questions when we get to that point after Matt has spoken us through the quarterly. Thanks, Matt. Over to you.
Thank you, Ian. Again, 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.
Tshipi 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, we will see that the first quarter of the FY 2027 financial year has again proven to be a solid period of production and performance for Tshipi, as well as Jupiter.
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 30 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.
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. It remained stable at a low 0.37. On the production front, for the first quarter, approximately 238,000 cubic meters of roughly 875,000 tons of graded ore was mined from the pit. Although this was about nine percent below the prior quarter, it was above expectations and 19% higher than the previous corresponding period quarter.
This enables the operation 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 quarter four, but in line with the prior corresponding period, quarter one 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.
The ore pricing was well ahead of the plan and enabled Tshipi to continue to utilize and benefit from additional available lower-cost rail export capacity we had. To this end, 880,000 tons was 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 two percent higher than the prior corresponding period quarter. Again, well above plan, where 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 through our Luderitz export channel in Namibia. No road hauling was required for this quarter to any South African ports.
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 five percent from around ZAR 16.40 at the start of the quarter to below ZAR 16 per dollar during the quarter, but averaging two percent 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 the prior corresponding period, in line with the FY26 unit costs we saw last financial year.
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, quarter one.
However, this was 12% below the quarter four FY26 prices of $4.05. It's 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 half of 2023 and 2024, manganese prices have not materially softened to around or below the USD 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's 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 C1 market and supports the price at these levels.
On a CIF basis at ports in China, prices averaged about $4.44 for the quarter, which is up 15% from the prior corresponding period of FY26 quarter one, of $3.86, but are below the $4.95 for the fourth quarter of the last financial year. It's important to see that current spot prices are around $4.28, and the freight free on board 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're 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.
While the increase in freight rates have been shared between consumers and producers, the increase in freight rates has kept the manganese price 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 comparative sales volumes in the previous quarter of FY26, as well as increased freight rates that we've experienced.
Total cash attributable to Jupiter, which is cash held by Tshipi and by Jupiter, decreased by AUD 21 million between quarter four and quarter one to AUD 53 million, following the payments of at least the 0.75 cents per share dividend, as well as cash consumed by working capital at Tshipi Mine. The total cash at 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 second quarter 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.
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. Thank you. We are showing no questions at this time. I will now hand back to Ian for. Pardon me. We do have a question from Chris Noronha with Noronha Family Trust. Please go ahead.
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. Are there any other Could you elaborate on any other value-added applications to the output? For example, LMR batteries, which are being developed in the U.S. And let us have your thoughts on value-added pathways which the management is thinking about.
Chris, thank you very much for that question. Indeed, as you may have seen in some of our releases, we have since been looking at a battery project for a couple of years, particularly around manganese sulphate. 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. But what we are seeing at the moment is a fairly limited drive in the manganese space for batteries. And I think the automakers are again facing 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 sulphate pilot plant that has successfully treated our ore to produce manganese sulphate.
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 an increased demand for manganese sulphate, 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.
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
Yeah
that product is perfect for EV batteries, for the manganese sulphate. 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 will rather partner with people in the industry. Up to now, the industry is getting sufficient product. The volumes are very small relative to what goes into the steel mills. But we are ready to move should we find the right partner.
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?
Chris, that is always an interesting path to sort of look at in terms of Tshipi. We have put state 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. Tshipi Mine, as you are aware, is a fairly large resource, and it has got over sort of what they sort of 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 cost or expenditure to do so.
That is something that I think the mine continues to look at and monitors, especially from an industry perspective. But the challenge is obviously the logistic side down to port, where there is a limited rail export capacity, and any sort 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.
In fact, we share a recently sort of entered an 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. We will continue to work with companies like South32 and Mamatwan to leverage those value opportunities. 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' or partners' share.
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. So, 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.
Yeah. Thanks, Matt. I think, Chris Noronha, Matt has covered the organic opportunity quite well. How we look at that opportunity, as Matt said, there's an opportunity given our long mine life, given that it's 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.
Our work there as Jupiter Mines 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 mines, 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.
From an M&A perspective, we have an M&A strategy that's 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. But there's also opportunities in consolidation at Tshipi itself. So there's opportunities that we have long been looking at beyond Tshipi, but we've also been of the view and continue to be of the view, and it's 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.
Obviously, all of these matters are confidential, and so we can't provide too much more than that other than to say the strategy that we have been focused on and continue to progress, and that's my responsibility here with Matt in his interim CEO role. I'm remaining on board to focus on strategic outcomes, cover 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. 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's helpful.
Okay. Thank you very much.
Pleasure. Thank you.
Thank you. Your next question comes from Haley with ACE. Please go ahead.
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're an owner-miner themselves. My understanding is the contract at Tshipi turns over or expires around June or July next year.
Yeah, I can-
And if you were supportive of that position, how much would the existing, I guess, billion rand sitting within Tshipi would be required for the fleet?
Yeah, we're 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're 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, and 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're not looking at making that change.
Thanks, Brad. To confirm, is that Jupiter's position or is that the combined position of Jupiter plus Exxaro?
It's Jupiter's and the combined position. We're both on the board of Tshipi. It's a matter that's being discussed by shareholders of the board, and we are not considering moving to owner-miner.
Understood. You previously said there's about 3 million tons of low-grade stockpile sitting at Tshipi, about 31%-32%. Is that still the case?
Matt, what's your view on the current numbers?
That is indeed, yes. That's about 3 million. Sorry, yeah, it's just under 3 million tons, about 2.5 million tons in the stockpile at the moment, yes, and that's 30% grade material.
Great. Thank you.
Thank you. There are no further questions at this time. I will now hand back to Ian for closing remarks.
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 then 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 the 26th of November 26th . Please attend. Matt will be there in person, and we will have the normal presentation to shareholders in that forum. Thank you very much for attending our quarterly update. Keep well. Thank you very much. Back to you, Mel.
That does conclude our conference for today. Thank you for participating. You may now disconnect.