Earnings Call: H2 2021

Sep 6, 2021

Particularly well, on both, whether that's the coal or the iron and manganese lines. And we're putting a lot of effort to address it, but it's not going that well at this stage. In line with our capital allocation, So we've obviously declared the ZAR30 dividend, which is 130% higher than last year. So that it is a payout of 112% of the dividends that we did receive from our underlying operation with at Friday's close price of 12% dividend yield. But the headline earnings will undoubtedly underpinned by simply high commodity prices, particularly iron and PGMs. The costs weren't impacted, obviously, due to a lot of inflation with pressures. But we did have low volumes, primarily due to logistical trains. And then obviously, all of this was and continues to a lesser degree be exacerbated by COVID challenges. The iron and PGM prices have come down from the highs that we did experience in 2021. But all of our operations have reasonable margins and the fundamentals and outlook for the metals we mine remain pretty bullish. We continue to assess value enhancing growth opportunities, both organic and from an M and A focus. Many of the projects we've announced over the last 2 years have primarily being organic of nature. When we benchmark our assets In terms of our capital allocation, we've always got superior returns from an organic, and that is obviously understandable. You know these assets. You know what you can achieve. You can piggyback on the current fixed overhead. So under these we've been pretty successful in ramping up organics. I mean, the latest ones, We've done a lot of work around the assets we, if you recall, 8 years ago, closed down effectively mined out. We then got another 14 years life. We're down to 6 tiers. We just rerun the satellites around us, done the optimization studies. We back up to 15 years. And that will always be a story of all what is your own. You really, really mine them out and walk away that And that's going to be true for iron ore and certainly also true for the commodity, which if there are any questions, I can touch on it. On safety and health, we remain absolutely committed to focus on achieving Is there a harm to people and environment? And regrettably, we've had faith of them. We continue to have disabling injuries and simply not acceptable. And how do we get out of it with systems, processes that ultimately moving to more and more levels of automation, mechanization and take the contact away where these accidents happen with people. And it's our absolute result to apply all of those technologies and focus on ore bodies that lend themselves to mechanization. And that really goes on to what our capital allocation strategy is. It's about delivering competitive returns and creating sustainable value for all of us and to offer out our portfolio safely, responsibly and efficiently. We want to allocate our capital in value creating investments, and we do focus on value enhancing and integrated growth. In terms of the vaccination program, we absolutely endorse and support it. Pleasing to say that the corporate office is fully compliant and that we are busy with rollouts at the operations. We've been able to regrow a couple of primary sites, some Secondary sites and what the only distinction, finally, we only we can extended family and community and secondly, only the employees. So we're in that process of rollout. We have about a 28% take up, and we want to accelerate that and encourage people to get due to a critical mass before we encounter more waves that come our way. The industry in general has done pretty well with its COVID, surprisingly well with its COVID infection rates. But regrettably, we've still lost lives in the group since the COVID we've lost 34 of our employees. BASF Koomani, pretty much steady state. Koomani, those 14.5 percent BASF, 3,500,000 tons. Commodities have a 25 year life. Biasuk is now up to a 15 year life. BlackRock has got assets, probably 50 years of life, right? So and we are ramping up. We must be it's been a long, slow process where we change the shafts, change the plants, change the infrastructure, do the development to get out to the ore bodies and store belts, do silos, transition. So all that transition is being done but we still maintain our trucking systems, which are pretty tough in terms of cost position. So only once we commission the belts and the silos will we do away with the expensive trucking. So the underground ore movement is a big component of our cost that we should see coming off over the next 12 to 18 months and either factor down the labor or ramp up production if the market conditions allow. The 2 alloy businesses, being both Kato and Sakura, really struggled on the back of pricing, nothing else. Operations doing pretty well. Cost performance is not bad at all, but price not supporting it. Post the reporting period, prices have improved substantially, and I don't think we've been able to capitalize on that yet and you could hold us. We unfortunately lost 1 of the furnaces of the transformers. We lost 3 transformers in short succession, still struggling to understand how and why the cause, but these things have to be shipped off-site, repaired, and we're going to probably fly 2 back by the end of the month. So they've been offline now since February on this. So we're talking nearly 6 months. Madikwa is in a slow ramp up moving in the right direction, still needs a fair amount of capital, albeit self funding over the next 4 to 5 years to get it into what we would call an operation which we'd be satisfied with. So although there's been improvements, it's still not where we want it. Currently ranging in the region of 200,000. Names date is 240,000. It needs a lot of development to get there. We started up all 3 declines moving in that direction. So moving in the right direction. We have started a trial, very small trial on the Merensky at Madikwa. And the intention is to follow a similar process, which was Took us a couple of years to get to the answer that we followed with 2 rivers. Now We have done a bulk sample previously. We do have established portals there. And We want to continue some trial mining and optimization study and look at real high level recognized and semi automated approach before making any decision once the feasibility is done. This take anything between 12 18 months before an announcement one way or the another. But I'm just stressing on this to say that our organic opportunities are enormous around our ore is extremely long life. TRP is sort of matched out on life capacity now, about a 25 year life on the DG2. We just announced the Merensky, which has similar life, 20, 25 years. And that feasibility is approved. It's a 3, 4 year ramp up to full production. Probably 2024, late 2024, we should be at nameplate there, 180,000 tons per month or 180,000 ounces per annum. In commodities on care and maintenance, I alluded to the fact that it has a huge underground resource. At the right trigger price, It certainly will be a go. We know what that is. We know what the capital is. We know what the mining method is. So I think it's just It's a timing point of view from a sustainability point of view and that's price dependent. I think ethyl and commodities are fully bimetal. So it's got significant byproduct credits in palladium, rhodium, copper and even cobalt. So there's no doubt that we will start up that operation sometime into the future. But we don't have specific timing, and we haven't concluded the feasibility. On the coal, we struggled, obviously, again with particularly struggling to get volumes internal challenges, pit challenges. But for the last year and even today, we are really struggling to get TFR mobilized and moving to its historic norms, not asking anything special. They were way off the historic norm. So we are, as an industry, through Minerals Council and a lot of involvement is working very, very close with the SOEs in terms of how can we help, how can we collaborate. It's in our interest to make them successful so that we can deliver our product growth and contain our costs. With that, I hand back Q and A. Thank you. Thank you. Our first question is from Brian Morgan of RMB Morgan Stanley. Hi guys, thanks very much. Can we just chat on coal quickly? And I don't know if Sue is there, but Just I was expecting quite a big derivative P and L move on the coal base At the end of the period, given what coal prices have done, it's not quite as big as I expected. Could you just remind me on how that whole thing works? Hi, Brian. It's Jangisa here. And Sue is here. So I'm going to kick start and then Sue will add. So the derivative, Which is I assume you're talking about the remeasurements on the value of the loans, right? Is that what you're referring to? Okay. So we have some you're saying we expect it to be bigger. And I think You're the compressive. Yes. It's always referenced The last time that we assessed and completed the model. So you did have you've had movement in the short So I think our ask hasn't changed as substantially as the move that you've seen in the spot price. So we had even the last period when we did the measurement of the loans had and the Prices that make a difference to the ones that are in the long term, right? So that's part of the reason. And I think even the higher spot Prices were partially netted off or kind of offset by expectations on the operational side, so revised down We expect hedges, etcetera. So on a net net basis, relative to where we were this time last year, Your movement in terms of how the progression of those loans are expected have not shifted as substantially as what the spot prices I don't know if that makes sense, Brian. It does make sense. I just could have thought of $160, dollars 170 a ton coal, regardless of how badly the operations are Outperforming and should be generating a huge amount of cash and that cost that debt should be paid down pretty quickly, right? No. Unfortunately, we were kind of hoping the same. And it's what I think Mike and Chairman was alluding to. We haven't been able to as much as we would have liked to from a cash flow generation perspective on currently high spot prices because we've had significant volume impact. And so I don't the expectation is that you continue to have on an impact into the next year, albeit less. And then on the longer term, we haven't had significant budget in terms of expectations. But Brian, just on there, I mean, interesting that and that's true. I mean, if you look at the various indices that measure coal and coal pricing varying between $174,000,000 $1.41 where it is, and that's the price euphemism. That's by far the price we realize. We firstly, we sell into very different markets with very different qualities and as low as 5.2%. And I wouldn't want to try and second guess what the average What we're feeding, we do have a blend throughout the market. But the both in the year that's passed outside of that, we were really struggling to get supply out in terms of demand because of the market conditions. And Eskom has not taken remotely what the even the contractual commitments were. And even around this table, the price we get from Eskom We don't need Kiolos. So it's a blended product, and so it all helps. So pushing out the Eskom with very low price, It's even below our cost of production. It is the markets are picking up. It is looking better, But we are not realizing even close to 100 in terms of what we did, Brian. Remember, there's also a marketing fee that quite a knock that we take. So we delivered to port, and we do not benefit on that arbitrage and we take quite a launch more quickly. Okay, cool. Thank you. Can we just ask Madikwa, so you it's running at 200,000 tonnes a month and based on the guidance through 2024, if look at that Slide 24, if I look at that, it looks as though you're suggesting we should be going towards 2.7000000 tons a year. What's the Ultimate and going here with Madequa in terms of tonnes milled, are we going It's tough at $240,000,000 Is there room to go beyond that? And how should I be thinking about that? Sure. Ryan, I mean, it's Such an interesting question, volatility and changing opinions through the cycle. And we've gone through an extremely typical PGM cycle, the big one in yellow wasters faced, substantial losses and made a hell of a lot of money in the last 2 years. And so all the platinum counters and thankfully, it's brought us some agreement. The fact that Nabigwa suffered for so long is it did not consciously did not is so capital thin. Just to put it into perspective, we've got 3 decline charts there. From 2017 to 2020, we're much weaker than any of these lines per capital. So the replacement of the extension, we have accelerated that a year ago. But We got a catch up going here. That target to get to 2.40 in 3 years, We agree to call, to say the least. Fortunately, we require any cooling at these prices from either partner itself funded. And besides accelerating, your next question is, okay? The liquidity to 40, is there opportunity to go beyond? Well, undoubtedly, there is. That ore body, we're mining 13 out of our 23 kilometers of that strike, let alone the deep extension. So we could at this license permitting, we could continue to mine for over 100 years. So obviously, then you do have that opportunity, all things taken into consideration. But our big, big drive is to get to nameplate capacity and then to reconsider whether the plant we just ramp up. Now the challenge you're setting with blind is the atypical decline, which is 1st generation shops. If you go throughout the history of South Africa, in all the declines, I'm talking conventional declines, not mechanized mining, You will struggle to find over the life of cycle of a decline, 1st generation to exceed on average 80,000 tons per month per deprime. That's where we get to the 2.40. To try and expect as you get deeper and further in and you become highly inefficient with conventional labor, and that's what that orebody for now lends itself to. I would premise to take a guess and say 240 is probably as good as it gets. Unless we can transition that mine in the next 10 years into An appropriate level of mechanization is that equipment. I would stick to 240. And I would rather do what we've done at Two Rivers is to see if we can't capitalize or optimize on the overlying Merensky, which would lend itself to a higher mechanization, high volumes, high tons, low cost, pretty soft, using high profile equipment, and you can go green on that equipment. And there you can sort of offset the overall dynamic of that mine. Ironfall, you've got to look at tailings today, which is a challenge. We embedded inside 7 communities, and you know the challenges we face there. Added to that, there's not a lot of space in the market today to take up base metals and primary smelting. And if you take your partner, who you know well, has got and understandably, big ambitions to grow the existing and fill up that capacity. So these are all serious things that have to look at in sustainable way. 2.40, long story, 2.40, I think, as good as it gets, 24, 25. Okay. That's great color. Thanks, Mike. Appreciate that. I mean, certainly, you spoke about 2 rivers doing 180,000 tonnes per mine. Could you give me a split there between Merensky and UG2 as you had envisaged it and also sort of grades in recovery between the 2? So the UG2 should do on an and I'll give you on an ounce basis. On an annualized ounce basis, Glanvise has got the slide about 380? Yes, 360,000 PGM ounces, This is including the additional plant capacity, right? Yes. And that should happen in the next 12 months. Yes. We start commissioning in November of this year of 2021, and then it's like a 6 month ramp up period from what I understand there across The plant in place, the tailings in place, the tower is not there yet. The water is a bit of a challenge working on it. And certainly, the plant is in a position to do it. So I think 12 to 16 months that the 360 that we call. And then by 2024, the Merensky, because of the ramp up is So I would call it seamlessly because it's high profile equipment. We should ramp up about 180,000 ounces per annum, which is also so overall, we're talking 500,000 ounces. And that's about The best 2 of us could do, and we can stay sustain that for about 23 to 25 years. Our next question is from Debang Sakhu of SBG Securities. Hi, everyone. Can I please ask for I'm sorry, this may be a silly question, but I'm struggling with it? Can I please ask for the breakdown of that ZAR20 dividend in terms of The cash received from the underlying businesses? Happy to. So 2 will just answer that. Hi, Sabang. So the dividends that we received during the year, we received $4,000,000,000 from SMAN. We received $1431,000,000 so $1,400,000,000 from Two Rivers. And then we also received EUR 289,000,000 from Modiglott. So that doesn't include so you guys don't include the how many dividends and the dividend that you then pass on to your own shareholders? We do, we do, Tarvan, dollars 82,000,000. Okay. So to I get that calculation, so I get to about $5,800,000,000 and a bit. And then I divide that by the number of the outstanding shares of ZAR 224, but I get to ZAR25.85, right? So even if I Reduce the ZAR10 from 1.8, I'd only get to ZAR15. I still wouldn't get to the Twinkle that you guys have to take for this half. So I'm not sure what I'm doing wrong. So, Tavant, we did mention in the presentation that we actually paid over and above the dividends that we received. So we paid 112%. So while the dividends received during the year totaled 6,018,000,000, We paid if we include the interim, we paid a total of 6 37 or 38, yes, 6637 for the year or 6,637. Okay. And then just as a follow-up to obviously, these underlying subsidiaries are not listed and neither is So forecasting this difference is a little trickier than sort of based on like some sort of earning multiple. How can you think about the dividend from Wodiqua and Two Rivers going forward? And even Aspen, because they seem to be paying a slightly higher dividend than in the past. So could I start, Thabong? So in terms of the asset dividend, We've been working on it for the last number of years to get a more formalized way of determining because the shareholders As we mentioned, quite clear that the idea is to maximize dividends to the shareholders, taking into account the outlook, the capital requirements of the business, etcetera. The reason you're probably seeing Acme pay a higher dividend than historically is because we've been pushing quite hard to have a formalized way of approaching what maximization is. So looking at how much cash is needed based on the capital requirements And really focusing on giving all of the excess over and above that out to the shareholders. So that's where we are with the Asang 1. In terms of Two Rivers, because it's a high Coal requirements phase that 2 Rivers is going to be going through for the next 2 to 3 years, While it self funds the Merensky, you're probably going to see very limited dividends coming out of Two Rivers. But once that CapEx because we are working very hard to ensure that it is funded at the operation by the operation without a need for cash cost from the partners or Empower and ourselves. So and that comes at the price of dividend. So you're going to see very limited dividends coming out of there. Where you will see increased dividends coming out is Really at Modiqua. The reason it was relatively smaller in the current period is because the first thing Modiqua did in the period was We pay its partner loans and Tim has helped me with the number. It's about ZAR580,000,000 that they repaid and then plus $289,000,000 dividends that we received. So there is going to be an improvement in the dividend outlook for Modica. Mogiko also has its own CapEx requirements, but they're not quite as high as what is at the moment. I don't know if that helps So is this how to think about it? Yes. So Yongby is absolutely spot on. But I'd probably just put a little bit of caution, albeit that it is not in the budget. The latest thinking is to accelerate all three d clients development. And to that effect, albeit that we haven't made a final decision, I believe in this environment, that's the right thing to do, to It's got a very, very high fixed overhead component of this. And we need to get to name grade capacity. And whilst Madikwa can fund it itself without going back to the partners, albeit at the cost of relinquishing the proposed dividends, that's the route I would start an engagement process with our partners. If we fail in that, then to Jomgiese's point, we will see improved dividends coming up. Thanks, Laurent. Thanks, Thafar. Thanks, everyone. So Jigisha, I'm just going to push a little bit here. So just looking at the and all these subsidiaries, would you say it's prudent to sort of like look at our estimated cash generated and then Transfer capital over the next 12 months, may assume anything over and above that will be and by CapEx, I mean both Growth and maintenance CapEx. And then assume that any leftover cash is likely to be paid out? Yes. I think that's a prudent approach to it, Tabang. And just flagging that with Asmang, there's going to be a little bit of Timing difference. So with Aspen, it's going to look like there is a little bit of cash that gets left behind at the Aspen level To fund the CapEx that's coming. So there is a little bit of a timing difference. I think that's the right way to think about it. Okay. Okay. And then, Mike, I just wanted to find out if you'd be willing to commit to some sort of number in that grand to 10 number For Merensky at Two Rivers, is 1,000 too cold or too warm? I know it's close to U. K. Mike, that well, I'm talking blind because the work's done. The feasibility is done. We've got all that. I'm just was caught off guard about the number. Now I haven't gone back to that number, but that number, I would think is in the region of about ZAR 900 a tonne, Melissa. Yes. It will be less than ZAR 900. So in the current period, The UG2 was mining at 9.05 percent. That's going to be less. And the Maren Sea will be less than that. No. So I'm going to get I'm going to go back to the just to the feasibility, and I'm just going to add Inflation, but I think Thiernghis is right. It's probably between 700,800,000. Yes. I'll get you the exact number. So I'd rather stick to a conservative mine, and it still makes good good sense. Okay. Easy achieve those numbers. The volumes are there easily. Yes. So I've already modeled And really, the only thing that's outstanding for me is that Rand per ton number. So Mike, are you still Of the view that the NPV is around $3,000,000,000 to $4,000,000,000 Or do you think it could be slightly higher than that given that PGM prices seem to be holding up? It's certainly between $3,000,000,000 $4,000,000,000 Yes. And Tybalt, I know that I mean, we saw I saw your note in that your valuation was higher. I think the differential I'm showing the PGM price assumptions. We were very conservative in terms of our price assumptions. And at the time, I think We had taken a view of a 40% discount to spot relative to where the long term prices that we were using For accepting the project. So that SEK 3,000,000,000 to SEK 4,000,000,000 NPV is based on that conservative outlook. And It will be quite leveraged to the change in the PGN price. So if you you're probably at a higher NPV because of The PG and price assumptions and outlook because we will consider this. Okay. That's quite helpful. Thanks guys. Our next question is from Justin Brown of Mining MX. Good afternoon. I just wanted to find out In the presentation, there was a graph showing capital expenditure, up to The end of the 2024 financial year, it's about 17,300,000,000 How much of that is growth capital and how much of it is just the same business or operating capital? Justin, so this has always been a question that we get over and over again. And It's a bit tricky to answer. But it's at least 5.7 percent of that which relates The Merensky project will be classified purely as growth, okay? So that's a simple one to answer. We then have a significant portion of CapEx that is going into completing the BlackRock project, which is almost And the $8,700,000,000 that was approved. But then there's also the Gloria project, which is $2,700,000 that was approved. Now The reason I say that this is not as simplistic is because a lot of that CapEx in the BlackRock project as well as the Gloria project is a mix Of expansionary and SIB in the sense that it's refurbishment of existing Production systems for improved efficiency and costs. And so there's a It's quite difficult to split that one very purely. In my non mining speak, it was explained to me in a way to say, To replace a winder, it will cost you X, but you can get a slightly bigger winder, which is going to be X plus 10, And that allows you to increase production, but it would have required replacing anyway. So the cost of that winder, would you classify that as FIB CapEx Or expansionary. So this is the reason why I say it's quite difficult to split. And then you'll see that CapEx is Higher than what we had previously guided over and above the Merensky. And some of that is related to the extension of life at the Atuk mine. So we've got to do additional waste stripping, which will be capitalized for the purposes of that. So it is I'm sorry, I don't give you a clean number of the $17,000,000,000 circa what the split is going to be. But at the very least, dollars 6,000,000 to $6,500,000,000 of that will be expansionary and the rest is quite That's difficult to split. Some of it is extension of life, which means there is expansion. I don't know if that helps, Justin. Yes. Thank you. So what is the mine? Is it Deerfield mine you mentioned just a moment ago? Yes. It's the Deerfield iron ore operation. This is the one that Maia said that We have done additional drilling, and we've increased the reserves quite substantially. We were initially on 6 years life remaining, and we've now Increase that to 15 years of life that's remaining. But there is some CapEx that needs to go with that because the approach of the life of mine is now different. So we need to strip in addition. There's some fleet replacement that we are having to do Because initially when we thought we had 6 years left, we were kind of going to run the coal for the rest of the period. But now we are considering some piece replacement for improved efficiency, etcetera. So it's the best of mine, the iron ore operation. Good. So and the financial director speaking? No. It's Tungisa here. Okay. Hi, Zhengyisa. Sorry, I just wanted to make sure I knew who was talking. So I came on a little bit late on the call. Okay, great. Thanks, Zhengyisa. I just want to know who I was speaking to for the moment. Thank you. The number is R800 tonnes. The next question is from Andrei Petitscha of Fresco Asset Management. Good day. Thanks so much for taking my call. Just a bit of a question on the profitability on the coal side, and apologies if I missed this earlier. You mentioned at some point that the cost of production is above what you would receive from Eskom. Maybe just some color in terms of Are you thinking where the profitability lies between the 2 different parts of the coal business as well as would you ever consider Closing or downsizing any part of the coal business or what is that thinking about the future there? Thank you. So Maybe if I can just clarify that statement or that comment, which you heard correctly, is when you mine a coal seam, you get different grading. And the top quality grading is where you normally demand quite a good premium over and above your cost. That historically has been exported, and that's where you make your money. So it doesn't really matter what you get for the remaining cost of steel. So if you have to sell everything exclude and you simply exclude or ignore the high quality and that's seen and you sold it all onto an Eskom basis, you would the mining cost would exceed the cost of sales. But historically, you've made, let's call it your profitability, the lion's share thereof, out of quality and export sales And then the lower quality C material, which was suitable for Eskom, you would then negotiate turn contracts, which are generally very low. And there's a lot of pressure, understandably, on Eskom to deliver, particularly with rising electricity prices. I hope that qualifies. So as long as you've got that mining proportion, it's fine where you can get different prices for different grades within the CMU Mining. It's not per operation. And I don't know if that helps. Yes, that's very helpful. Thank you. Just maybe if you have any kind of indication in terms of the export split of the business going forward, Just percentage wise for PCB and GGV there. And any idea what that split looks like? No, we've got it. And just Turning to the page, you may ask I want to take you to the page because we do, do so on Slide 30 of the presentation And these are in the sort of bottom right hand corner, we show a split of what the export sales are going to be for the next 3 years And what Eskom and Local sales are, but I mean obviously the bulk of Eskom and Local is just Eskom, but we do show it there. Thank you. That's very helpful. I hope you access it. Andres, have you been able to access it? Yes, yes, I see the slide. Thank you. I see the chart there. That's helpful. So just to confirm, sorry, I think Mike tried to say it while the operator was speaking. So that's the rand per ton Number for the Merensky cost is ZAR800 per ton. Our next question is from a follow-up from Tobang Thakur of SPG Securities. Thank you. I've got 2 more follow-up questions. On coal, guys, it just seems to be quite problematic. We've gone through, as Brian mentioned, a high price environment, and it's Just not coming through. Can we get an update on the operational issues that you guys have experienced with contractors and so forth? And is that largely behind you? So I do know that because that's a difficult question, Sandeep is on the line and I'm going to So far, I presume. And if I could ask the operator to open Tundong Kachanese line, so he can speak to some of the challenges Operational challenges at coal? Good afternoon. Can you hear me? Yes, we can hear you clearly, Carlos. Okay. Thank you so much. So, Thabang, I've got the end of your question, but I think it's related to online operational challenges that we have faced. I will start with PCB. As you know, PCB Actually, a preferential mine, which forms part of PCB, we are mining old underground workings there. Somehow, a year ago, we reported a fatal that came out of explosion explosive, combustion and exploding prematurely. Since then, we had had to really space The blasting holes away from errors that have been hold while we were looking for a solution. We have since found a new sleeve that you could insert and is able to extend temperatures up to about 250, 300 degrees Celsius that we can plus the hot holes. Unfortunately, in the meantime, while we're looking for that solution, we have errors that have not been blasted very well, And we've been struggling to expose coal there. We're going to be out of those errors by the end of Q1 actually this month, we believe, will be out of those areas. So we will sort out that part of the operation. We also have had planned the 2nd pipeline that was supposed to come early in around the first quarter of the last financial year. However, due to COVID and the delay in the supply of Spain, that pipeline got commissioned late in around November last year. Those were the main really challenges that affected the coal operations At the mine. However, the biggest contributor, the total business on the coal, we lost Production of about 4,000,000 tonnes as a result of stockpiles in full. When the stockpiles are full because tariff is not performing, we have had to Top operations and do other work. In December, we also took a longer break than we normally do. Normally, we'll have a 5 At daybreak, in this case, we took a 2.5 weeks break to accommodate the movement of coal. So our main inhibit in terms of being able to produce has been the TFR performance that has resulted in the cells not or rather coal not being moved, hence the stockpiles were full. Thank you. Okay. Thanks, Andrew. And then I I have one more follow-up question. Julie, so how should we think about that management fee from SMAM? I hope you guys have renegotiated and commodity Hi, Sousa. Hi. How can I model that fee going forward? Please make sure the line is not muted. Please hold on while we reconnect with the main speakers. We've been rejoined by the main speakers. Please go ahead. Hi, Sabang. Apologies about that. I could hear you, but I think we lost our list, so I do apologize. Can you hear me now, Sabang? Yes, I can. Okay, perfect. So I was saying that we have revised the fee arrangements with Atman such that the fees that ARM earns, The management fees are more in line or aligned with the profitability and performance at SMAG. So that's how you should think about it. I think based on the profitability this year, and we've had a full year of the revised fee arrangement, You have a sense of what the fees are. And so the relationship will be between those two factors. Since we have no further questions on the lines, may I hand back to Mike for closing comments? Thank you. Operator, Sue will do the closing comments. Thank you. Thank you, Jonita. So At ARM Management and ARM as Collective, we are positive on the outlook of ARM performance going forward. Yes. We have seen a decline in the commodity prices. However, management is doing all it can to ensure that We continue working hard to increase profitability, and that includes continued focus on cost containers across The board, basically looking at seeing what we can control and doing that to the best of our ability. Our balance sheet remains strong, which puts us in a position to take advantage of any value enhancing growth opportunities that come our way. And we're looking forward to taking advantage of those in a responsible manner, obviously, and not Overpaying for any assets or the like. But yes, we're still excited about the business. We're seeing a lot of opportunities within Both organic as well as outside, externally. And yes, we're just looking forward to getting on with it as management. Thank you, operator. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.