Earnings Transcript for JLP.L - Q4 Fiscal Year 2023

Unidentified Company Representative: Good afternoon ladies and gentlemen and welcome to the Jubilee Metals Group PLC Annual Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, they can be submitted at any time via the Q&A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so and these will be available via your Investor Meet company dashboard. Before we begin, I would like to submit the following poll. And I would now like to hand you over to the executive management team from Jubilee Metals Group PLC. Leon, good morning, sir.

Leon Coetzer: Hi, good morning and good morning to all our shareholders who have logged in. Good afternoon to the South African shareholders who have logged in and various interested people. It really is a great pleasure to host you on this webinar. And we also introduce you to our team that has joined me today. On my left, I've got Neal Reynolds as our new incoming CFO of our group. And we've also been joined by Pedja Kovacevic as our outgoing CFO and on our executive team and taking on a role as our Strategic Advisor on the group. It really is a nice opportunity to delve into some of our results, to explain what our company is focusing on, and touch on some of the questions we've gotten. Thank you for the questions we've received already. There's some really interesting questions we can debate and discuss. And without further ado, let me -- my role will be to really set the scene to explain our focuses, what we've attempted to achieve over this past year. And yes, recognize some of the challenges we face. Undoubtedly, we all are educated on the market at the moment, where we have some of our metal prices under pressure. But I'm really, I'm trusting that at the completion of this presentation, you'll see how group our diversified portfolio, how we've been able to react to these adjustments in the metal prices and how -- because of how we've structured Jubilee, we are able in many cases uniquely able to prioritize metal portfolio to overcome some of these metal prices that have reduced over the past period, especially over the last six months as we look forward to what seems to be a volatile market that lies ahead. The typical disclaimer, just to jump into the first slide and just again touch on just where everybody's benefit about who are we? Who is Jubilee? What are we trying to achieve in this space? Jubilee set on a path now roughly 10 years ago to carve out quite a unique space within the industry. It's not a path that is trodded by many people or many companies. It's not something that we could follow, but instead we had to lead companies and industry into this space, which recognizes that as mining has developed and as processing technologies have developed, that there are tremendous amounts of waste, which is waste created from mining activities, and tailings from process activities that are deposited across the mining jurisdictions. What we've also recognized and evolved in our approach in this particular industry as we learning and as our development centers are unpacking this challenge is that, waste often can be classified as materials that are on surface, mined and rejected, or it's waste that has yet to be mined and are rejected by mining companies in situ because of the type of reef it is or because of the composition of that reef. And it's these challenges that we as a group have taken on board and addressed. And in through our results, it's demonstrated probably most clearly through how our chrome operations have evolved to where we are today, one of the world's largest producers of chrome concentrates. Yet, predominantly all of that chrome does not come from any mining activities. If you look at the slide, we of course highlight the fact that we are a diversified metals producer and we continuously will drive that diversification. It's something that both Neal and Pedja will address in a market where we have metal groups, such as PGMs currently under pressure, yet we are able to really lean on the strength coming through our chrome operations. And we look to continue that diversification, not only in production, but on earnings and on margin. Where in the past, our company was heavily reliant on platinum and platinum group metals as our earnings driver as we now evolve and migrate onto chrome and copper. Of course that we are very proud and our results reflect that we remain one of the lowest cost producers in the world on PGM ounces. It really speaks to our efficiency drivers, our focus of cost containment, and very importantly, is the kind of technologies we develop and implement to extract or attempt to extract every ounce of value out of that waste and that reef we process. A critical enabler in our company, and it'll come through in the presentation, is our in-house world-class expertise we hold. Not only in operational and the style in which we operate our various operational footprints, but also in the development center we hold, where we tackle practical bespoke solutions to unpack some of the challenges industry faces in the metals that we are operating and it is an enabler that unlocks the potential of the material that we are pursuing. Some of our key deliverables over the past financial period, of course, we're very proud of our operational numbers we've delivered, especially in South Africa, where our PGM ounces delivered is setting yet another record. Our chrome has yet again expanded, and as we have said in our previous announcements, has already expanded even further into the current year with the new projects coming online. It comes off the back of a significant investment program we've driven into our company to renew our operations, expand our operations, roll some of our technical development breakthrough processes back into our operations. Our copper is in a permanent evolution as the breakthroughs coming through out of our development centers are coming through hot and fast, and we're implementing that back into our operations and our solutions. And of course, as a result, so there's also the success of the investment coming through in our PGM operations running now at a stable throughput, running above its 40,000 ounces that we are delivering going forward, now that the operations are running stably. Our chrome operations delivering its tonnages, delivering its concentrated producers on spec, in target and expanding yet again as we speak. Critical if we just jump into some of those numbers. As we said, record production across operations, highest PGM production to date, highest chrome, our copper is stepping up. Yes, there are challenges we faced in copper, which we spoke a lot of and we'll definitely touch on it again for shareholders as we unpack those challenges, as we are processing and targeting reefs. Most of the industry has absolutely disregarded and not looking at, and our technical solutions are actively addressing that to make it more efficient. Addressing the challenges we face within jurisdictions of infrastructure, both in Zambia and in South Africa. Well documented, well spoken about infrastructure challenges we had to overcome both in power in South Africa, power and water in Zambia that we had to address for our operational footprint in South Africa. We're proud that at the moment we have just about covered all of our chrome operations with our backup power systems going forward. And if you just look at the references in our annual report, the hours we are running on backup power has increased sharply in South Africa. So our reliance on our backup power systems have grown. That has cost pressures, but we have overcome that through efficiencies in our chrome operations. Our safety performance has remained stable throughout our group. And of course, as we said, key, key, key for our long-term success are earnings growth potential, even in softer markets is driven by our drive to expand. And not just expanding for the sake of expanding, but expanding into higher margin materials, higher margin chrome reefs and chrome materials that we are processing. And it's that philosophy that Zambia is benefiting from as that South African successes are now being driven into Zambia through operational and technical teams. In Zambia, as we said, we touched on it, we haven't spoken much of it, and yes, there's a lot of questions on PR which we'll address as well. But we've touched on as we are developing this solution in Zambia, as the clarity of the solution that is required to unlock this copper and cobalt out of waste and tailings is becoming more evident to our teams. It also is bringing the clarity on how do we deliver on the statements of our southern and northern copper refinery. Probably one of the biggest breakthroughs in copper we've made of late, and this is only over the past couple of months, is what we call a modular flow sheet development specifically targeting waste copper ores, not process tailings, but waste copper ore. These are ores that has been mined, rejected into hundreds of millions of surface tons in Zambia. How are we able to modularize the process flow sheet to ensure that we have low power, low capital requirements to expand and grab this opportunity in Zambia? The first of this module is already going into our Roan upgrade in Zambia, which unlocks a potential that did not even initially form part of the scope we were chasing in Zambia. Briefly, I mean the graphs normally speak a thousand words, just to show what we are driving in South Africa. Of course, chrome unlocks enables our ability to target PGM recoveries. Our chrome expansion drive is exceptional. We are already putting out guidance for 1.45 million tons of chrome concentrate in our current financial period with an aspirational target of breaching 2 million tons of chrome concentrate, it will make us the biggest, if not, one of the biggest in the world in producing chrome concentrates. And of course, the more chrome materials we process the more PGM rich tailings from Chrome we make for the recovery in our PGM refinery and PGM processing facility. Copper is at that breakthrough moment where we are finally reaching that position where we can deliver and break through our ability to make copper at a size and at a much larger quantum. We projected a relatively modest 5,850 tons for the coming financial period, taking into account the amount of construction and upgrade we're doing at our Roan Concentrator as these modular approaches, lessons learned are being pumped back into that facility. If you look at our results, which I'm going to hand over to Petra to talk us through, a theme that comes out of our results is a company with that kind of growth profile, as we show on the screen, is that an average number, an average production rate or a total earnings number doesn't reflect the reality that's happening behind the scene, as the company is actually a company of halves or quarters for the year, as every quarter reflects the growth that is being rolled into the company. Our chrome growth cannot come at a better time when chrome prices are enjoying tremendous support in the market, strong chrome values are being achieved, and we migrating on higher margin chrome. It has the ability to not only buffer the drop off in PGM margins driven by the pullback in PGM prices, but has the actual potential to grow our earnings even during these softer PGM prices, with copper offering the potential to step in at quantum. Our vision for the future, I touched on it briefly. It really touches on the things that make Jubilee unique. And what we are striving to capitalize and deliver on. First and foremost is our target to break 2 million tons per year of chrome concentrate, making us one of the biggest. It is being enabled through the efforts and the technology and the process efficiencies we are achieving on reefs so many companies ignored. We had to cut our teeth on waste and tailings to be able to recover that what companies had thrown away. That additional efficiencies that allowed us to apply that onto chrome has opened up a whole new chrome market for us on reefs companies have left and walked away from. It is the reason why we announced earlier this year that we were able to secure a new collaborative agreement with a chrome mining company where we are now extracting reefs that was left behind by previous owners. And we are doing it in a manner where we as a company are being exposed to far greater benefit in that chrome, where we are mining, they are mining, we are processing at cost and then we adjudicate an earnings contribution to both companies. So we no longer toll process the material through chrome to simply enable our PGM operations. It is why the chrome earnings potential coming to the company will be so visible through the current financial period. The second component which for technical engineers is exceptional and the value to our shareholders will be coming through in our copper industry is, this what we call this breakthrough modular approach for our flow sheets. It is perfected from our South African operations. It's how we drive our chrome expansion. We call it the B50 units. We already have eight such units in South Africa looking to build another five such units to achieve that 2 million tons per year of chrome. It's that design and development approach where we develop a technique and capture it within a modular process solution integrated with a manufacturing company to deploy them rapidly. It's that approach that now is also going to copper. And you can expect to see these modular implementation of our copper processing units to come through in the news flow as we expand our copper in Zambia. We spoke about continuous growth. The continuous growth is because of what we are unlocking through our development of our processing techniques in a space that is not captured by any company. Process efficiencies is what we are renowned for, it's why so many clients approach us, it's why we are able to make what is regarded as low value so valuable in the group. I quote, this is a quote we often speak of at our executive committee meetings as a company that really are steadfast in our commitment to unlock value out of materials overlooked by many or disregarded by many across the mining industry. And with that, I'll hand over to Pedja, Pedja Kovacevic, who has been acting as our CFO, while we've been looking and waiting for Neal to join our group to talk us through our financial results, give it more color to the numbers that often is just put out on an announcement. And Pedja is, of course, staying with our group as he joins our executive committee as one of our key Strategic Advisors on our expansion drive, because when you expand it comes with funding needs, it comes with cash flow management that really needs to support our CFO. Pedja, if I can hand over to you.

Pedja Kovacevic: Thank you, Leon. So let me start by going to what's been published this morning, and first of all, it's yet another strong operational performance during the financial 2023. So across the board, an increase compared to the previous year in production of all, copper, chrome and PGMs. The figures are slightly above or in line with the guidance provided by Leon towards the end of the previous calendar year. And if you look into PGMs, they're sitting at 42.4,000 ounces for the year versus 38,000 ounces target, still above about 2% from the previous year - year-on-year compared. Our Chrome target was 1.2 million. We came about 1,275,000 and we continue to grow as for the current year we're envisaging 1.4 million going forward. And then copper, due to the well-explained delays to infrastructure issues that we faced towards the end of last calendar year and resolved successfully on water in December and electricity in January, we stayed roughly in line with the guidance provided. What's important to note in this is that, throughout the period PGM and chrome had a different two halves of the year in terms of the operational performance, pure output first and second half roughly comparable in terms of revenues again, but the second half actually increased from the first by 25% odd overall. And what's important within that the key component was the actual growth in revenue coming from selling chrome concentrate. You would remember from our previous discussions that a lot of our chrome production came through a fixed margin arrangement that we had. We always kept and disclosed it to the market, about 30% of our total operating capacity to be taken to market. And the prices of chrome are performing well. That certainly took place during the course of the last two quarters of the financial year under review and we used the opportunity to do that. How big an impact that had to revenue is second half compared to first actually saw 40% more revenue coming from chrome. And if you look into our items of revenue year-on-year, yes it stayed roughly in line, but the actual composition of where that comes from, which gives a flavor of what's to be expected going forward, before even copper kicks in with significant numbers after Roan has been refurbished and restarted in November, it's actual chrome component, both in terms of revenue, in terms of receivables, also in contract assets that we disclosed on our balance sheet, where now chrome is actually a significant component of that. The key difference between the two halves is a better performance of chrome pricing and much stronger market for chrome and chrome fundamentals look extremely strong at the moment. South Africa being 70% supplier to the world economy, serious shortage with increased demand from the stainless steel industry and the fact that the open-cast mining is running out, whereas the technology that Leon referred to that we've developed over the years we are actually able to tackle things that others cannot and are opening up the market, extending the life for those open-cast opportunities and actually delaying for a lot of miners the need to go underground, spend capital in a high investment rate environment -- interest rate environment and therefore provided value to them, but at the same time increasing the actual access to resource to ourselves and therefore creating also the fee to PGMs. The PGM side, the prices came down quite rapidly. In our analysis we are one of the very few players in the market that actually remain profitable in the current environment. We kept our margin strong through actually controlling costs. So cost is firmly on the lower end of the industry and it remains there. It allows us to be profitable even at these level prices. What is different, of course, compared to the previous years, the contribution to our profits and to our revenues from PGMs is significantly less driven by those softer PGM prices. So as we move forward in terms of the composition of revenue and profits, chrome is featuring much more. And as we move towards our target of 2 million, chrome will be actually dominating that bit. Of course, with copper expanding through our southern strategy delivery and then north, copper will catch up to that. Interestingly, and it's not in our presentation, we run from time-to-time correlations to our market prices between the prices of metal and it is still quite a bit linked to the PGM prices. When we're looking into the breakdown of where the actual profits and drive come from and it's much more chrome as we speak and much more copper coming through, we expect that the market will catch up onto it, so PGM prices being where they are that correlation still remains where it is. Looking into graphs on the group revenue as we recently explained, roughly in line with the previous year. However, the composition thereof different and as we increase our production all these additional tons of chrome concentrate are actually to the market. So that means higher margins that's with a fixed margin arrangement and as we increase further going forward towards 2 million, we are targeting that all these additional tons of chrome being placed in the market will be placed at market prices and much higher margins. Jubilee remains as it always was a strong cash generator. So during the year under review, again, a strong performance on generation of cash in our cash flows. And again, as in previous years, most of that cash has been reinvested into our growth. In fact, we placed another GBP44 million back into the company growing our business. EBITDA compared year-on-year, mostly where it is because of the softer PGM market. However, with a switch now, and again, emphasis on a successfully delivered multi-metal strategy that you're after, unlike predominantly PGM exposed competitors through chrome and through copper exposed to other metals and diversifying further down the line, we are in the position to benefit off prices performing well in certain segments of the market where PGM prices are soft as they are and given the low cost and the very strong focus on keeping the cost down on the operating cost side and on the cost of production we managed to keep our margins at a healthy level. So looking into these numbers mentioned, capital spend, quite a strong number again compared to the previous year. It's still showing the growth that we are supporting and where we're going to. We expect these numbers to continue being there, in particular when North comes online. We will keep the market informed. One of the key features looking to our balance sheet, it remains geared at the low end of the spectrum. There's no term debt on our books, that's on purpose. When we look into funding and delivering our north strategy in Zambia, for example, this is where we [set] (ph) the strength of our balance sheet for. And most of our operations is actually funded from our own cash flow and small working capital facilities, as well as trade finance facilities. As we said cash from operations is quite strong revenue and EBITDA explained by the softer market prices and the communities pricing in general. Talking about the strength of our balance sheet, GBP44 million invested, GBP12 million in cash and cash equivalents at year end, comparable to the previous reporting period, GBP300 million in total assets and that's as a result of investments made during the period under review. That number of course is expected to grow. Total equity GBP205 million. The difference between the two years is FX movement on the value of our assets, which is run on our books in local currency, functional currencies of Kwacha and Rand and how they performed against the reporting currency of UK pound. In real terms, our equity ratio remains quite strong, very much in line with the previous year and the company is well capitalized. On the liquidity size, liability cover 103% to cover total liabilities against our short-term assets. So again a very strong position to be in. A couple of things that are worth mentioning here and we'd like to emphasize, we remain committed to our ESG and in particular supporting our local communities and being socially responsible. I think the number that stands out here is GBP9.2 million invested through our social responsibility program spend, this is through suppliers from the local community throughout disclosed in our income statement, both on the cost of production and operating costs. A lot of individual projects transfer the communities and making sure that we maintain our license to operate in place by always involving our communities and being socially responsible wherever we operate in South Africa and in Zambia. Similar story goes to our employees. We are now a significant employer in the places of operation in Zambia in particular and in [indiscernible]. Most of our employees, overwhelming majority actually is from local community and local. We spent a lot of time and effort in training our staff, in promoting our staff and making sure that they are positioned well enough with their skills and training to take us to the next level and deliver on all these projects and a lot of demands that management is putting on them to be on time and to deliver within budget. So on that, that's the quick overview of the financial performance presented this morning and issued in our release. I will hand over to Neal and then, obviously, we'd be happy to address your questions at the end of the presentation. Thank you, Leon.

Neal Reynolds: Thank you, Pedja. As I’ll dive into the next few slides, we're looking at South Africa and the Zambian regions. We'll just reflect on the foundation of our earnings and how that guides the look forward position of the business. All right, so on South Africa, the commendable production performance, what we've seen out of Jubilee is consistent performance. The record production underpins the earnings that you've seen in the cash flows. The PGM capacity as of now is at 44,000 ounces. That is also supported by chrome capacity increasing from 1.3 million tons to 1.47 million tons of chrome concentrate. As a PGM operations delivered 42,000 ounces of that just below the capacity that is well underpinned by the fact that the chrome business exceeded the prior year production by 7%, increasing to 1.28 million tonnes. Okay. And underpinning that is that the fact that I've seen a question on the side is that, that we are one of the lowest cost producers in the PGM market, although we have the chrome credits even without those chrome credits in the current challenging PGM market we are -- we do have a margin on the PGMs. Okay. So we have a PGM business and a chrome business that is cash generative. And fortunately we've, and previously announced, there's a long-term processing partnership that's been secured, which will support the growth in the guidance on chrome, chrome Concentrates, it was 360,000 tonnes per annum chrome concentrate partnership. Okay, I'm just going to jump to the next page, that is the looking ahead position. The aspiration is to have an annualized 2 million ton chrome concentrate production in the business. The chrome business has been able to expand on a modular basis. And this has been through plenty of lessons in the business. And the modular basis provides us with an opportunity to both fund this expansion into the chrome business through both cash flows, our existing facilities, our revolving credit facilities, and additional projects into that, we can then look at project financing or term facilities to fund it. Okay. And the reason for that direction is that, the new chrome feed that we are getting in comes with an exceptionally better quality, better terms to the original fixed margin contracts we had in place. So we have a better margin and a better cash flow upfront with the moving to this direction. Okay. Now, obviously, with the growth in the chrome concentrates will come additional PGMs. So the footprint of the current operations will need to shift with that. Okay. And also any new PGM facilities currently in the Eastern Limb that we currently are placed under review. Looking at probably more cost-effective joint venture options with the focus being on the higher margin chrome concentrate investments. Okay. The guidance on the PGM is 42,000 ounces for the 2024 year. 1.45 million tons of chrome concentrate. And that additional chrome concentrate increase from the 1.3 is coming from the investments previously in [indiscernible] plant. Okay. All right. So taking a look at Zambia, the region that I've been involved in for a few years in prior careers, the foundation to the business is driven through the Southern Copper Refining Strategy that's with the stable operations able to do 14,000 tonnes per annum. That's a capacity supported by the recently commissioned Roan copper concentrator and that's [indiscernible] and Ndola. Alright, now the business has been able to curb both power and water disruptions and furthermore just in the Q2 of the next year, we'll conclude the upgrades to Roan, which will then support and allow us to leverage the fee that we have secured and then provide the shareholders with the returns on that investment. All right. The good thing about the Zambian region is, it's a new jurisdiction from South Africa. It's giving us both a copper and cobalt play. Although in the current market copper is the flavor. Cobalt we can then switch to on and off, given it is a slightly lower liquid market and driven by a few players, but it's also at a record low at the moment. So when those markets do turn up in the cobalt industry, we can then turn to net production back on. All right, the copper guidance, we're looking at about 5,800 tons, although in the current year, we're just short of 3,000 tons. Yes, let's just switch on to the next page and we can dive into that. So as I've highlighted previously, we have Q2 2024 with upgrade of the Roan plant. This provides just a broader range of materials that that plant can then take in and then the concentrate that can then be pushed into the market through the current stable operations. We have secured six year copper run of mine supply for Roan. And this is something as an incoming CFO that I'm expecting to see a little bit more out of the Zambian region is that, securing the feed and really sweating those assets to go and get the output on the copper. So building up the production and hitting the capacity and filling the business. The second point -- sorry, the third point on the slide is securing additional long-term run of mine supply for Sable. There are surrounding areas that we can potentially look at securing. In terms of the tailing business in the northern strategy, there's continuous pilot trials to unlock additional value associated with the copper tailings. Yes, and just reflecting on the guidance, I did previously say, it's 5,850 copper tons targeted. Obviously in the future that should be incremented given the focus and the effort on the investment that we've done. All right. Okay, the Zambian opportunity. For those who don't know, Zambia, just north of South Africa has got a thriving junior mining industry. It's a significant amount of copper has been mined historically with billions of tons of tailings and hundreds of millions of tons of waste rock that's available for plants like Roan in and around areas like Roan and [indiscernible] that they can go and secure and feed into, as well as filling up the Sable plants. This can be -- also the expansion can be done on a module process. It's been proven within the chrome, the chrome concentrates process that we've been able to expand that production. And that's with the lessons learned and the technical expertise coming is that we can be a rapid mover in terms of taking opportunity of that market and really it does give us an opportunity for growth. Thank you very much.

Leon Coetzer: Thanks Neal. I think maybe just to add to what Neal was saying is, I know that probably from many shareholders they're saying, they've heard this Zambian story for so many times over, but the reality is quite simple is that, the opportunity is real, the tailings is on surface, we have secured them, the waste rock is on surface and available and we have secured our feed to these facilities. We're now in a very, very, very critical position for that drive into Zambia and it really is on the back of the upgrades we are doing to our own concentrate and for those that might have forgotten this Roan concentrator is where we upgrade the material to produce the cathode at our sable refinery. The [5850] (ph) target that's been spoken of really speaks to what comes in the second half of the year on the back of that upgrade so that we can up that throughput to fill up the capacity that the South holds. The capacity of the South, which is roughly 14,000 tonnes per annum, it really links to what is the grade of copper that goes into the refinery. It is the key target to achieve and full that capacity on the back of these modular sites that we are running or implementing into Zambia. To put that in perspective, one such additional, two such additional modules that we look to roll into Zambia would already exceed the capacity of the South by simply rolling out these solutions into Zambia. On the back of our construction partners, we have roughly a six months from commencement to commissioning and bringing on stream the implementation of these modules, they're specifically designed to roll them out in a rapid way. There's many questions around margins. And as you can imagine, the more copper tons you make, the better your margin, because the fixed costs of the refinery is being diluted by the additional tons. Even though already our copper production per ton of copper cathode, as we've shown our results, fall below 6,000 tons per copper cathode and we fully expect that to break $6,000 per ton once we are running at our full capacities. The teams are driving really hard to complete that Roan upgrade during the end of this year to come in before the big rainy season starts in Zambia so that we can see the benefits in our second half for our copper expansion. That really sets alight the Southern Copper Strategy and the copper impetus into Zambia that we are driving. As we've discussed before, if you look at our company and you look at what is being delivered and what is to come. What has been delivered and where we are today is a stable South African operation of chrome and PGMs, both enjoying good solid margins, even with a depressed PGM commodity price, and driven by a tremendous expansion drive in our chrome, as you can expect the numbers to reflect through the current period in our South Africa as we roll out that expansion. Those expansion targeted numbers we have stated for South Africa, that is before the implementation of any additional capacity in our facilities. It's on the back of the capacities we currently have and are commissioned in our South African operations. Any further expansions is in addition to those numbers. The 42,000 or 44,000 ounces capacity we speak of and the target for this year is all ounces produced out of our Inyoni operation. It excludes any third party or joint venture processing capacity that we have leveraged before. We spoke and touched on it on the announcements within the current PGM market pricing and environment that we have elected as an executive committee to rather leverage these joint venture agreements we've got to access their capacity to absorb the expansion of our PGM operations on the back of our chrome operations to avoid the necessity to spend capital now on our PGM expansion, but instead rather bleed our PGM assets and agreements to absorb those additional ounces that come through and rather focus on that rollout of our copper expansion drive in Zambia going forward. In Zambia, yes, we have had our challenges. Yes, I know that there's an expectation that we have to break out of our numbers to really deliver on that 10,000 tons and upwards capacity of copper per annum. And that's the key measure that we hold ourselves, also accountable to in the coming half year post the completion of our Roan concentrate, with that strategy we can really show its value to the group, to our earnings diversification as copper earnings start kicking into our group. And the PGM earnings component, which has been the key backbone to our earnings of our group over the past periods become actually a third earnings driver with chrome being its own key earnings driver as we expanding into high margin chrome and of course, copper leading that earnings push for our company going forward. That concludes the formal side of the presentation and really would like to jump in to the numerous questions we've received from our shareholders and from various interested parties. To add color to these questions because I think many of these themes that we receive probably address some of the questions that you might hold as well. The themes of the questions really cover into four areas, one of which is there's a lot of questions around now that we have our permanent CFO in the group and that's around the PR and communication to our shareholders. Yes, we can commit that we are entering now into a quarterly update phase. Our business is also at a level where South Africa has reached that stability of its implementation of a strategy into a business and a mature business with growth and definitely justifies a quarterly reporting of its performance for shareholders to get comfort and track our performance as well as the expectation they hold of our performance. The chrome business which is starting to stand up as in its own right not only as a biproduct as we always report chrome, but actually as an entity in its own right should, but by the sheer magnitude that this business offers Jubilee and its investors to unclutter that for many. Our chrome business consists of two components. We have the component where we started life, which is a component where our capacity is technically rented to miners or owners of chrome material, where we operate and process their material, we deliver exceptional efficiencies to them, we return the chrome to them for -- on sale to their clients or self-use. And we [Technical Difficulty]

Unidentified Company Representative: Ladies and gentlemen, please do just bear with us while we reconnect Leon from the room. Thank you. Hi Leon, can you hear us okay sir?

Leon Coetzer: Yes, I can hear you clearly.

Unidentified Company Representative: Perfect, we just lost you for a moment there. I think it was just a blip in the connection, but you are back and live. Thank you very much, sir.

Leon Coetzer: Thank you. Sorry, we seem to have experienced a slight [Technical Difficulty]

Unidentified Company Representative: Ladies and gentlemen, please do just bear with me while we reconnect Leon from the room. Thank you.

Pedja Kovacevic: I think I can carry on that arrangement on chrome until Leon comes back.

Unidentified Company Representative: Thank you, Pedja.

Pedja Kovacevic: Absolutely. So on the fixed margin, it was basically on a cost-plus basis. And during the load times of the market, I think it was in a way also a flaw for us, because that margin was guaranteed. You would have seen that level margin reported in previous years. We on purpose always kept about 30% of our total production processing capacity, which we could switch then swing to the market when the market is good. And as market is becoming almost permanently good, but certainly more bullish on the chrome prices, we've switched all that 30% across. So the composition of what goes -- what is sold where it changes, it also to an extent changes the cost structure of chrome, because we are now basically buying and selling this to the market portion of the chrome at market prices, but it's a much higher margin business. So even though the volumes and the historical contribution of chrome to revenues of the group was significant in previous year in terms of contribution to profits and to EBITDA, it wasn't that big. That's changed this year already and it's expected to change going forward. As we increase the actual volume of chrome production capacity and get more resources available to us. We'd be able to sell more of this material to the market and therefore not only increase the revenue from the chrome site, but very much increase the profits as well. Did we sort out the technical issues? Have a different video feed there. You're back. Leon, I used the opportunity to finish on the fixed versus market margin on chrome and how that works going forward. So I think you can carry on from there.

Unidentified Company Representative: Hi Leon, can you hear us in the room? Pedja, it looks like it may be an error on Leon's connection, so if I may just hand back to you.

Pedja Kovacevic: Sure. He was the one going through the questions and I need to go through it just to say.

Unidentified Company Representative: Yeah, let me just bring him back through. He's just coming in now. Hi Leon. Hi Pedja. Ladies and gentlemen, please you just bear with me. Pedja, on the right-hand side in the Q&A panel, there are the questions just coming through now.

Pedja Kovacevic: Leon, you're back.

Unidentified Company Representative: Hi, Leon. We have you back on the line.

Leon Coetzer: Thank you so much. It seems that we have an IT issue on our side, but it seems to have been addressed. The grouping of the question -- Thank you for Pedja for handling on the chrome side. The chrome, really the second question people have asked Pedja is really to understand what the expectation should be as we grow now from 1.3 roughly million tons to our 1.45 million tons. All of that growth coming from third-party chrome and therefore what that margin brings. To understand the impact on revenue, it means all of that chrome growth is exposed to the market.

Pedja Kovacevic: Okay, so that's exposed to the market. And I think the same goes, and it's important to know for future targets as well. So all these additional incremental increases through those modular processing plans being put in place and additional resources secured. As we move to now 1.4 as announced to the target in the current financial year, all these additional tons are for the market, therefore with a higher margin. And then as we move towards 2 million target, all those additional tons would also go into that same slot. So therefore, as previously said, in terms of contribution, not only to revenues, but the profits as well of chrome are expected to feature much more. And that's without any expectation for the time being of PGMs improving in a short term. I've seen some of the questions regarding the cost structure of PGMs. What we've published this morning is an actual PGM cost which is still very much making us a profit at carrying PGM basket in a region of about $300 per ounce. In the calculation, whereby we bring in chrome credits, I think as we increase chrome and chrome revenue and chrome profits against the steady state ounces without any expansion that would increase further, so at some stage you may even come to a negative cost. I think for the purposes of analyzing that you should probably delink it. But very much on PGM cost alone we are profitable as disclosed in the release and the financial statements as of this morning. Leon your back?

Leon Coetzer: Yes, thank you, Pedja. Unfortunately it seems that we are having a power issue as well as expected.

Unidentified Company Representative: Hi, Pedro, it does look an issue on the network from there.

Pedja Kovacevic: 100%. It seems we need generators for the head office as well. So I've also seen the composition of the chrome costs. So it's basically, we haven't disclosed that. So I can't give you the precise details, but I can tell you in principle, it's the cost of feed, cost of power to some extent that increased now with this backup power needed to be put in place. There's a note and detailed explanation on that in our financial statement. We have put in place backup generators to deal with the current or long-standing [ESCOM] (ph) issues on the supply side. So that's on our chrome facilities, which are at sites where chrome run of mine and materials are being brought to. They're now fully covered and they worked for quite a bit of time, but making sure that we continually have been producing. At our PGM refining side, Inyoni, we are right next to Hernic Ferrochrome Smelter. They are the last to go out sort of stage 6 load shedding. So we haven't experienced any issues that side. But certainly when we look into power, because those are diesel generated and you're looking into cost of transport and diesel going up and cost of transport is affecting it, these would be the three major components and then obviously labor. So I'd look to maybe one of the next releases in agreement with Neal provide a bit of more colors to the structure of cost of production across our metals just to give you categories and what you can track and look into. There was a question regarding cobalt. So yes, we kept our capacity. Neal mentioned the price is depressed. The market seems to be oversupplied. There are some interesting opportunities for cobalt going forward, in particular on responsible sourcing. And where is that cobalt destined to? We did produce a bit of hydroxide to test it and I think we need for this price to go a bit up for the market before additional production kicks in. So all of that capacity is now kept by copper. Copper is doing much better in the current market and we're looking to increase on that. Long-term target on the cost of production on copper, we published the figure this morning. I see 6,000 is proposed, we'd like it to be below that. Obviously, as we increase the production capacity and with the feed sources coming online as per what Leon's disclosed and Neal also touch on to as you produce more, you definitely reduce some of your fixed or semi fixed components of your cost structure, so that improves. Leon, you're back?

Leon Coetzer: Yes, it seems we're back. I hope that I'm back longer than 10 seconds this time around.

Pedja Kovacevic: Let me give you what I've covered. I've covered PGMs, I've covered cobalt and then cost of copper.

Leon Coetzer: Excellent. Thank you so much. Thank you for that, Pedja. And I apologize for the inconvenience caused to everybody listening. Just to jump in to some of the other key questions that have come up for us and I'll hand over to Neal just to answer as well. Of course a concern always for shareholders when we are on an expansion drive, as we are in South Africa and in Zambia would be on the funding side. The word dilution is often not a word that is really wanting to be heard. And maybe I'll just hand over to you, Neal, just to talk through how we're expanding in South Africa. I know Pedja has touched on the cash flows that we bring and also our approach in Zambia that we're looking to fund and that expansion drive.

Neal Reynolds: Thanks, Leon. Firstly, I mean, just the pre-step to funding is just looking at the investment and just applying rigorous capital principles against what we actually want to invest to. Once we've crossed that path or crossed that line, the funding within the group has got a strong balance sheet. It's a balance sheet that we can give it to the optimal level. It is cash generative at the same time. So in terms of funding, it's going to be both through cash generation, the existing facilities that we have. And then we will look at discussing with our current banking partners and other partners to look at how do we fund specific projects, both in the -- specifically in the chrome space.

Leon Coetzer: I think a key component to that is, if you look at how we're driving our chrome from our cash flows as Neal says, in copper with our modular expansion we are going forward that we fully expect expansion in copper to be driven by both our cash flows and of course our funding lines, because as you produce more copper with that comes your funding lines on the back of that copper. Some of the other questions that we speak of and questions have been asked, are we able to mention and give more clarity who we partner with? We often speak of our collaborative partners on chrome, which we are now expanding into. Because these companies are collaborative, we always have to gain their support for disclosing. And also critical for us is that the last thing we want to do is give away our competitive edge on how we secure these chrome. But now in South Africa, yes, very much so as we did in our announcement. We spoke about [Tutsi] (ph) Collaboration, which is a company in South Africa, where we are unlocking that operations. And we certainly would be eager to bring to market some of the others as we alluded to in our announcements, some of the other companies we are in advanced discussions to continue to expand this collaborative nature on chrome. And we certainly look as eager as you are to bring out their details going forward. We discussed on the PR side the fact that, yes, we are committing to a quarterly update for operations specifically, because we are now in that phase of stability of our operations in South Africa with growth on top of that. The comment around the financial calendar, it's one of the key focuses Neal is driving into our group, but yes, we'll publish our financial calendar for our investors and our shareholders to set the timelines, what communications can be expected during the course of the year. Questions around cobalt. Pedja touched on it. Neal touched on cobalt as well. Yes, we spoke of we currently have an existing cobalt infrastructure to process and produce cobalt as we've done before. The cobalt circuit remains offline because of the current nature of all the current prices cobalt is experiencing. But it's driven by two factors. One is, yes, the current LME price, if you were to look at the cobalt, but equally the demand for cobalt, which remains relatively low compared to the availability of cobalt. So what really would trigger us to bring the cobalt circuit back online is when those market fundamentals come back into balance. You always have the risk of if we are to put the cobalt circuit back into operation during an imbalance in the market that there might be a short-lived price appreciation rather than a consistent price appreciation coming through on cobalt. The other area that, of course, shareholders are concerned about, and we all share that concern as our incentives are driven towards that measure is the share price itself. The share price has been stagnant. It's been hovering in price range that certainly doesn't reflect neither the operational delivery, neither the financial potential that's being shown for the coming year. And a component that we certainly will be driving hard and it falls within Neal's portfolio going forward is to ensure that our communication to market on what we are driving are achievements, are progress we're making is better understood, partly because the clarity of how we implementing our copper strategy has reached that level of clarity now where we have our southern copper strategy very clearly positioned within the waste, copper and ore space, while our northern process which is being developed to unlock tailings is within its continuous trial period. One can therefore expect that within our Southern copper, that more of the same can be expected on the expansion side, more of the same meaning, a similar process driving out to the various operations or various areas where these materials we target are located, hundreds of millions being currently already on surface. So one can expect that the Southern copper strategy beyond Roan and its front end upgrade, that one can expect in our communication as these modular plants are being implemented and rolled out very similar to our chrome evolution of the business where we are collaborating with both companies who have left this reef behind as well as owners of this rock lying on surface as we develop and roll out our modular plants in their areas to constantly put our capacity in the south under pressure, to bleed the acid which is our refinery and its capacity and that's an expected news flow you can see out of the south, it's modular, relatively modest capital outlays to drive this capacity. While in the north it's all about technical breakthrough. It's all about process breakthrough as we driving that solution to unlock those tailings. Tailings being created by processing plants over the past, both concentrating up the difficult coppers, as well as rejecting certain of those coppers into these tailings facilities. And our research teams are progressing with that solution. As we've alluded to the market, we've completed the laboratory scale. We're now going into the continuous runs. It means that where previously a batch of material was processed, we're now running continuously at roughly a 90-day cycle that we run continuously to make sure that there's no particular element or component of the process solution that was not masked during the batch trials of that solution. It's a critical phase to go through to confirm whether that solution running for a continuous period is able to repeat the results achieved during the batch system. If successful, yet again Jubilee would have pioneered a process to unlock these vast tailings, low-grade copper tailings that is seen so complex and challenging by the industry to process in Zambia. That's the copper side, that's how we'll be driving it and as you can hear we use the word modular a lot, because the modular -- modularity of this expansion into copper also speaks to the ability to fund within our cash flow and within our ability to draw financing lines for that copper.

Pedja Kovacevic: Leon, if I may add to that, I think there was a lot of talk previously about dilution. As indicated to the market, we haven't gone to the market in the previous financial year. I think you'll see in our notes that the reason for the increased number of shares is that 85% of the historically issued warrants have been exercised during the period. So the total number has been driven down significantly. This is from periods where Jubilee was literally starting up. So our ability to fund is based on the strength of our balance sheet and cash generation and as these things come together, obviously, we will fund this through other means. The second thing is what I mentioned earlier is the actual correlation if you're running between commodity prices and our share. I think we need for the market to start understanding better the chrome component, which is a very significant driver and to start seeing our copper strategy coming together and delivering numbers and then through quarter reports we will be able to keep you closer to their performance and hopefully align that a bit better so that PGM prices are not driving the sentiment regarding our share performance as clearly it's not driving the revenues or profits solely anymore.

Leon Coetzer: Absolutely, Pedja. Just to further -- a few questions on clarifications that's coming through on the Q&A side. There seems to have been a bit of delay, but I'm getting them through now. The question really is again on chrome, which is totally understandable, because chrome is such a big driver of our expansion in South Africa to understand current chrome prices. You've touched on, Pedja, why fundamentally chrome is a commodity that Jubilee is investing in at this stage. There's a couple of drivers that has come through in chrome, this unique environment that's being created. On the one side, of course, chrome very much, 80% of the world's chrome is from South Africa. So South Africa's challenges on a currently experience on infrastructure and getting the product out, no doubt, is supportive of the chrome price. Equally, as chrome has been mined from shallow reserves over the past years, chrome companies are now being forced to look at deeper reserves to extract chrome, which comes with more expensive extraction costs and that's an upward pressure on the chrome price. It speaks even more to Jubilee's ability to go back and actually process those shallow reefs and wastes that were left behind by these mining companies and that coupled, of course, to the demand which is really driven by the stainless steel as Pedja spoke of. The tremendous demand at the moment is there's a expansion of ferrochrome processing capacity which is the ingredient to stainless steel, that is currently being experienced in China and that demand is seen in the stock held of chrome ores and chrome concentrates which is at very low levels at the moment in the world. That all speaks to a big fundamental driver to why we expect the chrome price to stay high for longer in this space. Some of the other questions that also came up on this topic of expansion, on this topic of our development center and the processes that it's rolling back into operations was twofold. One is, which other jurisdictions are we looking at? Jubilee, of course, beyond our immediate commitment and that is to make our copper expansion targets. And secondly, capitalize on the chrome expansion and the advantages that brings to our group. We constantly are offering as part of our services and as part of our business development side, we work with, as we referred to before many of the very large mining global houses as we look to resolve some of their own challenges on their waste and their waste opportunities. It acts as both as a feeder to our development center and also a great business development as we mature those relationships for the next opportunity and growth opportunity for Jubilee. If we look at where we are today, our immediate CapEx demand for our group going forward on the guided numbers we've provided into the market, as we said, our South African guidance on PGMs and on chrome is based on capital spent into our operations. Any further capital would be looked at further growth rather than delivering the forecast numbers we've given. In Zambia, our capital spent really is on the completion of the upgrade of Roan concentrator, which is a modest capital investment to upgrade the front end of Roan and bring this new modular flow sheet into the front end of Roan, making it able to process not only a wider variety of material, but more of such materials as well. Basically, therefore, our guidance given for both copper, chrome and PGMs is very much within our capitalized numbers already, with no significant capital outlay to achieve those numbers in giving guidance to the market at the moment. If one looks a bit beyond the short term, where PGMs are at the moment and suffering from nearly halving in basket price values over a two-year period. If one looks beyond the short term, we remain focused on PGMs. We remain optimistic on PGMs. The demand for PGMs, of course, as you're well aware, majority demand comes from the use in internal combustion engines as its catalyst for the automobile industry. And therefore, PGMs are trying to, and will react to the ultimate demand, comparativeness between electric vehicles and internal combustion vehicles and the hydrogen fuel cell adoption of the hydrogen fuel cell as their third ultimate green energy fuel and energy source for automobile industry. And it's very much linked to those adoptions of those new technologies. The space of energy within the electric vehicle space and within the automobile space is a very dynamic space. As you've seen, the excitement running between lithium’s and nickels and cobalt’s and vanadium’s and as those mature we have a firm belief that within that maturity that comes through the hydrogen fuel cell in its own right will also be part of that solution because of what it offers to that space going forward. On copper, copper fundamentals are looking particularly strong. We have a demand of copper that is sustained. We are seeing it through the prices. Yes, there are fluctuations. Yes, we've seen prices fluctuate between $7,500 ton up to nearly $10,000 a ton, but it quickly recovers to within the region of $8,000 a ton, driven by the fundamentals of supply and demand going forward. So we remain very focused on our expansion drive in copper and to deliver on those targeted numbers. There's a few extra questions coming in at the moment. There are questions around margins. Again, just to clarify, because I understand the nervousness in the market of metals, and just to explain, maybe just go through it again. Our PGM businesses, as Neal referenced is profitable irrespective of chrome. It is a particularly low-cost producer because there's no mining component to our PGM operations. It benefits from the fact that our chrome expansion drive, which is profitable in its own right, delivers further PGMs to our operations. At the moment, our basket prices for PGMs, which we realize is in the order of about $1,000 to $1,100 per ounce of PGMs we produce. Within our results you'll see that our all-in cost per PGM ounce is in the region of $700 an ounce. So it remains strongly profitable. Our Chrome margins are growing. In previous years, we spoke about our tolling agreement with a blend of own concentrate, running at a margin of between 7% to 9% of our chrome revenues. That chrome margin is set to grow as we explained with our new contracts coming on stream where those margins run between 20% up to 25% and even 30% depending on the chrome price. You can therefore see how that margin starts being weighted more and more to the new chrome coming on stream for our group. On copper, as our current operational costs of 6,000 tons -- $6,000 per ton of copper, that dramatically reduces as Roan kicks into its full capacity, because the dilutionary effect that has on the fixed cost of both Roan and Sable who designed to operate at far greater copper units than the current production levels. And therefore one can expect the copper cost to produce a ton of cathode to significantly come off as the Roan concentrator with its new front-end module kicks in. And that's what one can expect going forward. Equally if you look at your chrome numbers you can see that with a growth in chrome earnings and the growth of Chrome tons, that Chrome earnings has the potential to completely offset any loss in earnings margin in our PGM operations, which is a particularly strong position to be in. Because we are poised and ready to benefit from any appreciation coming back through the PGM market, while our chrome operations deliver the earnings for the South African or the majority of those earnings going forward for our South African operations.

Pedja Kovacevic: That's a strong point Leon. I think given the nature of how we structure the business, any additional dollar increase in PGM prices pretty much goes to our bottom line. And that's the potential. And I think the importance of chrome, the reason we are making those margins is a much higher efficiency than the industry standard and average about 20% more mass yield. In effect, that means from the same level feed, we get that much more products. Obviously, on average, the product will be cheaper. So there's a lot of, call it, meat for us within that margin, whatever the market, but certainly in the current market, that's a very profitable business to be in.

Leon Coetzer: Very much so, very much so. I mean, as much as we share in the frustration of the share price, we can only trust that as these numbers come out, as these results come out, people will see two components to the company. One is the ability to react through our diverse portfolio to market fundamentals or negativity in market prices. Secondly, because of the path we are opening up into the industry or the area we are opening up in the industry by processing these materials forgotten by the industry, how the potential to grow into that space is being captured by the company. So we have really two components. We have a diversity of earnings being formed, while at the same time, a very strong growing operational footprint and portfolio that comes with that development for our group. And with that, we've addressed, I think, most of the themes. We'll certainly go through the list of questions again and make sure if we've missed any particular questions or themes that we get answers to our shareholders and to the interested groups. But again, if I could say thank you for your support. I fully appreciate the frustration in the market that's being felt. But we certainly, you can bank on the commitment of the team to deliver and to strive towards these targets that we have set for ourselves and for this industry we are creating and carving out in the space of waste and tailings and those forgotten reefs we are currently exploring for the group.

Unidentified Company Representative: Leon, if I may just jump back in there. Neil and Pedro as well, thank you very much indeed for addressing all of those questions that came in from investors. And as Leon did just kindly mention, we'll be able to give you back all of the questions that were submitted today, just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform and we'll notify those on the call when they're ready for their review. And Leon, I was just going to ask you for a few closing comments just to wrap up with, but I think you might have just well delivered those. If it's okay, what I'll do is I'll redirect those on the call for their feedback, which I know is particularly important to yourself and the company. So could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Jubilee Metals Group PLC, we would like to thank you for attending today’s presentation. That now concludes today’s session. So good afternoon to you all.

End of Q&A: