Impala Platinum Holdings Limited (IMP) Earnings Call Transcript & Summary

Good morning. Right, welcome to everybody in the room. It's always a pleasure to see you in the room. Also a very hearty welcome to everybody joining us on the webcast. There will also be an opportunity on the webcast and on Chorus call to engage with the team directly after our short presentation in a Q&A session. As usual, we'll take questions in the room first, and then we'll pivot to quarter's call on the web. There are no emergency draws planned for today. So rest assured, if we are an alarm, it will be a genuine alarm. And the normal exit is as you come in, and there are people ready to steer and provide and look after us. So very, very welcome. I'm going to hand straight over to the team. There will be a short presentation, after which we'll pivot into Q&A. Nico?

Good morning, everyone, from my side. Also welcome all the [ in-class ] people, media, analysts, investment community. And thank you to all the people that have made today possible and a team for supporting the delivery of, I think, an absolutely stellar set of results. Before we do that, though, as is our practice, the cautionary statement. You'll make investment decisions on your own. So this is a wonderful time for us to come to the market. This obviously, we've got a very supportive price environment. We see very exciting activities in the industry, in the market. We have not been participating at this point, so it involves and other parties. But nevertheless, very exciting for us to be in an industry that is supported with a constructive price environment. Personally, this is a point that we as a company have worked many years to get to. And when I look at the last financial year, I have to thank our operational teams for the absolutely stunning operational performance that they were able to achieve. The most worry thing for me is not any ounces that was delivered. I mean that in part is really important. That provides us with our license. But is the fact that we were able to on top of all of that, increasing our minor reserves by 9%. It's the fact that [ Tim ] and his team in Canada extended the life of Canada by another year. And when I look at the work at what they're doing, it appears, like some of the rest of the portfolio that we have the ability under the current price environment to provide this continuous extension of life. So I'm very happy that there's a very strong team that is now very settled, that are able to deliver very strong results. A big part of the company is focused on the future and on developing future strength and competitive position in the company. So on supporting the 4% increase in ounces sales was a 63% increase in the dollar basket price and a 51% in rand price that resulted in a material increase in headline earnings. Therefore, cash flow, which resulted in a very robust allocation of capital from the team, from the Board, which saw 82% of our free cash flow being allocated to shareholders. And that is totally appropriate in the absence of capital-intensive growth projects that are currently not on the table, we have got a pipeline of opportunities, which I'll just touch on. The balance sheet is very strong. We've got no date and we've got ZAR 37 billion worth of liquidity. And so it's just absolutely appropriate that in line with our undertakings that we gave before that we had a very strong allocation lto shareholders. And so looking forward, it is our contention, and [ Emma ] is going to speak a little bit about the market that the current supportive environment is going to continue for the medium term. We don't believe that the macros are about to change. And every -- all the signals from a demand side is positive. And equally on the supply side, we have not seen major steps from producers to bring new supply to the market other than new engines in specifically two projects. But from the major petitions we are seeing a constrained supply base going forward, which combined with the increase in industrial demand, the EPs relevance of hybrid vehicles, we see a very strong market for the rentals for the next few years. So if you take all of that into consideration and you look at what our company will be focusing on, first, as I said earlier, our current performance is always critical. So the excellence that was displayed this year will be the first priority for the next year and beyond. But after that, our focus is on creating competitive strength in the company. And specifically, we are looking at life extension projects. And I must say we are blessed to have a quality set of assets with significant resources and reserves with a multitude of opportunities to provide longevity to most of our assets. And so that will be the first part of the business. And then secondly, we do have a study program that will look at growth options. We have got Portal 10 at Zimplats, which is another relatively shallow, mechanized possibility for the future, which will add tremendous value in future decades in the company as [ Estala2 ], which is probably the world's best quality untapped [ Merensky ] ore body that's left for us to explore. And on top of that, there is always the opportunity for us to explore partnerships with our joint venture partners and to in addition to that, to look at potential M&A opportunities to the extent that, that is value accretive. So that's all from my side. I just wanted to provide the context where [ X ] is going to be. I will now hand over to Emma, who will just briefly touch on the market.

Okay. Good morning, everyone. So I'm very conscious that we are the third major cytokine producer to report this week. So I'm not going to give you kind of a rehash of geopolitics. I think from a market perspective at Implats, we think about things in the short, the medium and the longer term. And the extent to which those trends and developments kind of influence and shape our competitive landscape and how also we can respond to them and make sure that our business is the best positioned for those. I think one of the things that has changed positively over the last kind of 1.5 years is absolutely this focus on critical minerals, the security and surety of supply. I think that's been combined with a broader debasement trade. And then from a kind of big demand, energy and impetus perspective, obviously, you've got AI. So if I look a little bit of demand in terms of some of the positive changes and some of the developments that have shaped that outlook and I think underpin a more positive stance from us in terms of business positioning and future focus, I think there is an increased focus on just how important and sticky the industrial demand is. And particularly, I think many of you have had the benefit and the privilege of going to Shanghai Platinum [ Week ] and getting exposure to the huge diversity of industrial applications and the kind of energy and impetus behind the development of those markets there. I think that's proved a really useful counter to the demand story, which has been very much about kind of waning our production over the last couple of years. And I think Johan and Patrick were there 6 weeks ago and visited one of the major fabricators where there were 300 million engineers working in R&D and not in Catalysis. We've also had some support in terms of policy developments on BEV penetration expectations. So you'll all be aware of the kind of easing of CO2 in Europe. We've got a bless Trump for his repealing of EV incentives. And we do still have changing emissions legislation, which is supporting demand. I think linked to that China story, but I think more broadly, just in terms of South African supply and the structure of the market, we are absolutely seeing a growing relevance in terms of [ mono ] PGMs. And I think that is a trend that you've seen in PGM markets over time. But there's no doubt that the next 10 to 15 years are going to be far more focused on the full basket and particularly redimenthemium. And we are a very significant producer of both. So we're close to 30% of primary refined Iridium production and around 28% of refined [ resin ] production. So [indiscernible] and ASH other people to get hold of in terms of long-term security. And then I think also what we've seen, which has been great over the last 1.5 years is renewed emphasis in terms of collaboration across market development initiatives. And I think the extent to which that's been done with fabricators is also important. We are part of a global ecosystem. And the people that we sell metal to are also facing shifts in terms of market outlook. So if you were traditionally an auto catalyst maker, how do you look to secure long-term longevity for your business? And I think that aligning of interests, and I think the collaboration between producers has definitely shifted the tone and the focus on market development. And I think that's also incredibly positive in terms of long-term planning. Just a few more words on supply because I know it's going to be short. We've seen minimal changes in our supplier outlook. We tend to look for offtake agreements and funding certainty before we count it in. We do still see a limited greenfield project pipeline. And I think most importantly, we are always assured by the people who we speak to and who we sell our metal to about how important a strong and sustainable primary supply data man. So I think we know that we produce special and critical minerals. And I think the world recognizes that South Africa is the absolute anchor of sustainable production and future market evolution over time.

Thank you, Emma. Good morning, everyone. We get into the engine room, starting with safety, very key to our front stay that safe production for us as implants remains our Apex priority and remains nonnegotiable. So if you look at FY '26, it marked 6 years of consecutive improvement in our LTI frequency rate, but also other rates for the year have significantly improved. But what is also more appealing is that we have seen an increase in our, what we call, white flag days. The the days that for 24-hour period, more than 55,000 employees come to work and go home unharmed. It is actually prove that the Zero Harm is possible. It's not just a pipe dream. So the more we increase these days, I think we'll get much more closer to, first of all, eliminated fatalities and secondly, to reach our zero-harm goal. So for FY 2026, we spent a lot of time maturing our safety system, defining clear controls and really embedding them. And that's what actually have led to some of this improvement that you see. Despite all these things on first, we had 4 losses of life. But really, we need to appreciate that the [ Gen2 ] elimination of facility is not a linear one. There are setbacks on the way. What is more important is that to resolute determine to carry on implementing our safety strategy because the results will come through resilience. And I think that's what the team has prepared themselves for. So for the new year FY 2027, our focus really can be someone in two. There will be an enhanced leadership visibility underground in our process plants to verify and track clear controls. We've define them with embedded them. Now it's a question of very fine that they work. And secondly, while doing that is to create an environment where every employee will feel safe to stop unsafe work without fear of any consequences. And that's what our safety gain is all about. So two takeaways from safety. Safe reduction remains nonnegotiable. And secondly, the recent labs auditor safety performance does not discourage us. We are more determined than ever to make sure that we send each and every man and women home on home on a daily basis. All righ then moving over to production itself. As [ Nico ] said, we've had a very strong operational performance coming both from our mining assets and processing assets. I do know that you have the numbers, but allow me to show some standard performance starting with Impala Rustenberg, Rustenberg remains our key assets. For the year, we have seen a 5-year high coming from the old lease area. But also, if you look at the whole Impala [ lasting ] now with the consolidation of RB plant, you will see that our growth short are the ones which are driving this improvement in production, [ 16-share ] and still we've combined all those 3 shafts gave us 80,000 ounces more, and we still expect still drift in the new year to continue to march towards full name capacity of 230,000 tonnes a month. Zimplats also on the back of improving fiscal policy in the country and the work we've done in restoring tricuspid reliability, we have seen in implants bouncing back from last year to the produce about 660,000 ounces in concentrate. What you see 606 only match because we ended up with a stock of about 24,000 ounces because of fairness maintenance that we have to do. But I think the star player, it is a processing division, the work we've been doing on our fantasies is starting to pay dividends for the first time in 20 years. [ Rustenburg ] make finances ran without any incident. And if you look at the work we have done to increase our capacity at BMR, we have seen record billing also at our basement refineries. And as a result, that's the reason why we were able lease 120,000 ounces from excess inventory as promised earlier in the year. So briefly touching on unit cost, the strong rent combined with strong volume delivery has helped us to maintain our unit cost increase in line with guidance of [ 8% ]. And this is even after spending about 3% more on maintenance because as a company, we've always decided that once there is tailwinds, let's take advantage of them and really create a strong operating platform, and that's what we have done by putting some maintenance in front ahead in plant also in Rustenburg. So when you look at the engine room, I believe that we've got strong assets, as Nico said. They are well geared, well capitalized to be able to deliver Enodis high price environment. Now moving over to capital guidance. You will all recall that around 2020, we announced capital project program of about ZAR 50 billion. So it peaked somewhere around 2024. For the last 2 years, it's been winding down. So we're now entering a new phase where we planned that for the next 5 years, we'll spend about circa ZAR 60 billion. to do two things, to again, make sure that our product is sustainable going to the future; but secondly, to create a strategic optionality by further increasing our process capacity at the basement refineries is about -- with about [ 20% ]. So what we're going to be doing in the next 5 years, we will be advancing love of mine extensions. Some are already approved [ 2 ] shut and [ 4 ] shaft. But we'll be advancing the likes of Marula deepening, we'll be advancing the likes of BRPM North and studies at [ Potts Nikos ] earlier and also the work we are doing with our partners at Mimosa and also at Two Rivers. We'll also be increasing our ore development. As I said, we've got tailwinds. So it's important that we create that pit room that. And that's what you have seen in Rosenberg the work we've just done during the good times, we were able to carry us through the tough times. And that's why our rest will continue to improve also on production. We'll also be strengthening our operating platform by making sure that we continue with our round-up grades and also implementing our fairness new designs, the fairness of the future. as we've been communicating all along. And lastly is to advance or accelerate our ESG commitment for 2030. So if you look at the graph, you will see that SIB for the first 2 years is peaking at about 9 billion, is really about taking advantage of the tailwind to fix our wins and upgrades and also implementing fairness of the future. From there, it will come back to normal levels of between 7.5 and about 8. So if you look only at FY 2027, we're guiding between 9 and 11 billion. And from there, as the replacement project and growth projects come to the party, it will then be about between 10 billion and 13 billion. So looking at the level of mine profile, we answered the question, what are we getting for this capital. You will see that [ Tech's ] been the brownfield project, we just spoke about when we execute all of them, we should be able to maintain the current production for another 10 years. And then there are 3 greenfields that they are on the study, start 2 [ Waterberg ] and all the [ Zyla ] portal. When we bring them along, that's another 5 years additional. So we have the life-of-mine profile that can be maintained through good asset for the next 50 years. And the capital I spoke about is just set to get us there. robust operating platform, extending life of mine and making show that through the BMR improved capacity increase, we have optionality to look at third parties and all those type of things. So then moving over to guidance. So let me take one step back, we're entering FY '27 with a strong operating platform because of the work we've done. So because of that, we even had a confidence to do a safety research in Rustenberg for 4 days. So we said we'll come back to you in terms of what is the effect of that for the store page. So the numbers I'm going to talk about is already factored in, plus or minus 60,000 ounces were lost because of that reset. So I'm not going to try to go through all the numbers. I'm going to go through what I've highlighted. So group production remains pretty much in line with what we have achieved this year. So we're guiding between 3.3 and 2.5. So moving over to unit costs, we're guiding between the lower end, 4% increase and the top end being 8%. So the midpoint is about 6%. After that we'll touch on capital expenditure, that for the year FY '27, we're looking at about between ZAR 9 billion and ZAR 11 billion. So my parting shot is we've done a lot of work to strengthen our business and that's what we enter in the new year with. So we'll work hard on safety. We've got plans in place to make sure that we send every employee home unharmed, but the machine is actually healthy to keep on delivering into this high price environment. Thank you very much.

Good morning, everyone, and thank you, Patrick. So I'll very briefly take you through the financial performance, a quick look at our balance sheet and liquidity position. and then end with what we've done with capital allocation this year. So let me first start off with from a financial perspective, FY '26 was an exceptional year. with the improved pricing in both on precious and base metal and the good operational delivery that you saw. But we are basically able to capitalize on the full benefit of the improved pricing. With the results, that revenue increased by 58% to ZAR 135.1 billion. This was driven by the 51% increase in the revenue per ounce sold to [ 38,116 ] but also because of the increase in volumes by 4% to 3.51 million ounces. And this additional volumes really came from the planned destocking of the excess inventory that we had actually guided. So the step-up in revenue increased our EBITDA from ZAR 9.9 billion to ZAR 43.6 billion, expanding the EBITDA margin from 12% to 32%. Headline earnings at ZAR 22.9 billion and headline earnings per share ZAR 25.48 per share. The improved PGM pricing, the consolidation of Impala Buffer King into Impala Rustenburg, as well as the approval of the 2 key life-of-mine extension projects at Rustenburg basically supported the ZAR 8.1 billion after tax reversal of previously recognized impairment losses at our Impala Rustenburg operations. As a result, our basic earnings for the year were ZAR 31 billion. I think what is probably most important for me is that we were able to convert these earnings into cash. So our free cash flow increased to ZAR 22 billion. But to put that in context, we funded capital of just under ZAR 7 billion. We allocated an additional ZAR 3 billion to our operations to fund the engineering and maintenance that Patrick had talked about. We funded taxes and royalties of just over ZAR 10 billion. And in addition to all of that, we also funded up the buildup in working capital of ZAR 7 billion. So all in all, I think our -- we were strongly free cash flow generative this year. And I think what's also important to remember is our first half was only ZAR 7 billion. So in the second half of the year, we generated double what we generated in the first half. And that was primarily because of a 30% increase in the basket in the revenue that we received, but also the bulk of the inventory that we released as we had guided, happened in the second half of the year. So now talked about the sort of the financial performance, it's useful to say, well, what did that do to -- what does the balance sheet and the cash position look like after that? So clearly, the strong cash generation significantly bolstered the balance sheet. We ended up with cash of ZAR 23 billion, and we exclude restricted cash from that number. But also, we repaid debt. Our gross debt and from debt, we exclude finance leases and the PIC loan actually declined from ZAR 1.8 billion to just under ZAR 0.5 billion. And that largely is the impact of Zimplats using the improved cash flow to repay the debt that it had previously raised to fund its expanded fund -- well, the new -- sorry, it's new furnace. The definition that we use for adjusted net debt really aligns with the covenants that we've got in the calculation. So we've put a little -- we've explained how we do it. But on that basis, we had net -- sorry, net cash increased to ZAR 22 billion for the period. I think what is also very helpful is to look at that cash flow bridge. On that cash flow bridge, the operating cash flows from the business. After paying taxes and interest was ZAR 26.7 billion. So here, you can see the huge leverage that we have to price and really the strong cash generation from all of our operations. So the biggest allocations of that cash so far for the dividends have gone to capital. So the ZAR 6.9 billion worth of capital, we repurchased some shares for the share scheme. And also, we made provisions for environmental rehabilitation obligations, which I'll talk about just now. I think what is probably very important and talks to balance sheet flexibility, we ended the period with liquidity headroom of ZAR 37 billion, which is really our cash plus our undrawn -- sorry, undrawn facilities. I guess from all of this, the next question is, well, how did we allocate cash? And how -- what considerations we took? So firstly, to reiterate our capital allocation policy is anchored on three things: making sure the balance sheet is strong and resilient through the cycle, making sure we reward our shareholders attractively and thirdly, making sure that we invest in value-accretive growth. And if you -- if we take first on the balance sheet, so we repaid the debt, which I talked about. We funded our rehabilitation obligations of ZAR 1.6 billion, and we retained cash so that we have enough cash to manage the liquidity -- to manage our ongoing liquidity. I think it's worth mentioning here. We said -- we've consistently said that to the extent that our Impala Canada operations generate free cash flow, we will be responsible about allocating that cash. And as you can see this year, Impala Canada generated ZAR 2.1 billion worth of free cash flow. And we allocated a large portion of that to basically fund their closure liabilities as well as their [ events ] obligations upon closure. The next bucket really is the shareholder returns. So some of you might have noted, we have revised our dividend framework. We believe that it gives a little bit more transparency and predictability. The base dividend has been set at the 30% of adjusted free cash flow pre-growth. But as with the previous policy, there's always the ability to declare additional dividends, provided that the balance sheet remains strong, and we've taken due consideration of any future growth opportunities. So the final dividend for this year of ZAR 14.45 per share or ZAR 13.1 billion, really, I believe, reflects our disciplined capital allocation. We have returned surplus cash of approximately 90% of our free cash flow of our second half free cash flow to our shareholders, in line with our commitment to providing attractive returns. I think the additional point that I want to make is that we've always been clear about what we would like to retain on the balance sheet and with the number that we've used is the ZAR 10 billion. After the payment of this dividend, we will -- our cash -- we would have retained ZAR 10 billion, in line with the guidance that we had provided. The last bucket is growth. And as you can see, growth and expansion capital looks very muted. Our focus this year was actually on ore reserve development, but also on progressing our life-of-mine extension projects. That capital is reported under replacement capital and we see that as nondiscretionary because that talks to the sustainability of the business. I think here, I want to highlight the benefit of having a strong balance sheet is that we have the funding flexibility to really take advantage of the portfolio of assets that we have and to fund projects that we believe are going to enhance the sustainability, the cost competitiveness and drive long-term value. So if I have to summarize FY '26 as capital allocation, we have done all of the three things that we have mentioned. We have kept the balance sheet strong and resilient. We have provided shareholders with very attractive returns. And lastly, we are continuing to invest in our portfolio of assets to drive long-term value for all of our stakeholders. Thank you. I'd like to hand over to you, Johan.

Thanks, Meroonisha. Well, that brings me to you, the audience. As usual, I think it just makes sense to start in the room. So if I could just again ask as the microphones move around. People can't really see you on the webcast. So if you could just introduce yourself before asking the question. We got a big team here in front of you, but we also have people online and in the room. So please feel free to ask anything that's of importance to you. The whole team is here to assist you in that regard. After the room, there will also be an opportunity for people who are watching online through quarter's call. And the operator will take you through that procedure. So we'll pivot there. And then to the extent that you want to type, there's also an option of typing some questions. And if we have time, I'll pose that to the team as well. So that gives us about half an hour or so to do Q&A.

So let's start in the room. Can we start here by moving the microphones around, please?

[ Angora, Absa ] CIB. I see there's been quite large changes in your reserves in Rustenburg. You've graded your reserves in the south by looks like about more than 70%. But you downgraded the reserves in the north. Can you maybe kind of give us some color on what the thinking was there? How does this change your life-of-mine profiles? So maybe some color on that? My second question is around Zimplats. You talk about some structural labor cost changes that you made. If you can maybe just talk around that and what that means for the future. And then lastly, maybe just remind us when you go into labor negotiations and...

I'm going to do something unusual Johan is in the audience, then? Yes. [indiscernible]. You can deal with the is resources and reserves. And [ Leanne ], if you don't mind responding to the 2 labor related questions, and the wage negotiations as well as the cost issues .

So for those who don't know, you want us heads up our MRM team, and they're also releasing the MRM report today. So for the guys in the room, hopefully, there are some copies available, yes, tens not, it's available on the website. .

Thank you, Jan. Thank you, [ Cara ], for the question. So I think all our Rustenburg, first of all, we've got the benefit of the combined Impala hooking into the Impala Rustenburg. And that obviously had a fixed cost benefit that we obviously saw through the reserve increase. The metal price outlook also in terms of the tails of our mining profiles, also had the benefit of bringing some of that back into the reserves. And the north section that you referred to, obviously, we look at how we can optimize our ore bodies through the different mining infrastructure. We have a 20 shaft and [ still the lift ] and then also the BRM section. So as was mentioned earlier, we've got the brownfield project also at [ PPG ] decline. That is under study at the moment. And obviously, that will come through as well later, but it's not in the reserve at the moment. So I think there is an optionality for us at Impala Rustenburg to optimize our extraction of our resources and converting to the reserves. So then obviously, the 20 shaft and the 14 shaft extension projects that significantly improve our reserve that you've seen at Impala Rustenburg.

Does the downgrade in the north in anyway affect your view on [indiscernible]? Is there a changing on the view of [indiscernible]?

The change that we see there is obviously optimization between 20 Shaft and Styldrift. One could see that with the Stena extension project that the life extension and the increase in number of years of life is sort of balanced between 20 Shaft and Styldrift Yes. So I think what you've noted with the decrease in the north is mainly because of a balanced view that we took between the various infrastructure opportunities that we've got between Styldrift and [ Winsoft].

[ Emma ], do you want to respond to the labor question?

Thanks for the question. So in 2023, when we went through the low price environment at Zimplats, what they decided to do, which has been done previously as well. as part of the austerity measures that they have put in place, all employees, including the executive and the Board took a tense cut in the salaries. So that was 10% drop in fixed salary bill. And what we had communicated to the market in the remuneration report is that when prices improve, we will reinstate the 10% cuts that was implemented in 2023. So that was restated last year and -- which now has created the structural adjustment. And then with regard to the wage negotiations, it's 30th of June, 2027 with the current 5-year agreement comes to an end. We normally get the demands around Feb, March of the year in question. And it always flows through after implementation date, which is 1 July. And that's just some of the union tactics because then we get to backdated to the first of July and employees receive backdated salaries, we are confident that we will get in at a 5-year deal, and it will be more or less in line with what our last deal in terms of structure intels. So we will start negotiations around April, May of next year, and it normally takes us between 3 to 4 months. Thank you.

Thanks, Leon. Let's go to Brian.

Thanks very much. It's Brian Morgan here, RMB Morgan Stanley. Just that chart that you put up there about the life of mine in the green wedge those growth projects, and I think you called out Styldrift and Portal 10 and the [ Waterberg ]; that wedge starts quite soon in 2032, but these are quite big projects. So does that mean that you're going to be pulling the trigger on them quite soon? Or are there other projects in that [ green wage ] which we don't know about, which you can bring to market a bit sooner? That's number one. Number two is just Meroonisha, there's ZAR 13 billion of tax expense that went through P&L is, I think, ZAR 7 billion went through the cash flow statement, so ZAR 6 billion roughly deferred tax. Why? And what's the outlook in the next year or 2? Will there be a catch-up? Or will cash tax percentage be quite depressed going forward?

Do you want to start with the tax? .

I'm going to try. So I think on the tax, it's -- so I mean, we did pay a lot of tax this year. So they were -- our deferred tax was a bit elevated for two of these -- well, for one reason is we raised deferred tax on undistributed profits at Zimplats. So we raised the withholding tax. Now that depends on our outlook on dividends directly linked to profitability directly linked to prices. So to the extent that varies, and it has changed a lot over the year, you are going to get that additional charge. So there's about 1 billion of that. Remember, the rest of the deferred tax is predominantly on the fact that we get to claim our capital allowances. And so at some point, it does -- it basically normalizes for depreciation and capital allowances. So there's always going to be a level of deferred tax in. I guess the other part is we have utilized all our unredeemed CapEx and assessed losses, I think Marula has got a little bit. But other than that, I probably would think that it would be largely the same. If we continue to spend on CapEx, clearly. Sorry. Sorry, ever just reminded me, which I forget is the impairment release. That's obviously a one-off with the deferred tax cost. .

Yes, Brian, You remember, we've always said that the green file projects will always depend on the long-term price forecasting. We're deciding to improve. So if you look at the 3 projects that are there, in particular, we are looking at early access, and that's the way the study is actually focusing early access from [ Chinese Shaft ] and still drift on itself. So to the long-term presuppose the project I think you will be able to see any production coming through because we're not waiting entirely for the [ vertical ] to be signed on stat. And I think similar to Portal 10, Portal 10, we should -- once you complete the study, we forecasted to start the thinking around the fourth year from now. [ Water bag ], BFS done. We are looking at optimizing it. You might probably have seen some news from PTM. So by November, it will come back to us. Is it a trade-off? Do you go for a big chunk or a small chunk? But because of the moment methodology, again, you'll be able to get any production start to trigger in. So ramp-up will take a bit long, but this project as get to start delivering some sort of production at an early stage.

Pat. Let's go there. .

Yes, [ on from Con ] from Nedbank, Good results, and thanks for the opportunity. Three quick ones from our side too for Marines. The one is cash lockup. Any progress there in getting that resolved? Then the second one, just on your excess inventory, how much is left and over what period is that coming out? And any changes there an acceleration? Because it seems your plants are running well. And then one for Patrick. On Styldrift 2, is that conventional or mechanized? Because I know there's undulation issues in later life of mine. So what's your approach to extracting that?

So Arnold, I'm going to leave the stock lockup for the Patrick to take the difficult one. On the Zim situation, it's actually improved significantly since we came to the market at interims. In about March, I think, we reached agreement -- a [ parts ] agreement with -- well, the various government institutions reached the agreement to allow us basically to get 50% of our surrender proceeds in cash and other 50% that will be utilized for setups. Since that agreement has been put in place, they have honored the terms of that. And we have been able to offset between taxes, royalties and customs duties; about $99 million of offsets and we've had access to $150 million of local currency. And that really has made a significant difference because we've now -- our local creditors are now all up to date, et cetera. And going forward, we do expect Zimplats to be quite profitable. So we'll continue to use the cash that's been offset. The only thing that we did do, which you'll see in the results and our cash flow would have been higher if we hadn't as we moved out ZAR 1.3 billion out of cash into receivables. And we believe that is an appropriate place to reflect it given that it will be utilized through the use of offsets.