Jubilee Metals Group PLC (JLP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Jubilee Metals Group PLC full year results investor presentation. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses, where it's appropriate to do so. And before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to CEO, Leon Coetzer. Good morning, sir.

Good morning, and welcome, everybody for joining this presentation. Thank you for taking the time to dial in and giving us the opportunity to talk you through our financial results for the period ending June 2024 and also reflecting on the year that lies ahead for our company. I'm joined this morning, on the right-hand side, by Bertus Van Der Merwe, who is our Managing Director of our South African operation and the driving force behind another year of exceptional operational results. On my left, I'm joined by our acting CFO for our group, Riaan Smit, who will talk us through some of the financial numbers and also discuss what lies ahead for our group. We have -- on standby, we have our Ricus Grimbeek, who's our Managing Director from Zambia, dialing in from Lusaka. And I trust the signal from Lusaka will allow him to dial in at the start of the copper review. How we're going to run this morning is we're going to run through a slide presentation and try and keep it as short and precise as possible so we can really spend some time for the quality questions we've received from so many of you that have dialed in. I see we have an exceptionally large number of people that have taken the time this morning, and I'm really looking forward to the debate and answering the questions that you have sent to us. In this presentation, I hope that, if nothing else following this presentation, what you'll see is a company that has come through a capitalization phase to deliver in South Africa over the past 4 years, a company that's grown from 40,000 tonnes of chrome, where, today, Bertus and his team speaks of north of 1.5 million to 1.6 million tonnes of product per year as they march towards that 2 million tonnes target we set ourselves to achieve. On the other hand, in our copper business, which we ended in our copper, on the back of the success of our South African operations, to replicate that strategy, which is a strategy driven by processing excellence, where we implement a processing capability in Zambia, overcoming the challenges, which, there have been numerous in Zambia, to deliver a world-class processing capability, allowing us to operationalize the resources we have secured in Zambia. And without having wasting any further time, I'm going to hand over to Riaan and maybe just allow Riaan to reflect on the results that we delivered and announced. And then after the presentation, we'll delve into some of the questions we received, specifically on these results. Riaan, over to you.

Thank you. Dial-in slides for today. Good. Thank you very much, Leon. I think Leon has actually given us a good introduction of our current business. And I think it promises to report on the financial numbers. Good revenue of $205 million; the EBITDA, solid on $27 million; and the capital invested. I think if you can go to the next slide, Leon, I can back that out in a little more detail. Again, if you look at the group revenue, a very solid 20% increase on last year, driven by the good growth in -- especially chrome revenue. On the copper side, we did increase on volumes and -- but most of that was more on the concentrate side, which have a smaller viability. And that's related to the slight decrease in volumes there. On the PGM side, it's very much a pricing side, where prices dropped significantly from [indiscernible] an ounce to [indiscernible] an ounce. So that hit the revenue quite hard. Again, a solid EBITDA performance, in line with the growth in revenues there. And on the capital side, you'll see the capital has actually matured from going down 65% from the previous year. And then we've fully capitalized on the copper side to make sure the capacity there for the production as well as on the mining side there. On the chrome side, we've expanded on most of the South African operations the production capacity to ensure further sustainability in our production levels.

Thank you, Riaan. And maybe just to add to Riaan's points, what these numbers really are demonstrating is, as we informed the market, very mature South African business, organically growing its business. Its capitalization of the business coming to fruition, as Riaan says, over the past year and past 2 years. We've already expanded our PGM operations to take up the additional PGMs. Bertus and his team have driven hard as we continuously run out our modular chrome plants to expand and take up an opportunity. And maybe the interesting fact that Bertus will undoubtedly address this side is the fact that this chrome business that has grown to this number, north of 1.5 million tonnes, being one of the world's biggest chrome concentrate producers, is producing chrome from reefs, which the industry had thought was either too low, too complex and not viable to process. [indiscernible] the operational efficiencies and the partnerships Bertus has driven in that business. And on the copper side, also nice to look at the balance of our revenues and our earnings coming through. We are a company now with 3 metal classes, are adding positive earnings to our group during volatile markets. On the right, you can see the wheel of revenues. Chrome absolutely dominating revenues with its constant significant growth coming through. More importantly, also, that growth comes through from chrome products, but more and more are market-facing rather than fixed to our agreements, which is where we started our business at the time. And copper is starting to play a role, even with the sharp increase in chrome, still showing its 5% component, which is comparative to the growth in chrome. This shows how copper is starting to also account within our company. Just as Riaan said, on the operational side, copper increasing. I totally understand that many shareholders was hoping that, that number would be much higher in Zambia. But I think, still, what Ricus and the team has delivered facing the challenges they had to face in Zambia, which we'll speak of during the copper presentation, exceptional to yet again show growth while we are building, implementing and commissioning our processing capacity. Bertus aside, impressive, and where we now speak of a company north of 1.5 million tonnes and seeking to exceed that into 1.6 million tonnes for the coming year. Of course, we, with the operational capacities that is currently in construction and coming online, and Bertus will share a quick video for people to see that construction of this capacity coming online towards the end of this year, just to be able to get the sense of the sheer magnitude of this operation that has been built by the team. PGM is coming down, which is an intentional decision as we prioritize chrome during this year, to rather focus on the increased market valuation of chrome. PGM, as Riaan spoke of, decreased significantly in the basket values. And we had the flexibility within our process because Bertus drove the modular approach for our facility. So it's not one large big facility where we had [indiscernible] some of our competitors might face. We have a modular approach, allowing us to accelerate chrome production to react to the market in some of our modules, to prioritize chrome earnings to PGM earnings. And that is why we were able, as a group, to still deliver, nearly touching $28 million of EBITDA, showing a very marginal drop in overall EBITDA when PGM crashed by nearly 70% during the year. Great man, love the ability to buffer these volatile markets by having that flexibility within our processing design and partnership agreements. Looking at the operational review of Zambia. And while we wait for Zambia's link to be established, I'll talk us through that until Ricus can join. And maybe I thought, just to start off with, Zambia has gone through an evolution, education in Zambia, as we entered Zambia end of 2019 to acquire an old decommissioned refinery, then we set out to recapitalize and bring into operation. What this slide unpacks, which, actually, we'll talk through, is just the simplicity of that strategy and maturity of the Zambian strategy that we are now rolling out to ensure there's clarity in the market. The top 3 blocks on that slide speaks to the key resources, key resources we went and secured. And as I start this slide, Ricus Grimbeek has just joined from Lusaka. Ricus, we've just started the discussion on the strategy of how we are pursuing Zambia and the maturity of it. I was so glad I can hand over to Ricus, who is our Managing Director of Zambia, dialing in from our Roan concentrator. Ricus, over to you.

Yes. Thanks. Can you guys hear me?

Yes.

Okay. Cool. That's good. Yes. Sorry, I'm a bit late, but we had some normal issues in Zambia. But we are back online. Yes, I'll just jump in with the strategy, Leon. As you can see on the screen, we pivoted our business a bit. And the main thing is that we've got amazing operational plants in Kabwe and in Angola. And the key is how do we fill those plants with material that would produce us the most cost-effective and most revenue-accretive product. So if you look at what we landed on is that we'll be feeding these 2 operations that we currently have with open pit and mining material, and I'll talk about that a little bit in more depth. And then also, the other part that we'll be filling this with is previously mined material, and then also previously processed material. So in terms of open-pit mining, you would have seen that we brought the Munkoyo Mine, that is -- it is now 42 kilometers away from Kabwe, from our Sable Refinery, because we are finally completing the roads and the direct road from the mine to the refinery. It is -- it was the previously mined operation that we've been able to take over and turn into more of a world-class type of open-pit mine. We currently had about 12 to 15 meters deep. And we've got about 100 -- we are working on opening up with 150 of strike. The type of mining, currently, is about 300 meters of strike that can be accessed pretty quickly. And so that is the key focus now. And then also, we announced that we have acquired Project G, that is in the Mumbwa area, and that is also an open-pit mine currently being mined, with a striking type of hand, also another plant that we can get into operation pretty quickly, which, I think, that plant is currently up and running [Technical Difficulty]

I think I'll just step in there. It seems like, unfortunately, Ricus -- because you were going through it, your signal were lost. Ricus, I'll just hand it over back to you to see if the signal lasts. I mean, please continue. Thank you. Ricus, sorry, I'll step in. Unfortunately, it seems like Zambia's signal is just too weak. What Ricus were really going through for everybody is, of course, on the open-pit mining resource strategy. We've announced an exciting acquisition of Project Munkoyo that Ricus has touched on. And that followed with Project G, which we announced earlier this week, another exciting open-pit operation that Ricus spoke of. We will show a quick video clip in the next 3 slides, just so we have a sense of the sheer size of these operations that Ricus and his team is bringing on stream. And I think the fundamental, combined, as we look at these 3 classes, you'll see under the heading of each of the 3 classes, that also gives you a sense of the copper content or the copper grade per group. And therefore, one can understand why the priority to secure such a large portion of this opportunity on offer in Zambia is in that open-pit area. It contains rich opportunity complex. It speaks to the processing capability of our team to unlock that copper. And at 3% copper, clearly, that's something that we should pursue. As we discussed here on the Sunday broadcast, there is, if you look at the sheer number of licenses in Zambia, it is estimated by far that this area of Zambia has the potential to carry up to 300,000 tonnes of copper per annum. Now clearly, that's not all going to be secured by Jubilee. We don't have that kind of ability. But that gives a sense of the size, of the price and the reason why we are so aggressively pursuing, with Ricus and his team, more and more of these opportunities. The exciting part is that both Munkoyo that has been acquired in June is already operational and delivering material to Sable when we can. It is currently being expanded, as Ricus explained, where the strike area or that's the area of the reef that is exposed that can be reclaimed. And since 2 more refinery is being increased, as Munkoyo goes through that phase, Project G, following the decision to acquire it and through the intervention of the team, negotiating a better transaction where we're taking 65% of that project by Jubilee, that project will come into operation this year. So it means that within this area, both Munkoyo and Project G will be processing -- material will be processed at Sable. The next core group of material, which we call previously mining material, is typically low-grade copper stockpiles that have been discovered by mining activities at the time because of its complexity or because of it's grade, roughly around half the grade to slightly less of the open-pit operations. And this is the material currently targeted towards our Roan plant, where the new front end had been commissioned. And that material is currently being processed through Roan, where it takes a low-grade material upgraded significantly north of 10% copper, which allows to being directly refined as material. Roan, of course, we will speak of later. We have 2 components to it. Because there is a third material group, which is the lowest containing copper value, this is material that has been mined and previously processed and discarded, either because of the type of process it was run or the type of material that was filled. The Roan currently processes all through its front and milling circuit, which are 2 separate service at Roan. It's very unique. The Roan Concentrator, it's got both the ability to process simultaneously. Previously mined the material through its front-end, which is it produces products, which is directly refined or further processed. And then you've got the previously processed material of tailings that is coming through. We're working towards that as the Munkoyos and the Project Gs are expanding. It rapidly gets to a position where Sable is fully occupied or utilized by open-pit material. We've been able to step up our operations. We have completed the Roan construction. As the Roan construction of the 2, combined, the front end and the back end, as we've discussed, where we deliver 13,000 tonnes of copper capacity, which we are now filling with both the previously mined material or the low-grade stockpiles as well as the tailings component of Roan. A very exciting part to have available to us, our last component of our processing upgrade, to reach that initial target of 25,000 tonnes per annum of copper capacity in Sable. Sable's expansion very simplistically means that we're adding a second tank house to Sable so that Sable can consistently refine and produce north of 15,000 to 16,000 tonnes of copper per annum. So we have the combination of both Roan is 13,000 and Sable is 16,000 as a processing footprint and capability in Zambia. Taking up that capacity now comes true with the commissioning of Munkoyo, Project G, set to commission within this calendar year before December. And of course, Roan stepping up each operation by processing both its previously mined material and waste. On the safety side, even though all of this construction activity was happening and we were running and constructing on the plants, the team delivered an exceptional safety performance, and congratulations to them. As we discussed, the third component of project, which is very exciting, the team is unpacking with Ricus and his team is this large waste project we told the market about. It's a project where we secured an exclusive rights to it, consists of nearly 260 million tonnes of copper. And that 260 million tonnes of copper is what we seek to bring into operation. How are we doing it? The front end of Roan is an example of the modules that will be placed onto this material. And we are currently commencing with that trial, where we're looking to process 15,000 tonnes of material through Roan. Of this material, as the final review of the design of those facilities to ensure that the upgrade from our labs to our pilot facilities into commercial is accurate, it needs that accuracy because this is a massive amount of material that's been created over time. It therefore has enormous variability in that 260 million tonnes. It contains all of the history of that area of mining, which consists of waste rock, low-grade rock, oxide copper, sulfide copper, all mixed together in that. And therefore, this trial is a great opportunity for us to model out that variability as part of our design. As we said, very short, if I therefore summarize our strategy in Zambia, what you can look forward to seeing coming out of Zambia, as we now roll it out is, on the one hand, to expand Sable to be able to operate consistently at a 16,000 tonne per annum of copper refinery by adding that second tank house. It takes roughly about 10 months to bring in all our various components into Sable to be able to do that. It does mean we are continuing to run Sable during this process, while we integrate these components into the integrated refinery. Sable is an old refinery, and therefore, start off this upgrade to the 60,000 tonnes, but also replacing the older technologies with modern processing solutions. And in Roan side, as we discussed, Roan with 30,000 tonnes of copper capacity, key driver now is fully utilizing both components of Roan, both the front-end part of Roan able to process those low-grade waste from our stockpiles, which there is mountains of in Zambia, together with simultaneously running its flotation circuits to process the previous process of ore tailings material. And at the same time, what you can expect to see coming out of our company is how we progress with our open-pit mining operations. We've got 2 under our belt. We certainly look forward to add far more than 2 to our operational strategy.

I think I'm getting excited. If I can jump in now, I'm excited to see that the focus is on the right places, where, if you look at it previously, where we're using the 0.3s, the 1.5% to 3%, that's upstream [ feed grade ]. So where, if you look at it, I mean, 0.3 should have 6 to 7x the feed on a 1.5 meter, 2 to 4x the feed. And on the open pit here, 1x the feed to make the same amount of [ tonnes ], which is exactly what we're driving in South Africa as well, which your primary cost, your biggest expense is your primary feed, but you're overall #1. And that's great to see that Zambia is able to go upwards, and reason it can go upwards is processing ability and then proper drive by management to look at the primary feed, which is, in all these essence, we all know that the good feeds are gone. The bigger companies have got all the good feeds. And this is when Jubilee demonstrates its expertise and processing ability to actually go after the inferior feeds and work its way up to the better feeds.

Very good point, Bertus. And putting in perspective, when you process a 0.3% copper versus 3% copper, it means that you have to process 10x more per material to make the same amount copper. And then, of course, it's a massive cost driver.

Then your ability to get more capital out with open-pit mining will come forth, and then your graph starts [ speaking ] at this first graph that we showed you on the copper cathode, which means you're looking forward, with the same amount of effort, you can make more tonnes.

Absolutely correct. In short, we've touched on this. Maybe the pictures there just gives you a sense of the sheer upgradability that the team is securing. And the little picture in that block, you'll see little blue blocks. All those blue blocks are what we call open cost or potential open costable opportunities, just given the sheer sense of the magnitude of this overlooked opportunity within the Zambian copper space. Outlook going forward for Zambia. We've given a guidance of range between 5,800 to 7,500 tonnes. Why did we give a range? Well, because our guidance links into the delivery of projects. This is not a company that's organically expanding. This is a company delivering on a strategy, which is a bit like a LEGO set, where the various components now come together, the processing capacity coming to its fruition. The resources being brought into operation, there are, as we've seen in Zambia, a number of factors that impact directly Ricus' ability and his team's ability to deliver. Power has been a potential significant threat to our operations in Zambia, as Zambia faces and continue to face a significant power crisis and the availability of power. We are very fortunate in that Ricus and the team was able to negotiate fully privatized power supply agreements to ensure that, as of the middle, end of September and going into October, we have uninterrupted power to all of our operations in Zambia. This is a fundamental derisking factor that Jubilee was able to successfully negotiate and implement. It means that 100% of our current power demands are not only met by renewal of our resources in hydropower and solar, but it also means that we are now not exposed to the current power instabilities within Zambia, which makes it impossible to run a refinery where the quality of your copper cathode determines the salability of your copper cathode. And that is -- so that range really gives the validity on how those projects are slotted in. As those projects come into fruition, we, of course, will provide the update to our guidance going forward. That gives you, hopefully, a better sense of what's happening in Zambia, how we're reacting to the challenges and how we are driving forward the strategy in Zambia. With that, it's nice to now shift into our South African business books, as we said in the beginning. Jubilee is 2 parts, 1 copper, which is emerging and evolving and a mature growing force in South Africa. With that, let me hand over to Bertus as Managing Director of South Africa.

Thank you very much. If you go to the next slide, Leon. You see that, in South Africa, it's a very simplistic approach, like very similar to Ricus' when the biggest thing is feed. I mean, without feed, you can't process. We call it [ one ] in South Africa, and [ all-around ] feed or PGM feed. Interesting thing to note, one of the initial slides, in the last 3 years, we've seen our feed regressing. We had an average of 30%, and now we're living on average of 27% to 28%. So our initial figures looking there at 1.54 million could have been up by another 5% had our feed stayed the same in the last 2, 3 years, again demonstrating the processing ability that we need to look at. We also have been looking at that, and we've been adding capabilities to make sure that where the feed is slower or lower, we're hopefully 20 to 25 range. We, initially, we would have liked at least 20% tonnes, which was previously seen as unprocessable. We are now able to look at 25%. So in that essence, our processing ability and the ability to look at this and basically secure small feed going forward, because everybody asks us, where do we get the feed. Because Leon said nothing. Well, last year, on average, we filled 260,000 tonnes per month through these processing abilities of processing plants. So first, basically, we are now running 10 individual plants. And all these plants, except the newest 2 we're adding, are running at capacity, which is a nice thing we see until now and the end of last year, in the '24, beginning of this year, we pushed into maximum capabilities, which also told us this time to step up and add the extra plants. So the processability is there, and we would like to call it, I mean, the ability to have a reef available, and then looking at what we can extract from a reef through the duly processability in that sense. That's been able to guide us forward, ad we continue to, where, historically, we had more contracted tonnes, the stable tonnes, from our primary feeder, where we secured feed, we then treat it and we supply it back. That's given us a very stable state of operation, and we've managed to basically up that significantly as well. We initially started with 60,000 tonnes a few years ago. We do 140,000 tonnes. Looking forward, we're looking at pushing it up to 180,000 tonnes. So that, at least, feeds the first 180,000 tonnes. And the next 200,000 tonnes we're embarking upon now is there is the [ unprolonged ] contracted, which gets us pretty close to a 50-50 split with regards to where we're running, which was the initial idea. So we make sure we can operate and make sure we can sustain it, run with a fixed margin, optimize the fixed margin, and then add the market value. Where chrome fundamentals are showing that this year, China will end up having more than 60 -- or the world will end up producing more than 60 million tonnes of stainless, which to put it in perspective, at the end of 2000, the world was doing 20 million tonnes of stainless. Basically, stainless steel has doubled in the last 20 years. It is exciting to look at that. The fundamentals show us that stainless steel growth will be sustained. And basically, chrome ore, which we produce, goes into ferrochrome, and ferrochrome makes stainless steel stainless. The chrome component makes it stainless. We go to the next slide. [indiscernible] 1 or 2 smaller entries that we look at there. I mean, one of the areas we need to focus on. I think it's the same one over Ricus' and on our side. It's always about management optimized at and people optimization. Safety, always part of it, to make sure that with our people, we safely perform. Very proud about the fact that we were able to surpass that 1.54 million tonnes chrome concentrates, which is a 20% year-on-year increase. And with the target going forward to see how quickly we can get to 2 million tonnes concentrate. As well, coupled with that, in the process of extracting the chrome, we do create PGM feed material. And the nice thing we are now in this financial year going forward, we actually have, for the first time, we have long PGM feed material. So this allows us now to optimize the PGM treatment deal we would like to get into a plant. And the way of optimizing that is taking the direct feed, which is produced at our OBB plant directly into our PGM plant, and then looking at which other materials give us the best tonne per ounce. And that will allow us then to optimize that and also why we believe in the 26,000 to 40,000 ounces guidance. We'll optimize that. So the aim would be because PGM market is deflated, to make the same amount of PGMs worth less feed because they would have a cost implication and will create the margin for us. That's where the focus is with the long PGM feed migration. The next 2 modules, like I said, we would be proud to say that we've embarked on that. I mean the like we call it the B50, the 50,000-tonne module. That's we expect to do 50,000 tonnes depending on what ore kind we [ prop ] . A lot of investigation, a lot of knowledge has been going into understanding the Chrome ore types. And in our essence, like I said, we have found the various ways to extract the Chrome that previously wasn't extractable or previously went too far and it became unextractable because it was over multiple instance. So in that essence, we feel very comfortable with the work that's been done in the last 18 months, year on Chrome side as well as PGM side that we really understand the fundamentals to extract this material and to enable us to go to the next step. As you imagined our PGM 1.6 -- in excess of 1.6 million tonnes of metallurgical grade, which we hopefully will exceed. But I mean, the important thing is to build on the basics and have a steady climb going forward.

Absolutely. Thank you, Bertus. I think, as Bertus educated and showed fundamental point that he mentioned and maybe not quite people understanding is that what drives this continues growth in Chrome when so many companies believe that to grow in Chrome is so difficult because of the availability of resources, is the fact that the team consistently and continuously unlock Chrome reefs that people classify as too difficult and/or too low grade. Bertus threw out a number where if we look at the -- if we dial back the clock for 2, 3, 4 years, we would not process Chrome below at 32% or 33% Chrome content. Today, it is normal for Bertus and the team to process Chromes at 25%, 26% content. These are reefs that would have been discarded into waste dumps previously. It is what they process at the same efficiencies as what the industry thinks the norm is for the high-grade Chromes. Maybe just to demonstrate the sheer magnitude of what is being built, and when we speak of modules, can I ask that the video be played? [Presentation]

Well, thank you. I hope that those videos, if nothing else, gave perspective to the magnitude. The first video, which was just a very quick sense of Munkoyo. Project Munkoyo, which shows the development and exposure of a reef as we're stepping up that production or mining rate. The second video showing and touching on our 2 new modules being constructed. And although we give the name modules, it doesn't mean that they're not launch. That is being implemented. These modules, as we have informed the market, are looking to be brought into full operational state within this period before year-end December. And then maybe just as a last slide, as we conclude the presentation and then get into the various Q&As and the questions that are there, which I think we're really excited to get into. What we have looked at our company and what we presented really is the fact that our growth strategy, both on Bertus and South Africa; as well as Ricus in Zambia, it's driven by innovation. It's driven by innovation and processing, looking at materials, questioning why certain reefs and materials are not being mined or recovered by the industry. And then solving those problems as some clearly demonstrated by Bertus and the team. In all cases, as you've seen, our strategy is always led by the implementation of our processing capacity, which we then -- following that, bringing to operation the various resources through partnerships or ownership to bring those resources into operation. I think just a point to highlight, the bottom point is the ability and the absolute achievement by the team to overcome, which was one of the biggest threats to our Zambian strategy and business, and that was power security. Without the availability of power, we cannot run processes that are critically dependent on stability to be able to extract copper or Chrome for that matter. And therefore, the ability to have now placed all of our operations onto a private power supply agreement, which kicked in towards the end of September. And this week, we announced to the market that we've extended that agreement so that Roan can run both of its sections at full capacity on the private power agreement is a fundamental important step taken in Zambia. And of course, looking forward, we're looking at the Waste Rock Project going into its commercial trial this month that lies ahead for that 15,000 tonnes of material going to be processed through that facility. And we're looking at delivering on those 2 operational modules through Bertus and his team as we march towards that 2 million tonnes of Chrome concentrate that we look to produce. That concludes the formal presentation style. And really thank you for taking the time to listen to that. I'll throw it over now so we can go through the Q&A and the questions, and especially while I have the team around me. Let's delve into the questions that we have received from so many people.

Thanks very much, Leon. And just to say that we've received quite a few questions during the presentation. We'll try and get through as many as we can. But any questions that we don't answer, we'll provide written answers to and post them on the platform after the call. Turning to our first question. What is the commercial arrangement on Jubilee's Chrome processing partnerships? Are they JVs? And if so, what is the weight to JV ownership?

Yes, I'm going to hand it over to Bertus as MD of South Africa to answer that specifically.

We've got a very big drive on our side through partnerships, like I said, and also partnerships, same as you see with Ricus in Zambia. And South Africa is important because partnership means we're engaging. And because we engage, we actually, a lot of the time get the local communities involved. We get our real partners involved. So our partnership in that is pretty much a cost-driven exercise. So where we are a partner and we mine with a partner, they mine at cost, we transport at cost and we process at cost. And that gives a common vision to make sure that we optimize the cost. And then we look at the market and see where is that margin. And then indefinitely, it becomes a type of a JV where there's a profit split that comes to as the scheme comes to fruition. So it's a very much common goal, common drive. One, is ROM; two, is transport; three, is the operational cost; our fourth one is our yield on the Chrome side, so how much Chrome can we extract and that is transparent. And then all the partners, wherever you fit into this partnership, drives to have a cost awareness, which gives us the lowest possible cost. And when we are on the lowest possible cost, that should give us a margin.

And maybe just to add to that question, when we speak of JV ownership side. So our JVs in South Africa are typically structured more on an earnings share model rather than ownership of the resource. We typically do provide the processing plant and facility and the resource owner provides resources, and that then calculates to a resource and earnings allocation. Over to you, [ Nica ] .

Great. So sticking with the Chrome operations, what is the mechanism used to set the price of the ROM purchase by Jubilee?

Overall, where we've got a partner. We've got a partner that we're mining with. We typically look at the fundamentals of mining as we look to do. We look at strip ratios. And then because of the strip ratios, we then see what is normal cutoff -- not only is the cutoff grade but the cutoff cost. Because of the extractability, we are able to push the cutoff cost because we look at a longer-term view and saying, "Mine a bit more -- maybe slightly more expensive, but our process ability allows us to do that." Then we've also got an alternative model because the market, we understand, because of the environment we play in. And since the MPRDA, the Mineral Resources and Petroleum Development Act in South Africa is playing a big role, we have got multiple smaller partners. We end up buying 1,000 tonnes, 5,000 tonnes, 10,000 tonnes from smaller partners as well. And as we elaborated to that, that's very much Chrome dependent. And in some instances, we find that there's no market for this. So we create the market, and because we create the market, we then utilize our third, which is our fairness aspect that we do basically, a calculation and say, "Okay, you are mining at a cost. We are going to sustain you." We do get this material cheaper but it's also a partnership where we basically can sustain the smaller enterprises to go forward, but that cost is determined by what we can process. So we utilize the fundamentals of strip ratio. We utilize the fundamentals of where the market is. And in essence, I don't want to use the word opportunistic, but we are opportunistic in saying what ore is available. And with the right amount of cash available, we are then able to buy some of these ores at lower prices just because we're sustaining operation.

So sticking with that, has the company given consideration to end in toll agreements in favor of ROM partnerships?

We see the company as a bit of both. We must never forget where we came from. The reason we initiated to embark on this 5 years ago, when we partnered with the world's biggest Chrome ore resource owner. There's a reason why you partner with the world's biggest Chrome ore resource owner because they are the world's biggest Chrome ore resource owner, and you provide a service to them. And I mean that we've grown and optimized where we can, but we've also seen them through optimizing our own processing ability and having that ability, our vision would be more towards own processing and not necessarily all the treatment, but we will not let the other one go unless market or something else on that side. So it's a bit of a joint approach. Like I said previously as well, where we were pushing to go to 50-50 might be a year or 2 from now. Hopefully, 60-40, 70-30, time will tell.

To Bertus' point, one mustn't forget the strength of having both where you have a fixed margin toll agreement, which is not market facing. And they're very conservative in the approach, together with a more market-facing Chrome contract that takes the full exposure to the Chrome market. The balance between the two offers strength in our earnings.

Turning to Zambia, is the Roan front end linked to the existing mill and flotation circuit? And if so, how are they linked?

So a bit of a technical question, and I'll break it down for the listeners. Roan's front-end module and its milling and flotation circuit are 2 fully independent circuits. In fact, what you're looking on the screen is the Roan front-end module. They are independent circuits. But since that front-end module processes 2 or produces 2 products, one of its products can be directly fed into the Roan float and milling circuit. So we're currently running it as independent circuits but we have the ability to send one of the products of the front-end module directly to the mill and float circuits.

And has this -- the mill and flotation circuit been operating at full capacity since the beginning of this financial year?

So the biggest challenge, Roan, has been doing commissioning, post commissioning, of course. It is very difficult to run both. So there definitely was impact on the floated milling circuit and the commission of the front end. And of course, the key factor that's coming during September was the availability of consistent electricity and power. So that was the key criteria to be able to ramp up Roan to its full capacity.

Staying with Zambia, instead of physically concentrating the copper ores, has Jubilee given consideration to concentrating the ores chemically using heap leaching and transporting that solution to Sable for refining?

We've looked at all of that. Clearly, there's a -- one thing that Jubilee has is we have the luxury of exceptional in-house technical team to look at technical. And then part of that review is we informed the market of the various tests. That includes leaching. It includes various experiments to leach copper. It includes various physical upgrade techniques. We really look at the full range of upgradability, and it's very ore specific. Unlike many companies who apply particular technique to all of what they have, we, because of our modular approach, for example, Munkoyo. Munkoyo gets a very specific solution compared to the design, for example, for Project G. There are commonalities in the process, but they are designed specific to the reef type. So in short, yes, we look at the full end of what is available technologically.

Will Jubilee be sharing the outcomes of the resource drilling program at the Munkoyo Project G and the Waste Rock Project?

We certainly will. The reason for the drill program is twofold. One is because we're constantly looking at how big can these projects become. That's the driver, and that is driven by the continuity of the reef. So it's more on the operational side. But also equally, the fact that we have opportunistically secured exceptional opportunities in Munkoyo and Project G. And therefore, we will certainly bring that out to the investment market what is the outcome of that drill program being run at these 2 -- and of course, at the last Waste Rock Project.

Leon, on a recent podcast, you suggested the copper output of 300,000 tonnes, which is 50x this year's guidance. Can you expand on this suggestion and what needs to happen to reach such agreement?

Yes, sure. I mean, I wish we didn't say that we would target 300,000 tonnes, certainly not. 300,000 tonnes refers to the size of the opportunity of all of Zambia as the department look at the full ambit of what they have under the open pit initiative. To put that in perspective, the open pit initiative was driven by Zambia very progressive law -- legal framework to allow the rapid implementation of opportunities to accelerate copper into production in Zambia as the President has stated, the 3 million tonnes of copper target. That 300,000 tonnes, clearly, we are looking to take a significant position within that opportunity. How big that opportunity will be is dependent on speed of transaction, our ability and funding ability to secure these transactions and bring them into operations.

Turning to a more corporate question. Will Jubilee declare a dividend in the future? Or is this the long-term strategy purely capital growth at this stage?

It's a topic that the Board often debates, and it's a balanced view between the growth the capital will deliver versus the sharing of the dividends from our earnings generated out of that capital. Certainly, over the immediate future, our drive to expand on South Africa, our drive to bring into operation our copper resource to take up our processing capacity is the priority. To get to that position where this can be reviewed again.

So quite a few questions relating to the share price. So with all the good news that we put out recently, the share price has not moved as expected. Is there any reason for this?

Well, as a shareholder myself, I fully share the disappointment in the share price and markets are driven by buying and selling. So one would suspect that the selling is higher than the buying at the moment, and there's a lot of speculation around that but one cannot. Ultimately, the market must reflect the company's fundamentals. And therefore, what is in our control is delivering. Delivering on to what you said the strategy is in both South Africa and in copper. And that has to come through in recognition within the market. And that is our focus right now to address what is, as we said, a particularly low share price.

Turning back to Zambia. Can you further expand on Monday's RNS where we referenced a targeted regional processing hub? Can you just elaborate on what this would entail and what that means?

Yes, sure. So as we've explained in our strategy, when we look at our various copper resources, we look at clustering those resources. So for example, Munkoyo, which is now in operation. We are looking at a few further opportunities around that region, which combined would justify upgrading the reef further at source before transporting that reef to our refinery, equally with Project G. So when we look at a local upgrade hub, it really speaks to what you see on the screen, which is the front-end module of Roan is where you're looking at physically upgrading or as previously asked by one of the participants around maybe more of a chemical upgrade of the material before you transport it to the refinery. It is driven by your success to cluster the area and bring in 2 or 3 opportunities to combine therefore, justifies the module that is implemented within that region. And draws in, of course, further opportunities in that region.

When do you expect to achieve 25,000 tonnes per annum of copper in Zambia?

As quickly as possible. The biggest drive to achieve that is the completion of the Sable upgrade. That has to be completed to be able to consistently deliver the tonnages at Sable. And that is driven, as we said, that project is running over the next 10 months. And parallel to that, we definitely keep the market abreast of the resources coming into operation as we take up that capacity. And market can expect that kind of news flow coming out of Zambia as the resources deploy, Project G, the large Waste Rock Project, Roan steps up to take up that capacity.

Going back to South Africa, why run only at 80% and not 90%?

So I'll throw that to Bertus, which really links into what he discussed earlier. And just maybe, just technically to explain, when Bertus gives his PGM ounce target, you know his capacity. As a refinery's capacity is dictated by the amount of material that flows through it. It's not dictated by how much it produces. And therefore, if you are going to put in a 3% copper feed into the same capacity as a not common 3% copper feed, as an example, you are likely to make 10x less in that. And that is the driver on Bertus side.

So you only feed 75,000 to 80,000 tonnes a month every month. That's primarily to make sure it's full. But then what we work on is depending on the feeds we have, the tonne per ounce. So to be utilized in our array of feeds, we have feeds that can go as low as 15 tonne an ounce and feeds that goes as high as 55 tonne an ounce. Of course, we call the varying ores. And as we explained previously, as the Chrome ore varies, so does the PGM component and the PGM acceptability varies. With us now being longer on Chrome ore, we can push back and say, "Run full out and feeding only full." And the target is for us to get to 25 tonne an ounce, which gives us a typical 36,000 ounces and then go to 20 tonne an ounce, which would then give us 40,000 ounces and even may see we can exceed that. But again, that then comes back to the tonne per ounce of the typical ore we are processing. So the front end of the Chrome dictates what the tail would look like that goes into [ the ore ] . And depending on that, that's why we're running somewhere between 80%, 90%, and sometimes might even be 100% if you look at it, just depending on how many tonnes is required to make 1 ounce.

Turning to more of a corporate question. What consideration has been given to gearing up the balance sheet with long-term debt?

Riaan will answer that question, and just maybe as an introduction, we have very intentionally kept the Zambian balance sheet free of gearing it to allow it to be ready for the capitalization and expansion, as we discussed. But really, Riaan, let me hand it over to you.

Thank you, Leon. As I explained when I went through the numbers, I think the maturity of the performance in terms of EBITDA and the sort of actually brings us to that point where we now have the sustainable income from our operations to actually sustain funding facilities over a longer period of time, and that's exactly what we are working on. We are in various discussions to work on funding to give us the capacity also on the 3 areas: one, to create capacity for growth; secondly, to give the facilities for the working capital both in Zambia and South Africa. The buying, of course, there's quite a large amount of working capital associated with our business. And thirdly, it will also give us the capacity to run our business on the short term and the longer-term facilities that we have for the business.

And I think the uniqueness of the fact that some -- you tell someone you've got processing ability, you've got to prove it. So track record. And what we've seen in the discussion I've been involved with Leon and Riaan is that now the institutions are sitting up and listening because there's repeatability.

You're quite correct. I mean, absolutely. I mean, maybe just in simplistic terms for some people. It does mean that you can give something when people believe there's value in it. And to get to the point where people believe there's value in it comes through repeatability. As Bertus says, proof of concept where we don't speak of our processing capability but we're actually delivering on that capability. And that's the evolution our company is going through the maturity going at the moment.

Regarding the IRH deal or the large Waste Rock Project, when do you see this going ahead?

Thank you for that. I mean for us, the 6th of November, as we told the market is a critical date we're chasing down. The large-scale trial is a fundamental step in that transaction and in that project to demonstrate for many people, which are for us, it's what we do day in, day out. We work with these kind of materials. But for many new investors and then people getting involved in the operations that we do, this is an unknown factor. And therefore, to demonstrate at a scale that the trial is going to run at 15,000 tonnes is a very big step in derisking that opportunity and actually processing and showing the results of the potential variability in that material. So the next step is critical in concluding the transaction to go forward.

And is it possible for Sable and Roan to be further expanded? Or are they now maxed out? And if so, how urgent is it that Jubilee sources additional processing and refining capacity?

Yes. Excellent question. Absolutely. I mean, Roan clearly offers the potential at Roan to expand it by implementing more of a refining component at Roan. Instead of just concentrating is to actually step up concentrating into partially refined material as a natural expansion. We're fortunate that Roan has got vast expanse of property to expand. And so Roan certainly offers significant potential for expansion. Sable runs into a constraint on its footprint to really be able to expand past the 20-odd thousand tonnes of copper, and we need to then look elsewhere. The urgency at which we look is driven by the resources coming into operation. And I'll pass it over to our shareholders and investors to ask the questions for themselves as you see our operations step up in their production. So we're fortunate in that Zambia, of course, offers this unique situation where there are quite a bit of refining capacity underutilized in Zambia for various reasons. And therefore there are solutions potentially one can pursue to address your shortfall in refining capacity.

Thanks, Leon. I think we'll answer one more question. I'm conscious of time. And the rest of the question, we'll provide a written answer for, as I mentioned earlier. And just one last question on Zambia. For the copper production guidance that we've given for this coming year, please clarify how many tonnes will be cathode and how many will be concentrates?

Yes. So what you can expect from the operations as Munkoyo now expands and Project G comes in, the delivery of that material, which is, of course, all destined to Sable not Roan. One could expect the ratio of cathode to increase compared to the previous year as the cathode component of the production steps up. And also because the oxide copper, which is soluble and therefore, can be refined at Sable from Roan will be sent to Sable up until the full capacity of Sable is reached. And there, one could expect the cathode production to dominate the production for this period.

Guys, if I may just jump back in there. Thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors. And of course, we will give you back all of the questions that came in. We'll give you these back immediately after the presentation has ended 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 for investors to access. But Leon, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that would be great.

Well, firstly, thank you, everybody, for dialing in and taking the time to listen to us. I'm so glad that I've introduced our senior leadership team to you as well. And I think if -- with this presentation, I hope we've clarified your view on the one hand, to get the sense of the magnitude of what Bertus and the team is delivering, the maturity of that business that is being operated. And on the other hand, is the maturity and clarity of the strategic focus that Zambia has in delivering now its operational targets, and the manner in which that team has overcome those challenges to be able to evolve and develop a strategy that is that clear path to now implement and deliver on what is so exciting under that copper side. I hope that message came through. And of course, also the quality in the leadership and the people around me that is actually making this a reality. Thank you.

Perfect, Leon. That's great. And thank you, all, once again for updating investors this morning. 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 for the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it 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 morning to you all.