Jupiter Mines Limited (JMS) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by for the Jupiter Mines Limited GM 2021. I would like to hand conference over to your first speaker today, Chairman, Brian Gilbertson. Please [indiscernible].

Thank you. Are we ready to go?

Yes, Brian.

Okay. Good afternoon, ladies and gentlemen. Welcome to the General Meeting of Jupiter Mines Limited. My name is Brian Gilbertson, and I am the Chairman of the company. A quorum is present, so I declare the meeting open. I'd like to introduce my fellow directors. Priyank Thapliyal, Jupiter's Chief Executive Officer, is on the line; Andrew Bell, an independent, non-Executive Director; Paul Murray, an independent, non-Executive Director; Mr. Yeongjin Heo, a non-Executive Director; Hans-Jürgen Mende, a non-Executive Director; and Brian Beem, a non-Executive Director, who helps as alternate to Mr. Mende. Also present is Melissa North, Jupiter's CFO and the company's Secretary; and Greg Durack, the Managing Director and Chief Executive of Juno Minerals Limited. This is a meeting of shareholders of Jupiter Mines Limited. Only shareholders, their appointed proxies, corporate representatives are entitled to ask questions and to vote. All other attendees are welcome as observers. Shareholders attending the meeting on the line will be able to cast their votes using the electronic voting card, which you received for online registration and is validated. Please refer to the virtual Annual General Meeting portal or use the help line, which has been specified. Prior to voting, questions will be taken. [Operator Instructions] I encourage shareholders attending online and who have questions to send their questions through as soon as possible. Shareholder questions received prior to the meeting will be addressed after all the questions submitted to the -- and the questions and the comments in that section. I intend to vote the proxies given to me as Chairman in favor of the resolutions, where I am directed and committed to do so. Finally, after discussion and [ before the ] voting poll is taken, the total number of valid proxies, the manner in which they have been directed will be displayed. These figures will be as at the closing time of the receipt of the proxies, which was at 5:00 p.m. Australian Eastern Daylight Saving Time on the 17th of February 2021. The resolution will be voted by a poll, which will be conducted at the end of the meeting. Ladies and gentlemen, I would now like to invite our CEO, Priyank Thapliyal, to give you a brief summary of the demerger, which forms the basis of today's general meeting. Priyank, can I hand over to you?

Thank you, Brian, and good afternoon, ladies and gentlemen. I think -- let me start off by saying that when we listed Jupiter Mines on the Australian Stock Exchange approximately 3 years ago, we came to the market with 2 promises, which we have religiously stuck to since that time. The first promise was that the exclusive focus of Jupiter Mines would be on manganese, primarily our Tshipi manganese mine in South Africa. And then the second focus would be to run these assets as hard as possible, as cost effectively as possible and, every 6 months, pay out a very healthy dividend, which we basically classified as a very high payout ratio and double-digit yields. And that is what we have done since launch of Jupiter on the ASX 3 years ago. What we have also maintained over that period is that stuck within Jupiter are these 2 iron ore projects, Mount Mason and Mount Ida, which have got tremendous option value, which can be crystallized and released with the right set of parameters: firstly, the iron ore price; and secondly, some opportunity on the rail and the port. And when the Board of Jupiter realized that those 2 parameters were more or less achieved over the last 3 months, they decided [ to spin off ] of these assets to a separate entity, which we have called Juno. So the IPO is basically a two-pronged approach. The first approach is that the current assets will be spun off into Juno in return for approximately 120 million shares, putting a value of $30 million. And every Jupiter shareholder will get their pro rata share of Juno on a ratio of 1:16. The second thing which we have tried to achieve in this IPO is that because the timing is hot and the Mount Mason project, which, although is small with 6 million tonnes, is almost shovel-ready, we do not want to waste any time in developing that project. So the second strategy has been to raise $20 million, which we believe will give enough financial wherewithal to Greg and his team to substantially advance these projects because they sit with all the approvals, and everything is placed. So that has largely been the reason why we have done this demerger and IPO. And what I've described to you as the two-pronged strategy is largely to make sure that Mount Mason project can be brought into production fairly quickly. So that has been the sole strategy to fast track the production from Mount Mason. What I think we will also try to achieve once the company is launched is to see how we can consolidate further DSO resources to increase the life of mine and the infrastructure, which will be put for Mount Mason and, thirdly, on a mid- to long-term basis, see what creative ways we can come up with to optimize and crystalize value out of Mount Ida. So in summary, what we have done with this demerger is achieved a couple of things. Firstly is for every Jupiter shareholder now to be holding 2 shares, 1 which will be a pure-player manganese through Jupiter; and the other on this fast-track development of Mount Mason, primarily an iron ore company, through Juno. It will release the value from these iron ore assets, which, within Jupiter, were probably having 0 value. So that is going to be a crystallization of the value, which has been the focus of the Jupiter Board. What it will then lead to is Jupiter exclusively focusing on the Tshipi Borwa mine, things like the expansion, how we can further focus on the cost and production and see whatever can be done to further release value from the manganese asset. And then what we are hoping to achieve, why this demerger, is to have an independent management team led by Greg and a Board which will have substantial capital from this IPO to fast track the development of the Mount Mason project. So in a sense, the umbilical cord which attaches these 2 iron ore projects to Jupiter mine would be severed, and there will be an independent management team and Board of Juno to lead these projects into the future. And what we will then be able to achieve is that there will be no ambiguity on the focus and strategy for Jupiter. It is going to be exclusively on the Tshipi manganese assets. There will be no concern or risk of diversion of any funds into either holding these iron ore projects or any risk of diverting that cash to develop these iron ore projects, which will further consolidate our strategy that every penny which we get is a half share from South Africa and Tshipi mine will be paid out as fully as possible as a very healthy dividend to the Jupiter shareholders. So that, in a nutshell, is why we have done what we have done and what we feel Jupiter would be now focused on in the near future and also the management team and the Board of Juno. So with that, Brian, back to you. Thank you.

Priyank, thank you very much. Ladies and gentlemen, I now invite your questions or comments. Please note that only shareholders of Jupiter Mine may ask questions or make comments at this time. Melissa, do you have any questions that have been received that we should discuss at this point?