Northam Platinum Holdings Limited (NPH) Earnings Call Transcript & Summary

Okay. Good afternoon, everybody. Good afternoon to Ed, Lisa and Felix, who are in the room with us with the Northam team. And I just -- I want to ask, on the line, we would have expected Martin and David. If you can just confirm? Try if it's up? if not, I'm just going to keep going and we'll get to it. I'll do a very broad introduction. You've obviously sat through the presentation so it's -- I'm not going to repeat all that. But the highlights for us, for the period gone, tough operating environment. You've heard me talk about that. And of course, a major feature on the financial side is that we did a big furnace rebuild. We took the furnace down in May, and we only brought it back in November. So we operated for 4 months, if not 4.5 months on only 1 wheel, which is -- does mean that you lock up cash flow in the smelter. The furnace has been recommissioned in November. It was a bit slower than what we expected. But again, you've got very, very large amounts of project people and you all know how difficult it is with the protocols around COVID. If you have 1 case, everybody's out. And it was in-and-out, stop-start and that did cause us a delay in the project work. But the furnace is back online, and you can expect the cash flow to come through in the second half. Even with that, though, the numbers are pretty strong. Alet will help you with any particular question you might have on the financials. But we're in good shape. Profitability is strong. Also in the period, there are two very significant corporate activities that we have undertaken. The first one is the wind-up at Zambezi. Again, maybe not yourself, Lisa, so much, but certainly, I know I've interacted with Felix way back when in 2015, and Ed. Everybody thought that the Zambezi structure was not going to work or would cause dilution and [ unless ] being quite pointed to suggest to you that the shares in issue today are pretty much exactly the same as they were 10 years ago. There is no dilution and Zambezi -- but Zambezi has been wound up. On the Royal Bafokeng acquisition, again, you've heard me speak on that. This is a rare, shallow, well-capitalized, large ore body. It is literally a once-in-a-lifetime opportunity. It will not come up again. This is a 450,000 to 0.5 million ounce producer. There is essentially ourselves and Implats are competing for. I do want to make 1 statement that it's easy perhaps to assume that somehow, and it was -- it can be easily interpreted that way, that somehow Northam is fighting Impala or Impala is fighting in Northam. I think that's a misinterpretation of what you'll see. It's a very, very valuable rare asset. We are both fighting over the asset, impala, a highly professional outfit. And neither they nor us would want to get into any public argy-bargy on this issue. That's certainly our view. But it's a natural thing that you're seeing. It's a really valuable asset and both companies would like to own and control it. And I think that's the primary interpretation of what you are seeing. Northam has a particularly strong view for PGMs. It's perhaps nonconsensus. In other words, it's above consensus. We do not hold the view that internal combustion engines will be replaced by battery electric vehicles. Let me say it absolutely bluntly. Internal combustion engines of one form or another would be around across the world for many decades to come. And on that basis, it's like a double-edged sword in a way. So we acknowledge that BEVs have a role to play. However, we do not believe it will completely replace the ICE. But what that means is if you do produce an ICE or a hybrid ICE, it must be clean. The public and the social environment across the world will not accept less than optimal exhaust solutions to produce the best possible internal combustion engine or a hybrid engine that you can. Now some of the modern hybrids that -- [ sales ] across springs to mind. These things -- it's a hybrid. It's a medium-sized car. It is literally running on thin air. It runs at 5 liters per 100 kilometers. It's incredibly efficient. And I think the list price is somewhere around ZAR 400,000. I think, it's ZAR 420,000. It's a very, very cost-effective motor car, both from a capital point of view and the running cost. It is extremely clean. So on that basis, we have a stronger view. We do not believe that we're at peak, PGM, for instance, as some people have portrayed and people talk about peak oil. You can see, we're clearly not at peak oil. We -- neither are we at peak PGM. And on that...

Coal.

Or peak coal for that matter, I agree. So the practicalities of the rules do override even the most ardent of environmental considerations. It's the way of the world. I'm teaching a little bit now, which is I don't intend to do, but you know, we, having a polarized view, and the answers are always in the middle in reality. We've got, perhaps, idealism and pragmatism going this way as opposed to coming this way. And we feel the answer always lies in the middle. And in our analysis, hybrids will do very well on that basis. And on that basis, in turn, PGMs are absolutely essential. The automotive metals, palladium, rhodium and platinum, we see strong demand into the future. The hydrogen metals, which is platinum, ruthenium and iridium, the same. And you've seen our graphs on depletion. I mean, these graphs, they look very simplistic when you see them on the screen. But believe me, and you can speak to Damian, that's -- the body of work behind those graphs is extensive. It's a very, very detailed bottom-up analysis, half level by half level, shaft by shaft, asset by asset. You can only produce what you got. And if you do not reinvest in money, you'll eat yourself up. And the last decade, because of the -- since the financial crisis, actually, in a way, mining companies, and this is generally a mining company. It's not just PGM companies. They pull their homes in and in some ways, you've had the pendulum swinging the other way, where the investments now are not timely as enough. And the point on that one is mining -- the nature of mining projects, as you see with Booysendal, these are 10-year projects and we've made the point that if you were to build Booysendal's house today alone will probably come in at a cost of ZAR 10 billion. So I made the point again in the presentation. This is, we think, quite an important point. Capital escalation is very insidious. You know that definition of that word is something that happens, gradual but is -- can cause a lot of pain, actually. And capital cost escalation is a very insidious thing. Because when you don't do things for 10 years, you forgot what it costs. And then when you wake up one morning and you say, "Okay, now I'm going to build something," the cost of it is going to hit you in the face like nothing else. And that's what we see. What it means, it inhibits the decision to do a new build because the -- when you see the number, you'll be very, very surprised what it cost to replace some of these assets. So we have a depleting mining asset. We have a lack of capital investment, a lack of build for at least a decade. The cost of that build today is difficult to swallow. In turn, that means the existing asset base has a higher value because inherently, it is rarer. And certainly, the RBP assets are, in our view, of the rarest. And they're of the rarest because they're really big, 68 million ounces. They're pretty shallow. Most of it's above 700 meters. Well capitalized, remember, this is an Anglo Platinum JV, well-capitalized assets and good people. And on that basis, we value it as a stand-alone basis. And on that basis, Northam has took a position. It has been suggested that, somehow, Northam woke up one morning and reacted the Impala announcement. I mean, really, do you think a mining company operates within 2 or 3 days to make a decision like that? It's not the case. It's a highly considered strategic decision over many months of analysis and interaction as opposed to some sort of knee-jerk reaction, which is far from the truth. So I just want to make a few point on that basis, if you don't mind, and then we'll open it up to questions. Let's see who wants to start.

Okay, I'll start.

Thanks, Ed.

Yes. Cool. Yes. Ed Stoddard from the Business Maverick. Sorry, because I missed the presentation. I just want to check. You had mentioned about the social unrest, community unrest around Booysendal. I was just wondering how much production did you lose -- do you estimate that you lost to that during the period under review?

Yes. Thanks, Ed. Yes, we can pick up another question. Don't worry, but it's easier if I answer them 1 by 1 for me, maybe not for you. But certainly for me. The unrest that we're talking about is right across Limpopo and Mpumalanga. It's not specific to Booysendal. It is regional and provincial and very, very extensive over this period. And I think we all know what the issues are. It is really economic deprivation at the region that is very high unemployment amongst the youth, the broad use definition. We have over 50% unemployment in those regions. And mining companies and mines themselves, the assets are the center of economic activity, an opportunity and they're a natural center for people to ask for those opportunities. Unfortunately, we can't fix everything. And -- but that doesn't mean that we can't do what we should be doing, which is schools, water, power, roads, electricity. It's within our means. And the companies themselves are working together on this. So the company involved there would be ourselves, it would be Anglo and it would be some of the smaller chrome producers. It is Glencore and Samancor. Those are the big names that are operating in that region, Impala also at Marula. So it's a regional issue. It's a socio-economic issue. The nature of the disruption is such that on occasion now people can't get to work early in the morning because the road might be blocked and it's very difficult then for the employees to get there, as you can imagine. So we've interrupted at the highest level with the Deputy Police Commissioner, Lieutenant General [ Masemola ] is his name, for those of you who may know him. I hosted the Lieutenant General [ Masemola ] on Booysendal together with the -- when the big General goes, the other Generals come with. So we did host the police to the mining operation to indicate just how important that economic activity is. And if it doesn't -- if the criminal behavior doesn't get stopped, now I'm not talking about genuine community process now. I'm talking about now the procurement mafia-type behavior where people are leveraging for contracts and things like that. That must be stopped. And when it's off-site in the towns, in and around the communities, the police must act. And we've requested that they do. So in order to help with the understanding, we hosted a very, very large police contingent on the mine. We took them on a technical visit, if I can put it that way. We indicated just how many people are employed there, what the multiplier effect is, what the dependency ratio is of these -- as I call it, decent work, as Versace would always say, there's decent work, well-paid decent work. And disrupting that activity as well as all the other economic -- I mean kids coming in and getting to school, for instance, disrupting the province is in that nature is only detrimental and counterproductive to what is trying to be achieved. But yes, it is -- so it is a common problem, Ed. And on the number of days, I mean, the 1 incident alone, we were totally without power for over 4 days, 0 power from Eskom. Because remotely from the mine, an Eskom substation, we call it a switching station, it was effectively hijacked. And the Eskom switching people were too frightened to go there to restore the power. So these are -- that's an example of just one incident. Now when a mine is...

How were they hijacked?

Effectively hijacked, yes. Held to ransom or much...

Hijacked. Like, they really hijacked.

Yes. Well, taken control of is probably a better word, but I use a word that effectively hijacked. So you can imagine that you've got a high degree fixed cost, you don't produce in 4 days. You've got a one-way street. On the income statement, you're incurring the cost, but not the revenue. And the employees cannot earn their variables. We don't stop paying the employees, but they can't -- in the variable portion, for instance. So they're also extremely unhappy. And that money then doesn't flow into the communities. And I'll stress once again, these are high dependency jobs. You can pick a number, but it's at least high single-digit dependency against one of these jobs for the broader family. And the economic multiplier effect is also extremely important. Mining is massively important for South Africa. We're right at the bottom of the economic triangle. We are a primary industry. There's only3, fishing, farming and mining. They are the primary industries right there. The secondary industry comes, which is things like manufacturing and tertiary, which would be shops and banks and then, of course, some people refer now to the IT as the fourth level. We are the base. And you really need no better indication of how important that is than to look at the budget statement in terms of the fiscus, balance that came about last year. Again, not to blow our trumpet necessarily, but mining, together with government, made a decision after the first 3-week lockdown that we need to go back to get. So we all went back to work. It's where I make a little bit of a joke for -- to the -- that there goes the Investec lady. He's only just going back to work now 2 years later. The mining fraternity, 0.5 million people have literally been mostly back at work for the last 2 years. It's a risk-adjusted decision that the mining companies and the government made. And you can have your view on that, of course, as an individual because COVID is highly emotive subject. But can you imagine if didn't happen? What the consequence for the country would have been in terms of the -- again, the income statement of the country would have been very, very disastrous. So mining is really important, and it needs to be -- I won't use the word protected. That's probably overplaying it, but nurtured. Mining needs to be a nurtured through policy, through the dependencies that we have, the government like environmental permitting, water and power supply, law and order. I do believe, by the way, that the government of the day does -- has come to a very, very strong realization on this point. Did you have a second question, Ed?

No, no.

Do I need to [ go on and ] mic?

I think so because of the audience, yes.

Okay. Felix from Bloomberg News. Paul, just a couple of issues. The instance you described about the power issue, did they know that it supplies power to your operations? When was that exactly?

November. So it was in November into early December. So that, Felix, supplies all the mines in the area. Yes, that switching station. And they did know. I mean, it's obvious. It's the main switching station.

So it was basically meant to put -- to send a message to mining companies or something like that?

Yes, I agree.

Okay. You have described in very colorful terms, your justification for buying into Royal Bafokeng and the [ funds ] used in the -- what, the current holding you have, 35% is like, it's still [ primarily made of ] -- but it doesn't really give much in terms of where this is going. There's been talk of a potential JV being in place. If you maybe give us any indication of just them -- to intend to gain majority control in Royal Bafokeng? Where is this going? You have options to go up to 38%. Would you be content just being there and maintaining that position?

Felix, I'm going to try and answer as best I can. But before I answer, I'm going to stress once again, we are in a highly regulated environment, which is governed by the TRP. So I'm limited in what I -- how I can answer that question, and I'm sure you will understand that. The other reason why we may not want to talk just yet is because we would want to not promote market speculation. It doesn't help in a situation like this. I know that's direct contrary to what you might want. But it is the facts of the matter. Northam, we've been very, very quiet and we've been very quiet very deliberately. We hold our counsel on this issue. The position that we have, we are comfortable with at the moment, but you may assume that we -- ideally, we would want to move to a controlling position. But that is indeterminate at the moment. And I'm not really going to comment too much more than that for now. There will be a time in the future, but it's not for now. Is it -- again, I mean, he's asking me. Oh, sorry. Power hijacking was aimed at sending a message to Eskom actually, not -- yes. I remember now.

[indiscernible]

Collateral damage, yes.

Okay. So -- when you say ideally, should we take that as hypothetically? Or how do you want us to kind of...

You can't really say anything too much, Felix. I must be honest with you. I'm trying to tell you that even I can't say too much. But I mean -- let me find a way of saying it the next -- it just helps the conversation. We desire to control the asset, let me put it that way, yes. Whether we are able to or not is not yet determined. I think you must say it that way. In other words, yes, of course, we would desire control. However, it is not yet determined. There are a number of potential -- here's a nice way of saying it as well, there are actually a number of potential outcomes rather than the obvious. That's a nice way of saying it as well. There's not just 1 or 2 outcomes. There are a number of potential outcomes, so let's try and help you here.

There are various potential outcomes or alternative outcomes, which remain to be determined at this point in time.

So on that basis, I'm not really going to add fuel to the fire. But you should know, there are more than one potential outcomes. Is that fair enough? Lisa, are you happy with that? Because it applies to everybody. You're happy with the statement that I'm making? There's more than one potential outcome. Yes.

Lisa from Fin24. So yes, that wording "more than one potential outcome" and "critical juncture" that -- are you then only talking about the RBPlat opportunity? Or are there potentially other surprises that might be coming in terms of this critical juncture that you're [ rather at ].

Those comments would directly end at the current situation or the current construct.

Okay. I have lots of questions. So you guys are going to have to stop me. Okay. So the RBH are now your BEE partner. Is that correct?

Empowered shareholder.

And that satisfies your [ incumbent ] requirements?

Not all of them, no. But it is 8.7% empowered shareholder.

But they could sell out at any time?

Yes, they can. Yes. Yes. I mean that is, in fact, there's often overlooked point. If you have a BEE -- this is a general comment for our industry, not that -- not specific to mining. The other [ 7named ] empowerment partner who is inhibited in the shareholder rights, that means it's not a full shareholding right. So there are no inhibitions on RBH.

Maybe I can just add to that. So when we talk about our extended empowerment transactions, part of that transaction we had was public SCB. That need no longer exists because of the shareholding hold by RBH. However, we will still continue with the empowerment portion with our employees and host an effective community. So that will remain and that will be a 23% shareholding in the original Northam Platinum Limited. So that will remain in place.

Could you give us some insights into your negotiations with RBH leading up to the deal? I mean, was it tough? Did they push you to the premium that you paid? Or did you sort of just go in looking to pay high?

I have no comments on that.

Okay. So you said it was months of negotiations. It wasn't just that you woke up.

No. I said months of consideration in the valuation of the asset, yes.

All right. So -- but it did seem to take RBPlat and Implats by surprise from their comments, publicly. Did you feel that it was -- you were doing something underhanded? I mean, did you feel that you needed to smooth things over with these parties once the announcement came out?

I don't think we...

I want to make one comment. Our interaction with RBP is well documented.

All right. So the debt has gone up considerably. Does that -- I take your point that it's under your target ratio. But does it make you nervous? Does it hinder your moves going forward?

It's very conservative. Onetime did it, but that's very conserve. It's a conservative approach to gearing.

You mentioned that RBPlat...

Maybe, Alet, should comment. I shouldn't -- I'm doing my questions...

Yes, yes, yes. Very comfortable with where we are, as we mentioned in the presentation. At the end, we forecast it to be still at 1.1, but -- 1:1, sorry. But if you actually look at the date, it is -- a lot of it is longer term. It's -- a big chunk of it, ZAR 9.5 billion is the MTN program. That is essentially our own shareholders. So we see it as a permanent debt layer in the business. That's not something that we are looking to repay. We'll continue to roll these notes as we've done in the past. And that will be a continuous sort of funding layer within our business. As was mentioned in the presentation, that has enabled the growth of this company. We haven't issued shares. We have done it through using our balance sheet to grow this business. And we've grown that sort of ounces basis 3x, which is remarkable sort of where we are. So very comfortable, too, with the basic growth of business.

Yes. I just want to explain because I don't think -- I made the point, often underestimated what we have done. We've used the bond market, not the equity market. Now there are very few companies on the bond market, except the banks. The banks are on the bond market, and then you'll have discovery -- you'll see discovery on the bond market. So the bond market of South Africa, the industrial side of the bond market of SA. The bond market of South Africa is very underdeveloped. Northam has a very large presence on the bond market embodied in the domestic medium-term note program. It's very, very important what I'm saying here. I know you're confused because you're not used to -- not confused as you're always confused. But if there's the -- you will not be used to what I'm saying because the company -- the industrial companies, very few of them do it. The banks do it all the time. So we are active in the bond market of South Africa. We funded the growth mostly through access to the bond market of SA. Now if you look at the bond market, you'll see there are tradable instruments in Northam. They're called domestic medium-term notes. DMTNs. Again, I know you're not familiar with this. So forgive us -- but I'm trying to make the point that the reason you might not see it is because you've not seen it before. The domestic medium-term notes is a very, very underappreciated part of the capital structure of Northam. That's how we've done it. You can't grow a company from nothing the way we've grown Northam. As Alet pointed out, over 3x growth. Where do you fund it from? As you know, the shares [ are ] an issue, as I've just said, today, exactly the same as they were 10 years ago. Where did the funded -- funding come from for the Northam growth? It came from accessing the bond market of South Africa through the DMTN program. I know I'm lecturing here. I can feel myself lecturing, but the reason I'm trying to do it is to just show a little bit of something here that perhaps it's understandable why you might not understand what I'm talking about because very few companies do it outside the banking system.

Why do few companies do it?

Because they use -- they've used a -- what has happened is you'll see the equity have been used. So you need to go back and see who did what with share issuance, which company is different. But in our case, we have not, on a net-net basis, over the last 10 years, issued shares. They're exactly the same, so there's no dilution. Everybody thought there will be dilution at Northam, if you remember, through the Zambezi transaction. There is 0 dilution, nada, nothing. The shares we've issued today are the same. So we've grown the company. We've grown the shareholder participation on a per ounce basis by 3x. You saw that [ crafted ] in the presentation, yes. How did we do it? We did it by accessing the debt markets. The bond market at South Africa. The domestic medium-term note structure inside our overall capital strategy. We have a debt layer and we have an equity layer. And that's what we're trying to get across. And it's a very, very powerful way of doing because you use the debt to grow the business on behalf of your shareholders. You repay the debt, and the shareholders got a greater business participation. It's like -- it's not different to normal business. It's just -- it's not -- you wouldn't necessarily expect it in South Africa. It's very common across the world, by the way. Very, very common. But in SA, the bond market -- I'll say it 1 more time, the bond market in South Africa is very underdeveloped. The industrial side of the bond market in South Africa is very underdeveloped. There are a few participants. The bankers are all there. All the banks are there. And then you will find -- as I say, you'll find discovery and then a couple of others. Felix?

Two questions from me, maybe the final ones. Just 2 questions from me, maybe the final ones. So 2 issues for me, Paul, is because we're having this conversation, and this is the only access we have. And I must say it's not been easy to try and get communication from you over this period, not only just yourself, but your whole team, and you can understand that it must be frustrating. Would you -- your desires to gain majority control in Royal Bafokeng's to be met if you do not get access to do due diligence? And the fact that you bought -- Northam bought, rather, not you, a key stack without doing due diligence, why then do you need to do due diligence at this point in time?

Mentioned in the room. In fact, we are requesting due diligence. We haven't been given a due diligence yet. That's the very first answer to that question. In terms of communication, Felix, we have deliberately, to your frustration, I understand what you're saying, held our own council. There are very, very good reasons why this is the case. It's a highly regulated environment, what you are seeing. It is wise to hold your counsel and only speak when you have something proper and authorized to say. It's really, really important to mention. On top of that, all we're doing is by speaking too loudly in public, if I can say that way, is promoting unwarranted and unwanted speculation.

Sounds good. So my question then was to be, do you still expect to be granted -- your request for due diligence, do you expect that to be granted? And if I can just finish them all. The CEO for Royal Bafokeng pointedly said to use roughly [ these words ] whoever wants to put up a bid must say they put up or shut up. If you can maybe respond to that? And I would also want you to talk the way Impala has been purchasing Royal Bafokeng shares. Do you see them being able to cross over then the 50% threshold before June when their offer comes -- when their offer ends? I think those are the only ones.

Thanks, Felix. And let me go quickly on that due diligence one. We've requested due diligence. We have not been granted due diligence yet. And no further comments on that one. Now Steve's comment, he's a colleague of mine, first of all. And we bear Steve no ill, but I will not respond to that type of pressure. And then the third one is -- so not just I, the company, shall I say, but I can say I. It's okay. He knows me well. What was the third one again? Yes, well, of course, the -- let me make a few comments there. Again, it's not for us to speak on the hand of Implats. It's not for us to speak -- you know what I mean when I say the hand. It's not for us to speak on the hand of Implats. So we can only speak on what we see. At the moment, the offer has not gone unconditional, which means all holders of RBH, including ourselves, have a proverbial free option. So why -- nobody has to act now. Must I explain. Are we off the record? Must I explain that? So the offer, which is a mandatory offer, in other words, must. That word mandatory is a very, very important word. This is a regulatory -- a regulated transaction. It is a must. So the offer must. It has not -- the offer, which must, has not yet gone unconditional. There is time associated with that -- of the period. You pointed out a potential time. It's a potential time. So those hurdles to make the offer unconditional have not yet been crossed, which means all current holders of RBH have a proverbial, I'm using my language very, very carefully here, free option. You don't have to do anything today. Very frustrating, I know that. But I'm hoping to explain the mechanics of these transactions in a way I'm doing it, because this is not peculiar to this transaction. This is the structure of transactions that you're seeing here, the regulated structure of transaction. It's not particularly peculiar to this transaction.

Do you see -- do you expect some of them to hold out until that period comes to an end?

Felix, each shareholder must make their own decision. They have their own absolute rights to buy, sell or hold.

[indiscernible]

That means Felix is asking too many questions at a time. No, let's go to the line. [ Neal ], if you can ask David or Martin that primarily got questions, [indiscernible] and Martin is going on, I think.

[indiscernible]

And who? Who's on the line otherwise? [ Dineo ]

It's Irene.

Look, I'm wondering if we're picking up the lines.

Yes. Irene please go ahead.

Apologies. We have a question from Martin Creamer.

Martin Creamer, Mining Weekly. Just like Chris, on your renewable energy plans you had, you outlined some of them last year. Is there any progress on what you've done on the renewable energy front, especially seeing that you described Eskom as being a risk?

Yes. Thanks, Martin. We have a 10-megawatt PV installation under construction at Zondereinde. The road network and the site has been prepared to accept the glass. We haven't got the glass on there yet. You may know that during this period, China restricted glass out, exports. And the price, consequently, spiked. So we're just waiting for that to come down. But you're happy -- we're happy to take you out there 1 day. You can have a look. We're also looking at a potential wind project, which Damian, actually, has been with and it's early, early stages yet. You may know there's -- I don't know whether I should say this or not, we're looking -- yes. So Martin, we're looking at a potential wind project, which is an off-site wind project. In other words, it has to be wheeled. And there are smaller PV projects at both Booysendal and Eland Platinum in construction. So again, if you need a visit there, we will take you 1 day by arrangement.

Interesting. Just quickly, I just wanted to ask, I saw no country [ fraught ] -- it's actually, they filed intellectual property on having hydrogen in driving an internal combustion engine. In other words, you won't have a fuel cell. You have hydrogen driving the traditional internal combustion engine. Have you got sight of that and what it could potentially mean to development of -- or demand for platinum group metals?

Yes, Martin, there are a couple of companies busy with that technology that you're speaking about. So you obviously picked it up. We are aware of those potential developments. It is commercialized, so that's an important point. And of course, they are amply internal combustion engines and still will require emission control systems on the exhaust, which of course, require -- internally require PGMs.

At this stage, we have no further questions.

That's good. Let's come back to the room. Lisa, are you covered?

[ I've got 1. ]

Okay. We'll go for Lisa, and then Felix? Just pass the mic, please.

So your unit costs have obviously increased, and the inflationary pressures are going to persist. Presumably you need production to come online. So that -- when do you expect the unit cost to start moving the other way?

Well, they certainly won't go down. So just to be clear about that. Because there's 2 effects here. The inflationary pressure, which is the cost of power. I think last year's power increase is about 14% on a per-unit basis. There are very, very substantial cost increases coming through on steel, chemicals, explosives.

Explosives, lubricants.

So all oil-based and steel-based commodities under extraordinary, I'll use that word, extraordinary inflationary pressure. And it is not easy for me to say to you that in 1 year's time, it's all going to normalize, because the world is in a difficult place at the moment. So it's very hard for me to say to you that inflation will normalize in 6 months' time. We don't know. The world doesn't know actually. The only combat we have is achieving our production performance, and that's, of course, what we focused on. Felix, are you covered? Yes?

Just 1, last 1 again. I think that this is the only time we'll probably meet between this quarter.

I can guarantee you [ that ]. No, not really. I'm joking.

Yes, that's fine. Given where things at Royal Bafokeng, would you -- with Northam, would you be comfortable with a JV arrangement? And what pathway would you see if it ends up in a JV? Would prefer that Royal Bafokeng operates a stand-alone, delist or something like that?

Again, Felix, you're touching on things I simply cannot answer given the regulatory framework in which we operate in. I'll get myself in trouble. Thank you. Ed?

I'm good.

Okay. Thanks very much, everybody. And thanks to Martin on the line, and [ Dineo ] and David.