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Jupiter Mines Ltd (JMS) reported a solid start to the fiscal year with notable increases in sales and production efficiency. Despite these positive financial and operational metrics, the company’s stock saw a decline of 3.33% following the earnings call, closing at 0.145, down from the previous day’s 0.15. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value assessment, with the company maintaining a GOOD financial health score. The market reaction suggests a cautious outlook among investors, likely influenced by broader market conditions and specific company challenges.
Key Takeaways
- Sales increased by 14% quarter-on-quarter, indicating strong demand.
- EBITDA and NPATA grew by 65% from the prior quarter, showcasing improved profitability.
- Production costs decreased by 15%, enhancing operational efficiency.
- The stock price fell by 3.33%, reflecting potential investor concerns despite strong results.
- Manganese prices ended 10% higher at the quarter’s close, though still below the full-year average.
Company Performance
Jupiter Mines demonstrated robust performance in the first quarter of 2025, with significant growth in sales and profitability. The company managed to reduce production costs by 15%, which, coupled with a 14% increase in sales, highlights effective operational management. This performance is set against a backdrop of improving manganese prices, which increased by 10% by the end of March.
Financial Highlights
- Sales: Increased by 14% quarter-on-quarter
- EBITDA and NPATA: Up 65% from the previous quarter
- Production cost: Decreased by 15% to USD 2.06 per DMTU
- Net cash generated: ZAR 147 million
- Cash on hand: AUD 60 million, an improvement from last year
Market Reaction
Following the earnings announcement, Jupiter Mines’ stock decreased by 3.33%, closing at 0.145. This decline comes despite the company’s positive financial performance, suggesting investor caution possibly due to external market conditions or future growth uncertainties. The stock remains within its 52-week range, indicating some stability despite the drop.
Outlook & Guidance
Jupiter Mines remains optimistic, expecting manganese prices to stabilize around current levels. The company continues its strategic initiatives, including the High Purity Manganese Sulfate (HPMSM) study and aims to secure significant offtake agreements. These efforts are part of its long-term strategy to capture market demand and expand its operational footprint.
Executive Commentary
CEO Brett Rogers expressed confidence in the company’s trajectory, stating, "This is a business performing very well." He emphasized the expected support for manganese prices, saying, "We think looking forward, we should expect to see support at around about these levels." Rogers also highlighted the company’s cautious approach to market expansion, noting, "We don’t think it’s prudent to move ahead of where the customer market is."
Risks and Challenges
- Potential fluctuations in manganese prices could impact profitability.
- The return of competitors like Genco may increase market pressure.
- Ongoing geopolitical and economic uncertainties could affect global demand.
- Dependence on South African logistics could pose supply chain risks.
- Execution risks associated with the HPMSM study and customer demand alignment.
Q&A
Analysts inquired about the impact of Genco’s market return and the dynamics between high-grade and semi-carbonate ore. Discussions also covered potential mergers and acquisitions in the Kalahari region, strategies for low-grade ore sales, and the development strategy for the HPMSM market.
Full transcript - Jupiter Mines Ltd (JMS) Q3 2025:
Conference Moderator: Good morning, and I would like to welcome everyone to the Jupiter Mines Q3 Call. Today, we have Jupiter Managing Director and Chief Executive Officer, Brett Rogers and Chief Financial Officer, Melissa North, to provide a brief update on the third quarter of the twenty twenty five financial year, and then we will open up to questions from callers. Thanks, Brad. Please go ahead.
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: Thanks very much, and good morning, everyone. Thanks for joining us. You will no doubt have seen our March quarterly activities report that was released to the market this morning. You’ll see in that report that this is a business performing very well, and that’s reflected in that quarterly activities report. As usual, I’ll just give some overview comments touching on the key outcomes and themes that are summarized in that report, and then I’ll turn the line over to any questions that you may wish to ask.
So just starting with sales and production levels, sales were up 14% on last quarter. And overall, if we’re looking at the financial year track, we’re on track to deliver the 3,400,000.0 tonnes for the full financial year that we typically seek to target. So nine months in, we’re on track for that and that was supported by that strong sales quarter that we just delivered. Similarly, production was up 15% on last quarter, and that’s enabled us to build quite strong stockpiles, more than three months of high grade ore at normal sort of 3,400,000 tonne per annum run rate levels sitting in stockpile currently. So good sales, but even better production.
Realized prices quarter on quarter were 8% higher, and I’ll come back to what’s going on with manganese prices and the market more generally later on in my comments. And you’ll also have noted that cost of production decreased by 15% quarter on quarter. So that’s quite material cost of USD 2.06 per DMTU is much lower than we’ve seen for the last few quarters. What’s going on there is mostly about strip ratio. We’re in a section of the pit that has a lower strip than what we’ve been in for the preceding quarters, and we expect to be in this section of the pit until at least the end of the June.
So we should see lower than average levels of unit costs in the June as well. The FX ratio helped a bit. So if we look at that, the U. S. Dollar cost of production was down about 15%.
In rand, we were down about 12.5%. So there was a bit of assistance from the FX rate, but the underlying rand costs were down in real terms as well. All of that higher sales, improved pricing and lower unit costs led to a very pleasing profit result. You’ll see that EBITDA and NPATA were both up by about 65% on the prior quarter. Mining during the quarter was impacted by wet weather.
We flagged that in our last quarterly. It wasn’t more than you would usually expect. It is the quarter of our financial year that is impacted by rain. And as you’ll note from my comments in relation to both production and sales and stockpiles, it won’t impact our target for the full year. But if you look at mining, graded ore and waste mining, both down 817%, respectively, on the previous quarter.
But if you compare to the preceding quarter, to make my point, rather than prior year comparative quarter and quarter three FY 2024, the quarter just finished saw much higher mine volumes across both graded ore and waste volumes. So again, notwithstanding, there were some wet weather impacts there. It was still a strong quarter when you compare it to the most comparable quarter in the preceding financial year. As I mentioned in this detailed where we set out mining production volume in further detail, high grade ore processing was 15% higher than the previous quarter. Not surprisingly, there was no low grade ore processed, although manganese prices came up a bit.
They didn’t incentivize us to produce more low grade, notwithstanding we’ve got some sitting on the stockpile that was low grade produced or sold during the quarter. Logistics, not surprisingly, were stronger as well, up 26% on the last quarter where we saw a return of South African road haulage in order to meet the level of sales that we delivered in the quarter. And as we’ve already covered, export sales increased materially, and that was both an intention to remain on track for our full year targeted sales volumes, but also to capitalize in quarter on some better manganese prices that we saw.
: In terms of
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: cash, if you look at the total attributable cash, it was down slightly for two main reasons. Both of them were dividends. The number is down because of the GBP 300,000,000 interim dividend that was paid by Chippy during the quarter. Chippy’s own cash is down slightly as well. Obviously, we had our normal operating costs, but we also, during the quarter, contributed some of our own cash over AUD 2,000,000 to that interim dividend that was paid to shareholders during the quarter.
If you strip out the impact of that AUD 300,000,000 interim dividend that was paid by Chibi, site generated positive cash, net cash of ZAR147 million. And if you take out the impact of working capital, operating cash generation was quite strong at million. So if you look at the detail in our quarterly activities report, there was a working capital net accounts receivable build and also an inventory build for the reasons we mentioned before in the quarterly activities report. So notwithstanding, there was something of a working capital investment during the quarter and an interim dividend payment during the quarter, cash generation, both operating cash and net cash flow would be back out. That interim dividend was quite strong.
I’ll also point out here that the Chippy cash on hand, 100% level, AUD 60,000,000 better than at the same time last year. So again, this is a site that is performing well, strong sales and production, unit costs were pleasing, all of that resulted in good profitability and cash for the quarter. If we turn to the manganese market, you’ll see that at quarter end, the March 31, manganese prices were 10% higher than they were at the December. And this is really reflective of during the quarter, fairly moderated levels of delivered manganese ore from the supply side, and that was reflecting lower manganese prices at the back end of last calendar year that was subsequently selling and then delivering into the March fairly moderated levels of supply. Demand through the March was steady and maybe even a bit better than expected.
And so both of those factors combined to support the manganese price that was higher during the quarter on a realized basis. And also resulted in stock at Chinese ports being very much lower than average levels. You’ll see that in the quarterly activities report as well. With higher manganese prices through the quarter, you have seen some elevated levels of manganese supply towards the back end of the quarter and into the current quarter that we’re in currently. And that has resulted in a moderating of manganese prices to the level that you can see in the quarterly activities report, FOB, about $3.23 per DMTU, and that’s about 5% lower than full year average level.
So not great, but not bad. Really, this is a market today that is being driven by sentiment. There’s really no new factors. There’s an absence of downstream momentum, but that’s nothing new that’s been prevailing for the last few years. There was elevated manganese supply, but not drastically so, not as high as it got to last year.
And given where manganese prices have moderated to now, that ton supply will again moderate. So that will be a fairly short lived increase in manganese supply. And Chinese stocks, while they’ll come up a bit from the level that we reported at the April, ’3 point ’7 million tonnes, that’s very significantly lower than the last few years’ average of, call it, 5,700,000, five point eight million tonnes. So there’s a lot of headroom in that level there. So overall, it’s a market that’s sort of waiting for inspiration.
Stocks are low, demand is sideways, nothing new there. But it is a market that’s obviously also impacted by sentiment around global trade wars and those sorts of things. Inside the manganese market, there’s really similar factors driving the price than we would be used to and we would expect. And really, it’s been all about manganese supply and we think that will continue to both support the manganese price in the short term given the manganese price has run off a little bit. During this period of time, freight rates have remained quite low compared to what we’ve seen over the last few years.
So they were marginally lower quarter on quarter, and they remain about that level today, around US21 dollars US22 dollars per tonne for the sort of shipping that Tippi uses. So in summary, from an operational perspective, this was an outstanding quarter in every respect. Sales were up, production was up, unit costs were down, profit was significantly up and cash generation from an operating perspective. And also a net cash perspective backing out the dividend were all strong and better than run rate and expectation. Manganese prices during the quarter were up on a realized basis and quarter end to quarter end compared to the December, and that was really supported by what was going on with manganese supply in the back end of last calendar year.
Manganese supply was low. Conversely, manganese supply increasing a bit in response to those slightly elevated manganese prices has caused the manganese price to come down a bit, but Chinese stocks are still low. The level of manganese price today will mean that manganese supply should moderate again. So notwithstanding post quarter end, the manganese pricing has reduced a bit to a level that’s around 5 percent lower than last few years’ average. We think looking forward, we should expect to see support at around about these levels.
We do expect Genco to come back in based on South32’s comments ramping up through the coming quarters, but we think that, that’s largely priced into the market that we’re seeing today. So hopefully, that overview is helpful. I’m happy to turn the call over to any questions that might be out there.
Conference Moderator: Thank The first question comes from Jon Schultz from Argonaut. Go ahead.
Jon Schultz, Analyst, Argonaut: Hi, Brad and team. Good results, like where the EBITDA is going here and obviously, quite as well for the dividend in the full year result. But just a question on Genco and its impact. So with it out to the market, I mean, we obviously would have seen an impact to that high grade supply globally. Could you give some insight into where high grade versus that mid grade sits at the moment in terms of stocks and maybe demand in China?
And sort of what you see Gemco doing over the next few periods and how that could impact the market?
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: Yes. So I’ll ask you to answer your first question last, if that’s okay, John. I think the most relevant thing for us is what the reintroduction of Genco supply does to the manganese prices that we sell into. And my view is that we’re sitting today at demand that’s unexciting, that it’s been unexciting, that status quo for the last few years. And hopefully, that changes at some point in time.
But we’ve been in a sort of sideways demand situation for the last few years. And we’re sitting slightly below average manganese prices that we’ve seen for the last few years. For most of those last few years, Genco has been producing and supplying into the market. And so that’s what I mean when I say I personally think that is priced into the current market, which is being driven by sentiment, mainly supply going up and down on a prospective expected basis. And we’ve seen that move in the market from South African oil volumes.
We think that Gemco is priced in, but we’ll see. The asking question about what we’ve seen in the last few years and what supply and demand side of the manganese market has learned about high grade versus semi carbonate chippy type ore. There traditionally is a grade premium of about $0.50 per dmtu between 36.5% benchmark semi carbonate ore and the high grade ore that Eramet, Gemco and some others sell into. That in the early days of the Gemco disruption widened. And that’s not surprising.
Obviously, that was the tightest section of the market and so we saw the great premiums blow out. And then subsequently, something interesting happened, which was Chinese alloy plants and traders being nimble and responding to that shortage. In part that benefited semi carbonate ore. They increased the usage from what they would ordinarily do of chippy type ores, but they also processed high grade ore slag that was in China already, so waste essentially containing many of these, and increased the use of some ores like Garmaine ores that typically don’t go into the seaborne steel market, they would go into the production of electrolytic manganese metal, for example. So that actually resulted in a narrowing of that premium And we’ve now seen sort of a moderation back to more normal type premium levels, John.
So it is something where I think the market has demonstrated that it can respond to high grade ore shortages and in part that benefits demand for our ore. I think, though, there are trade offs in terms of that substitution, in terms of what it costs to produce alloys and the market would prefer while it’s available to use Genco top ore. So I think that premium probably goes to about where it was and we’re seeing indications of that now, John.
Jon Schultz, Analyst, Argonaut: Thanks for that. And maybe just one more. In the Kalahari, how we’ve seen the M and A and consolidation of GP, maybe what’s happening with Anglo and South32 next year guys, what’s happening up the road with some of the other operations? And is Exoro still knocking on the door of everybody? Maybe if you can give some insight into that.
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: Good question. Obviously, to answer that given kind of what we’re working on. And obviously, it’s part of a product strategy that we’re interested in driving value on. We believe that there is value to be driven through consolidation within the Kalahari for all the reasons that have set out in our strategy. And that’s ongoing work from Jupiter and there are many aspects to that.
And yes, there are parties who are interested given the quality of these assets, including Chibi and getting involved in that consolidation, the strategy of consolidation and the idea that it will drive incremental value through being able to operate and grow these assets more efficiently than you can under joint control structures is common logic. And you can see from the quarterly result we reported today how valuable Chippy is as we think the best asset in the Kalahari. So that’s a very roundabout way of answering your question without really answering it, John. There’s confidential work going on where we’re very focused on that as part of our strategy. I think South32 and Anglo have both made somewhat public comments about their intentions for their assets there.
But I’d say everyone, including all of those parties, believes that consolidated ownership of these assets so that they can be operated and controlled in a more direct and efficient way will be a better answer than how they’re set up currently. So there’s work going on with different parties involved, involving different assets, I’m sure, and Jupyter is part of that in terms of our own scope of influence.
Jon Schultz, Analyst, Argonaut: Thanks for that. Looking forward to updates. I’ll pass it on.
Conference Moderator: Thank Your next question comes from Mark Fisher from Fosters Stop Brokings. Please go ahead.
: Yes. Hi, Brad. Just a question on the low grade or what price would you need the high grade manganese cost to be for me to contemplate starting shipping low grade
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: ore? Yeah. Thanks, Mark. So overall, what we’re trying to do is hit 3,400,000 tonnes and maximize the proportion of high grade within that 3,400,000 tonnes. So it’s not as simple as saying at a certain price we’re looking to put low grade out if we’ve got good stockpiles and we do want to maintain at least three months’ worth of high grade ore in stockpile.
At the moment we’ve got more than that, then we’ll look at maximizing the amount of high grade ore we’re putting out even if we’ve got some low grade. If you’re in a market like we’re in briefly last year, June, July, where the market is hungry for more material, everyone knows we’ve got low grade ore on stockpile, then that certainly does incentivize putting some low grade ore out there. We have, at other times, also put some low grade into the market just to generate a bit of cash notwithstanding. It was just basically washing its face and sitting there on stockpile. We’ve got several million tonnes of that material and so clearing a bit of stockpile space and generating a bit of cash notwithstanding at not very exciting prices and something we can occasionally do.
So if you look at the prices that prevailed through the March, given everything I’ve just said, didn’t kind of incentivize to put any low grade ore out there. But I’d say somewhere between where we were in March and where we got to in June, July last year, all other things being equal would be thinking about low grade. There is demand out there for that material even in sort of more moderated markets that we’ve seen, but we also want to be thoughtful around supporting the high grade ore price and not putting low grade ore in unless there’s a really good return in doing it, particularly if we can hit our run rates as we have done through the March with 100% high grade ore.
: Okay. And just a final question. Just on the high purity manganese sulfate study, I understand you’re looking to complete the PFS this year. How is that progressing, I guess, in light of also the demand for critical minerals, especially in The U. S?
Thanks.
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: Thanks, Mark. Yes, so we have We are progressing that. The work that we’re doing in relation to the PFS is focused on the technical side of that PFS study and the customer side. We think that that’s proven in a situation that we have, which is that battery makers and vehicle makers are still doing their work in relation to the future that they see for electric vehicles. One of the biggest drivers across the supply chain is reducing the cost of electric vehicle batteries, and manganese has a really important role to play in that because it’s cheaper and more available than other cathode battery metals.
So that’s why, regardless of whether it’s LFP looking to move to LFMP, the sort of more typical Chinese cathode chemistry that we think will become more prevalent in the world or other NMC and LMO Western type cathode chemistries looking to either introduce or increase the amount of manganese, that’s an ongoing trend. So we believe in the thematic, and that’s why we’re continuing to do the work. But the way that we’re doing the work is to focus on what we think will benefit from effort right now, and that is building a pilot plant, sharing some material with customers. All of that goes to proving up offtake demand and that’s what’s important before we will move into the definitive feasibility study phase. That phase will cost more money.
Ultimately, what we need to do, what we think is important and prudent, is to get to a stage where we can underwrite through committed offtakes 100,000 tonnes per annum of HPMSM demand for at least five and ideally seven years. The payback in our study is about three point five, four years. And so what we’re looking to do is derisk the capital investment, and we think that will place us in quite a strong investable position. And the market isn’t there yet. Notwithstanding, this is a growing market, and we can see real moves towards greater manganese use, as I mentioned.
If you go out to non Chinese buyers of HPMSM today and ask them to commit to a number that they will put in writing, both price and volume, call it 2028. They can’t do it yet. They’ll say keep talking to us, but this is a market that is going to grow rapidly. And so, yes, if you look at our strategy update, we say PFS this year, PFS next year. And that’s kind of a square bracketed intention.
If we get to the stage of being able to move into a DFS, but we still don’t see the market there ready to stand behind the volumes in terms of the people we’re talking to, then we’ll keep talking to them. Because whilst the returns are attractive and we believe in the thematic and there are many ways to monetize this opportunity, we think Jupiter is competitively well positioned. We don’t think it’s prudent to move ahead of where the customer market is and we don’t think it’s prudent for juveniles to take volume risk on this very new market.
: Okay. Thanks.
Conference Moderator: Thank you. There are no further questions at this time. I’ll now hand back to Brad for closing remarks.
Brett Rogers, Managing Director and Chief Executive Officer, Jupiter Mines: Okay, great. Thank you very much for joining the call today, and I hope you had time to read the quarterly. But if not, I’ve provided the key comments here today and just leaving you with the key takeaways, which was sites performing well, sales, production, unit costs, earnings, cash generation, all strong and above trend in a market where we saw improved manganese prices and towards the tail end some moderation there. But we think the kind of risks that have driven that moderation of price in manganese supply should pull back a bit and that should support prices around current levels and hopefully a bit better through the coming quarter. Thanks again for your time and look forward to talking to you next quarter.
Conference Moderator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
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