Impala Platinum Holdings (JSE:IMP) Q4 2026 Earnings Call

0:00 Welcome to everybody in the room. It's always a pleasure to see you in the room. Also, a very hearty welcome to everybody joining us on the webcast. There will also be an opportunity on the webcast and on Chorus Call to engage with the team directly after our short presentation in a Q&A session. As usual, we'll take questions in the room first and then we'll pivot to Chorus Call and the web. There are no emergency draws planned for today. So rest assured, if we hear an alarm, it will be a genuine alarm. And the normal exit is as you come in, and there are people ready to steer and provide and look after us. So very, very welcome. I'm going to hand straight over to the team. There will be a short presentation, after which we'll pivot into Q&A. Nico?

0:45 NICOLAAS JOHNSTON- Thank you, Johan. Good morning, everyone, from my side. Also welcome all the InPlatts people, media, analysts, investment community and thank you to all the people that made today possible and the team for supporting the delivery of, I think, an absolutely stellar set of results. Before we do that though, as is our practice, the cautionary statement. You'll make investment decisions on your own. So this is a wonderful time for us to come to the market. Obviously, we've got a very supportive price environment. We see very exciting activities in the industry, in the market.

1:31 We have not been participating at this point, so it involves a number of other parties, but nevertheless, it's very exciting for us to be in an industry that is supported with a constructive price environment. Personally this is a point that we as a company have worked many years to get to. and when I look at the last financial year, I have to thank our operational teams for the absolutely stunning operational performance that they were able to achieve. The most noteworthy thing for me is not in the ounces that was delivered, I mean that in part is really important, that provides us with our license, but it's the fact that we were able to, on top of all of that, increase our mineral reserves by 9%.

2:21 It's the fact that Tim and his team in Canada extended the life of Canada by another year. And when I look at the work, at what they're doing, it appears, like some of the rest of the portfolio, that we have the ability under the current price environment to provide this continuous extension of life. So I'm very happy that there's a very strong team that is now very settled, that are able to deliver very strong results. The big part of the company is focused on the future and on developing future strength and competitive position in the company. So on supporting the 4% increase in ounces sales was a 63% increase in the dollar basket price and a 51% in the rand price that resulted in a material increase in headline earnings, therefore cash flow which resulted in a very robust allocation of capital from the team, from the board which saw 82% of our free cash flow being allocated to shareholders.

3:28 And that was totally appropriate in the absence of capital intensive growth projects that are currently not on the table. We have got a pipeline of opportunities which I'll just touch on. The balance sheet is very strong. We've got no debt and we've got 37 billion Rand worth of Hedrum liquidity. And so it's just absolutely appropriate that in line with our undertakings that we gave before, that we had a very strong allocation to shareholders. And so looking forward, It is our contention, and Emma is going to speak a little bit about the market, that the current supportive environment is going to continue for the medium term.

4:17 We don't believe that the macros are about to change and all the signals from a demand side is positive and equally on the supply side we have not seen major steps from producers to bring new supply to the market other than New Entrance, specifically two projects, but from the major producers we are seeing a constrained supply base going forward, which combined with the increase in industrial demand, the increased relevance of hybrid vehicles, we see very strong market fundamentals for the next few years.

5:02 So if you take all of that into consideration, you look at what our company will be focusing on. First, as I said earlier, our current performance is always critical. So the excellence that was displayed this year will be the first priority for the next year and beyond. But after that, our focus is on creating competitive strength in the company. And specifically, we are looking at life extension projects. and I must say we are blessed to have a quality set of assets with significant resources and reserves with a multitude of opportunities to provide longevity to most of our assets. And so that'll be the first part of the business and then secondly, we do have a study program that will look at growth options, we have got and Portal 10 at Zimplatz, which is another relatively shallow mechanized possibility for the future, which will add tremendous value in future decades in the company, as is Tales of 2, which is probably the world's best quality untapped Mariinsky ore body that's left for us to explore. And on top of that, there is always the opportunity for us to explore partnerships with our joint venture partners, and to, in addition to that, to look at potential M&A opportunities to the extent that that is

6:33 value accretive. So that's all from my side. I just wanted to provide the context where our focus is going to be. I will now hand over to Emma who will just briefly touch on the market. Won't you just move it forward one for me because I just need one. Okay, morning everyone. So I'm very conscious that we are the third major South African producer to report this week. So I'm not going to give you kind of a rehash of geopolitics. I think from a market perspective at M-Platz, we think about things in the short, the medium and the longer term, and the extent to which those trends and developments kind of influence and shape our competitive landscape.

7:19 and how also we can respond to them and make sure that our business is the best positioned for those. I think one of the things that has changed positively over the last year and a half is absolutely this focus on critical minerals, the security and surety of supply. I think that's been combined with a broader debasement trade. And then from a kind of big demand energy and impetus perspective, obviously you've got AI. So if I look a little bit at demand in terms of some of the positive changes and some of the developments that have shaped that outlook and I think underpin a more positive stance from us in terms of business positioning and future focus. I think there is an increased focus on just how important and sticky the industrial demand is and particularly I think many of you have had the benefit and the privilege of going to Shanghai Platinum Week and getting exposure to the huge diversity of industrial applications and the kind of energy and impetus behind the development of those markets there.

8:28 I think that's proved a really useful counter to the demand story which has been very much about waning at production over the last couple of years. I think Johan and Patrick were there six weeks ago and visited one of the major fabricators where there were 300 engineers working in R&D and not in catalysis. We've also had some support in terms of policy developments on BV penetration expectations, so you'll all be aware of the kind of easing of CO2 in Europe. We've got a blessed Trump for his repealing of EV incentives. and we do still have you know changing emissions legislation which is supporting demand.

9:13 I think linked to that China story but I think more broadly just in terms of South African supply and the structure of the market we are absolutely seeing a growing relevance in terms of minor PGMs and I think that is a trend that you've seen in PGM markets over time. but there's no doubt that the next 10 to 15 years are going to be far more focused on the full basket and particularly iridium and ruthenium and we are a very significant producer of both. So we close to 30% of primary refined iridium production and around 28% of refined ruthenium production. So Sifiso and Ash are the people to get hold of in terms of long-term security. and then I think also what we've seen which has been great over the last year and a half is renewed emphasis in terms of collaboration across market development initiatives and I think the extent to which that's been done with fabricators is also important.

10:08 We are part of a global ecosystem and the people who we sell metal to are also facing shifts in terms of market outlooks. If you were traditionally an auto catalyst maker how do you look to secure long-term longevity for your business and I think that aligning of interests and I think the collaboration between producers has definitely shifted the tone and the focus on market development and I think that's also incredibly positive in terms of long-term planning. Just a few more words on supply because I know I was meant to be short. We've seen minimal changes in our supplier outlook. We tend to look for off-take agreements and funding certainty before we count it in. We do still see a limited green fields project pipeline and I think most importantly we are always assured by the people who we speak to and who we sell our metal to about how important a strong and sustainable primary supply base remains. So I think we know that we produce special and critical minerals and I think the world recognises that South Africa is the absolute anchor of sustainable production and future market evolution over time.

11:28 Thank you Emma. Good morning everyone. We get into the engine room starting with safety. It's very key to our front stay that safe production for us as implants remains our apex priority and remains non-negotiable. So if you look at FY26, it marked six years of consecutive improvement in our LTA frequency rate, but also other rates for the year have significantly improved. But what is also more appealing is that we have seen an increase in our what we call white flag days. These are the days that, you know, for 24-hour period, more than 55,000 of our employees come to work and go home unharmed.

12:16 It is actually a proof that zero harm is possible. It's not just a pipe dream. So the more we increase these days, I think we're getting much more closer to first of all eliminating fatalities and secondly to reach our zero harm goal. So for FY2026 we spent a lot of time maturing our safety system, defining clear controls and really embedding them. and that's what actually have led to some of this improvement that you see. Despite all these things, unfortunately we had four losses of life, but really we need to appreciate that the journey to elimination of fatalities is not a linear one. There are setbacks along the way. What is more important is that we are resolute, determined to carry on implementing our safety strategy The results will come through resilience and I think that's what the team has prepared themselves for. For the new year FY2027, our focus can be summarised in two. There will be an enhanced leadership visibility underground in our process plans to verify and track career controls.

13:28 We've defined them, we've embedded them, and now it's a question of verifying that they work. And secondly, while doing that, is to create an environment where every employee will feel safe to stop unsafe work without fear of any consequences. And that's what our safety journey is all about. So two takeaways from safety. Safe production remains non-negotiable. and secondly the recent LAPS auditory safety performance does not discourage us. We are more determined than ever to make sure that We send each and every men and women home unharmed on a daily basis. All right, then moving over to production itself, as Niko said, we've had a very strong operational performance coming both from our mining assets and processing assets. I do know that you have the numbers, but allow me to, you know, We have seen a five-year high coming from the old lease area but also if you look at the whole Impala Rostenberg now with the consolidation of RB Platinum you will see that our growth shafts are the ones which are driving This improvement in production 16 shaft, 20 shaft and steel drift combined all those three shafts gave us 80,000 ounces more and we still expect steel drift in the

15:00 new year to continue to match towards a full name capacity of 230,000 tons a month. Zimplets also you know on the back of improving fiscal policy in the country and the work we've done in restoring We have seen these implants bouncing back from last year. They produce about 660,000 ounces in concentrate. What you see, 606,000 only met because we ended up with a stock of about 24,000 ounces because of fairness maintenance that we have to do. But I think the star player, it is a processing division. The work we've been doing on our furnaces is starting to pay dividends for the first time in 20 years. Rusty McFurnaces ran without any incident.

15:47 And if you look at the work we've done to increase our capacity at BMR, we have seen record milling also at our basement refineries. And as a result, that's the reason why we were able to release 120,000 ounces from excess inventory as promised earlier in the year. So briefly touching on unit cost, the strong rent combined with strong volume delivery has helped us to maintain our unit cost increase in line with guidance of 8%. And this is even after spending about 3% More on maintenance because as a company we've always decided that when there is tailwinds let's take advantage of them and really create a strong operating platform and that's what we've done by putting some maintenance in front. I mean, ahead in Zimple and also in Rustenberg.

16:46 So when you look at the engine room, I believe that we've got strong assets, as Nico said. They are well geared, well capitalized to be able to deliver into this high price environment. Now, moving over to capital guidance. You all recall that around 2020, we announced a capital project program of about 50 billion rand. So it peaked somewhere around 2024. For the last two years, it's been winding down. So we're now entering a new phase where we plan that for the next five years, we'll spend about 60 billion rand to do two things. To, again, make sure that our production is sustainable going into the future. But secondly, to create a strategic optionality by further increasing our processing capacity at the base metal refineries with about 20%.

17:41 So what are we going to be doing in the next five years? We will be advancing life of mine extensions. Some are already approved, 20 shaft and 14 shaft. But we'll be advancing the likes of Marula Deepening. We'll be advancing the likes of BRPM North. and studies at Portal 10, as Nicolaas said earlier, and also the work we are doing with our partners at Mimosa and also at Two Rivers. We'll also be increasing our origin of development. As I said, we've got tailwinds, so it's important that we create that, you know, and that's what you've seen in Rastimbek that the work we've just done during the good times we were able to carry us through the tough times and that's why Rastimbek continue to improve also on production.

18:32 We'll also be strengthening our operating platform by making sure that we continue with our WANDA upgrades and also implementing our fairness new designs, the fairness of the future. as we've been communicating all along. And lastly, is to advance or accelerate our ESG commitment for 2030. So if you look at the graph, you will see that SIB for the first two years is peaking at about 9 billion. It's really about taking advantage of the tailwind to fix our windows, wind upgrades, and also implementing fairness of the future. From there, it will come back to normal levels of between seven and a half and about eight. So if you look only at FY2027, we're guiding between 9 and 11, Berlin Lent, and from there as the, you know, replacement project and growth projects come into the party.

19:28 It will then be about between 10 and 13 billion. So looking at the life of mine profile, we answered the question, what are we getting for this capital? You will see the tech was being the brownfield project we just spoke about. When we execute all of them, we should be able to maintain the current production for another 10 years. And then, you know, there are three, Greenfields that they are under study, Stellar Drift 2, Waterberg and also Zimbras Portal 10 when we bring them along that's another five years additional so we have the life of mine profile that can be maintained through good asset for the next 15 years and the capital I spoke about is just ready to get us there a robust operating platform extending life of mine and making sure that through the BMR 20% capacity increase. We have optionality to look at third parties and all those type of things.

20:26 So then moving over to guidance. So let me take one step back. We're entering FY27. with a strong operating platform because of the work we've done. So because of that, we even had a confidence to do a safety reset in Rustinburg for four days. So we said we'll come back to you in terms of what is the effect of that four-day stoppage. So the numbers I'm going to talk about is already factored in. Plus or minus 60,000 ounces were lost because of that safety reset. So, I'm not going to try to go through all the numbers. I'm going to go through what I've highlighted. So, group production remains pretty much in line with what we have achieved this year.

21:11 So, we're guiding between 3.3 and 3.5. So, moving over to unit cost, you know, we're guiding between the lower end, 4% increase, and the top end being 8%. So, the midpoint is about 6%. I've already touched on capital expenditure, that for the year FY27, We're looking at about between 9 and 11 billion rent. So my parting shot is that we've done a lot of work to strengthen our business and that's what we enter in the new year with. So we will work hard on safety. We've got plans in place to make sure that we send every employee home unharmed, but the machine is actually healthy to keep on delivering into this high price environment.

21:57 Thank you very much. Good morning everyone and thank you Patrick. So I'll very briefly take you through the financial performance, a quick look at our balance sheet and liquidity position and then end with what we've done with capital allocation this year. So let me first start off with, from a financial perspective, FY26 was an exceptional year. With the improved pricing in both on precious and base metal and the good operational delivery that you saw, we were basically able to capitalise on the full benefit of the improved pricing. with the result that revenue increased by 58% to 135.1 billion rand. This was driven by the 51% increase in the revenue per ounce sold to 38,116 but also because of the increase in volumes by 4% to 3.51 million ounces and this additional volumes really came from the planned destocking of the excess inventory that we had actually guided.

23:16 So the step up in revenue increased our EBITDA from R9.9 billion to R43.6 billion, expanding the EBITDA margin from 12% to 32%. Headline earnings at R22.9 billion and headline earnings per share R25.48 per share. The improved PGM pricing, the consolidation of Impala Buffer King into Impala Rustenburg, as well as the approval of the two key life of mine extension projects at Rustenburg, basically supported the R8.1 billion after tax reversal of previously recognized impairment losses at our Impala Rustenburg operations. As a result, our basic earnings for the year were R31 billion.

24:05 I think what is probably most important for me is that we were able to convert these earnings into cash. So our free cash flow increased to R22 billion. But to put that in context, we funded capital of just under R7 billion. We allocated an additional R3 billion to our operations to fund engineering and maintenance that Patrick had talked about. We funded taxes and royalties of just over 10 billion Rand. And in addition to all of that, we also funded up the build up in working capital of 7 billion Rand. So all in all, I think we were strongly free cash flow generative this year. And I think what's also important to remember is our first half was only 7 billion Rand. So in the second half of the year we generated double what we generated in the first half and that was primarily because of a 30% increase in the BASC in the revenue that we received but also the bulk of the inventory that we released as we had guided happened in the second half of the year.

25:09 I talked about the financial performance. It's useful to say what does the balance sheet and the cash position look like after that. Clearly, the strong cash generation significantly bolstered the balance sheet. We ended up with cash of 23 billion rand and we exclude restricted cash from that number. But also we repaid debt. Our gross debt, and from debt we exclude finance leases and the PIC loan, actually declined from 1.8 billion rand to just under half a billion rand. And that largely is the impact of Zimplatz using the improved cash flow to repay the debt that it had previously raised to fund its new furnace.

25:58 The definition that we use for adjusted net debt really aligns with the covenants that we've got in the calculation. So we've explained how we do it. But on that basis, we had net cash increased to $22 billion for the period. I think what is also very helpful is to look at that cash flow bridge. On that cash flow bridge, the operating cash flows from the business after paying taxes and interest was R26.7 billion. So here you can see the huge leverage that we have to price and really the strong cash generation from all of our operations. So the biggest allocations of that cash so far for the dividends have gone to capital, so the 6.9 billion rand worth of capital.

26:46 We repurchased some shares for the share scheme. And also we made provisions for environmental rehabilitation obligations, which I'll talk about just now. I think what is probably very important and talks to balance sheet flexibility, we ended the period with liquidity headroom of R37 billion, which is really our cash plus our undrawn facilities. I guess from all of this, the next question is how did we allocate cash and what considerations we took. So firstly, to reiterate, our capital allocation policy is anchored on three things. Making sure the balance sheet is strong and resilient through the cycle.

27:33 Making sure we reward our shareholders attractively. And thirdly, making sure that we invest in value accretive growth. And if we take first on the balance sheet, so we repay the debt which I talked about, we funded our rehabilitation obligations of 1.6 billion, and we retain cash so that we have enough cash to manage the liquidity, to manage our ongoing liquidity. I think it's worth mentioning here, we've consistently said that to the extent that our Impala Canada operations generate free cash flow, we will be responsible about allocating that cash. And as you can see this here, Impala Canada generated 2.1 billion rand worth of free cash flow. and we allocated a large portion of that to basically fund their closure liabilities as well as their severance obligations upon closure.

28:29 The next bucket really is the shareholder returns. So some of you might have noted we have revised our dividend framework. We believe that it gives a little bit more transparency and predictability. The base dividend has been set at the 30% of adjusted free cash flow pre-growth, but as with the previous policy, there's always the ability to declare additional dividends, provided that the balance sheet remains strong and we've taken due consideration of any future growth opportunities. So the final dividend for this year of R14.45 a share, or R13.1 billion, really, I believe, reflects our disciplined capital allocation.

29:14 We have returned surplus cash of approximately 90% of our second half's free cash flow to our shareholders, in line with our commitment to providing attractive returns. I think the additional point that I want to make is that we've always been clear about what we would like to retain on the balance sheet. And the number that we've used is the R10 billion. After the payment of this dividend, We would have retained 10 billion Rand in line with the guidance that we had provided. The last bucket is growth and as you can see the growth and expansion capital looks very muted. Our focus this year was actually on all reserve development but also on progressing our life of mine extension projects.

30:01 That capital is reported under replacement capital and we see that as non-discretionary because that talks to the sustainability of the business. I think here I want to highlight the benefit of having a strong balance sheet is that we have the funding flexibility to really take advantage of the portfolio of assets that we have and to fund projects that we believe are going to enhance the sustainability, the cost competitiveness, and drive long-term value. So if I had to summarize FY26's capital allocation, We have done all of the three things that we have mentioned. We have kept the balance sheet strong and resilient. We have provided shareholders with very attractive returns. And lastly, we are continuing to invest in our portfolio of assets to drive long-term value for all of our stakeholders.

30:53 Thank you. I'd like to hand over to Johan. Easier for me to squeeze out there. Thanks, Meroonisha. Well, this brings me to you, the audience. As usual, I think it just makes sense to start in the room. So if I can just again ask, as the microphones move around, people can't really see you on the webcast, so if you could just introduce yourself before asking the question. We've got a big team here in front of you, but we also have people online and in the room. So please feel free to ask anything that's of importance to you. The whole team is here to assist you in that regard.

31:39 After the room there will also be an opportunity for people who are watching online through chorus call and the operator will take you through that procedure so we'll pivot there and then to the extent that you want to type there's also an option of typing some questions and if we have time I'll post that to the team as well. So that gives us about half an hour or so to do Q&A. So let's start in the room. Can we start here by moving the microphones around please? Thank you. Gerard Engelbrecht, APSA CIB. I see there's been quite large changes in your reserves in Rustenburg. You've upgraded your reserves in the south by, it looks like, about more than 70%.

32:30 But you downgraded reserves in the north. Can you maybe give us some colour on what the thinking was there? How does this change your life of mind profiles? So maybe some color on that. My second question is around Zimplatz. You talk about some structural labor cost changes that you made. If you can maybe just talk around that and what that means for the future. And then lastly, maybe just remind us when you're going to labor negotiations.

33:20 Thanks, Harald.

33:24 I'm going to do something unusual. Johannes, I did see Johannes in the audience, didn't I? Yeah. Johannes, you can deal with the rest of the resources reserves. And Lee-Ann, if you don't mind responding to the two labour-related questions, the wage negotiations as well as the ZIM cost issues. Thank you. So for those who don't know, Johan is heads up our MRM team and they're also releasing the MRM report today. So for the guys in the room, hopefully there's some copies available here. If there's not, it's available on the website. Thank you, Johan. Thank you, Gerard, for the question. So at Impala Rustenburg, first of all, We've got the benefit of the combined Impala Bafukeng into the Impala Rasenberg. And that obviously had a fixed cost benefit.

34:21 The metal price outlook also in terms of the the tails of our mining profiles also had the benefit of bringing some of that back into the reserves and the north section that you referred to obviously we look at how we can optimize our Our ore bodies through the different mining infrastructure. We have a 20 shaft and the style drift and then also the BRPM section. So as was mentioned earlier, we've got the brownfield project also at the BRPM UG2 decline. That is under study at the moment and obviously that will The 20 shaft and the 14 shaft Extension projects that significantly improved our reserve that you've seen at Impala Rasenburg.

35:47 Does the downgrade in the north in any way affect your view on stale drift or is there a change on the view of stale drift too? The change that we see there is obviously optimisation between 20 shaft and stale drift. One could see that with this 20 shaft extension project that the life The extension and the increase in number of years of life is sort of balanced between 20 Shaft and Steldrift. So I think what you've noted with the decrease in the north is mainly because of a balanced view that we took between the various infrastructure opportunities that we've got between BRPM, Steldrift and 20 Shaft.

36:37 Lee-Ann, you want to respond to the labour question? Thanks, Johannes. Thanks for the question. So in 2023 when we went through the low price environment at Simplatz, what they decided to do, which has been done previously as well, as part of the austerity measures that they had put in place, all employees, including the executive and the board, took a 10% cut in their salaries. So that was a 10% drop in the fixed salary bill and what we had communicated to the market in the remuneration report is that when prices improve we will reinstate the 10% cuts that was implemented in 2023.

37:31 So that was restated last year, which now has created the structural adjustment. And then with regard to the wage negotiations, it's 30th of June, 2027, when the current five-year agreement comes to an end. We normally get the demands around Feb-March of the year in question, and it always flows through after implementation date, which is 1 July. and that's just some of the union's tactics because then we get to backdated to the 1st of July and employees receive backdated salaries. We are confident that we will get another five year deal and it will be more or less in line with what our last deal in terms of structure entails. So we will start negotiations around April, May of next year, and it normally takes us between three to four months.

38:37 Thank you. Thanks, Lee-Ann. Let's go to Brian.

38:47 Thanks very much. It's Brian Morgan here, RMB Morgan Stanley. That chart that you put up there about the life of mine and that green wedge, those growth projects I think you called out, Staledrift 2 and Portal 10 and the Waterberg. That wedge starts quite soon in 2032, but these are quite big projects. So does that mean that you're going to be pulling the trigger on them quite soon? Or are there other projects in that green wedge which which we don't know about, which you can bring to market a bit sooner. That's number one. Number two is just Meroonisha. There's 13 billion rand of tax expense that went through P&L. I think 7 billion rand went through the cashless net and so 6 billion rand roughly deferred tax.

39:38 Why and what's the outlook in the next year or two? Will there be a catch up or will cash tax percentage be quite depressed going forward? You want to start with the tax? I'm going to try. So I think on the tax, we did pay a lot of tax this year. Our deferred tax was a bit elevated for one reason. We raised deferred tax on undistributed profits at Zimplatz. So we raised the withholding tax. Now that depends on our outlook on dividends, directly linked to profitability, directly linked to prices. So to the extent that varies, and it has changed a lot over the year, you are going to get that additional charge. So there's about a billion of that.

40:25 Remember, the rest of the deferred tax is predominantly on the fact that we get to claim our capital allowances. And so at some point, it basically normalizes for depreciation and capital allowances. So there's always going to be a level of deferred tax in. I guess the other part is we have utilized all our unredeemed capex and assessed losses. I think Marula has got a little bit. But other than that, I probably would think that it would be largely the same if we continue to spend on capex, clearly. The projects? Yeah. So, Brian, you're... Oh, you're done. Oh, sorry, sorry. It just reminded me, which I forget, is the payment release. That's obviously a once-off with the deferred tax, yeah?

41:13 Yeah, Brian, you remember we've always said that the greenfields projects will always be dependent on long-term price forecasting, which is starting to improve. So if you look at the three projects that are there, still the two in particular, We are looking at early access and that's the way the study is actually you know focusing early access from training shaft and still drift one itself so show the long-term price forecast you know support the project I think you will be able to see early production coming through because we're not waiting entirely for the vertical shaft to be signed when we start and I think similar to portal 10 portal 10 as things stands we should you know Once you complete the study, we focus it to start the sinking around the fourth year from now. Waterberg BFS done, we are looking at optimising it.

42:12 You might probably have seen some news from PTM. So by November it will come back to us. There is a trade-off, do you go for a big chunk or a small chunk? But because of the mining methodology, again, you'll be able to get any production start to trickle in. So ramp up will take a bit long, but this project is geared to start delivering some sort of production at an early stage. Thanks Pat. Arnold, let's go there.

42:44 Yes, hi, Arnold van Graan from NetBank. Good results and thanks for the opportunity. Three quick ones from my side, two for Meroonisha. One is cash lock-up, any progress there in getting that resolved? Then the second one, just on your excess inventory, how much is left and over what period is that coming out and any changes there, any acceleration, because it seems your plants are running well. And then one for Patrick, on stale drift too, is that conventional or mechanised? Because I know there's undulation issues in later life of mine, so what's your approach to extracting that? Thank you. Thanks Arnold. So, Arnold, I'm going to leave the stock lock up for Patrick to take the difficult one. On the ZIM situation, it's actually improved significantly since we came to the market at intrams. In about March, I think, we reached a tripartite agreement with the The various government institutions reached an agreement to allow us basically to get 50% of our surrender proceeds in cash and the other 50% that will be utilized for set-offs.

43:55 Since that agreement's been put in place, they have honored... We have been able to offset between taxes, royalties and customs duties about $99 million of offsets and we've had access to $150 million of local currency and that really has made a significant difference because we've now Our local creditors are now all up to date, etc. And going forward, we do expect Zemplats to be quite profitable, so we'll continue to use the cash that's been offset. The only thing that we did do, which you'll see in the results, and our cash flow would have been higher if we hadn't, is we moved out $1.3 billion out of cash into receivables. and we believe that is an appropriate place to reflect it given that it will be utilised through the use of offsets.

44:54 The study has just started so I think it's 80 days to commit to a particular mining method. It is a different process but I need to remind you that we have made it very clear that we want to go to mechanised mines. So part of the study we're going to be testing all mining methods including low profile hybrids so because you know for us conventional we need to be the last resort so I think it's too early to commit to a mining method but I really need to leave with this thing that we want to move away from convention as much as we can. All right. So I think, first of all, I mean, we've been able to prove that the stock exists. There was a lot of stories about that.

45:43 So we've now released 120. So I think for this year, we... We had two weeks stoppage at our fairness in Rustenburg following the SO2 leak incident. So conservatively I'll put 50,000 on the table. We're working very hard to see how do we catch up and still be able to deliver north of 100,000. But I think we should be able to update with much more fair numbers when we come back in February. But that's where we are in terms of that. The stock exists and we will try to release it. Yeah, maybe just to add, there's two components. The stock moves forward, but you will only see it if it's in the vault and sold. So that 120 is actually what was sold. But stock has moved forward, and even if it doesn't get sold in the next six months, we're still hoping to push that stock forward in the value chain.

46:40 All right. Yes, please go for it, Katika. Congratulations on very good results and Meroonisha on the final dividend. My first question is for Patrick and around the group unit cost, which you are guiding to increase by 6%. At the midpoint of production guidance, it's a 4.5 or 5% deadline. So maybe if you can talk about Some of the aspects that will anchor this very good cost guidance that you are guiding despite production that is likely going to be a bit lower. And then if you can also talk on Zimplatz and the prospect of you being able to sustain the current production of 680 to 660 beyond 2028.

47:28 My assumption is Mopani does not fully replace Mafuti portal. So if you can talk to that. Also two rivers, the guidance is the same as the previous year. What is happening as far as the Merinsky project is concerned, how should we actually factor that in? And then last question is for Emma on the minor metals. Are you seeing any forward buying on the minor metals which would actually support the consensus bullish focus for the minor metals? Thank you. Thank you. I think on a unit cost, like we said earlier, there was some elective spend that we've taken advantage of the tailwind. So going forward, we don't see us spending all that money because we've managed to now set our operating platform strong enough to be able to deliver. and I believe that we've proven in the past that we've got good cost control management and that's what the team will be doing, really making sure that unnecessary costs are taken out of the system without compromising delivery of safe production.

48:44 In terms of Zimplet, Zimplet for the next five years will be able to deliver 660,000 ounces of mat to South Africa. It's only beyond the five years that Portal 10 comes in and should be able to plug that gap. So Mopani, Bima and the remaining pieces should be able to give us 26,000 ounces for the next five years. Two reverse Merinsky, good project. We are aligned with our partners. We've six months ago approved early capital which is over 100 million to start the development. The focus already now is to fill the plan of the UG2 and that's where we spend most more time in FR26. That's why you saw little Merinsky be milled. So the project where we are now we're optimizing it with our partners so should be able to come to For final board approval somewhere in Q2, Q3 next year. But that's where we are.

49:49 Focus, fill the plan with UG2, optimise Merensky studies and only next year get approval and then we'll get going. But it's still a good project. So just to clarify, are you talking about purchases in excess of requirements at the moment? So some stockpilings? So we wouldn't have seen that based on what we trade. I think the one thing to bear in mind on some of these demand drivers is you've got to think, I always think with industrial, is it linked to plants, so capacity and new installation in terms of creating capacity, or is it used Is it consumed in the final production? And I think if you look at where the growth has been coming from in terms of Iridium and Ruthenium, it's a mixture of both, but there is a capacity expansion element to it, which means some of that demand can be quite lumpy.

50:48 but it's not something that, it's not screen traded, we can't look at forward positionings and all the rest, it's not something I can kind of comment on. Anecdotally, there is a view in the market that suggests that there has been some Thank you very much. and even just the way in which different market commentators account for when metal goes into plant, you almost need to smooth some of those industrial numbers to get a better idea because do you account for it when it was purchased?

51:41 Do you account for it when the plant is built? So short answer is no. Sifiso is in the room. Can we get a mic? Sifiso, Raffinium Iridium is very topical. There wasn't a Chinese that didn't stop me, that didn't want to buy those two metals recently in China. Maybe just share some of the interactions with the buyers on those two particular metals. Thanks, Johan. When it comes to ruthenium and iridium, we haven't seen any forward buying as Emma has mentioned. But on the ruthenium side, we are actually seeing the opposite of demand, whereby a lot of customers are actually decreasing the use of ruthenium on the back of the higher prices that we are seeing. But the demand still remains very good and supportive.

52:34 But there are developments within the environment. Thanks. Thanks, Sifiso. Bruce?

52:41 Hi, good day. Bruce Williamson, Integral Asset Management. Hi, team. Nico, to you and the team, really well done on stabilizing the underground operations. I think there's a fantastic improvement there. Just a question. On your underground labour, can you give us an estimate of what the average age is? And just remind us of your hard retirement age. And then how many do you think are due to retire in the next three, four years? And then, particularly in the Rustenburg area, could you talk about how secure the water supplies are? Lee-Ann, it looks like you're going to be popular today.

53:33 Our average age at the underground operations is 45 and our retirement age for underground workers is 62 and a half years and that was industry practice over the years. People gearing up for retirement, I think it is about 5-8% of our underground workforce over the next 3-5 years. And given that the employment targets have now changed, employment equity because of sectoral targets, We are looking at the talent pipeline to make sure that people nearing retirement, we do replace those skills. So lots of skills development taking place and it's in line with some of our other HR plans that needs to be considered for retirement.

54:34 And then we do have Moses in the room to answer to water security in Rustenburg. Thanks, Bruce. Moses. In Rustenburg, luckily we've got two water boats. So one from the north, one from the south. So that gives us at least some flexibility. About a year ago we started seeing issues on one of the water boards with regards to the supply. Then SMI we started developing some contingency plan. So at the moment I can tell you that should we again have similar issues? We will be able to run the mine at least between two and five days on the south side which is the water board that previously has shown us they are having some unreliable supply.

55:22 The plans are in place to continuously year on year increase the storage so that we can at least at some point say we end up with a month. At the moment it's two to five days the contingency plan. Thank you.

55:36 Bruce, just in terms of water security, there are two elements to it. One is the overall supply, which is to date not proven to be a major risk, but the other one is the infrastructure, the distribution infrastructure, and that's where we've picked up some issues. There's a gradual deterioration in the integrity of the distribution piping to get the available source to the operation and so that's the issues that he's referring to. So what we've done is we've also collaborated with municipalities in terms of skills sharing to ensure a remediation of the infrastructure. I'm just conscious of time, there's five minutes left, but there will be an opportunity for people in the room to still ask questions after when we're having something to eat and drink. So let me go to chorus call and let's take two calls from chorus call and then we'll close at that point and we'll take further engagements in the back of the room at the end.

56:39 If I can hand over to the chorus call operator. Thank you. We have a question from Adrian Hammond of SBG. Please go ahead.

56:50 Thanks, Operator. Good morning, Nico and Tim. I just want to ask a bit more about Staledrift 2. It certainly represents a long-term view for your future. When do you expect to make a decision on Staledrift 2? Thank you very much. Thank you. You did allude to M&A. Did we think about M&A in stolen PGMs or do you have other metals in mind?

57:43 Thanks.

57:46 Thank you. Do you mind if I answer the questions? So the first one, as far as TELR2 is concerned, It is currently the subject of a concept study. So typically, if you think about the study program, a year for a concept study, two years for a pre-feasibility study, and two years for a bankable feasibility study. So a stale of two is nowhere near But it is really important. It was part of the entire acquisition consideration, the high quality Mariinsky reef, the last of its kind, untapped. So I don't think it's a short term. I think the Waterbergs and the Portal 10s possibly is running a little bit early in terms of the study program. Having said that, it is really a good option long term for us. And then in terms of our focus and the extent to which diversification is a current topic, it's not.

58:42 We have got, in my introduction I spoke about the myriad of internal options that we have in terms of life extension and our current focus is proudly as a BGM producer but as with all the other companies we are exploring options in the current part of the value chain in which we are operating and beyond. And so to the extent that there are value accretive opportunities we will do so. Thanks Adrian. One more.

59:14 Thanks. The next question we have comes from Renee Hochreiter of NOAA Capital. Please go ahead.

59:22 Morning Chaps. Thanks very much for the dividend. Very, very welcome. Just a question on the Waterberg. I see it's been included in your greenfield study to keep your production going into the future at the current level. But as far as I remember, you only own 15% of Waterberg. So what is the outlook there? So I think Waterberg has got

59:56 A very likely future. I think the options that are being considered at the moment are looking far more attractive to us than the previous versions which relied more on a large implementation. So I think we are far more in favour of the current thinking and the way the study is progressing at the moment where, as Patrick alluded to earlier, where it's a phased approach to implementation over a period. We currently own just less than 15%. Yeah, but we've got the offtake as well, so we're confident that to the extent that it comes to the market, it will come through our refineries.

1:00:43 I think that takes us to the hour mark, so I just really have to thank everybody. There will be lots of opportunity now for people in the room and for others on the road and through various communication. So we look really, really forward to further engage with you, not just on these results, but particularly on the outlook for the industry and for our business. So thank you for your attendance and for the people in the room, please join us for some light refreshments. Thank you very much.