[Ferro-Alloys.com] Jupiter Mines Q4 2026 Earnings call transcript

Jupiter Minerals said it ended fiscal 2026 with stronger sales, higher production and steady cash generation, as its Tshipi manganese mine continued to benefit from low costs and a favorable position in a volatile market. The company sold just under 3.5 million tonnes of ore in the year, above its 3.4 million tonne target for the eighth straight year, while June-quarter production rose 14% from the prior quarter to 966,183 tonnes. The stock last traded at $0.265, unchanged on the day and near the lower half of its 52-week range of $0.20 to $0.31. With a market capitalization of $363 million and a P/E ratio of 12.15, the shares currently trade below Fair Value estimate, suggesting the stock may be undervalued relative to its fundamentals.

Key Takeaways

Jupiter said Tshipi sold 943,740 tonnes of ore in the June quarter, up 12% from the prior quarter.

Full-year sales came in just below 3.5 million tonnes, topping the 3.4 million tonne target for the eighth year in a row.

Quarterly production reached 966,183 tonnes, a 14% increase, putting the mine on a 3.9 million tonne annualized run rate.

FOB cost was $2.48 per dmtu, or about $2.20-$2.25 after adjusting for U.S. dollar weakness, well below many competitors.

Management said it expects dividend discussions to begin after year-end accounts are finalized, with an announcement due at the end of August.

Company Performance

Jupiter’s results reflected a strong finish to the financial year at Tshipi, the manganese mine in which it holds an investment stake. Sales and production both improved in the June quarter, while the company kept costs low and maintained a stable safety record. Tshipi recorded zero lost-time injuries during the quarter, and its total recordable injury frequency rate held at 0.37.

Jupiter Mines

Analyze JMS

The mine’s performance also reinforced its long-running operating record. Since Jupiter’s 2018 investment, Tshipi has met or exceeded its annual 3.4 million tonne sales target every year. Management said the latest quarter’s production mix, including 820,642 tonnes of high-grade ore, should support a strong start to the new financial year.

Against a backdrop of uneven manganese prices and soft downstream demand, Jupiter said its cost position remains a key advantage. Management described the market as supply-driven since about 2021, with prices moving more on supply concerns than on demand growth. That has favored lower-cost producers such as Tshipi.

Financial Highlights

June-quarter sales: 943,740 tonnes, up 12% quarter on quarter.

Full-year sales: just under 3.5 million tonnes, above the 3.4 million tonne target.

June-quarter production: 966,183 tonnes, up 14% quarter on quarter.

Annualized production run rate: about 3.9 million tonnes.

High-grade ore production: 820,642 tonnes in the quarter.

FOB cost: $2.48 per dmtu, slightly lower than the March quarter.

FX-adjusted cost: about $2.20-$2.25 per dmtu, according to management.

Corporate cash: down AUD 2.6 million from March 31 to June 30, mainly because of an AUD 2.8 million interim dividend.

Quarter-end CIF manganese ore prices: about 6% above the current year average.

Earnings vs. Forecast

No EPS or revenue forecast was provided alongside the quarter’s reported results, so a direct comparison with analyst expectations is not available. The company’s operating figures, however, were clearly strong. Sales rose 12% quarter on quarter and production increased 14%, while full-year sales exceeded target for the eighth consecutive year.

In practical terms, the quarter looked more like an execution story than a surprise story. Investors did not get a headline earnings beat or miss to drive a sharp valuation move, but they did get evidence that the mine remains efficient, consistent and profitable in a difficult market. That helps explain why the stock was unchanged at $0.265 in the latest reading.

Market Reaction

Jupiter’s shares last traded at $0.265, flat from the previous close of $0.265. The stock has moved within a relatively narrow band over the past year, with a 52-week range of $0.20 to $0.31. At the latest price, it sits about 14.5% below the high and about 32.5% above the low.

The muted reaction suggests investors were not surprised by the operating strength, or are waiting for clearer signals on dividends, pricing and the next phase of logistics improvements. The absence of EPS and revenue guidance in the provided data also limits the chance of a sharp re-rating based on the quarter alone.

Outlook & Guidance

Management said Tshipi is targeting 3.4 million tonnes of manganese ore sales in FY2027, in line with its long-term annual target. The June-quarter production run rate of 3.9 million tonnes gives the mine a strong base heading into the new year.

Cost expectations remain favorable. Jupiter said FOB costs should stay around the reported $2.48 per dmtu level, or roughly $2.20-$2.25 when adjusted for current foreign exchange conditions, if the U.S. dollar remains weak against producer currencies.

On pricing, management expects manganese ore values to stabilize near current levels in the near term as lower shipments from South Africa reach key markets, especially China. The company also said it will begin dividend discussions after the year-end accounts are completed, with an announcement expected alongside preliminary financial results at the end of August. For investors seeking deeper analysis, Jupiter is among the 1,400+ companies covered by  comprehensive Pro Research Reports, which transform complex financial data into clear, actionable intelligence through intuitive visuals and expert analysis.

Logistics remains a strategic focus. Tshipi is working to improve throughput at Lüderitz, where annual volumes currently run at about 700,000-800,000 tonnes, with potential to move above 1 million tonnes if efficiency improves. The company is also expanding the East London channel as an alternative route.

Executive Commentary

Brad, the chief executive, called the quarter “a really strong June quarterly activities report” and said it marked the close of Jupiter’s 2026 financial year. He said the company delivered “a little under 3.5 million tonnes” for the full year, above the 3.4 million tonne target that Tshipi has now met every year since Jupiter’s 2018 investment.

On costs, he said the mine’s $2.48 per dmtu FOB cost was “bang on trend” and noted that comparable large South African producers are reporting costs closer to $3 per dmtu. That, he said, gives Tshipi “a nice defense margin compared to the field.”

He also pointed to the dividend record as part of the investment case, saying Exxaro, the new joint venture partner, invested in “a great cash generative company” and was attracted in part by Tshipi’s history of shareholder returns.

Risks and Challenges

Manganese price volatility: The market has been driven by supply concerns, which can reverse quickly if conditions change.

Weak downstream demand: Management described demand in China as soft, which can limit pricing power.

Freight and fuel costs: Diesel and shipping rates remain important inputs and can pressure margins if they rise again.

Logistics constraints: Lüderitz faces draft and rail limitations that reduce its natural cost advantage.

Dividend uncertainty: Investors may wait for the next payout decision before assigning a higher value to the shares.

Q&A

Analysts focused mainly on logistics, dividends and the role of Exxaro as the new joint venture partner. One question asked how much ore can move through Lüderitz. Management said the port currently handles about 700,000-800,000 tonnes a year, but could potentially exceed 1 million tonnes through efficiency gains rather than major capacity expansion.

Another question centered on whether Exxaro could help lower costs. Management said Exxaro has ideas to bring logistics advantages into the joint venture, including possible rail-related efficiencies, but any changes must be agreed within the partnership structure.

A final question addressed dividend policy. Management said it was too early to give a firm view, but noted that Exxaro is also a dividend-paying company and was attracted to Tshipi partly because of its strong distribution record. Dividend discussions are expected to begin after year-end accounts are finalized.

Full transcript – Jupiter Mines Ltd (JMS) Q4 2026:

Brad, CEO/Managing Director, Jupiter Minerals Limited: Thanks, Mel, good morning, everyone. Thanks for joining the call this morning to talk about what was a really strong June quarterly activities report that we released this morning. Since Jupiter is a 30 June financial year company, it also marks the conclusion of the FY 2026 financial year. As usual, I’ll just run through some of the highlights from that activities report that I think bear mentioning, then at the end of that brief overview, there’ll be time for questions. Starting with safety, there were no lost time injuries during the June quarter at Tshipi, and at the end of the June quarter, TRIFR remained stable at 0.37, which was the same TRIFR that it had in the last quarterly that we reported. Operationally, as I mentioned, this was an extremely strong quarter for the mine.

Starting with sales, we had 943,740 tonnes of manganese ore sold for the quarter. That was 12% up on the prior quarter. When you add that in with the previous quarters for the financial year, Tshipi delivered a little under 3.5 million tonnes for the full year. You’ll recall that our target for the moment at Tshipi is to sell 3.4 million tonnes in each financial year, and Tshipi has achieved that target for every year that Jupiter has been listed with our investment in the mine since 2018. We again conclude another year having exceeded our target in that regard. Production in the quarter was also very strong. 966,183 tonnes of manganese ore produced. That was 14% up on the prior quarter. That marks a 3.9 million tonne per annum run rate.

When you think about the sales target for the year that I mentioned a moment ago of 3.4, that run rate in production for the quarter was very strong and sets us up for a good start to this new financial year that’s already commenced. Noteworthy in that production number is that it was overweight to high-grade ore. Within that number, we had very strong high-grade ore production of 820,642 tonnes. Again, when we’re coming into the mix of tonnes that we’re looking to always prioritize to the greatest extent possible, high-grade ore in our overall target of sales, that production number in the June quarter set us up well for a good start to this financial year in terms of grade mix as well. Mining of graded ore increased 22%. Waste mining increased 14% from the previous quarter.

That high-grade mining number of the big step-up on the previous quarter was benefited from the fact that there was a greater mix of barrier pillar mining during the quarter. From a logistics perspective, we were up 3% on the previous quarter in terms of our overall logistics volumes. The June quarter, again, saw no South African road haulage. As I’ve discussed on previous calls, that’s a factor of benefiting from greater Ngqura Rail allocation than we had anticipated because smaller miners not taking up their capacity on the Ngqura Rail. That’s something that other large miners, not just Tshipi, have been reporting. That’s a benefit in the overall mix of costs on the logistics side, and that was pleasing to see. We continued to haul by road into Namibia through the Port of Lüderitz.

When I talk about no road haulage in South Africa, that is talking about road haulage to South African ports. The only road haulage that we conducted in the June quarter was over the border into Namibia, where we then get onto rail for the rest of the journey to the Lüderitz port. Our cost of $2.48 per dmtu FOB was slightly down on the March quarter. You’ll recall we’ve talked about a key factor here, and it is continuing, which is U.S. dollar weakness against producer currencies in the manganese ore world, including the rand. In the quarterly, you’ll see that there hasn’t been a big movement quarter-on-quarter, but this ongoing feature of U.S. dollar weakness means that U.S. dollar-reported costs tend to be inflated, and this is the case here compared to what they would otherwise do.

I haven’t done the conversion for this quarter, but I think I guided last quarter that cost at around $2.50 if they were like for like with exchange rates that we saw prior to the U.S. dollar weakness becoming a feature, you’d be $2.20, $2.25. That’s bang on trend for where Tshipi is with its costs. We should expect, whilst the exchange rates remain around the levels that they are right now, that Tshipi’s costs will be around the level we’ve just reported, more or less. That’s fine, provided we understand that FX is driving that. What’s most important here is not the U.S. dollar reported cost, it’s how we are comparing to other manganese ore miners. You’ll recall our strategy is to be what we call fittest in the field, i.e. one of the cheaper, more cost-efficient producers of manganese ore in South Africa.

Notwithstanding these movements in the U.S. dollar/rand exchange rate, Tshipi at $2.48, as just reported, is absolutely in that position. Other large, efficient, important producers of manganese ore from South Africa are reporting FOB costs more around $3 per dmtu FOB, Tshipi at $2.48 has a nice defense margin compared to the field. We should just bear in mind the effect of FX rates on U.S. dollar reporting costs for the moment while U.S. dollar weakness compared to historical levels is a feature. From a cash position, Tshipi’s cash was stable quarter-on-quarter. We had strong operating cash flow during the quarter, but we also had to pay year-end taxes and royalties. When you have a look at the reconciliation in the quarterly activities report, that is naturally a key feature.

Whereas at the end of June, we have to pay a true-up for the year. Both the taxes and royalties for the six-month period concluded, but also a top-up for the full year and the way the royalties work in particular. That was a key feature there. Jupiter cash, while we’re on the topic, you’ll note that quarter-on-quarter, Jupiter’s own cash was down AUD 2.6 million, 31 March to 30 June. This was entirely because of the AUD 2.8 million of Jupiter’s cash that we contributed to the interim dividend, which was actually paid on the 2nd of April, so slightly after the March quarter end. If it wasn’t for that, Jupiter’s cash would have been slightly up. Tshipi’s cash was basically stable. I would expect in the March quarter, we’ll start to see a bit of a net accounts receivable unwind.

There wasn’t much of a movement quarter-on-quarter. We should look out for that in the next quarterly. From a manganese market perspective, we started the quarter and the discussion in our quarterly activities report last time was around elevated manganese ore prices that were driven by costs and concerns surrounding the Iran War. Actually, high diesel costs, high freight costs, but also concern forecast around potential interruptions to supply, concern also forecast to elevated freight costs that went beyond the level that we were seeing. As we moved through the quarter, those costs and concerns somewhat abated. We have seen and we are still seeing, obviously, elevated diesel costs and elevated freight rates. They haven’t necessarily gone as high as people anticipated, and particularly through the month of June, we saw some abatement of both of those levels.

The concern, for the moment at least, that there could be interruptions to manganese ore supply, and some of that was feeding into the elevated manganese ore prices that we saw at the beginning of the quarter, has certainly abated. With that, naturally, manganese ore prices that were being driven substantially by those factors have also abated through the course of the June quarter. Downstream demand, as we note in the quarterly activities report, this is demand for manganese ores for the production of alloys, in particular in China, through the quarter was unexciting, but I would say that that has been the case for recent years. The manganese ore market, as we all know on this call, and its prices really have been driven over recent years since about 2021, much more so by supply factors than demand.

You have pockets of better or worse demand than you expected, but really what we’re going through is a multi-year remaking on the demand side where India hasn’t yet risen to prominence, although they are growing strongly in the background in their demand for alloys and their manufacturing and demand for steel. China’s going through a gentle deflation. Notwithstanding in the activities report, we talk about downstream weakness, which is true. That’s actually nothing new. The major factor going on in the June quarter with respect to manganese ore prices, frankly, as always, is more factors and concerns around supply.

Anytime you have a concern or a disruption to supply, given how concentrated the supply side of manganese ore is around major producers, that does tend to go to price, and that’s something we’ve seen many times in the last few years, and that’s really all that’s going on here with the manganese ore price as well. We continue to be in that market. At the moment, it’s predominantly supply-side driven, and everything we’ve seen through the June quarter is true for that as well. That’s fine for Tshipi, where we’ve been in that market, we’ve been successful in that regard. Back to the comment I made before about operating costs, that’s the design of our strategy to ensure that we remain stable sales around our target of 3.4 million tons, and we remain focused on being one of the more cost-efficient producers.

That will deliver outcomes that we continue to see and that we’ve seen in this quarter as well to be as profitable and cash generative. To the extent that supply needs to moderate in order to stabilize prices, that will come from other producers who are higher cost than Tshipi having to moderate their supply. As the quarter ended and we had prices that whilst they were lower than at the start of the quarter, they were actually still around average or even slightly above in terms of CIF prices, recent year average levels. Lower than at the start of the quarter, no doubt, but fine for Tshipi. When you compare the FOB price at around $3.34, which I actually think is factoring in a higher shipping rate than we’re seeing in our business at the moment.

Taking that as an observation as against our cost of $2.48 for the quarter, we’re still making a good margin, but others aren’t. What we started to see at the end of the June quarter and into the current month is a reduction in supply. Shipments coming out of South Africa were lower than they had been for much of the last financial year. That naturally will start to moderate the market. In the near term, we would expect, based on what we’re seeing in the market, prices to stabilize around these levels, and lower shipments starting to arrive in key markets, in particular in China. Whenever that happens, prices start to stabilize. That’s what we’re seeing right now.

Tshipi, of course, with its cost position, is focused on, again, achieving 3.4 million tonnes for this current financial year and remaining focused on the key items of operation, including unit cost, which was well demonstrated in the June quarter. From a dividend perspective, we will now, having concluded the financial year, move into discussions around a dividend from Tshipi. You will see in our published calendar that that’s expected to be announced along with our preliminary financial accounts at the end of August, so in about a month’s time. Those are the key points I wanted to cover off in overview. In summary, this was a great quarter. Sales up, production up, targets hit for full year, costs slightly down, stable, which is good in a market that has a lot going on in terms of movements in cost inputs. A great outcome from the team.

Safety was good. No lost time injuries for the month. Against a manganese market that has seen a bit of price volatility, but ultimately coming down to a level which, from CIF price perspective, is about 6% above current year average levels and relative to Tshipi’s good ongoing performance from a cost perspective, sees us, as we always have been, producing cash throughout the cycle. That’s resulted in a healthy level of cash remaining at Tshipi at quarter end, notwithstanding the payment of royalties and taxes at year-end. Those are the key comments I wanted to make in overview. Happy to take any questions that may be on the call now.

Mel, Operator/Moderator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you’re on a speakerphone, please pick up the handset to ask your question. Your first question comes from Mark Fisher with Foster Stockbroking. Please go ahead.

Mark Fisher, Analyst, Foster Stockbroking: Yeah. Hi, Brad. Just a couple of questions. Firstly, can you remind us what the shipping capacity is annually from Lüderitz? Thanks.

Brad, CEO/Managing Director, Jupiter Minerals Limited: Yeah. Thanks for the question, Mark. We tend to ship around 700,000, 800,000 tons per annum. We would like to do more than that, pending cost, and there’s an ongoing effort to look at improvement of that channel, both in terms of capacity and cost. Lüderitz is a bit closer to Tshipi than Port Elizabeth is, which is our major Ngqura port in South Africa. You would think for that reason, and also because part of the channel is rail, that it should be cheaper. There are currently inefficiencies which counterweigh some of that natural advantage with Lüderitz. Low draft, you have to move intermodally, road and then rail. Old gauge rail, and you have to top up ships that are loaded in Lüderitz with ore at other South African ports because of the low draft there. This is an ongoing continuous improvement.

We would like to see that potentially being higher than that, 1 million tons or higher. At the moment, not so much a capacity issue. It’s a blending of cost and continuous improvement. We tend to put out 700,000, 800,000 tons through that channel. It could be higher even on existing capacity.

Mark Fisher, Analyst, Foster Stockbroking: Right. Then, I guess a related question. With Exxaro now in the JV, they sort of indicated potential synergies or saving costs in terms of logistics using their existing operations and networks. I was just wondering, are Exxaro bringing any ideas or initiatives to lower costs or improve logistics? Thanks.

Brad, CEO/Managing Director, Jupiter Minerals Limited: Thanks, Mark. I suspect you have seen, but others on the call may not have seen, that Exxaro, since we last spoke, had a capital markets day. If anyone’s interested, go to Exxaro’s website and you will see a presentation which touches on some of these matters in Exxaro’s view. That could be interesting reading for people on this call. To answer your question, Exxaro does have plans about how they can vend logistics advantages into Tshipi. Obviously, that would benefit Jupiter as a co-investor in the mine through the joint venture. It’s worth noting that Transnet, over the last 18 months or so, has been working on establishing public-private partnerships where they will allow private participants to use their rail line to carry their own private rolling stock trains and wagons.

Exxaro is one of the parties, I would say on the coal side of the network, not on the manganese line for now, that has been given a concession to do that. There is another party who has been given a concession to operate on the manganese ore line. Meantime, Transnet is actually working really well, including with us at Tshipi, on business improvement initiatives themselves. We have been expanding the East London channel, unique to Tshipi as an example of the collaboration between Tshipi and Transnet. East London is giving Luderitz a run for its money on a cost basis. It’s good to have that tension there. To answer your question, yes, Exxaro has that aspiration. That obviously has to be done through the context of the current joint venture, where Jupiter would need to agree to that.

We’re all in favor of things that would vend in a lower cost and lower risk of delivery. That’s something in Exxaro’s capability. It’s something they’re actively looking at doing on the coal side, and that is something that their plan for any manganese ore investment that they’re in as well. Some of that is mentioned from memory in the Capital Markets Day presentation that I referred to a moment ago.

Mark Fisher, Analyst, Foster Stockbroking: Great. Thanks.

Brad, CEO/Managing Director, Jupiter Minerals Limited: Thanks, Don.

Mel, Operator/Moderator: Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from John Schultz with Argonaut. Please go ahead.

John Schultz, Analyst, Argonaut: Hello. Just a quick one on the dividend coming up. I think we probably kept a bit of cash at the interim. What’s your current thinking going into the negotiations with Exxaro? It’s tough to speak for them, but do you think they have any different views on paying out dividends than the previous JV partners had?

Brad, CEO/Managing Director, Jupiter Minerals Limited: Thanks, John. It is a bit early for me to comment on that, and I’d be preempting the process. I would say Exxaro is a public company like we are and has made an investment here into a great cash generative company. If you look at the reasons stated for that investment, page one is a history of Tshipi’s dividend record, and Exxaro also is a dividend-paying company. They would, with that in mind, look at these things the same way that we do. They’re obviously also a responsible company that wants to ensure that we’re being prudent here. They are aligned with Jupiter as a public company that wants to provide good returns and has provided very good returns to their shareholders, including through dividends from their operating mines, and that’s been part of their rationale.

That’s a good political answer to your question, John. The punchline is we haven’t yet started, but we’re on that now, having concluded the end-of-year financials. Yes, you will have seen at the end of the quarter as well, a good level of cash as there always is at Tshipi. That’s a function of another successful quarter, and we’re about to start that conversation.

John Schultz, Analyst, Argonaut: Perfect. Thanks.

Brad, CEO/Managing Director, Jupiter Minerals Limited: Thanks, John.

Mel, Operator/Moderator: Thank you. There are no further questions at this time. I’ll now hand back to Brad for closing remarks.

Brad, CEO/Managing Director, Jupiter Minerals Limited: Thank you all for dialing in. Hopefully, you’ve taken away the key themes that I tried to emphasize through this conversation. Very strong quarter, great end to the year, across sales, production, mining, and cost performance. This mine continues to perform well, and that’s added up to a good outcome in terms of quarter end cash as well. Also in terms of the production and mining outcomes, particularly around high-grade ore, we should be well set up to start this new financial year and to continue this proud record of predictable success from the mine. Thanks very much for dialing in. Look forward to talking to you all again next time.

Mel, Operator/Moderator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

• [Editor:tianyawei]