African Rainbow Minerals Limited (ARI) Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to the African Rainbow Minerals results for the 2026 financial year. We'd like to thank everyone who's joining us online who is joining us via LinkedIn, but a special thank you to those of you who are joining us in person. Before I hand over just some house rules. So we will allow the presentation until the end, and then we will start with questions. We'll start with questions from the floor, and then we'll move over to online questions, and then we will conclude the presentation. Now please help me in welcoming our Founder and Chairman, Dr. Patrice Motsepe.

Thank you. Thank you. Just a few brief remarks here deep gratitude, my personal deep gratitude. I know I speak on behalf of the Board, and I also know on behalf of the management, to thank each and every one of you for being with us and it's very important. Philip will lead the team with [ Sue ] and the executive management to talk about the results. Also my deep personal gratitude to our board members, Dr. [indiscernible], thank you so much for being here and the rest of the management team. Just as I sit down, 2 important issues. Number one is we started this company many, many, many years ago. We've got some of our partners here. Is that right? Yes. Can you whisper some names because, Thabang, because some of the departments say, I mentioned some and don't mention others. Sorry? And so who's here from [indiscernible]? [ Sandra], wonderful to see you. Thank you so much, Sandra, and [ Impala ] and [ Glencore ] [indiscernible] was in there. I was in Geneva 2 weeks ago at a meeting of the top CEO and Chairman of the largest companies in the world and somebody came to me. I thought a young man and said hello to me and halfway said to me that you are my partner. Well, we work together and I am also quite embarrass, sometimes you've got to pretend, yes, I am your partner. Yes. I'm your partner. And thank God he didn't ask me who am I and the CEO -- the Global CEO of [ Sumitomo ]. Thank you so much. Please pass my deep gratitude to him and tell him that it was wonderful seeing in Geneva and the partnership and the good work that they are doing with the [indiscernible] and through your shareholding, the partnership in [ Assmang], very, very important. As I said, 2 big issues before I sit down. Number one is every company is judged by its results. We've always known that. We have to consistently, consistently from an African Rainbow Minerals perspective, deliver competitive results, good results. And what is very obvious is, of course, there are circumstances which are outside our control. We understand and we know that we are no different in that regard from every single mining company in the world. So we take the price of our commodities and our commodity prices are very volatile and cyclical. And we also take the prices, the currency. I should say, as a South African, I love a strong rand and I should stop there. It's good for the country, good for the poor. And we've always said we have a broader obligation, of course, our #1 duty is to make sure that in terms of our performance. And this I'm so proud of what Philip and Sue and [indiscernible] everyone, who's part of the management toon the rest. And as I said, thanks to the Board. So our track record must reflect that we consistently -- based on what the management does deliver competitive results and our dividends and Philip and Sue will talk about it in terms of the policy that the Board has set is competitive and world-class. But the second issue, which is also important is a company that behaves in a manner that reflects integrity, that reflects honesty, that reflects governance, that reflects respect for legality geo process, it's important for us to create value for shareholders. It's equally, if not more important, that we do so in a legal manner, in an ethical manner. And that is what has always been the culture of ARM and all of the other partnership with establish. And the last point is we've always had a commitment to all stakeholders. We're a company that South Africa has a duty to reflect the best based on meritocracy, the best of our people from all backgrounds and cultures, black people, white people, colored Indian and everybody else must feel that this is their company, not in terms of what we say, but in terms of our track record and how our employees and management feel that we behave and also duty to the country jobs and upliftment. Now we've also agreed that there will be no -- I'm not going to answer any questions and any means any. If you we are going to focus exclusively on the results. And if you have any question about who's going to win the [ MTM ]. And I don't know what the MTN means or other questions that are significantly more complicated. There will be other platforms for that. But because I'm not going to tell you anything that I haven't said in the past. So let's -- the result so good. So when we have good results, and of course, the aim is to do even better. So let me conclude the and -- thank you all for coming. We are so honored and grateful that you are here. And I'm going to hand over back to Thabang and she will call the rest of the team. Thank you so much. Thank you.

Thank you very much, ladies and gentlemen. I will now hand over to Mr. Phillip Tobias to take us through the presentation.

Good morning, ladies and gentlemen. And to all attendees, those attending in person and online. A special welcome to our Chairman, Dr. Patrice Motsepe, and to the Board members in our presence. The joint venture partners executive leadership members, operational management and all the ARM employees. Improved earnings once again demonstrates the value and the resilience of a diversified portfolio in a highly volatile market. ARM is pleased to declare a final dividend of ZAR 7 per share. ARM has consistently paid dividends through the cycle. Net cash improved by 54% to ZAR 10.2 billion. This gives ARM the flexibility to pursue value-enhancing growth opportunities. All operations have and continue to improve mining flexibility. Headline earnings is up 19% to $3.2 billion for this financial year. Final dividend of ZAR 7 per share declared dividends from [ Harmony ] of ZAR 512 million was received for 2026, which is up 113%. Assmang is finalizing its final dividend for the financial year FY 2026. Net cash of ZAR 10.2 billion, up 54%, underscoring the strength of our balance sheet. In terms of the headline earnings, improved headline earnings, as I said, demonstrating the resilience of the diversified portfolio, a strong rebound from the PGM operations whilst the other divisions were largely affected by the stronger rent compared to the U.S. dollar. By division, ARM Ferrous posted ZAR 2 billion which was 42% down comparing year-on-year, ARM Platinum ZAR 1.3 billion and ARM Gold ZAR 428 million loss. Headline earnings per share increased by 20% to ZAR 1,660. The 19% increase in headline earnings was driven by the ARM Platinum division were headline earnings for 2 reverse platinum mines increased by 495%. Headline earnings from Modikwa increased by 168% and this was partially offset by ARM Ferrous, ZAR 1.4 billion lower; and ARM Gold ZAR 475 million lower, where earnings were negatively impacted by the stronger rent. The ARM Ferrous division was also negatively impacted by the closure of Beeshoek in October 2025, where local sales decreased by 1.4 million tonnes. We remain committed to paying competitive dividends to shareholders whilst maintaining a robust financial position. Dividends received. We received ZAR 3.4 billion from Assmang and ZAR 512 million from our investment in Harmony. Subsequent to the year-end, AM received a dividend of ZAR 77 million from ARM Coal and ZAR 200 million from Modikwa via ARM Platinum and evidence of improving cash generation across the group. The segmental EBITDA slide demonstrate the value and the resilience of our diversified portfolio in a highly volatile market with a significant contribution from the PGMs this year. With continued improvement in the rail performance on both the Coal and the Saldanha lines. Ferrous and Coal volumes should improve over time. Maintaining a safety and a healthy working environment remains our foremost priority. We are very pleased to report a fatality free year a significant milestone and our first fatality-free since the financial year 2017. It is possible. It is doable. The lost time injury frequency rate improved by 9% to 0.29 200,000 man hours. Key milestones just to mention, Khumani achieved 7 million fatality-free shifts, [indiscernible] achieved 3 million fatality-free shifts, Modikwa achieved 2 million fatality-free shifts over 18 months period, and BlackRock achieved 1 million fatality-free shift over a period of 1 year. This reinforces our commitment to 0 harm and to ensuring that all employees return home safely to their loved ones on a daily basis. ARM remains committed to the responsible stewardship of natural resources. Environmental management continues to be embedded in the way we manage our business, and we are encouraged by the progress achieved during this financial year. Scope 1 and 2 carbon emissions decreased by 33% to 1.06 million tonnes of carbon dioxide equivalents mainly due to reduced activity and the adoption of renewable energy at our PGM operations, also realized a 19% reduction to 21.30 million cubes in the water withdrawn. Construction of the 100-megawatt solar plant is completed, marking an important milestone in our transition to a lower carbon energy mix. Our PGM operations began receiving up to 50 megawatts of the renewable power in December with a full 100 megawatts expected to really be realized by the end of -- by the first quarter of the financial year '27. And a long-term ARM Ferrous decision is expected by December 2026. The slide strategy underpins our business focus, our direction and our organizational culture. ARM continues to deliver on its strategy by operating globally competitive mines, disciplined capital allocation, decisive action on underperforming assets and pursuing value-enhancing growth. Production by commodity and ore production volumes decreased by 9% to 13.2 million tonnes, mainly due to Beeshoek Bask mine being placed on [ can ] maintenance in October 2025. Manganese ore production increased by 5% to 3.9 million tonnes, reflecting targeted operational and technical improvements at our BlackRock mine. PGM production was marginally lower. [ 2 Rivas ] came down 1% as a result of the great decline. And Modikwa was down 3% as a result of the open pit ore that was actually delivered to the plant to substitute plant feed with a lower plant recovery factor. The cessation of Beeshoek and the closure of [indiscernible] demonstrate our commitment to take decisive action on nonprofitable businesses. The slides highlight the importance and the resilience of the diversified portfolio and securing sustainable earnings. ARM Platinum headline earnings increased 204% to ZAR 1.345 billion on a stronger PGM basket prices. ARM Ferrous [ East ] to ZAR 2 billion on a stronger rand and lower iron ore rand manganese rent prices. ARM Coal reported a ZAR 28 million loss on lower realized coal prices and a stronger rent. Our outlook on earnings remains positive. We remain focused on quality mining, improving quality production volumes and mining to ore reserve grades. A strong and improved margins from the PGM business on the back of a [indiscernible] PGM basket prices. Our decisive actions to exit manganese alloys businesses is in line with our stated position to deal decisively with loss-making assets. The increase in PGM presence drove earnings with a segment result benefit materially from higher realized U.S. dollar prices and also positive mark-to-market adjustment. [ To Rivas ] and Modikwa unit cost will improve as volumes increase. We remain focused on great improvement and quality production to support unit cash costs. We continue to focus on factors that are within our cost control the cost discipline, mining flexibility and quality mining. PGM production at Modikwa has mentioned, decreased by 3% due to lower planned recovery from the increased processing of open pit ore and the unit cash cost rose by 8%. Two Rivers production declined marginally by 1% and impacted by sympathetic geological structures affecting mining flexibility. Unit cash cost was further impacted by increased development that was realized which contributed an additional 1% to the total increase. Volumes are expected to improve as we mine away from geological disturbances and additional phase line flexibility to be created. Capital expenditure at Modikwa increased, driven by fleet refurbishment, critical space and open pit waste stripping. Very pleased that the Board approved the development of the Bokoni 180,000 tonnes per month project following the completion of the successful definitive feasibility study in June 2026. Bokoni holds the second largest PGM mineral resource base in South Africa, underpinned by a world-class high-grade UG2 resource. The project is expected to deliver an NPV of ZAR 5.9 billion an IRR of 28% and a payback of 6.3 years based on the capital expenditure of ZAR 15.2 billion, a phased brownfield led approach derisks execution and positions Bokoni below the 50th percentile of the global PGM cost curve. Steady-state production of between 350,000 ounces 6E and 400,000 ounces will be achieved and delivered at steady state. Following the acquisition of full ownership in July 2025 at Nkomati, we streamlined our governances and accelerated decision-making, establishing a clear pathway to unlock value. In July 2026, the Board approved the recommencement of open pit mining and nickel concentrate production, fulfilling one of the remaining conditions of the [ Boliden ] offtake agreement, which was announced earlier. The restart is a low-risk, immediately executable opportunity that leverages existing infrastructure and reestablishes South Africa's only primary nickel producer. The stronger rent and lower U.S. dollar index prices for manganese ore and always impacted profitability and free cash flow generation. In wholesales volumes decreased on the cessation of the local sales to [indiscernible], which was followed by the placing of Beeshoek Mine on care maintenance. Improved rail performance, taking into account the introduction of an additional shutdown, I mean this was the first time that we had 2 shut down per annum, basically increasing it from 10 days shutdown to 20-day shutdown for the first time. And we did communicate that this is coming as a measure of really making sure that over a period of time over the next year, we'll be able to catch up with the maintenance backlog that has been communicated. And also the considerable unutilized production capacity position ARM Ferrous to unlock upside potential as rail availability improves. Khumani remains our Tier 1 asset with a long life of high-grade ore. The water supply remained consistent during the year with no significant operational disruptions. Heavy rains and more rains did also help as well even though it has a negative impact on the production as well. Despite adverse weather, Khumani increased production by 92,000 tonnes, demonstrating operational resilience, unit cash cost increased by 10% on inflation and higher diesels, blasting, power and labor costs. At Beeshoek, management is considering all value-accretive options 1.2 million tonne offtake agreement was concluded with AMSA to sell down the stockpiles. Local sales decreased by 1.5 million tonnes for this year. Black Rock mine increased production by 5%, reflecting the success of management targeted operational and technical improvement initiatives. Unit cash cost increased by 7% and driven by inflation, higher safety and compliance-related labor costs and battery electric vehicle maintenance. Significantly, this number came down. I mean, at H1 reporting this number was around 18%. So there was quite a lot of considered effort that went into improving the volumes and really driving this cost increase down. Capital expenditure increased by 18% on a higher development capital against lower prior year base. While unit cost sales decreased by 1% on lower marketing and distribution cost. Production at [indiscernible] reach works and alloys ceased at the end of May 2025, following the permanent closure of the operations. Existing stock is being sold at the [ Qataris ] complex. Sakura production until 31 December -- 31 October 2025 was 81,000 tonnes. The investment was successfully sold avoiding significant losses and liabilities. By taking decisive actions on loss-making operations, Assmang has strengthened its financial position and set itself up for sustainability. Lower coal price and stronger rent weighed on the core results were partially offset by the higher export sales volumes on improved rail performance, demonstrated a strong cost performance. stockpile levels were managed across GGV and PCB. GGV and PCB remained well positioned on the cost curve and continue to have long lives. The average realized USD export thermal coal price for GGB and PCB decreased by 5% and 3%, respectively. Saleable production at GDV increased by 2%, supported by a modest improvement in [ Transnet ] freight rail performance enabling higher production and sales. On-mine unit production costs at GGV increased by 5% as higher diesel prices were offset by increased salable production. ARM's investment in Harmony was positively revalued by 30 -- was positively revalued by ZAR 388 million in financial year '26 and is reflected at ZAR 8.67 billion based on the 30 June 2026 share price -- 18.67 billion, well, thank you very much. ZAR 18.67 billion based on the June share price. -- received ZAR 512 million in dividends from Harmony. Subsequent to the year-end, Harmony declared a final dividend of ZAR 750 per share. ARM owns 74.65 Harmony shares. ARM remains fully committed to Harmony as a strategic investment and remains confident in Harmony and its management's ability to drive growth and value for our shareholders. We are pleased with the progress in advancing the Berg project, confirmed by the prefeasibility study as a large-scale copper molybdenum development with a 28 year life of mine. Following the top-up offering and the private sales placement, ARM shareholding in search increased to 19.9% on a non-diluted basis. The project is progressing now into the feasibility level studies, environmental assessment and permitting with ARM assessing its participation through defined decision gates as it is derisked. ARM's key focus areas: operating globally competitive, profitable and safe mines. We are proud of achieving a fatality free year and remain committed to achieving 0 harm. On the disciplined capital allocation, we'll prioritize opportunities that deliver competitive margins and superior risk-adjusted returns and deferring or rephrasing capital where appropriate. Decisive action on underperforming assets, with regard to Bokoni, the Board approved the development plan, with regard to Nkomati, the Board approved the restart of the mine and the divestment of [ Katerech ] and Sakura. Maintaining a robust balance sheet by generating profits, reducing costs and deferring nonessential capital expenditure whilst running our current portfolio of assets profitably. Pursuing value-enhancing growth, the phase the development of Bokoni, developing commodities open pit operations, strengthening copper exposure through [indiscernible] Copper and implementing the phase approach also to our Merensky restart. Collaborating with key stakeholders to optimize logistics and infrastructure constraints, including rail, port and water recovery and private sector participation on the [ Cubera ] and the Saldanha export corridors. With that, I'll hand over to Tsu will come and take us through the capital allocation.

Good morning, everyone. Chairman just asked that I also recognize [ Andre Hubert ]. He forgot -- he forgot to recognize you earlier. Hello, Andre. Okay. All right. So during the year, we prioritized investing in our existing businesses, and we invested around ZAR 2.5 billion during the year. And if we look at it on a segmental basis, that comes to around ZAR 4.9 billion. And that would include our attributable portion of CapEx at the Assmang operations. So in terms of how we allocated capital, we allocated capital to the deepening of declines, fleet refurbishment and replacement to infrastructure and waste stripping at our open pit operations. During the year, as part of our capital allocation, we also sought to grow our existing business. So this is evidenced by the recent announcements we made that Philip referred to being the Bokoni 100 and [indiscernible] development project and the restart of operations at Nkomati. And both of those projects, we are confident will enhance shareholder returns. We remain committed to declaring dividends and returning capital to shareholders, which we continue to demonstrate in the form of the ZAR 7 final dividend that we've just announced. This slide illustrates how we generated cash and how that cash was allocated during the year. If we look at the cash generated by operations, we generated ZAR 4.2 billion, which is a significant increase in the cash generated specifically ZAR 45 million -- ZAR 45 million versus ZAR 4.2 billion and the cash generation also takes into account an increase in net working capital of ZAR 803 million. In terms of dividends received, we received dividends 3.4 billion, from our Assmang JV with [indiscernible], which is ZAR 1.1 billion lower than the dividend received in the prior corresponding period. During the year, we also received dividends of ZAR 512 million from our investment in Harmony. If we look at how we actually applied the cash that came in, so we paid our tax to the tune of ZAR 445 million. We invested ZAR 2.7 billion in capital expenditure, which -- yes, which was the largest cash outflow in terms of our cash flow statements. And in terms of our CapEx, it's relatively consistent with what we spent in the prior year. The majority of that spend was for stay in business capital, totaling ZAR 1.5 billion, of which ZAR 718 million was spent on mine development at Bokoni and ZAR 524 million was spent, deepening the declines at the main and North [indiscernible]. Okay. If we look at our net cash, our total borrowings during the year decreased by ZAR 1.9 billion to a balance of ZAR 157 million as of the end of June 2026. The decrease was due to the repayment and settlement by Two Rivers of its term loan and revolving credit facilities which had been taken out by Two Rivers to complete the Merensky plant. Now despite that, ARM still has a relatively low interest-bearing debt from a group level and close the year at a net cash to equity position of 16%. The capital expenditure for the reporting period was covered by Philip in his section, but I will just highlight a couple of things. So segmental capital expenditure on attributable basis. This is segmental was ZAR 4.9 billion for the year under review, which was ZAR 880 million higher than last year. So most of this was spent as you'll see there, ZAR 2.8 billion or ZAR 2,759 million, ZAR 2.8 billion at our ARM Platinum operations, ZAR 1.8 billion at ARM Ferrous operations and ZAR 299 million at our Coal operations. In terms of the ARM Ferrous capital expenditure, it includes capitalized waste stripping costs of ZAR 400 million. That's on a Assmang 100% basis. And last year, that figure was at ZAR 848 million. If we look at the guidance for 2027, '28 and '29. So if we look at '27, firstly, it shows an increase of ZAR 2.1 billion and increasing to ZAR 7.2 billion. Now that is compared to the guidance we had communicated in March, where we expected that the 2027 CapEx would be ZAR 5.1 billion. Now the reason for the increase is obviously due to the approval of the new projects, namely Bokoni and Nkomati that have now been brought into the guidance. So Bokoni project capital, between the period 2027 to 2029 will come to about ZAR 8.4 billion just for those 3 years as the project ramps up. Also included in the capital guidance are waste stripping costs at our iron ore operations, which increased to ZAR 1.3 billion on an attributable basis in F 2029. Thank you. Sorry, just an addition to the financial results, but as long as it's ARM related. Thank you very much.

Thank you, Philip. Thank you, Tsu. We'll start with questions from the floor. Do we have a question? Go ahead, Brian.

Morgan Stanley. Just a question on Modikwa. If we could just dive into that a little bit more. Last year, you started milling open cost material through the concentrate. And I always get a little bit worried when mines do that because it tells me that there's not enough coming from underground. You are spending a bit more money, but it doesn't look like a lot of money at Modikwa. Just could you just catch us a little bit about the way forward there. The guidance is -- this is about a 10% to give us a bit of confidence that that's actually going to materialize.

Okay. Brian, do you have another question? We're going to take 3 questions at a time.

My name is Thobela Bixa from Nedbank CIB. Just a couple of questions from me. I think the first one is on, I guess, the valuation of the company. If one takes into account your Harmony proportion, your Assmang attributable net cash as well as also your net cash on the balance sheet and of the valuation of the business. So could you just take us through as to what your thinking is with regards to the undervaluing of your PGM assets? And what is management planning to do about that? So that's the first question. And then just with regards to your Ferrous division, even though perhaps Transnet did a bit better in the period, it doesn't seem to translate into some of your export sales and volume numbers. Could you just talk to us as to what perhaps could have constrained your export sales?

Thank you, Thobela. Okay. We'll deal with those questions. Johan, can you --

Yes, certainly. Good morning, everybody. Yes, your observation has been correct. We started producing open cost as a result of the lack of flexibility from the Underground UG2. Now we have been suffering on the development side for quite a few years. We have, however, turned that around. So compared to last year, and I just want to give you an accurate figure, we've done 2,000 meters more in terms of development this year than what we've done last year. That is a 28% improvement in the development. So the open cost is essentially a gap filler. As soon as we have adequate reserves available from underground, we will switch back to underground. I must also add that the open cost at this stage is profitable. The grade is higher than the underground grade. This are is closer to surface where it's oxidized, you see lower recoveries than typical, but it makes good business sense to produce the open cost. Thank you.

Thank you, Johan. Philip, will you take the question on the Harmony issue and the undervaluation of our PGM assets?

Yes. Thank you very much for that question, [indiscernible]. I think, firstly, just to acknowledge, conglomerate discounting that the undervalue of the PGM. I think if you have a look at the period, I would say, over the past 3 years. You would remember that we've already mentioned on the performance side, that there has been some constraint, especially on the Two Rivers. We mentioned that we're going through geological features. Thus, we're going through for structure can say on the optimal side, we touch on that. With the phase flexibility that is coming, we believe that we're sort of going to unlock that potential performance. And as Johan mentioned, on the Modikwa side, there has been also a phase length flexibility challenge. We brought in that last year. I mean, we took a decision to put the South 1 shaft on can maintenance because it was economically -- it was not economically viable. So with that, one would say there's still areas of opportunity on the performance side on the PGM side. We're not really on that full output. So we do believe that also with that optimizing the performance to a certain extent, we'll also be able to sort of really unlock that value and be able to uplift the valuation on that. And then yes, I'll stop there, Tim.

Okay. I'll come back to you guys if you have any follow-ups on that. And then [ Marika ], could you please take the first question?

So on the iron ore well within Ferrous on iron ore, 2% year-on-year better ratings and a system delivered 1%. What is positive about that is we have 2 shutdowns. So we, in effect, had another 10 days out, but the result of that at in days out fares, but it is not only indicative of the maintenance. We did receive several trains that were allocated to us due to other mining companies and emerging miners that could not take up their capacity allocated to that, and that really assisted us where Khumani railed 12.6 million tonnes versus the 12.3 million of last year. And Black Rock railed at 3.8 million versus 3.68 of last year. So it is a short-lived increase because the sustainability is not there due to the maintenance on the line having to be prioritized, having to be attended to, which is going to take time for the industry to up. And obviously, that is our main target. For our business, manganese and iron ore, we need volume.

Thanks, [ Marika]. Brian and Thobela, I just want to ask if you have any clarifying or follow-up questions. Yes.

Sorry, just to press you a little bit on Modikwa. I'm still not entirely clear how we're going to lift those volume from 10% from where we are today to 2029. It's not a mine that survives through the cycle. It gets cross subsidized by the other mine. [indiscernible] feet or is it just -- this is always going to be Modikwa. It's always going to be a mine that struggles through the cycle. Is that -- that's just a clarification on that one. Maybe just to be cheeky, just add another one, if I may. We heard from [indiscernible] yesterday that the Merensky and Two Rivers hasn't been bought -- approved out of thought in this price environment, it looks like an attractive project from our perspective than it would have been. Maybe just some comments from your side on what's holding that process up.

Thanks, Brian. Johan, can you please answer that again? And then on Merensky, I'll ask Jacques to answer that one.

Brian, yes, to clear up, the key issue at Modikwa has been availability of stoping areas. So through the additional development we're doing, we are opening up additional stopable reserves. We also invested money in real enabling structures, infrastructures. So we're pushing the declines deeper. And as you push the declines deeper, you can move away from the upper levels with a longer distance. So we've introduced level costing models. We can have a look at the profitability of every level, if it's making sense we will continue to push it. If it doesn't make sense, we cut back. But we're also looking at other things that helps us to get better results. You look at the cost control, the cost had been very close to budget the actual expenditure. The volume had been the thing that impacted on the unit cost. We've maintained the grade very well. So grade control is absolutely well controlled. In the concentrator, we are doing a lot of additional work to push up the recovery. We've looked at statistical process control. So we know where the sweet spot sits in the concentrator. And we've also started investing money in advanced process control. So that you automate the adjustments in the process and that you ensure stability in the concentrator. So I'm very confident that looking at the team we have, looking at what we've achieved compared to what we planned, we are on a road to success at Modikwa. I must also mention that in the past, we had some issues with instability in the community that is something of the past. The communities are very supportive. Labor relations are very good at Modikwa. It is a good team, and you will see the success coming from Modikwa. Thank you.

On your question with regards to Two Rivers Merensky, that project was placed on care maintenance in August 2024. Since then, we have invested the resources to better understand the geology based on the infill drilling that we have done. So revised updated block model was completed as well as analysis of the 1.2 million tonnes that we did mine during the Merensky project itself. And that then informed a restated feasibility study restart plan that was completed in May this year in 2026. The outcome of that was that to ensure the optimal mining cut, we are transitioning from high-profile fleet to low-profile fleet to provide a bit more flexibility for the teams to be able to follow the optimal cut, which we do believe will provide us with the increase in grade. And the overall outcome of the feasibility study was positive. It was exceeded our hurdle rate.

So what we have -- what the -- two Rivers Board has approved with both partners in last year October, we recommenced with the Merensky decline development. And by June this year, we've deepened it from 4 level to 5 level. We have -- what that development crew development has now transitioned to a stoping crew. And emphasis, and we'll introduce a second stoping crew in November. That's progressing very well. In July, we had 1 stop in crude at 22,000 tonnes. And last month in August that at 23,000 tonnes. And the emphasis over the next couple of months is to really just see the changes that we've done in the mining cut as well as the low profile fleet that we've introduced, what sort of great can we achieve out of it. And the plan is going forward that was approved in March next year, we'll introduce another sinking crew. Going forward, we would progressively ramp up the stoping crews to a total of minimum requirement of 6 to be able to get 120,000 tonnes, which is the minimum required to restart your Merensky concentrator plant. We anticipate that we will reach that level in about 2 years from now. In the meantime, the stocks that Merensky is -- stoping crews are generating. We are milling a proportion of that through. We have also recommissioned a crushing plant of the Merensky circuit, which can crush finer than the UG2. And that increased our ability in terms of processing Merensky through the UG2 concentrator plant by about 10% so overall, the Merensky project is looking quite positive. We are taking a disciplined staged approach in terms of how we ramp it up. And the key intention is that we need to get to that minimum 120,000 tonnes sustainably per month before we can recommence and start of the concentrate plan.

Thank you. Do we have more questions from the floor?

Good morning. I'm [ David Rocker ] from Phoenix Research. First of all, I'd like to offer congratulations for your fatality free year. That's always [indiscernible]. Congratulations there. Secondly, I see that Bokoni, you're mentioning a number of ZAR 15 billion at a long time since any of us have seen something over ZAR 10 billion. So that's a big number. If anyone would like to say something about that, it would be much appreciated. And then just some small detailed questions on Modikwa. As per your previous announcement, your -- the [ bench ] shaft at North shaft is that finished now? And secondly, your underground to surface conveyor belt at South 2, is that commissioned. And I see that you wanted to go up to 100 kilotons per month there. So just those 2 questions. Thank you.

Okay. Johan and Jacques?