Dear Investor
It is with great pleasure that I invite you to become a shareholder in an ASX listed Jupiter.
Jupiter owns a beneficial interest of 49.9% in the world class Tshipi Borwa Manganese Mine (Tshipi) in the Kalahari manganese field of South Africa. That basin contains approximately 77% of the world's known economic manganese resources, an essential and irreplaceable raw material for steel-making. Tshipi, an open-pit mine is one of the largest, longest life and lowest cost manganese exporters globally. The outlook for manganese is strong and via its holding in Tshipi é Ntle, Jupiter remains well leveraged to the traditional steel markets and the growing clean energy and battery technology markets.
Tshipi has come a long way in a short time. Development commenced in 2011, with first production in 2012. Today it is one of the world's pre-eminent manganese exporters, with sales for the financial year ended 28 February 2018 of 3.3 million tonnes. During the financial half year ended 31 August 2017, Jupiter generated revenues and EBITDA of $4.4 million and $37.5 million respectively. For the same period, Tshipi é Ntle generated revenues and EBITDA of ZAR2.9 billion and ZAR1.1 billion respectively. That strong performance has enabled Jupiter to return in excess of $153 million to its shareholders over the last 2 years alone. That constitutes a return of 150% on Jupiter's investment of $100 million into the project. The mine has a very long life ahead.
The strong and experienced management team at Tshipi runs a “lean and mean” operation. Costs are low and tightly controlled. There are no allocated overheads, management fees or interest charges from a distant head office, because it does not exist, unlike elsewhere in the industry. A focus for the immediate future is to continue Tshipi é Ntle’s record of unit cost reductions, which has characterized the mine since start-up.
Given reasonable commodity markets in years to come, Jupiter expects to continue rewarding shareholders with healthy returns. It is the intention of the Board to target a payout ratio of 70% of the income and cash distributions received by Jupiter from Tshipi é Ntle. That could be in the form of dividends, buy-back offers or returns or distributions of capital to shareholders, subject to the Company maintaining an appropriate working capital balance.
An offer of a minimum of 500 million Shares, and a maximum of 600 million Shares is being made through the Prospectus. The proceeds of the Offer will primarily be paid to those Existing Shareholders who are selling Shares through the Offer to ensure an adequate free float, shareholder spread and liquidity after the listing. Neither Jupiter nor Tshipi é Ntle are seeking to raise capital.
The Prospectus contains detailed information about Jupiter and, importantly, the risks of an investment of this type.
There are a number of specific and general risks associated with Jupiter, Tshipi é Ntle, mining in South Africa and mining in general. These risks include risks relating to Jupiter deriving almost all of its revenue from its interest in Tshipi é Ntle, the sole product of Tshipi é Ntle being manganese ore, the Tshipi mine being located in South Africa, fluctuations in exchange rates, fluctuations in the global price of manganese ore, reliance on certain key personnel, logistical constraints, operational disruptions and compliance with extensive mining, economic empowerment and environmental regulations.
I encourage you to read this Prospectus in full.
I thank our Existing Shareholders for their support in recent years, and I welcome our New Shareholders to a re-listed Jupiter, with its interest in this world class asset.
We look forward to a bright future.
Yours faithfully
Brian Gilbertson
Chairman
