As at 26 June 2026

Executive Summary

Key highlights

In this report, we review the 1Q26 production report released in April 2026:

Financial results at a glance:

• Total PGM production expanded by 7% from 696 300 ounces (oz) in 1Q25 to 743 500 oz in 1Q26, driven by improved own-mined production and higher POC volumes. Own-mined production increased by 5% from 461 900 oz to 486 200 oz, supported by the recovery at Amandelbult following the flood-related disruptions in 1Q25.

• Refined PGM production (excluding tolling) grew by 78%, from 437 100 oz in 1Q25 to 778 500 oz in 1Q26, driven by higher M&C production and the re-phasing of planned maintenance and annual stock counts from the first quarter into the third quarter to improving plant utilisation and reducing electricity costs.

• PGM sales volumes rose by 60% from 493 700 oz in 1Q25 to 791 400 oz in 1Q26, supported by higher refined production and a modest drawdown in refined inventory during the quarter.

• The realised basket price advanced by 70% from R28 005/oz in 1Q25 to R47 529/oz in 1Q26, while the US dollar basket price increased by 90% from $1 533/oz to $2 911/oz, supported by stronger realised prices.

• Mogalakwena production declined by 6% from 227 000 oz in 1Q25 to 212 300 oz in 1Q26 due to lower tonnes milled and lower head grade. Meanwhile Amandelbult production grew by 43%, from 85 800 oz to 122 800 oz, as operations normalised following flood-related disruptions in the prior year.

• Nickel production expanded by 41% from 4 161 tonnes in 1Q25 to 5 880 tonnes in 1Q26; copper production expanded by 26% from 3 054 tonnes to 3 845 tonnes; while chrome production grew by 56% from 181 000 tonnes to 283 000 tonnes, supported by stronger processing throughput and stable operations.

Analyst thesis

Our recommendation is based on:

• Valterra Platinum benefits from a diversified platinum-group metals (PGM) production mix across platinum, palladium and rhodium, together with associated by-products. Its operations on the Bushveld Complex in South Africa, large-scale resource base, established infrastructure and integrated processing capabilities underpin its operational resilience and provides leverage to improving PGM prices over the medium term.

• Supportive platinum market fundamentals: Structural supply constraints across the South African PGM industry, driven by mine closures, limited development of new projects and underinvestment in refineries, continue to tighten the global platinum market. At the same time, platinum demand remains supported by auto catalyst requirements, jewellery demand, industrial applications, and emerging hydrogen economy opportunities, supporting a firmer long-term pricing outlook.

• Management continues to focus on operational efficiencies, production stability and disciplined capital allocation amid a volatile pricing environment. Lower industry-wide production growth and ongoing restructuring efforts across the sector are supporting supply rationalisation, while Valterra’s established operations and processing network position the company to benefit from higher prices and improved margins.

• Valterra Platinum currently trades below our intrinsic value (IV) estimate, suggesting the market may be overly discounting the near-term PGM price correction. We believe the current valuation does not fully reflect the company’s operational quality, leverage to improving platinum fundamentals and medium-term cash flow recovery potential.