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CANCELLATION OF S523197 Short Form Announcement: Audited Results for the Year Ended 28 February 2026
MANTENGU LIMITED
(formerly Mantengu Mining Limited)
Incorporated in the Republic of South Africa (Registration number: 1987/004821/06)
Share code: MTU ISIN: ZAE000320347
("Mantengu" or "the Company" or "the Group")
SHORT FORM ANNOUNCEMENT - AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2026
Highlights for the period:
Details 28 February 2026 28 February 2025
Revenue R393.2m R317.5m
Gross profit R23.6m R106.4m
Operating (loss) profit (R258.6m) R3.9m
(Loss) profit for the year (R315.2m) R303.3m
(Loss) Earnings per share (101 cents) 148 cents
Headline (loss) per share (90 cents) (23 cents)
Net asset value per share 71 cents 178 cents
Commentary
The contributing factors to the loss of R315 million for the year were as follows:
• Sublime Technologies ("Sublime") - R168 million
• Chrome operations - R115 million
• Blue Ridge Platinum ("Blue Ridge") - R26 million
• Corporate - R6 million
Sublime Technologies shut down in May 2025 for routine maintenance. The Board took the decision not to
resume production in July 2025 after completion of this maintenance. The rationale for this was that Sublime
would have incurred an additional energy charge of R7 million per month because its tariff agreement with
Eskom expired on 31 March 2025. Sublime submitted its application for extension of its tariff agreement with
Eskom in June 2024 and to this day continues to negotiate with Eskom for approval. Sublime consumes a
significantly large amount of energy to produce silicon carbide as it uses open arc furnaces. Similar to other
smelting operations in the country, it is not viable to continue operations at current Eskom tariffs and energy
costs.
Since shutting down in May 2025, the Board has continued to pay full staff salaries and operational costs in
anticipation of successfully concluding a deal with Eskom and resuming production. The Board announced
on 14 May 2026 that it commenced a consultation process with Sublime employees and trade union in terms
of Section 189 of the Labour Relations Act 66 of 1995. This process is expected to be completed in early August
2026. It is no longer viable to continue to incur the full operational costs whilst not generating any income.
The R168 million loss in FY 2026 consists of operational costs, the write down on inventory to net realisable
value and impairment of intangible and deferred tax assets. The non-cash portion amounted to R76 million.
The Board continues to negotiate with Eskom and will evaluate its options on successful conclusion of an
agreement. On completion of the Section 189 process in August 2026, Sublime's monthly costs are expected
to decrease by approximately 80%. This will significantly stem further losses.
The Group's chrome business incurred a loss of R115 million for the year. Shareholders will recall the results
announcement for the interim six months ended 31 August 2025 where we mentioned that the significant
flooding in early calendar 2025 caused a negative impact on net profit of R40 million. We also mentioned the
fact that Langpan's contracted off taker at the time, RWE Supply and Trading GMBH ("RWE"), exercised an
outright purchase option to buy chrome concentrate at a lower price compared to that of the market during
the quarter May 2025 to July 2025 which caused a negative impact on net profit of R29 million and that we
had expensed R16 million of infrastructure costs. The remaining R30 million in losses was incurred during the
second six months of FY 2026. The main contributor to this was sabotage at our Langpan operation. We
attempted to inform the market of this at the time, however the JSE did not allow the release of the SENS
announcement as they deemed it not price sensitive despite evidence, such as legal agreements and signed
affidavits by individuals who were approached by the perpetrators. Individuals involved in the sabotage are
no longer employed by the group and various legal actions are in process of to respond to what occurred,
the detail of which cannot be publicly disclosed at this stage.
Langpan entered into new offtake and funding agreements with HMS Bergbau Africa (Pty) Ltd ("HMSBA") to
replace RWE as its chrome offtaker. HMSBA is a subsidiary of HMS Bergbau AG ("HMSB") HMSB is an
international commodities marketing company specialising in commodities such as coal products, liquid
fuels, oil and gas, cement, ores, as well as other bulk products and is listed on the Frankfurt Stock Exchange
in Germany. The new structure with HMSBA is more commercially aligned with Langpan's long-term
development and sales strategy and eliminates the RWE legacy concept of unilateral price determinations
below prevailing market prices.
The Group assumed control of Blue Ridge on 1 August 2025 and the losses of R26 million consist of the monthly
expenditure without any income generation due to Blue Ridge not yet being operationalised. The Board
announced on 12 June 2026 that, it entered into advanced negotiations to dispose of Blue Ridge for a
purchase consideration of R50 million. The disposal, once complete, will eliminate all losses out of Blue Ridge.
The main contributors to the corporate losses of R6 million were increased security costs due to threats on the
lives of the executive directors and increased legal costs to respond to various nefarious actions. The Board
will continue to exercise its fiduciary duty to protect shareholder wealth. The Board's actions are guided by
legal advice from globally reputable law firms.
Audit opinion
The 2026 AFS have been audited by the Company's auditor, HLB CMA (South Africa) Inc., who expressed a
qualified "except for" opinion thereon. The audit opinion, which is included in the 2026 AFS, is available on
the Company's website at: https://www.mantengu.com/investor-relations and on the JSE's cloudlink at:
https://senspdf.jse.co.za/documents/2026/jse/isse/mtue/YE26.pdf
Qualified Opinion (extract from audit report)
In our opinion, except for the effects and possible effects of the matters described in the Basis for Qualified
Opinion section of our report, the consolidated and separate financial statements present fairly, in all material
respects, the consolidated and separate financial position of Mantengu Limited as at 28 February 2026, and
its consolidated and separate financial performance and consolidated and separate cash flows for the year
then ended, in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board and the requirements of the Companies Act of South Africa."
Basis for Qualified Opinion (extract from audit report)
Group – Financial Liability (extract from audit report)
During the period under review, Mantengu Limited acquired 100% of the issued shares and shareholders'
claims in Blue Ridge Platinum (Proprietary) Limited. As part of the transaction, the historical shareholders' loans
were also acquired by Mantengu Limited. Subsequently in the same reporting period, 30% of the shares and
claims in Blue Ridge Platinum (Proprietary) Limited was sold at a nominal value to 3 Broad- Based Black
Economic Empowerment (B-BBEE) parties. IFRS 9 contains explicit requirements dealing with the recognition
and derecognition of financial liabilities. IFRS 9 requires an entity to recognise a financial liability when, and
only when, the entity becomes a party to the contractual provisions of the instrument.
While Blue Ridge Platinum (Proprietary) Limited remains contractually obligated under the agreements of the
claims transferred, the group does not recognise the liability, to the B-BBEE parties, in its financial statements.
IFRS 9 states that a financial liability shall be removed from the statement of financial position only when the
obligation specified in the contract is discharged, cancelled or expires. None of these events have occurred
in relation to the 30% portion of the shareholders' loans in Blue Ridge Platinum (Proprietary) Limited, transferred
to the B-BBEE parties. The liability, although recognised in Blue Ridge Platinum (Proprietary) Limited's separate
accounting records, was incorrectly eliminated against equity in the Group financial statements, of which
30% has not been transferred out, and the loss recognised. IFRS 9 also requires a financial liability to be
recognised at its fair value on day one. Sufficient reliable evidence was not available to quantify the fair
value of the financial liability by the Group to the B-BBEE parties, and alternative audit procedures did not
provide us with sufficient appropriate audit evidence to conclude in this regard.
Due to the matter above, we were unable to obtain sufficient appropriate audit evidence that the closing
balances of financial liabilities of the group as at 28 February 2026, were free of material misstatement. We
were unable to satisfy ourselves by alternative means concerning the value of an adjustment to recognise
the financial liability at its fair value in the consolidated financial statements, and therefore did not include
the omitted information in our auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion.
Mantengu Board view of Group – financial liability
The board strongly disagrees with the auditors and cannot record a fictitious liability of R570 million that will
never be paid out. Although the auditors make no mention of the quantum in their qualification paragraph,
they requested the group to record an expense of R570 million and record a corresponding liability which
equates to 30% of the R1.9 billion debt claims acquired. Shareholders will recall that Mantengu acquired
100% of Blue Ridge for a nominal value of R100 and thereafter transferred 30% of the equity to BEE parties at
a nominal value of R1. It is nonsensical to contend that Mantengu is then liable to the BEE parties for an
amount of R570 million. The Board is of the view that it has fully complied with IFRS 9 which requires the
recognition of the financial liability at fair value, which in the Board's view is Rnil because there is no
probability whatsoever of Mantengu being liable to the BEE parties for any amount in respect of the historical
debt claims of Blue Ridge.
Group – Inventory (extract from audit report)
As part of the Group's inventories, work-in-progress, comprising tailings stockpiles, are carried in the
consolidated statement of financial position at approximately R521 million. In determining the net realisable
value of these tailings, management's assessment is dependent on significant assumptions relating to the
expected recoverable yields, recoverable mineral content, processing recoveries and future economic
benefits expected to be realised from the tailings material. For the tailings produced by the Langpan Mining
Co (Proprietary) Limited operations, we determined that the Net Realisable Value is less than the cost of the
tailings. This was based on yields from production records after the tailings processing plant was commissioned
in the current financial year. The group's records indicate that, to recognise the inventories at the lower of
cost and net realisable value, an adjustment of R84,214,985 is required to reduce the carrying value of
inventories to net realisable value, requiring adjustments of the same amount to cost of sales, and accordingly
the net income and shareholders' equity will be affected with the post tax amount of R61,476,939.00.
For the tailings produced by the Meerust Chrome (Proprietary) Limited operations, we were unable to obtain
sufficient appropriate audit evidence regarding the assumptions and data used by management to
determine the net realisable value of the tailings inventories. Sufficient reliable evidence was not available to
support the expected recoverable yields and processing recoveries attributable to the tailings stockpiles, and
alternative audit procedures did not provide us with sufficient appropriate audit evidence in this regard.
Consequently, we were unable to determine whether any adjustment to the carrying value of these tailings,
cost of sales, taxation, retained earnings, or related disclosures in the consolidated financial statements was
necessary. Since the amount of the adjustment could not be determined, it is not disclosed in this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion."
Mantengu Board view of Group – inventory
The board strongly disagrees with the auditor's conclusion on both Langpan and Meerust inventory and
considers the audit work on inventory to be derelict.
Langpan – The Board is of the view that the valuation of Langpan's inventory at cost of R185 million is in full
compliance with IAS 2 Inventories which requires inventory to be carried at the lower of cost or net realisable
value. Management obtained and provided its auditor with two independent expert reports on the chrome
content (quality) and expected yield from processing the significant tailings stockpiles (approximately 323 000
tonnes) on site. The first report indicated a yield of 30% and the second a yield of 22%. Management recorded
the value at the more conservative 22%. The second chrome processing plant which was commissioned at
the beginning of December 2025 operated for only 3 months of the 2026 financial year and only achieved a
14% yield as it is still in the process of being optimised. The most critical factor in being able to achieve a
theoretical yield of between 22% and 30% is the quality of the feed grade material i.e. the chrome content
of the tailings itself. Management conducts independent 3rd party laboratory tests on a daily basis of the
material that ends up as tailings and therefore there can be no doubt as to whether the theoretical yield can
be achieved. As a result, management believes it would be a gross misrepresentation to write down
Langpan's inventory by R84 million. In fact, management believes that the net realisable value of Langpan's
inventory exceeds the cost of R185 million in respect of chrome only. Langpan's ore also contains 1.45 grams
per tonne of PGM's in situ. As a result, the Platinum alone using current prices, that could be extracted from
the current volume of tailings exceeds R300 million. This value is not recorded on Langpan's balance sheet.
Therefore, the very notion that Langpan's inventory should be written down is nonsensical. After rejecting
both expert opinions provided by management, the auditor neglected to appoint their own expert but rather
relied on a misleading 14% yield of a plant yet to be optimised.
Meerust – The Board is also of the view that the valuation of Meerust's inventory at cost of R160 million is in full
compliance with IAS 2 Inventories. Management provided the auditor with an expert opinion again which
was rejected and the auditor again neglected to appoint their own expert. Similar to Langpan, management
conducts independent 3rd party laboratory tests on a daily basis of the material that ends up as tailings and
therefore there can be no doubt as to whether the theoretical yield can be achieved. Meerust's chrome is
far more valuable as it produces an average grade of 46% chrome concentrate which commands an
approximate $30 to $40 per tonne premium in the market compared to a 40% to 42% concentrate. Again, it
would be nonsensical to write down inventory. Notably, the auditor did not provide a suggested write down
value for inventory as they merely rejected the expert opinion provided and did not perform any further work.
Mantengu Limited separate financial statements – Economic Credit Losses (ECL) (extract from audit report)
Management has not recognised an expected credit loss allowance on intercompany loans receivable as
required by IFRS 9. Based on the financial condition, liquidity constraints, and repayment uncertainty of
certain counterparties (specifically, Langpan Mining, Meerust Chrome and Blue Ridge), indicators of
impairment exist and a material ECL allowance is required. Due to the absence of a supportable ECL
assessment and insufficient appropriate evidence available to quantify the adjustment with reasonable
precision, the potential misstatement has not been quantified. Consequently, we were unable to determine
the amount of an adjustment to ECL allowances, taxation, retained earnings, and related disclosures in the
separate financial statements, in order to disclose them in this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion."
Mantengu Board view of Mantengu Limited separate financial statements – Economic Credit Losses (ECL)
The board strongly disagrees with the auditor's conclusion. The Board is of the view that it has fully
complied with IFRS 9 in that it has considered all impairment indicators and concluded that no ECL should
be raised on intercompany amounts owing by subsidiaries to Mantengu Limited. It is important to note
that these are not intercompany loans. Mantengu as the holding company performs a treasury function
for the group. Available cash is managed at a group level on a daily basis with cash resources being
transferred into high interest-bearing call accounts on a daily basis. This, therefore, has an impact on
intercompany amounts owing. In addition, the subsidiaries are backed by global blue chip offtakers for its
product and any notion of a material ECL is nonsensical.
Emphasis of matter - Material Uncertainty Related to Going Concern (extract from audit report)
We draw attention to Note 34 to the consolidated and separate financial statements, which indicates that
although the group's total assets exceed total liabilities by R230 million, the group's current liabilities exceed
current assets by R283 million. The Group incurred a loss of R315 million for the year ended 28 February 2026.
In addition, the Company incurred a loss of R6 million for the same period. As stated in Note 34, these events
or conditions indicate that a material uncertainty exists that may cast significant doubt on the group and
company's ability to continue as a going concern.
Management's assessment of the Group's and Company's ability to continue as going concerns is based on
detailed cash flow forecasts covering at least 12 months from the date of approval of the financial statements
and incorporates assumptions relating to future revenue generation, gross margins, operating costs, working
capital requirements and planned operational performance improvements.
In evaluating management's assessment, we assessed whether the key assumptions used in the forecasts
were reasonable, tested the mathematical accuracy of the cash flow forecasts, considered compliance
with loan agreements including any covenant breaches, assessed adverse movements in key financial ratios,
evaluated compliance with capital requirements and other statutory obligations, evaluated the availability
of funding and indications of financial support, considered post year-end events that may impact the going
concern assessment, and assessed the adequacy of the related disclosures in Note 34.
Our opinion is not modified in respect of this matter.
Mantengu Board view of going concern
The Board is in no doubt whatsoever as to both the group's and company's ability to continue as going
concerns into the foreseeable future. Although FY 2026 was a difficult year, it was characterised by large
once off items that are not expected to recur.
The Board has considered multiple factors in arriving at its decision to prepare the financial statements on a
going concern basis and these are set out in note 34 of the audited financial statements.
Reportable Irregularities
The auditor identified reportable irregularities during the reporting period and reported this to the
Independent Regulatory Board for Auditors ("IRBA"). The reportable irregularities related to non-compliance
with statutory tax obligations. Notably, the auditor did not communicate with management or the Board prior
to reporting these to the IRBA. As a result, much of the information used and reported was factually incorrect
such as the auditor for example using the incorrect SARS statements and balances. In certain instances, the
auditor issued reportable irregularities in respect of entities in the group that are owed monies by SARS. In
other instances, reportable irregularities were issued for entities that owe SARS less than R100 000 for certain
statutory taxes.
OUTLOOK FOR FY 2027
The Board announced on 20 May 2026 that it entered into advanced negotiations with Averi Finance
("Averi") to acquire assets of Averi in exchange for the issue of new Mantengu shares. Management is
currently busy in the due diligence phase, and this transaction is expected to be completed in FY 2027.
The Board also announced on 12 June 2026 that pursuant to receiving an offer from Afresources Mining (Pty)
Ltd ("Afresources"), it has entered into advanced negotiations to dispose to Afresources the Company's
entire shareholding and claims in Blue Ridge. The Board took the decision to streamline its investment portfolio
in anticipation of completing the Averi Finance transaction. Once completed the transaction will have an
expected positive impact on net profit of the group of R24 million per annum as it will no longer have to fund
operational expenses at Blue Ridge without any income.
The Section 189 process at Sublime is expected to be completed in early August 2026. The completion will
have an expected positive impact of R38 million per annum as it will no longer have to fund operational
expenses at Sublime without any income.
The Group's chrome operations continue to ramp up production after a difficult FY 2026. The Board's
objective for FY 2027 is to monetise the production of PGMs at Langpan as well as increase production at
Meerust by processing its tailings into chrome concentrate.
RESPONSIBILITY
This results announcement is the responsibility of the directors of Mantengu. This results announcement does
not include full or complete details of the audited consolidated and separate financial statements for the
year ended 28 February 2026 ("2026 AFS") released on SENS on 25 June 2026. Any investment decision should
be based on the 2026 AFS as a whole. This announcement is unaudited and therefore not covered by the
audit report.
CORPORATE INFORMATION
Postal address: Postnet Suite 446, Private Bag X21, Bryanston, 2021
Registered and Physical address: 5 Saint Michaels Lane, Bryanston, 2021 Tel no: +27 (0) 11 036 3100
Web: www.mantengu.com
Board of Directors: M Naidoo, L Mpofu, J Tshikundamalema* (Chairman), V Madlela#, W Geyer*
(*Independent Non-Executive) (#Lead Independent Non-executive)
Company Secretary: Alistair Collins
Transfer Secretaries: Computershare Investor Services Proprietary Limited Rosebank Towers, 15 Biermann
Avenue, Rosebank, 2196, Private Bag X9000, Saxonwold, 2132
Auditor: HLB CMA South Africa Inc.
Johannesburg
25 June 2026
Designated Advisor
AcaciaCap Advisors Proprietary Limited
Date: 25-06-2026 03:14:59
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