Q2 2024 First Quantum Minerals Ltd Earnings Call
So first of all why isn't the conference operator, welcome to the Quanta Limited's second quarter 'twenty 'twenty four results conference call.
Operator: Thank you for standing by. This is the conference operator. Welcome to the First Quantum Minerals Limited second quarter 2024 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad.
Speaker Change: As a reminder, all participants are in listen only mode and the conference is.
Speaker Change: It's being recorded.
Speaker Change: After the presentation, there will be an opportunity to ask questions.
Speaker Change: And the question you May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then zero.
Operator: Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Bonita To, Director of Ambassador Relations. Please go ahead. Thank you, Operator, and thank you, everyone, for joining us today to discuss our second quarter results. During the call, we will be making forward-looking statements. As such, I encourage you to read the cautionary notes that accompany this presentation, our MD&A, and the related news release.
I would now like to turn the conference over to lineage I Chow Director Investor Relations. Please go ahead.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Thank you operator, and thank you everyone for joining us today to discuss our second quarter results.
Speaker Change: During the call we will be making forward looking statements as such I encourage you to read the cautionary notes that accompany this presentation, our MD&A and the related news release.
Speaker Change: As a reminder, the presentation that's available on our website and that all dollar references are in U S dollars unless otherwise noted.
Speaker Change: On today's call. We are we have Tristan Pascal, our Chief Executive Officer, Brian like Williams, our chief.
Bonita To: As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars unless otherwise noted. On today's call, we have Tristan Pascall, our Chief Executive Officer, Ryan MacWilliam, our Chief Financial Officer, and Rudi Badenhorst, our Chief Operating Officer. And with that, I will turn the call over to Tristan for his opening remarks.
Speaker Change: Chief Financial Officer, and really bad and horse, our Chief operating officer, and with that I will turn the call over to Tristan for opening remarks.
Tristan: Thank you Vanessa and thank you everybody for joining us today for our second quarter update.
Tristan Pascall: Thank you, Bonita, and thank you, everybody, for joining us today for our second quarter update. Operationally, we had another solid quarter in Zambia, which Rudi will cover in his remarks. And both Kinshanti and Sentinel are set up well for the second half of the year.
Tristan: Operationally, we had another solid quarter in Zambia, which Rudy will cover in his remarks and voice Constancia and Sentinel are set up well for the second half of the year we.
Tristan Pascall: We remain on track to deliver on the copper production guidance which we provided earlier in the year. We were pleased to announce commercial production and enterprise on June 1st. However, in April, we made the difficult decision to place Raventhorpe on care and maintenance due to the high cost structure of the operation.
Speaker Change: We remain on track to deliver on our copper production guidance, which we provided earlier in the year.
Rudy: We were pleased to announce the commission commercial production in enterprise on June 1st.
Rudy: In April we made the difficult decision to place the ravensthorpe on care and maintenance due to the high cost structure of the operation.
Rudy: Despite this with enterprise performing better than expected, we have maintained a nickel production guidance, albeit at the bottom of the range.
Tristan Pascall: Despite this, with Enterprise performing better than expected, we have maintained our nickel production guidance, albeit at the bottom of the range. Whilst we are not natural hedges, the copper price in May reached levels that provided assurance on maintaining balance sheet strength during this time of elevated debt and while we look for a resolution in Panama. As such, in our continued efforts to prudently manage the balance sheet, we initiated a copper hedging program about which Ryan will provide more details in his financial overview.
Rudy: Whilst we are not natural hedges the copper price and my reached levels that provided assurance on maintaining balance sheet strength. During this Tom elevated debt and while we look for a resolution in Panama.
Rudy: As such in our continued efforts to prudently manage the balance sheet, we initiated a copper hedging program to which Ron will provide more details in his financial overview.
Rudy: It was pleasing to reach a shareholder rights agreement with Shaanxi corporate during the quarter, which formalizes our relationship and removes uncertainty for all of first quantum stakeholders by establishing guardrails with respect to three key areas.
Tristan Pascall: It was pleasing to reach a shareholder rights agreement with Junxi Copper during the quarter, which formalises our relationship and removes uncertainty for all of First Quantum's stakeholders by establishing guardrails with respect to three key areas. Firstly, with a few exceptions, Juncsi Copper will not vote against board-recommended matters. Secondly, Shanxi Copper remains under a standstill for the term of the agreement.
Ron: Firstly with a few exceptions Shaanxi copper will not vote against board recommended matters, Secondly, Shaanxi copper remains understand still for the term of the agreements.
Tristan Pascall: Thirdly, any material block of shares that Shunksy Copper wishes to sell will have the oversight of First Quantum. As part of the agreement, Jiangxi Copper will have the right to nominate, rather than appoint, one director to First Quantum Sport, with the nominee being subject to the recommendation of the Nominating and Governance Committee of First Quantum Sport. The nominee must fit the skills matrix as required by the board, as well as perform all of the duties regularly expected of directors sitting on the board of a Canadian company.
Ron: And thirdly any material block of shares the chunky copper wishes to sell we will have the OIBDA sorts of first quantum.
Ron: As part of the agreement Shaanxi copper will have the right to nominate rather than appoint one directed to first quantum sport.
Ron: With the nominated being subject to the recommendation of the nominating and governance Committee or first Quantum's Board.
Ron: The nominee must be at the skills matrix as required by the board as well as discharging all of the G. T is regularly expenses of directors sitting on the board of a Canadian company.
Ron: Over the years since its initial investment in 2019, the relationship between junkie copper and first quantum has strengthened.
Tristan Pascall: Over the years, since its initial investment in 2019, the relationship between Junxi Copper and First Quantum has strengthened. Junxi is supportive of the strategic direction of the company, and both parties expressed a willingness to formalize the boundaries of this relationship. This agreement has been many years in the works, and we are pleased to have reached this outcome. In Panama, President Melino was inaugurated on July 1.
Speaker Change: Junk see as supportive of the strategic direction of the company and both parties expressed the willingness to formalize the bandwidth of this relationship.
Speaker Change: This agreement has been many years in the works and we are pleased to have reached this outcome.
Speaker Change: In Panama, President Molina was inaugurated on July one.
Tristan Pascall: He has authorized discussions between the company and its various ministers and officials. Initial meetings have taken place, and there should be further dialogue in the coming weeks once his government is ready. In the meantime, there continues to be 121,000 dry metric tons of concentrate on site. Shipment of this concentrate is part of the Preservation and Safe Management Program, and therefore, sale of this concentrate will not take place until the program is approved.
Speaker Change: He has authorized discussions between the company and the serious ministers and officials initial meetings have taken place and there should be further dialogue in the coming weeks once he's government is ready.
Speaker Change: In the meantime, there continues to be 121000 dry metric tonnes of concentrate on site.
Speaker Change: Shipment of this concentrate as part of the preservation and Safe management program and therefore sales. This concentrate will not take place until the program is approved.
Tristan Pascall: We continue to work with the new officials for the approval of the Preservation and Safe Management Program, which involves getting the new administration up to speed on the current situation at the mine. In his inauguration speech, President Melino announced that a strict environmental audit would be conducted at Cobra Panama. Our understanding is that the government is currently assembling a list of independent international experts who could conduct this audit. We understand and welcome this move as a necessary step for the new administration and the Panamanian public to learn more about Cobra Panama's exceptional environmental practices and standards, and we are prepared to cooperate fully. The company has always operated its operations with transparency and in full compliance with international environmental standards.
Speaker Change: We continue to work with the new officials for the approval of the preservation and Safe management program, which involves getting the new administration up to speed on the current situation at the mine.
President Malino: And these are no gracious speech, President Malino announced that a strict environment audit would be conducted on cobre Panama.
Speaker Change: Our understanding is that the government is currently assembling a list of independent international expert who could conduct disorder.
Speaker Change: We understand and welcome. This move is a necessary step for the new administration and dependent on any public.
Speaker Change: To learn more about cobre, Panama is exceptional environmental practices and standards and we are prepared to cooperate fully.
Speaker Change: The company has always operated its operations with transparency and in full compliance with international Environmental standards. We are confident the results of this environmental audits in line with all previous audits at the mine will demonstrate the world class nature of their operations.
Tristan Pascall: We are confident the results of this environmental audit, in line with all previous audits of the mine, will demonstrate the world-class nature of our operations. Moving on to arbitration, the company has taken steps toward two arbitration proceedings, one under the International Chamber of Commerce and the other under the Canada-Panama Free Trade Agreement. The ICC is the most advanced of these two proceedings, with the arbitration initiated in November of last year, and the final hearing scheduled for September 2025.
Speaker Change: Moving onto arbitration the company has taken steps towards to arbitrations proceedings, one under the international Chamber of Commerce and the other under the Canada, Panama Free trade agreement.
Speaker Change: The RCC is the most advance of these two proceedings with the arbitration initiatives initiated in November of last year with a final hearing scheduled for September 2025.
Speaker Change: Under the S. T. A arbitration an updated notice of intent was filed on February seven.
Tristan Pascall: Under the FTA arbitration, an updated Notice of Intent was filed on February 7. The company has three years from Panama's breaches of the FTA within which to file its arbitration claim. I would once again reiterate that arbitration is not our preferred outcome, and we remain committed to dialogue with the new government and to being part of the solution for the country and the people of Panama. Now, on to Zambia. The severe drought continues to impact the country.
Speaker Change: The company has three years from Panama's breaches of the FTAA within which to fall its arbitration claim.
Speaker Change: I would once again reiterate that arbitration is not our preferred outcome and we remain committed to dialogue with the new government and to being part of the solution for the country and the people of Panama.
Speaker Change: Over to Zambia.
Tristan Pascall: I'm proud that First Quantum is supporting Zambia's food security efforts by contributing to transportation costs to import grain into Zambia from Tanzania. The severe drought conditions also continue to impact power availability. In June, SESCO imposed a further 20% in power restrictions across the mining sector for a total 40% reduction overall.
Speaker Change: The severe drought continues to impact the country well I'm proud that first quantum is supporting zombies food security efforts by contributing to transportation costs to import grain into Zambia from Tanzania.
Speaker Change: The severe drought conditions also continued to impact power availability in June Cisco imposed a further 20% in power restrictions across the mining sector.
For a total of 40% reduction overall.
Rudi Badenhorst: As such, the company made the decision to source power beyond the formal restrictions imposed by the government through this ESCO contract and will be sourcing 193 megawatts of power, or 52% of its needs, from imports. There will be an impact on costs, which Ryan will review, however, the company anticipates it will be able to sufficiently substitute power with imports and avoid operational interruption. In addition, the company is proactively securing sufficient power for the commissioning and ramp-up of the S3 expansion at Consanche with three independent power producers.
Speaker Change: As such the company made the decision to source power beyond the formal restrictions imposed.
Speaker Change: By the Tesco contract and we will be sourcing 193 megawatts of power or 52% of its needs from imports.
Speaker Change: There will be an impact on costs, which Ron will review however, the company anticipates it will be able to sufficiently substitute power with imports and avoid operational interruptions.
Speaker Change: In addition, the company's proactively securing sufficient power for the commissioning and ramp up of these three expansion at Constancia with three independent power producers.
Speaker Change: The situation in Zambia serious and we will continue to work constructively with government and civil Society to achieve the best possible outcomes that ensure employment and income to the country remained stable and Zambia state restructuring efforts remain intact.
Rudi Badenhorst: The situation in Zambia is serious, and we will continue to work constructively with government and civil society to achieve the best possible outcomes that ensure employment and income for the country remain stable and Zambia's debt restructuring efforts remain intact. With that said, we are pleased and supportive of the commitments made by the country for additional and reliable power generation capacity, including wind, solar, and hydro projects, as well as infrastructure investments, including interconnections with other countries across the Southern African Power Pool, to address the country's power needs for the future.
Speaker Change: With that said, we are pleased and supportive of the commitments made by the country for additional and reliable power generation capacity, including wind solar and hydro projects as well as infrastructure investments, including interconnections with other countries across the southern African powerful to address the country's power needs for the future.
Speaker Change: With that I will conclude the opening remarks and pass the call to Rudy to review our operational results.
Rudi Badenhorst: With that, I will conclude the opening remarks and pass the call to Rudi to review our operational results. Thank you, Tristan, and thank you, everybody, for joining our call today. Total copper production for the second quarter of 2024 was 103,000 tons, a 2% increase from quarter one. This was another solid quarter operationally, and with the work accomplished during the quarter, we are now well set up for the remainder of the year and on track to achieve our copper production guidance, as Tristan noticed earlier.
Thank you Justin and thank you everybody for joining our call today.
Rudi Badenhorst: Copper sales volumes did lag during the quarter by approximately 8,000 tons due to the timing of shipments, vessel delays at Wafers Bay and Dar es Salaam ports related to weather, port congestion, and scheduled disruption. Copper C1 cash costs declined by 29 cents to average $1.73 per pound, benefiting from higher gold production at Kansanshi and record gold prices.
Rudy: Total copper production for the second quarter of 2024.
Rudy: 103000 tons, a 2% increase from quarter one.
Rudy: This was another solid quarter operationally and with the work accomplished during the quarter. We are now well set up for the remainder of the year and on track to achieve our copper production guidance as this.
Speaker Change: Just I noticed earlier.
Speaker Change: Copper sales volumes did lag during the quarter by approximately 8000 tonnes lower.
Speaker Change: Due to the timing of shipments.
Speaker Change: They saw delays at Wolf as Bland, Dallas alone ports related to weather.
Speaker Change: Port congestion and scheduled disruptions.
Speaker Change: Yeah.
Speaker Change: Copper cone cash cost declined by 29 seems to average $1 73 per pound benefiting from higher gold production that can send sheet and record gold prices.
Speaker Change: That concern she copper production totaled 42000 tons in the second quarter.
Rudi Badenhorst: At Kansanshi, copper production totaled 42,000 tonnes in the second quarter, an improvement of 10,000 from quarter one driven by higher feed grades. During the quarter, we gained access to high-grade material at the main 15 cutbacks. This, along with access to mine 17, will allow for grades to remain at elevated levels for the remainder of the year. In addition, we will be swapping the mixed and sulfide moles during the third quarter in order to maximize mixed ore and grade through the mold.
Speaker Change: An improvement of 10000 from quarter, one driven by higher feed grades.
Speaker Change: During the quarter, we gained access to higher grade material at the mine and 15 cutback.
Speaker Change: This along with access to my 17 would allow for grades to remain at elevated levels for the remainder of the year.
Speaker Change: In addition, we will be swapping the mixed and sulfide, mostly hitting in the third quarter in.
Speaker Change: In order to maximize mixed ore and grade through the malls.
Rudi Badenhorst: This will allow us to comfortably achieve our production guidance of 130,000 to 150,000 tons of copper at containment. Copper production at Sentinel totaled 54,000 tons in the second quarter, a decline of approximately 9,000 tons from the previous quarter.
Speaker Change: This will allow us to comfortably achieve our production guidance of 130 to 150000 tonnes of copper at Kentucky.
Speaker Change: Yeah.
Speaker Change: Copper production at Sentinel totaled 54000 tons in the second quarter a decline.
<unk> of approximately 9000 tons from the previous quarter.
Speaker Change: The decline in production was expected as the mine experience.
Rudi Badenhorst: The decline in production was expected as the mine experienced higher grades during the first quarter and have since returned to normalized levels. The ongoing Stage 3 development progressed well during the quarter, with the input crushers successfully commissioned well ahead of schedule that enabled access to softer ore. Access to the Western Cutback at Stage 3 will increase the availability of softer ore and allow for improved mining performance and throughput over the remainder of the year.
Speaker Change: Higher grades during the first quarter and a sensitive turned into normalized levels.
Speaker Change: The ongoing stage III development progressed, well during the quarter.
Speaker Change: With the input crushing successfully commissioned well ahead of schedule.
Speaker Change: Enabled access to softer ore.
Speaker Change: The access to the wisdom cutback in stage three will increase the availability of softer ore and allow for improved mining performance and throughput over the remainder of the year.
Speaker Change: As such.
Rudi Badenhorst: As such... Copper production guidance at Sentinel has been maintained at 220,000 to 250,000 tons. At Enterprise, over 6,000 tons of nickel were produced during the second quarter, an increase of over 2,000 tons from the first quarter.
Speaker Change: Copper production guidance at Sentinel has been maintained at 220 to 250000 tons.
At enterprise.
Speaker Change: Over 6000 tonnes of nickel was produced during the second quarter, an increase of over 2000 tons from the first quarter.
Speaker Change: Mining volumes have been steadily improving and plant performance has been stone allow.
Rudi Badenhorst: Mining volumes have been steadily improving, and plant performance has been strong, allowing for the deceleration of commercial... Declaration of Commercial Productions. Due to the stronger-than-expected performance at Enterprise, nickel production is expected to be at the upper end of guidance, at $17,000 to $20,000, as Tristan noted earlier. We made the difficult decision to place Ravensthorpe under care and maintenance.
Speaker Change: Allowing for the deceleration of commission declaration of commercial production.
Speaker Change: Due to the stronger than expected performance at the enterprise.
Speaker Change: Nickel production is expected to be at the upper end of guidance at 17% to 20000 tonnes.
Speaker Change: That's just a noted earlier.
Speaker Change: We made the difficult decision to place the ravensthorpe in the care and maintenance.
Rudi Badenhorst: This work commenced in May and should be completed during the third quarter. Care and maintenance costs are estimated to be approximately $5 million per month during the third quarter and will reduce to $2 million a month thereafter. Production guidance has been lowered to 5,000 contained tons of nickel in reflection of this. However, we continue to support our personnel, particularly those living near, in the local Ravensthorpe region. And we are thankful for support from the community and local and state governments to the mine during this challenging phase. The recovery of Panama remains in a phase of preservation and safe management. During the quarter, the process plant reservation and maintenance cycle was changed from 14 days to 28 days.
This work commenced in May and should be completed during the third quarter.
Speaker Change: Care and maintenance costs are estimated to be approximately $5 million per month.
Speaker Change: During the third quarter, and we'll reduce it $2 million a month thereafter.
Speaker Change: Production guidance has been lowered to 5000 contained tonnes of nickel in reflection of this.
Speaker Change: We continue to support our personnel, particularly those living in years.
Speaker Change: And the locally Ravensthorpe region, and we are thankful for support from the community and local and state governments to the mine during this challenging place.
Speaker Change: Corporate Panama remains in a phase of preservation and safe management.
Speaker Change: During the quarter the process plant reservation that maintenance cycle was changed from 14 days to 28 days.
Rudi Badenhorst: The new maintenance cycle will allow for the execution of corrective maintenance activities to maintain optimal conditions. The focus continues to be on the environment. Care and maintenance activities for all areas, including cleaning and maintenance work at sediment ponds and pumps. Managing Surface Water at the Waste Dump and Low-Grade Stockpiles, Redirecting rainwater, and the treatment of water to manage the pH level.
The new maintenance cycle will allow for the execution of corrective maintenance activities to maintain optimal conditions.
Speaker Change: The focus continues to be on environmental.
Speaker Change: Care and maintenance activities for all areas.
Speaker Change: Leading cleaning and maintenance work at sediments ponds and pumps managing surface water device dumped and low grade stockpiles.
Speaker Change: Without eating rainwater the treatment of water to manage the ph levels.
Speaker Change: These expenses are expected to range from 15 million to 17 million per month for the remainder of the year depend.
Rudi Badenhorst: These expenses are expected to range from $15 million to $17 million per month for the remainder of the year, depending on the level of the environmental stability and asset integrity program. I wish to thank all our employees at Cobra Panama for their ongoing commitments to safe and responsible environmental management of the mine area and its surrounding communities. Thank you, and I will now hand the call over to Ryan to review the financials.
Speaker Change: Depending on the level of environmental stability.
Asset integrity programs.
Speaker Change: I wish to thank all our employees at Cobre, Panama for the ongoing commitment to safe and responsible environmental management of the mine area and.
Speaker Change: And its surrounding communities.
Speaker Change: Thank you and I will now hand, the call over to Brian to review the financials.
Brian: Thank you Rudy.
Rudi Badenhorst: During the quarter, copper prices reached a peak of $4.92 per pound following the collapse in copper treatment charges and the resulting concern of smelt production cuts, combined with lower mine supply forecasts. The copper price has since pulled back to around $4.20 per pound on the back of expectations of slower growth in China.
Brian: During the quarter copper prices reached a peak of $4.92 per pound following the collapse of copper treatment charges, resulting consider smelter production cuts combined with lower mine supply forecast.
Speaker Change: The copper prices since pulled back to around $4.20 per pound on the back of the expectations of slower growth in China.
Speaker Change: During the quarter, we took advantage of the stronger pricing environment and entered into a copper hedging program made up of unmatched and zero cost collars to the end of 2025, roughly 40% of all production.
Ryan MacWilliam: During the quarter, we took advantage of the stronger pricing environment and entered into a copper hedging program made up of on-margin, zero-cost collars to the end of 2025 on roughly 40% of our production. The Hedge Program is the next step in protecting the balance sheet following the successful completion of the financing activities in Q1. We've been consistent that while our goal as a company is generally to be unhedged, we will consider the use of hedging as an insurance policy to protect the balance sheet during more capital-intensive phases.
Speaker Change: The hedge program is the next step in protecting the balance sheet. Following the successful completion of the financing activities in Q1.
Speaker Change: We've been consistent that while our goal as a company is generally to be unhedged.
Speaker Change: Consider the use of hedging as an insurance policy to protect our balance sheet and more capital intensive phases.
Speaker Change: This hedging strategy shows a minimum price on a portion of our production while cobre, Panama is offline and until the <unk> expansion is fully commissioned at the end of 2025.
Ryan MacWilliam: This hedging strategy ensures a minimum price on a portion of our production while Cobra Panama is offline and until the S3 expansion is fully commissioned at the end of 2025. The hedges are front-end weighted, as this is when the S3 expansion project is most capital-intensive. Once fully operational, S3 is expected to return First Quantum to strong positive free cash flow generation. Revenue and EBITDA increased from the first quarter by 19% and 86%, respectively, mainly on the back of higher realized copper prices and improved operational performance, particularly at Kinsanchi. Our Q2 net loss attributable to shareholders also improved to $46 million.
Speaker Change: The hedges are front end weighted as this is when the S. Three expansion project is most capital intensive.
Speaker Change: Once fully operational is three is expected to return first quantum to a positive to strong positive free cash flow generation.
Speaker Change: Revenue and EBITDA increased from the first quarter by 19% and 86% respectively.
Speaker Change: On the back of higher realized copper prices and improved operational performance, particularly at Constancia.
Speaker Change: Our Q2 net loss attributable to shareholders also improved to $46 million.
Ryan MacWilliam: Although it was impacted by a further impairment at Ravensdorp, we wrote off the majority of the remaining inventories following the decision to place the operation into care and maintenance during the quarter. As Rudi noted, second quarter C1 cash costs averaged $1.73 per pound, a 14% improvement over the previous quarter. In general, costs have largely stabilized. However, as guided in our Q1 results, electricity costs increased as of May 1st at Kinshanshi and Trident as a result of the power shortage in Zambia and the need to import power at higher rates.
Speaker Change: Although it was impacted by a further impairment at Ravensthorpe, we wrote off the majority of the remaining inventories following the decision to place the operation into care and maintenance during the quarter.
Speaker Change: As Rudy noted second quarter C. One cash cost averaged $1 73 per pound.
Speaker Change: 14% improvement over the previous quarter.
Rudy: In general costs have largely stabilized.
Speaker Change: However, as guided in our Q1 results electricity costs increased as of May 1st conceptually and Trident as a result of the power shortage in Zambia, and the need to import power at higher rates.
Speaker Change: As Justin noted Cisco has increased has requested further restrictions so it will be more than doubling our important imported power from July one onwards.
Ryan MacWilliam: As Tristan noted, ZESCO has requested further restrictions, so we'll be more than doubling our imported power from July 1 onwards. With these additional imports, the impact on our cash costs increased to approximately $55 million, or $0.06 per pound for the full year.
Speaker Change: With these additional imports the impact our cash cost increased to approximately $55 million or six cents per pound for the full year.
Speaker Change: In other areas input costs and prices are tracking favorably to the assumptions used in our C. One cash cost guidance.
Ryan MacWilliam: In other areas, input costs and prices are tracking favorably to the assumptions used in our C1 Cash Cost Guidelines. Oil prices have averaged in the mid-80s year-to-date, while we continue to use $90 per barrel in our assumptions. The quattro has been weaker than the 21 assumed in our guidance.
Speaker Change: Oil prices have averaged in the mid eighties, yet states, while we continue to use $90 per barrel and our assumptions.
Speaker Change: The quarter has been weaker than the 21 assumed in our guidance.
Speaker Change: And lastly, gold prices have been a significant tailwind for us more than offsetting the impact of the highest hog prices as the gold prices averaged well over $2000 pounds through the first part of this year.
Ryan MacWilliam: And lastly, gold prices have been a significant tailwind for us, more than offsetting the impact of the higher power prices, as gold prices averaged well over $2,000 per ounce through the first part of this year. Considering all these factors, we remain comfortable with our C1 cash cost guidance range for the year of $1.80 to $2.05 per pound. In respect of our balance sheet initiatives, the sale process for our Las Cruces mine in Spain remains ongoing as well as the potential minority investment in the company's Zambian business.
Speaker Change: Considering all these factors we remain comfortable with our C. One cash cost guidance range for the year of $1 80 to $2.05 per pound.
Speaker Change: In respect of our balance sheet initiatives. The sales process of our lost Creek mine in Spain remains ongoing.
Speaker Change: As well as the potential minority investments and the company's Zambian business, we will bring in a partner create strategic value proposition Zambia.
Ryan MacWilliam: We will bring in a partner if it creates strategic value for our business in Zambia. NASDAQ increased this quarter by $160 million to $5.4 billion. The strong progress on S3 and the resulting increase in capital expenditure was the main driver of this cash outflow. Liquidity remained strong at $1.6 billion at the end of the quarter, comprising approximately $876 million in cash and $740 million of undrawn revolvers.
Speaker Change: Net debt increased this quarter by $160 million to $5 4 billion.
Speaker Change: The strong progress on these three and the resulting increase in capital expenditure with the main driver of this cash outflow.
Speaker Change: Liquidity remained strong at $1 6 billion at the end of the quarter comprising of approximately $876 million in cash and $740 million of Undrawn revolver.
Speaker Change: And that concludes the finance section I'll now hand, the call back to Justin.
Ryan MacWilliam: And that concludes the finance section. I'll now hand the call back to Tristan. Thank you, Ryan. Two years ago, First Quantum approved the Enterprise and the S3 expansion projects following a commitment made by Zambia's New Dawn administration to reform the mining sector and establish a platform for more stable, durable, and responsible mining in Zambia. It is very pleasing to share with you that Zambia was recognized in the latest annual mining survey by the Fraser Institute for its improved investment climate. Out of 86 countries, Zambia's ranking improved from 58 to 34.
Justin: Thank you Ryan.
Speaker Change: Two years ago first quantum approved the enterprise and the S. Three expansion projects falling a commitment made by zambia's, new torn administration to reform the mining sector and establish a platform for more stable durable and responsible mining in Zambia.
Justin: It was very pleasing to share with you the sandy it was recognized in the latest annual mining survey by the Fraser Institute for its improved investment climate.
86 countries, Zambia is ranking improved from 58 to 34 34.
Justin: The country achieved the third highest ranking in Africa, and now ranks ahead of traditional mining jurisdictions, including Chile and Peru.
Tristan Pascall: The country achieved the third highest ranking in Africa and now ranks ahead of traditional mining jurisdictions including Chile and Peru. The current administration has made great efforts to improve the investment climate for the mining sector within the country, and it is very pleasing to see this bear fruit. At Enterprise, it is pleasing that the mine was completed, commissioned, and delivered into commercial operation ahead of schedule. I wish to acknowledge our in-house project teams for another project successfully executed that distinguishes First Quantum's approach to delivering growth.
Justin: The current administration has made great efforts to improve the investment climate for the mining sector within the country and its very pleasing to see this bear fruit.
At enterprise. It is pleasing that the mine was completed commissions and delivered into commercial operation ahead of schedule.
Justin: I wish to acknowledge.
Justin: In House project teams for another project success successfully executed that distinguishes first quantum's approach to delivering growth.
Justin: At the <unk> expansion project, we continue to receive long late deliveries with the last major delivery of flotation cells completed early in the third quarter.
Tristan Pascall: At the S3 Expansion Project, we continue to receive long-lead deliveries with the last major delivery of flotation cells completed early in the third quarter. Construction continues to focus on the assembly and installation of major components, mainly the mills and the primary crusher, and we are pleased to show you the progress of our S3 project in the presentation on our website. Work has also begun on configuration of the plant controls. The S3 expansion is key to restoring First Quantum's strong cash flow generation, and we remain on track for first production mid-next year. We have also published a 43-101 technical report for Consanche.
Justin: Construction continues to focus on the assembly and installation of major components might need the mills and the primary crusher and.
Justin: And we are pleased to show you the progress of our Street project in the presentation on our website.
Justin: Work has also begun on configuration of the plant control system.
Justin: Yes, three expansion is key to restoring first quantum strong cash flow generation and we remain on track for first production mid next year.
Justin: We have also published our 43 101 technical report for Constancia.
Tristan Pascall: The copper production profile at Kinsanchi has smoothed over the life of the mine, while unit costs and capital spending have increased, reflecting inflation since the last report in 2020. Also, reflected in the higher capital spending are fleet replacements related to the S3 expansion. As part of the report, we are pleased to see an increase in mineral reserves that has extended the operating life of Consanche by five years to 2049. This brings our prepared remarks to an end.
Speaker Change: A production profile that concerned she has smoothed over the life of the mine while unit cost and capital spending has increased reflecting inflation since the last report in 2020.
Speaker Change: Also reflected in the higher capital spending a fleet replacements related to these three expansion.
Speaker Change: As part of the report we were pleased to see an increase in mineral reserves that has extended the operating loss of concerned she bought five years to 2049.
Speaker Change: This brings our prepared remarks to an end there was a lot of information with our second quarter results and I would be pleased to take any questions.
Tristan Pascall: There was a lot of information in our second quarter results, and I would be pleased to take any questions. Operator, we can open the call for Q&A. Certainly. We will now begin the NLS question and answer session. Question and answer session. Analysts are permitted to ask one question and one follow-up and are welcome to rejoin the queue if they have more. To join the question queue, you may press star then 1 on your telephone keypad.
Speaker Change: Operator, we can open the call for Q&A.
Speaker Change: Certainly.
Speaker Change: We will now begin.
Speaker Change: Oh gosh.
Speaker Change: A question and answer session.
Speaker Change: Hello.
Speaker Change: Want to ask one question and one follow up and I'll welcome to rejoin the queue if they have more.
Speaker Change: Jim joined the question you May press Star.
Speaker Change: One on your telephone keypad.
Operator: You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys, to which are your questions. Please press star then choose. We'll pause for a moment as scholars join the queue. The first question comes from... Orest Wowkodaw from Scotiabank. Please go ahead. Hi, good morning.
Speaker Change: Tal and knowledge of a class.
Speaker Change: If there wasn't a speakerphone please pick up your hometown.
Right.
Speaker Change: So we'll tell you a question. Please press Star then two.
Speaker Change: Well pause for a moment eschar in Charlottesville.
Speaker Change: The first question comes from.
Speaker Change: Alright, well come out from Scotiabank.
Speaker Change: I had.
Speaker Change: Hi, good morning.
Orest Wowkodaw: It's great to hear that the new president of Panama has authorized, and got some discussions to restart with the company. The President has made some public comments about potentially restarting the mine to close it. And I'm wondering if you can provide any color on what you think that means from a restart perspective and whether you think that could be a partial restart, a full restart, and under what sort of timeline, potentially. Hi Orest.
Speaker Change: You hear that the presence of the president of Panama authorized I guess from discussions to restart with the company.
Speaker Change: The President has made some public comments about potentially restarting.
Speaker Change: Starting the mine to close it.
Speaker Change: And I'm wondering if you can provide any color on what you think that means from.
Speaker Change: From a restart perspective, and whether you think that could be a partial restart of full restart.
Speaker Change: Or what sort of timeline potentially.
Hi Forest Shaw.
Tristan Pascall: Sure. Thanks very much for the question. Yeah, so the President, in his inauguration speech and since that day, has made a number of comments about the mine, and we note his comments about open to close. I think it's been very pleasing to see the dialogue about the mine, which is a very important issue for the country in terms of the need to deal with, in particular, environmental issues and how those need to be managed through an operating asset. It's very hard to manage an immediate closure such as happened at the end of last year.
Speaker Change: Thanks very much for the question yeah, So the president.
Speaker Change: He needs inauguration speech and since that day has made a number of comments around the mine and we know it's his comments around <unk>.
Speaker Change: To close I.
Speaker Change: I think what's been very pleasing to see the dialogue around the mine, which is a very important issue for the country.
Speaker Change: In terms of the need to deal with in particular, the environmental issues and how those need to be managed through an operating are asset it's very hard to manage.
Speaker Change: And immediate closure such as happened at the end of last year and so it's very necessary that there is a level of activity that can ensure.
Tristan Pascall: And so it's very necessary that there be a level of activity that can ensure environmental security. So that's the first point. Initially, we see that progressing through the Preservation and Safe Management Plan that we have submitted, and I think that's very important to underline the costs and the ability to keep ensuring asset and environmental security in the interim. But we're very open to and committed to dialogue with the new administration to put in place a framework around which we can have those conversations that will result in a stable level. The timing of that, Orest, is difficult. I think, you know, there's a number of complexities to work through. But we don't see that happening this year.
Speaker Change: Environmental security so that's the first point.
Speaker Change: Initially, we see that progressing through the preservation and safe management plan that we have submitted and I think that's very important to underline the costs and the ability to keep ensuring assets and environmental security in the interim but we are very open to and committed to dialogue with the new administration to put in place a framework around which we can have those.
Speaker Change: The stations that we will see a.
Speaker Change: Stable level of operation to ensure the long term environmental security of the asset.
Speaker Change: The timing of that or if this is difficult I think you know there's a number of complexities to work through we don't see that happening this year and certainly.
Tristan Pascall: And certainly, you know, the President's made comments around that. We are committed to engaging the dialogue in order to get to that position. Thanks.
President's made comments around that.
Speaker Change: We are committed to engage in the dialogue in order to get to that that position.
Speaker Change: Oh, thanks, what's the timing for the environmental audit.
Speaker Change: Yes, thanks tourists so.
Tristan Pascall: What's the timing for the environmental audit? Yeah, thanks Orest. Firstly, to say we're absolutely open to the audit and we see it as a necessary step for the government of Panama. We're waiting for the instructions from the government. We understand they're currently putting together a short list of international experts.
Speaker Change: Firstly to say, we're absolutely open to the audit and we see it as a necessary step for the government of Panama were waiting for the instructions from governments are we understand that currently putting to get together a shortlist of international experts are that could take a few weeks and so we we waiting to hear back on the government or the exact timing.
Tristan Pascall: That could take a few weeks, and so we're waiting to hear back from the government on the exact timing, but the indications are that it would come this year, and, you know, the cost will be, you know, perhaps to be discussed and agreed with the government. The consequences, I think, of doing nothing at the mine will be very, you know, challenging for the environment, and so we welcome this audit, which we expect would understand that doing nothing right now is not a good outcome for the country. The next question comes from Jackie Przybylowski from BMO Capital. Please go ahead. Thanks very much for taking my questions. I guess maybe my first question would be to Ryan.
Speaker Change: But the indications were that it would come this year and the cost will be.
Speaker Change: Pepsi.
Speaker Change: He used to be discussed.
Speaker Change: Discussed and agreed with the government the consequences I think of doing nothing at the mine are will be very cheap.
Speaker Change: Challenging for the environment and so we welcome this order.
Speaker Change: Which we expect would understand that doing nothing right now it's not a good outcome for the country.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: The next question comes from Jackie.
Jackie Przybylowski: On the hedge program, it seems very well-timed and opportunistic, and I totally understand the rationale behind it. Can you talk a little bit about what you might look at in terms of adding hedges, and what you may need to see in the market to add further hedges going forward? Sure, Jackie.
Jackie: From BMO capital. Please go ahead.
Jackie: Alright, thanks, very much for taking my questions I guess, maybe.
Jackie: Maybe my first question would be for Ryan on the hedge program, it seems very well timed and opportunistic and totally understand.
Speaker Change: The rationale behind it can you talk a little bit about what you might look at in terms of adding hedges, what you may need to see in the market too.
Ryan: To add further hedges going forward.
Ryan: Sure Jackie our intention would be to replace hedges as they roll off and to stay broadly 40% to 50% hedged through to the end of 2025 and that really ties in with the delivery and ramp up of Phase III project and then from there we moved to a stronger phase of cash flow generation and therefore, we don't need that hedging and sharing hedged.
Ryan MacWilliam: Our intent would be to replace hedges as they roll off and to stay broadly 40 to 50% hedged through to the end of 2025. And that really ties in with the delivery and ramp-up of the S3 project. And then from there, we move to a stronger phase of cash flow generation. And therefore, we don't need that hedging insurance policy from then on.
Ryan: Insurance policy from then on.
Sir: Okay. Thanks, Brian and as my follow up question, maybe I'll just ask have you Sir.
Ryan MacWilliam: Thanks, Ryan. And as my follow-up question, maybe I'll just ask, have you sort of looked at that in terms of the scenarios for restarting Cobre Panama in 2025 or not? Does that affect your hedge program? I mean, obviously it would in terms of that 40 to 50% calculation, but would you be more comfortable being hedged or not hedged in a different scenario with that restart?
Speaker Change: Look at that in terms of the scenarios for restarting cobre, Panama in 2020 five or not does that affect your hedge program. I mean, obviously what in terms of that are 40%, 50% calculation, but would you be more comfortable being hedged or not hedged them in in a different scenario with that restart.
Speaker Change: Jackie we've made that decision and approach independent of Cobre, Panama timing. So it really focuses on what the S. Three ramp up looks like and then matching a program that ties in with that.
Jackie Przybylowski: Jackie, we've made that decision and approach independent of Cobra Panama timing, so it really focuses on what the S3 ramp-up looks like and then matching a program that ties in with that. Okay, thank you very much. The next question comes from Ioannis Masvoulas from Morgan Stanley. Please go ahead.
Speaker Change: Okay. Thank you very much.
Speaker Change: The next question comes from.
Speaker Change: And that's all that's all right.
Dan Farrell: Hello, Dan Farrell.
Dan Farrell: I had.
Hello. Thank you very much for the presentation. My first question questions around asset sales or stakes since actually you mentioned that you will only bring a partner in Zambia, if this would present strategic value.
Ioannis Masvoulas: Thank you very much for the presentation. My first question is around asset sales or stake sales, actually. You mentioned that you would only bring a partner to Zambia if this would present strategic value. Would this preclude discussions with certain types of potential bidders that may offer an attractive economic value instead?
Does this preclude discussions with certain types of potential bidders talk may offer an attractive economic value instead.
Dan Farrell: Hi, This is Ryan do you want to take that question Joe.
Ryan MacWilliam: Hi Yanis. Ryan, do you want to take that question? Yeah, sure. Yanis, the comment was really focused on the fact that... We don't have to do a transaction in Zambia, but we think the improved investment climate there, which Tristan referenced in his script, gives us an opportunity to engage with parties who are now looking at Zambia afresh, following the positive business reforms in the last few years. And if there's a partner that has the capability, the experience in the mining sector, and the desire to work with us and the Zambian government in moving those assets forward, we will really take that very seriously. But the comment really was focused on, we'll consider it holistically, rather than just the dollar value of any transaction. Very clear. Thank you very much.
Joe: Sure Yes, the comment was really focused on the fact that.
Joe: We don't have to do a transaction in Zambia, but we think the improved investment climate, there, which Tristan referenced in his script gives us an opportunity to engage with parties who are now looking at Zambia fresh following the positive business performance in the last few years and if there's a partner that has the capability that <unk> experienced in the mining sector.
Joe: Designed to work with us in the Zambian government and moving those assets forward.
Speaker Change: We'll really take that very seriously, but the comment really was focused on we'll consider it holistically rather than just the dollar value of any transaction.
Speaker Change: Very clear thank you very much and just a follow up.
Ioannis Masvoulas: And just to follow up, back to Cobra Panama, certainly lots of uncertainties on the path forward, but assuming the environmental audit concludes successfully, what would be the next milestones towards a possible restart? And within that, how should we think about a new contract agreement between you and the government, given recent comments made by the president? Thank you.
Speaker Change: Back to Cobre Panama.
Speaker Change: A lot of uncertainty on the path forward, but I'm assuming that the environmental audits are concludes successfully what would be the next milestones towards a possible restart and within that.
Speaker Change: How should we think about the new contract agreement between you and the government given recent common space. It made by the president. Thank you.
Speaker Change: Sure Yes. Thank you.
Tristan Pascall: So the milestones as we see them, but you know we committed to dialogue around that with the government, really initially to address the immediate activities required under the preservation and safe management plan to ensure environmental security. Currently, we're covering all of that cost, and we outlined that in the second quarter results as to where that cost is now at $17 million a month, approximately, the range of $15 to $20, and that's important that we cover that cost.
Speaker Change: So the milestones as we see them, but you know we committed to dialogue around that with the government really initially to address.
Speaker Change: The immediate.
Speaker Change: Activities required under the preservation and safe management plan to ensure environmental security currently recovering all of that cost and we outlined that in the second quarter results as to where that cost is now $17 million a month approximately that ranging from <unk> to 'twenty and that's important that we cover that cost.
Speaker Change: The initially.
Tristan Pascall: Initially, the concentrate sale would go a long way to support that, and that's part of the preservation and safe management plan that we would hope is approved. Going forward from that, I think it's important that we provide space for dialogue, and that would really be a conversation around a framework as to how that dialogue could work to really understand the full solutions required for Panama and its people, but to work in order to ensure the ongoing environmental security, asset security of the mine, and the conditions there. The mine exists, and it needs to be dealt with in a respectful way and in a patient manner.
Initially the concentrate sale would go a long way to.
Speaker Change: To support that and that's part of the preservation of site management plan that we would hope is.
Speaker Change: It is approved.
Speaker Change: Going forward from that I think it's important that we provide space for dialogue.
Speaker Change: And that was it would really be a conversation around a framework.
Speaker Change: As to how that could work to really understand the full.
Speaker Change: Solutions required for Panama and its people.
Speaker Change: To work in order to ensure the ongoing environmental security asset security of the mine and the conditions at the mine exists and it needs to be dealt with.
Speaker Change: In a respectful way.
Speaker Change: And in an Ah patient manner. So those are the milestones we think this year the.
Tristan Pascall: So those are the milestones we think this year. The President has made comments around that timetable. I think he said not before the summer months, which run through from December.
Speaker Change: <unk> has made comments are on that timetable I think he said you know not before.
Speaker Change: Summer months, which run through sort of from December it really for us the important does not win.
Tristan Pascall: For us, the importance is not when; the importance is getting to a proper agreement that benefits both parties, that ensures a stable operation going forward and must make sense for our shareholders. Thanks very much. The next question comes from Dalton Baretto from Kenneka, Juneau. Please go ahead. Thank you. Good morning, Tristan and team. Maybe you can start by following in that same vein here.
Speaker Change: The importance is getting to a proper agreement that benefits.
Speaker Change: Both parties that ensures a stable operation forward and must make sense for our shareholders.
Speaker Change: Thanks very much.
Speaker Change: The next question comes from Dow Jones, Alright, so from Canaccord Genuity. Please go ahead.
Speaker Change: Hi, Thank you good morning, trusting that team maybe I can start by following in that same vein. There just a point of clarification Trust and does the approval of the preservation and safe maintenance plan depend on the outcome of the audit or are they completely separate.
Dalton Baretto: Just a point of clarification, Tristan, does the approval of the preservation and safe maintenance plan depend on the outcome of the audit, or are they completely separate? Dalton, look, we'll go through that process. A lot of that conversation needs to happen with the government. From our perspective, though, the Preservation Safe Management Plan was really needed just to deal with the immediate environmental requirements.
Speaker Change: Yeah.
Speaker Change: Adults.
Speaker Change: Look we will go through that process, a lot of that conversation needs to happen with government from our perspective, though the preservation site management plan was really needed just to deal with.
Speaker Change: The immediate environmental requirements and with or without an order with or without the future framework. There are a number of environmental matters that need to be it needs to be the right framework by which those those could be.
Tristan Pascall: And, you know, with or without an audit, with or without a future framework, there are a number of environmental matters that need to be covered and be dealt with, and that's what the Preservation Safe Management Plan really was set out to do. We submitted that in January, and it's really about dealing with those up-front key environmental matters well before we get to the sort of long-term items that we, you know, we would envisage coming into a more holistic framework discussion. I got it.
Speaker Change: We cover them be dealt with and that's what the preservation Safe management plan really was set as we submitted that in January and it's really about dealing with those upfront key environmental metals, well before we get to the sort of long term.
Speaker Change: All items that we we would envisage a come into a more holistic framework discussion.
Speaker Change: Got it so but for millennia, especially back then from the government's perspective. The two are completely separate or are they waiting to see what what the order looks like for us.
Dalton Baretto: But from Milenio's perspective and from the government's perspective, are the two completely separate, or are they waiting to see what the audit looks like first? Look, we see the audit as a key step. There have been a number of environmental audits of Cobra Panama, the last one at the end of last year from August to October, while the mine was operating. The audit demonstrated that we were 100% compliant with the environmental and biodiversity requirements of the 371 obligations under the ESIA.
Speaker Change: Look we see the order does it is a key step.
Speaker Change: There's been a number of environmental audits at Cobre, Panama. The last one at the end of last year from August to October while the mine was operating.
Speaker Change: <unk> demonstrated that we were 100% compliant with the environmental and by diversity requirements of the 371 obligations under the ESI I. They were five health and safety areas are to be addressed which we would look at we were addressing at that time and that demonstrates the very strong.
Tristan Pascall: There were five health and safety areas to be addressed, which we were addressing at that time, and that demonstrates the very strong environmental standards of the operation to international standards at the highest level. So we would welcome the audit. We think it's an important part for Panama to understand the situation on the ground at the mine, to provide transparency, to provide meaningful context around what needs to happen that the mine just can't stop in mid-air. There needs to be, you know, to ensure the integrity of the environment there. The next question comes from Marcio Furry from Goldman Sachs. Please go ahead. Thanks, everyone. Good morning.
Environmental standards, the operation to international standards at the highest level. So we would welcome the audit we think it's an important part for Panama to understand the situation on the ground at the mine.
Speaker Change: To provide transparency to provides a meaningful context around what needs to happen that the mine just can't stop it.
Speaker Change: To me there are there needs to be.
Speaker Change: To ensure integrity of the environment there.
Speaker Change: The next question comes from last year I'm sorry.
Speaker Change: And then Sac.
Speaker Change: Go ahead.
Speaker Change: Hey, good morning.
Marcio Furry: The questions around the operations exam, obviously, performed quite well in the quarter, both in terms of cost but also grade improvement as well. We talk about potential further efficiency gains in the release, so just trying to understand what you are thinking about in terms of the magnitude of potential cost improvement if the grades that you reported in the quarter can be sustained into the next quarter. And if the surprise that you published highlights any potential upside risks in terms of cost and grades for S3 expression as well. Thank you.
Speaker Change #101: Those are all the operations.
Speaker Change: So true.
Speaker Change: The Florida.
Speaker Change: Both in terms of cost, but also greatly improved.
Speaker Change: As well, we talk about the potential further efficiency gains.
Speaker Change #103: So just trying to understand what are you thinking about the magnitude of potential policy.
Speaker Change #100: It's the grades that we reported in the quarter can be sustained into the next quarter and it's no surprise that you published a highlight any potential upsides.
Speaker Change #100: Of course some grades.
Speaker Change #102: Ex special as well thank you.
Speaker Change #100: Sure.
Ryan MacWilliam: Sure. Thanks for the question, Marcie. I'll let Ryan answer the first part of that question and then, just a look ahead, I can give you some context as well. Sure. So on cost, we did see very strong cost performance through the quarter. That was largely driven by the low unit cost of Kansanshi, which in turn was driven by the strong gold production there, which tied in with the strong gold price environment.
Brian: Thanks for the question Marci I'll, let Brian answer the first part of that question and then just looking ahead I can give you some context as well.
Brian: So on costs, we did see very strong cost performance through the quarter that was largely driven by the low unit cost of care essentially which in turn was driven by the strong gold production, there, which tightened with the strong gold price environment. We do expect through the second half of the Sentinel to represent the largest share of the production central it doesn't come with that byproduct credits.
Tristan Pascall: We do expect through the second half of the year that Sentinel will represent a larger share of the production. Sentinel doesn't come with that by-product credit, so we would expect higher costs through the second half of the year than what we had in Q2, but still well within guidance. Yeah, and then looking forward, Marcio, we were very happy to release the updated 43-101 technical report at Consantee. I think that gives a very fullsome picture, and the team has done an excellent job presenting the overall look forward as we get into Southeast Dome and as the S3 project comes online.
Brian: So we would expect higher costs through the second half of the year than what we had in Q2, it's still well within our guidance.
Speaker Change #104: Yeah, and then looking forwards Marcio you we were very happy to release. The updated 43 101 technical report at consensus I think that gives a very fulsome picture and the team has done an excellent job in presenting.
Marcio: The overall look forward as we get into South east doing and as if the <unk> III project comes online in terms of cost you'll note in that.
Tristan Pascall: In terms of costs, you'll note in that our assumptions around inflation and as we bring new mining fleets and shift from the traditional methodology we had, which was a selective mining methodology at Consantee, and as we shift across to a bulk mining methodology, that's the major impact on costs at Consantee looking forward. We're pleased at being on site very recently in the last few weeks to see those large trucks operating under Trolley Assist, those Hitachi 250 tonners, including the first battery truck, which we saw running under its own power, completely carbon neutral in terms of emissions from that truck.
Marcio: Our assumptions around inflation and as we bring new mining fleets and shift from the traditional.
Marcio: The methodology, we had which was a selective mining methodology at consent sheet and as we shipped across to a bulk mining methodology.
Marcio: That's the major impact on costs at Constancia looking forwards.
Marcio: And you know we pleased being onsite very recent in the last few weeks to see those large trucks operating on petroleum assist the Hitachi.
Marcio: 250 tonnes, including the first battery truck, which we saw running under its own power.
Marcio: <unk> carbon neutral.
Marcio: In terms of emissions from that truck. So it's an exciting time for concern as we deliver the <unk> III expansion and as we bring on that bulk mining methodology, we expect to see cost structures in the future.
Tristan Pascall: So it's an exciting time for Consantee as we deliver the S3 expansion and as we bring in that bulk mining methodology. We expect to see costs reduced in the future. Great, thank you. And a quick follow-up on the energy side, obviously, Zesco reduced the power supply by about another 20%, which is probably, it now gets to the 40% you have contracted with imported sources, right? Just trying to understand what the risk that you see that for the current containment happens between now and the end of the year.
Marcio: Great. Thank you and a.
Speaker Change #106: A quick follow up on the energy side, probably let's call it reduced I'm bullish about that.
Speaker Change #106: 20%.
Speaker Change #107: And I'll get to the 40% to help construct and corporate sources right just trying to understand what is the you said assuming that for the court will confirm its weapons.
Speaker Change #108: And what are the actions mistaken.
Speaker Change #108: To avoid any production.
Speaker Change #109: Thank you very much.
Marci: Thanks, Marci. So yeah look the situation is serious with regards to the drought that PS.
Tristan Pascall: And what are the actions the company is taking to avoid any production displacements then? Thank you very much. Thanks, Marcio. So yeah, look, the situation is serious with regard to the drought. That appears to be an effect of El Nino in terms of, you know, dry conditions in Zambia, similarly dry conditions in Australia, and wet conditions in Brazil and in Latin America.
Marci: To be in effect from El Nino.
Marci: In terms of.
Marci: Dry conditions in Zambia, Similarly, dry conditions in Australia, and wet conditions in Brazil and in Latin America.
Tristan Pascall: You know, a lot of the outlook is for a flip to neutral conditions by the middle of this year, August-September is what the metrological forecast seemed to be pointing to, and potentially a flip to La Nina, around a 40% likelihood, which would reverse things the other way, and we would see higher rainfall in Zambia, similarly higher in Australia, and lower in Latin America. So we're preparing for a heavy wet season but also planning for if there are limitations to power and the drought does continue through the dry season, as to how to go about that, in particular with relation to the S3 expansion.
Marci: A lot of the outlook is for flip to neutral conditions through by the middle of this year August September is what the metallurgical forecast seem to be pointing to and potentially afflicted law anemia around a 40% likelihood which would reverse things the other way and we would see higher rainfall in Zambia seemingly hiring.
Marci: In Australia and lower in Latin America. So we are preparing for heavy wet season, but also planning that if there are limitations to pound the trapped dust.
Speaker Change #111: Continue through the dry season as to how to go about that in particular with her license to the <unk> expansion.
Tristan Pascall: And Marcio, we've put in place the flexibility in the contract with ZESCO. We're very pleased with the long-term relationship we have there. ZESCO is working very proactively around that in terms of highlighting the challenges ahead for power delivery in the country, but then we're able to secure power through imports with independent power providers, and we feel confident at the moment in those agreements that we'll be able to cover our operational requirements.
Marcio: And Marcio, we've put in place the flexibility in the contract with Cisco with very pleased with that long term relationship. We have been Cisco is working very proactively around that in terms of headlining the challenges looking forward in the country for power delivery.
Marcio: But then we were able to secure power through imports with independent power providers and we.
Marcio: We feel confident at the moment in those agreements that we'll be able to cover our operational requirements. Although the situation is serious in the country that's coming from sources.
Tristan Pascall: Although the situation is serious in the country, that's coming from sources that are gas and very interesting, on the east coast of Africa, they've had good rainfall in places like Mozambique, Malawi, and so on, and so they are not impacted to the same degree.
Speaker Change #112: From gas and very interesting on the East Coast of Africa, they've had good rainfall.
Speaker Change #112: You know places like Mozambique, Malawi, and so on and so we're not impacted to the same degree so as I said strong sources of supply in the current market environment, and we're able to import that power our.
Tristan Pascall: So those are strong sources of supply in the current market environment, and we're able to import that power and believe that we'll be able to see no impact on operations. The next question comes from Bryce Adams from CIBC. Please go ahead. Hi, everyone.
Speaker Change #112: And believe that we will be able to see no impact on operations.
Speaker Change #112: Okay.
Speaker Change #112: The next question comes from Bryce Adams from CIBC.
Speaker Change #113: Please go ahead.
Bryce Adams: Hi, everyone. Thanks for the presentation. There was a note about government officials visiting sought in the report for the immediate explore the concentrate and the power plant restart I wanted to clarify is that a couple of months style. When when was the report was it earlier in the year or was it more recent what's the latest on the concentrate and <expletive>.
Bryce Adams: Thanks for the presentation. There was a note about government officials visiting the site and the report for the immediate export of the concentrate and the power plant restart. I wanted to clarify, is that a couple of months stale?
Tristan Pascall: When was the report? Was it earlier in the year, or was it more recent? What's the latest on the concentrate and shed? Thanks, Bryce. Officials from the previous administration visited the site in June in the run-up to the inauguration on July 1, so it was up-to-date at the end of the quarter.
Bryce Adams: Thanks, Brian Yeah that was.
Speaker Change #115: Officials from the previous administration.
Speaker Change #116: Visit to the site in the run up in June.
Speaker Change #117: In the run up to the inauguration on July one so it was up to date at the end of the quarter or the feedback from that site visit as far as I understand was positive in terms of all of the.
Tristan Pascall: The feedback from that site visit, as far as I understand it, was positive in terms of all of the structure and the way in which we presented the Preservation and Safe Management Plan, including the export of concentrate, although we're still waiting for that approval. We are in dialogue with the government around that approval and the need to ensure that the provisions that are in that Preservation and Safe Management Plan are put in place in order to ensure environmental security is the first priority, both for the country and in order to ensure that the mine is in a good, stable position. So the answer is waiting for that approval, although the technical official visits went well. Okay. What are the key drivers for the shareholder agreement? It's a more formalized relationship, but what practically changes?
Speaker Change #117: The the.
Speaker Change #118: Structure and the way in which we presented the preservation and safe management plan, including the export of concentrate although we still waiting for that approval. We are in dialogue with the government around that approval and the need to ensure that the provisions that are in that preservation safe management plan, we can enact in order to ensure environmental security.
Speaker Change #119: As the first priority both for the country and in order to show that the demand isn't it isn't a good stable position so.
Speaker Change #119: The answer is waiting for that approval.
Speaker Change #120: As always a technical official visits went well.
Speaker Change #120: Okay.
Speaker Change #121: What are the key drivers for the shareholder agreement, it's a more formalized relationship, but what practically changes and then I can see the reason their fame would enter into the agreement, but what do you think the key benefit food Zhang Z.
Speaker Change #122: Yes. Thanks, Brian look we were happy to enter into that agreement. It's been a long time coming we have been working with our partners Shaanxi for some time.
Bryce Adams: And then I can see the reasons FM would enter into the agreement, but what do you think is the key benefit for FM? Yeah, thanks Bryce. Look, we were happy to enter into that agreement. It's been a long time coming.
Tristan Pascall: We've been working with our partner, Xiong Xi, for some time now, and really, it does now provide for the formalization of the relationship between us. The key provisions, number one, ensure the guardrails around our relationship and the ongoing relationship with Xiong Xi in the form of a standstill, restrictions on dispositions of shares, and ensuring board support, not for all matters, but for the overwhelming majority of matters that the board will come for. Those guardrails, we think, are very important.
Speaker Change #122: And really it does now provides a formalization of that.
Speaker Change #123: The relationship between us the key provisions.
Speaker Change #124: Number one inch.
Speaker Change #125: Sure the guardrails around our relationship and the ongoing relationship with GE in the form of a standstill restrictions on dispositions.
Speaker Change #124: Dispositions of shares and ensuring board support not for all matches, but encompassing majority of matches that the board will come through those guardrails. We think are very important they really benefit for first quantum I think in forest shareholders remove uncertainty.
Tristan Pascall: The benefit for First Quantum, I think, and for our shareholders, is to remove uncertainty for all our stakeholders regarding the nature of our relationship with Xiong Xi and their intentions into the future. In terms of Xiong Xi, they've been very clear, they're backing the strategic direction of the company, and backing the strategic direction which we're heading in. And to your question around motivations for them, to ensure a customer and supplier relationship in a time when copper is scarce, we saw that in the prepay agreement, they were seeking to ensure security of supply to what is the number one or number two largest copper smelting business in the world.
Tristan Pascall: And a lot of strength and capability in downstream processing all the way from smelting through to rod and bar and into copper foils for battery technologies, a huge capability in those downstream areas. So for Xiong Xi, I think it provides it access to the front end in terms of scarce copper supply and ensures a relationship going into the future where there's certainty for both parties. The next question comes from Miles Alsop from UBS. Please go ahead.
Speaker Change #126: For all of our stakeholders regarding the nature of our relationship with junk C and their intentions into the future in terms of junk see they've been very clear that backing the strategic direction of the company backing the strategic direction in which we're heading and to your question around motivation for them to ensure.
Speaker Change #126: So our customer and supplier relationship.
Time, where copper is scarce, we saw that in the prepay agreement that they were seeking to ensure security of supply into what is the number one or number two largest copper smelting business in the world.
Speaker Change #127: A lot of strength and capability and downstream processing, all the way from smelting through to Rod and bar and into copper foils for battery technologies, a huge capability in those downstream areas. So for <unk> I think.
Speaker Change #126: It provides them access to the front end in terms of.
Speaker Change #126: <unk> copper.
Speaker Change #126: Supply and it shows the relationship in the future going into the future with a certainty for both parties.
The next question comes from Myles Allsop from UBS. Please go ahead.
Miles Alsop: Thank you very much. Could you give us a sense of the timing of the sale of Los Cruces and the stake in Zambia? Is it kind of hopeful over the next six months, or could it take longer? Thanks, Miles. Ryan, do you want to take that one? Yeah, we expect both of those to play out through the second half of this year.
Myles Allsop: Great. Thanks, so much could you give us a sense.
Myles Allsop: On the timing of the sale at Las Cruces.
Myles Allsop: The stake in Zambia, as it kind of hopeful over the next six months or could it could take longer.
Ron: Thanks small Ron do you want to take that one yes, we expect both of those to play out through the second half of this year.
Myles Allsop: Okay.
Ryan MacWilliam: And then maybe just going back to the environmental audit, would you expect it to take three months like last year? And what are the key sensitive areas that you expect to come out of this audit that we should be focused on? Sure, Miles. Yeah, challenging to give a time frame for that, although these things, you know, we would expect that a detailed audit would take, you know, a few months to get resolved.
Myles Allsop: And then maybe just going back to the.
Speaker Change #131: Environmental audits would you expect it to take three months like last year.
Speaker Change #129: What are the key sensitive areas do you expect to come out of this order that we should be.
Speaker Change #130: I'm focused on.
Myles Allsop: Sure Myles.
Myles Allsop: <unk> to give a time frame for that although these things we would expect that a detailed all it would take.
Myles Allsop: Two months to get resolved, but in terms of where the asset stands we.
Miles Alsop: But, you know, in terms of where the asset stands and the capability of us to respond to those audit requirements, we can do so very quickly. The President, in his comments, noted that he wanted it done quickly in order to prepare the ground and so the government and the people of Panama had a good understanding of the conditions and more transparency or understanding of conditions at the site. In terms of the main focus areas for the audit, look, the key at Cobra Panama has always been the handling of water, in particular through the tailings dam.
Speaker Change #132: And the capability of us to respond to those audits requirements. We can do so very quickly.
The president: The president in his comments noted that he wants it done.
Speaker Change #134: You wanted done quickly in order to prepare the ground and to the government and the people of Panama had a good understanding of the conditions and more.
Speaker Change #134: More transparency.
Speaker Change #134: Understanding of conditions that saw it in terms of the main focus areas for the orders look.
Speaker Change #135: Look the key always at Cobre, Panama has been handling of water in particular through the tailings dam and <unk>.
Miles Alsop: And, you know, our objectives and our continued strong management of the environmental conditions at site really do relate to water and, in particular, the tailings dam to ensure the integrity of those assets. That's challenging while the asset is not operating because of the buffering, because of the addition that the process plant provides to managing that water. But as we see now and bring, you know, technical people to site, bringing auditors to site in the past, we continue with a strong track record in terms of the downstream water key indicators. So, you know, fish in the stream, and microfauna are all very strong..., strong and healthy from the discharge.
Speaker Change #135: Our objectives and our continued <unk>.
Speaker Change #135: <unk> management of the environmental <unk>.
Speaker Change #135: Additionally, so I really do relate around water and in particular, the tailings dam to ensure.
Speaker Change #135: Integrity of those assets, that's challenging while the asset is not operating because of the buffering because of the.
Speaker Change #135: In addition, the process plant provides to managing that water.
Speaker Change #135: As we.
Speaker Change #135: We see now and bringing technical people to start bringing order to saw it in the past we continue with a strong track record in terms of the downstream water.
Speaker Change #135: Key indicators.
Speaker Change #136: So you know fish in the stream microphone is all in a very strong.
Speaker Change #136: Strong and healthy from the discharge the water is really the key issue always have Spain, and our continued management of that requires the approval of preservation stack management plan in the interim and long term our ability to operate the plants in order to ensure that that asset integrity continues.
Tristan Pascall: But the water is really the key issue, always has been, and our continued management of that requires the approval of the Preservation and Safe Management Plan in the interim, and long term, our ability to operate the plant in order to ensure that that asset integrity continues. The next question comes from Lawson Winder from Bank of America. Please, go ahead.
Speaker Change #136: The next question comes from Linda.
Speaker Change #136: Linda from Bank of America.
Linda: Got it.
Linda: Hi, Thank you operator, and good morning, Tricia Ryan and team.
Lawson Winder: Hi, thank you, operator. And good morning, Tristan, Ryan, and team. Rudi, I wanted to ask about the report that the Panama Canal Authority now has some level of jurisdiction over the watershed in which Cobra Panama is contained. Does that change how the environmental audit might be done or how anything might be considered in any sort of negotiations or arbitration?
Linda: <unk>.
Speaker Change #138: Wanted to ask you about the report that the Panama Canal Authority now has some level of jurisdiction over the watershed in which cobre.
Speaker Change #139: Cobra Panama is contained does that Ah.
Speaker Change #140: Change, how the environmental audit might be done or how anything might be considered in any sort of negotiations or arbitration.
Lawson: Hi, Lawson, yes, not sure on that one I mean, we sort of three or four watersheds OIBDA from the Panama Canal.
Lawson Winder: Hi, Lawson. Yeah, not sure on that one. I mean, we're sort of three or four watersheds over from the Panama Canal. Look, you know, I'd need to follow up on the detail, and perhaps you can reference where you're looking at there. Not something I'm particularly aware of.
Speaker Change #142: You don't need to follow up on the detail, perhaps you can reference where you're looking at there.
Speaker Change #143: Not something.
Speaker Change #144: Particularly aware of we are a long way from the canal the sort of previous.
Tristan Pascall: We're a long way from the canal. The sort of previous, you know, miscommunication, sort of fake news around that we were taking water from the canal is completely misplaced. I think very positive for Panama. You know, rainfall in the last few months has meant that the canal has improved its operating capacities. It's getting back to normal, you know, normal provision of draft and ability to service ships coming through the canal, although I'm aware the canal authority is worried in the long term about the ongoing effects of climate change on the canal and how they'll deal with that in the future. Certainly, we would be willing to be part of solutions for the country and part of solutions for the Panama Canal.
Speaker Change #145: Miscommunicate since a fake news around that we were taking water from the canal is completely misplaced I think very positive for Panama rainfall in the last few months has meant that the canals.
Speaker Change #145: Proved its operating capacities, it's getting back towards normal.
Speaker Change #145: Hum.
Speaker Change #146: Normal provision of draft and ability to serve the ships coming through the canal, although I am aware of the canal authorities worried in the long term about ongoing effects of climate change on the canal and held out there with that in the future certainly we would be willing to be part of it solutions for the country.
Speaker Change #146: And part of solutions for the Panama Canal.
Speaker Change #147: Okay Fantastic and then just my follow up would be on the cash cost guidance.
Lawson Winder: Okay, fantastic. And then just my follow-up question would be on the cash cost guidance. Would you suggest or guide us to model on the higher end of the range, just given the power cost impact, or can we still think of it as being the middle of the range?
Speaker Change #148: Could you guide us to or.
Speaker Change #149: Suggest that we model on the higher end of the range just given the the power cost impact or or can.
Speaker Change #150: Can we still think of it as being in the middle of the range.
Speaker Change #149: Sure Ron will take that one.
Ryan MacWilliam: Sure, Ryan, will you take that one? Lawson, so there is no change to the commentary on our cash costs. I'd still use the same range as we provided before, and we wouldn't point you to the top or bottom end of that cash cost, a function of in some areas we've seen tailwinds, such as the gold price, such as quatra, such as diesel prices, and in some areas we've seen headwinds, such as electricity prices in Zambia.
Net loss since I know change to the commentary on our cash cost. So I would still use the same range as we provided before and we wouldn't point you to the top or bottom end of that cash costs a function of in some areas. We've seen tailwind such as gold price such as kwacha, such as diesel prices and in some areas, we've seen headwinds such as electricity prices in Zambia.
Speaker Change #149: Yeah.
Speaker Change #149: The next question comes from Gautam Khanna.
Ryan MacWilliam: The next question comes from Dalton Baretto from Kennecar, January D. Please go ahead. Thanks for taking my follow-up, guys. I wanted to ask about the partnering process in Zambia. My understanding is that Vedanta is also looking for a partner, and I'm just wondering, you know, given what you said about the improved business climate, the fact that Geonax is also looking, you know, to secure supplies, is there an opportunity for you guys to do something together? Thanks Dalton, I'll let Ryan take that one.
Canaccord Genuity: Canaccord Genuity.
Speaker Change #152: Please go ahead.
Gautam Khanna: Thanks for taking my follow up guys.
Speaker Change #154: I wanted to ask about the.
Speaker Change #155: The partnering process in Zambia.
Speaker Change #156: My understanding is that the data is also looking for a partner and I'm just wondering.
Speaker Change #156: Given what you said about the improved business climate in fact that geography is also looking.
Speaker Change #157: To secure supply is there an opportunity for you guys to do something together.
Speaker Change #157: Thanks, Dalton I'll, let Ron take that one.
Speaker Change #157: Sure.
Ron: I think we monitor developments in Zambia, but I'll focus on Zambia right at the moment is on the ramp up of Ace III and really pleased to see the delivery of enterprise.
Dalton Baretto: I think we monitor developments in Zambia, but our focus on Zambia really at the moment is on the ramp-up of S3 and really pleased to see the delivery of Enterprise. Yeah, Dalton, we follow the progress at Mapani and at Vedanta. We think those operations are very important for the ongoing capacity of Zambia. They're big employers, they're important to the Copper Belt as being the traditional sort of source of mining in the country, and so they're very important providers. We previously had an ownership interest in Mapani; we know that asset very well. We understand the characteristics of underground mining at Mapani and potentially what that would look like at Vedanta.
Speaker Change #158: Yeah Delta and we follow the progress at Mopane and Vedanta, We think those operations are very important for the ongoing.
Speaker Change #158: Capacity of Zambia, the big employers they are important.
Speaker Change #158: Copper belt as being a traditional sort of source of of mining in the country and so theyre very important providers. We previously had an ownership in mopane, we know that asset very well.
Speaker Change #159: We understand the characteristics of underground mining at Mopani and potentially what that would look pocket, but center no interest directly in that at the moment and our focus as Ron said is on developing S. Three and ensuring that comes in on track on schedule.
Ryan MacWilliam: No interest directly in that at the moment, and our focus, as Ryan said, is on developing S3 and ensuring that comes in on track and on schedule. Alongside that, we're very excited this quarter to have delivered commercial production from Enterprise. That's a huge step forward. The team there, both on the project side, executing that successively ahead of schedule, and then on the operating side, we've seen really strong progress and huge better-than-expected performance on the flotation, in particular dealing with talc and dealing with what, typically, nickel mines can be very difficult to bring into commercial production, so it's been very pleasing to see that happen, and really, Dalton, Thanks for that, Tristan. If I can squeeze in this follow-up, I wanted to ask you also about a comment you made on the ICC arbitration. Hi Dalton. I just dropped in. Are you still there?
Speaker Change #160: Alongside that we are very excited this quarter to deliver commercial production from enterprise. That's a huge step for the team made both on the project side to execute that successfully ahead of schedule and then on the operating side, we're seeing really strong progress and huge.
Speaker Change #160: Yeah.
Speaker Change #161: Better than expected performance on the flotation in particular dealing with talc and.
Speaker Change #161: In dealing with what we typically nickel mines can be very difficult to bring into commercial production. So it's been very pleasing to see that happen and really dull.
Speaker Change #162: Delta and that's what's taking a focus.
Speaker Change #162: Right.
Speaker Change #162: Right now and into the future.
Speaker Change #162: Yeah.
Thanks for that attrition or if I can squeeze in a follow up I wanted to ask also about a comment you made on the ICC arbitration.
Dalton: Hi, Dalton just.
Dalton: Drop there are you still there.
Speaker Change #164: Sorry, he's lying job almost to the next question and ask him to rejoin.
Dalton Baretto: Sorry, his line dropped. I'll move to the next question and ask him to rejoin in case he wants to finish his question again. The next question comes from Ralph Profiti from 8 Capital. Please go ahead. Thanks, Operator. Tristan, when you look at the power supply and demand situation across Zambia and you look at sort of excess power from countries and sort of competing industrial demand outlook, and you think about this 193 megawatts that is currently sourced,
Sure.
Speaker Change #165: This question again.
Speaker Change #164:
Speaker Change #174: The next question comes from Citi.
Dalton Baretto: Does some of that address the increased power draw potentially required at S3? And I'm just kind of wondering, trying to reconcile the 40% requirement versus a 52% actually sourced, and then maybe my second question is what is the step up in max power requirements once on. My apologies, I couldn't find it at. Yeah, thanks, Ralph. Tristan, Tristan, do you love it?
<unk> from eight capital. Please go ahead.
Speaker Change #166: Thanks, operator.
Speaker Change #176: Interesting when you look at the the power supply demand situation.
Speaker Change #167: Across the Zambia, and you look at sort of excess power from countries and sort of competing industrial demand outlook.
Speaker Change #168: And you think about this 193 megawatts that are that is currently sourced.
Speaker Change #168: Some of that address the increased power draw potentially required at S. Three and I'm just kind of wondering trying to reconcile the 40%.
Speaker Change #169: Requirement versus the 52% actually sourced and then maybe my second question is what is the step up in Max power requirements. Once S. III comes on them I apologize I couldnt find it at the concentric technical report.
Speaker Change #170: Yeah. Thanks Kristen.
Speaker Change #175: Let me.
Rudi Badenhorst: Yeah. Rudi, if you want to take that question, Yeah, I'll just jump in on the first question, Ralph, or the first portion of your question, um, the reason for us to commit to a slightly larger proportion of imported power right now than Zesco is asking for is that we are in a position to secure it. Power from third-party providers, a fixed and firm power so that we are 100% certain of what power we're going to get hour by hour with the Legislative Powering Boards that Desco is doing.
Speaker Change #171: Yeah, Great question. Thank you.
Speaker Change #172: Yeah, I'll just jump in on the first question first.
Speaker Change #173: First what portion of your question.
Speaker Change #171:
Speaker Change #171: The reason for us to commit to slack the large proportion of important dollar right now than <unk>, because he's asking for is because we are in a position to secure.
Speaker Change #171:
Speaker Change #171: <unk> from third party providers.
Speaker Change #177: Fixed and firm power, so that would be a 100% certain of what are we going to get hour by hour.
Speaker Change #177: The emergency power imports.
Speaker Change #178: Cisco is doing is not orphan power at the moment.
Speaker Change #178: Because it provides.
Speaker Change #178: This and less uncertainty.
Speaker Change #178: Either from.
Rudi Badenhorst: It's not all firm power at the moment, which provides less and less uncertainty. From August, which is next month, a few weeks from now, there will be an additional 800 megawatts of power available coming out of South Africa with the new turbines that have been brought in line and synchronized on the South African grid from Kisili. That power is available, or some of that power is available for the Southern African Power Pool, either directly to be procured by ourselves on imports or through ZESCO.
Speaker Change #178: From August which is next month, a few weeks from now.
Speaker Change #179: As an additional 800 megawatts of power available coming out of South Africa with a new turbines that have been brought in line and synchronized in the southern if he can get it from Sealy.
Speaker Change #179: And that power is available or some of that power is available.
Speaker Change #179: For the southern African powerful either directly.
Speaker Change #179: To be procured by ourselves on imports or throughs through Cisco and that powers, it's a substantial substantially cheaper than than the existing emergency power.
Rudi Badenhorst: And that power is substantially cheaper than the existing emergency power imports that are taking place. Similarly, ZESCO has entered into an agreement with Mozambique for Additional Power Imports on a new gas-fired power station that will become available from January.
Speaker Change #179: Imports that are taking place.
Speaker Change #179: Italy Cisco's entered into an agreement with.
Speaker Change #179: Mozambique.
Speaker Change #179: For additional poly imports.
Speaker Change #179: On the new gas fired power station that becomes available from Germany.
Rudi Badenhorst: It's an additional 250 megawatts from that area. And then we have also gone into various agreements that Tristan highlighted earlier, including an additional 150 megawatts that we might need for S3 going forward. So we're very comfortable that... The commissioning of Phase 3, will not be dependent on power issues.
Speaker Change #179: 250 megawatts from that area.
Speaker Change #179: And then we have also gone into various agreements that system has highlighted India, including an additional 150 megawatts that we might need for phase three going forward. So we're very comfortable that the commissioning of phase III.
Speaker Change #179: Well not to.
Speaker Change #180: Be dependent on Palliations.
Speaker Change #181: Great. Thank you that's the answer I was looking for thank you.
Rudi Badenhorst: Thank you. That's the answer I was looking for. The next question comes from Dalton Baretto from Kennecar Genuity. Please continue your last question. Thanks, guys. I'm sorry; I'm not sure what happened there. Tristan, just a question, a point of clarification, if you will, I think you said the ICC arbitration is scheduled for a final hearing just over a year from now, in September 25. And I'm just wondering, will that result in a binding decision?
Speaker Change #181: The next question comes from Gautam.
Speaker Change #182: You cannot.
Gautam Khanna: Thank you my last question.
Gautam Khanna: Thanks, guys I'm, sorry, I'm not sure what happened there interest and just a question a point of clarification. If you will I think you said the ICC arbitration is scheduled for a final hearing just over a year from now in September 25, and I'm. Just wondering will that result in a binding decision.
Dalton Baretto: Yeah, hi, thanks for the follow-up. Yeah, it's our understanding that this is the final hearing on the ICC arbitration. This concludes the question and answer session. I would like to turn the conference back over to Tristan Pascall for any closing remarks. Thanks, Operator. Thanks, everyone. I want to thank you all for your interest and time today, and I wish everyone an enjoyable summer in the Northern Hemisphere. Thank you. This concludes today's conference call.
Speaker Change #183: Yeah, Hi, thanks for the follow up yes, thats here understanding that that's the final hearing on the ICC arbitration.
Speaker Change #183: This concludes the question and answer session I would like to turn the conference back over to Pascal for any closing remarks.
Speaker Change #183: Thanks, operator.
Pascal: Thanks, everyone I want to thank you all for your interest and time today and I wish everyone an enjoyable summer in the northern hemisphere. Thank you.
Pascal: Yeah.
Speaker Change #185: This concludes today's conference call you may disconnect your lines.
Dalton Baretto: You may disconnect your lines. Thank you for participating and have a pleasant day. ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ?? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?? ?? ?? ?? ?? ?? ?? ?? ??
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Speaker Change #186: Have a pleasant.
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Speaker Change #186: Yeah.
Speaker Change #186: [music].
Speaker Change #186: [music].
Speaker Change #186: Yes.
Speaker Change #186: Yeah.
Speaker Change #186: [music].
Speaker Change #186: Yeah.
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