Q2 2024 Metals Acquisition Ltd Earnings Call

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Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the Meadows Acquisition Limited Half-Ear Accounts Conference Call and Webcast.

Speaker Change: 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.

Speaker Change: To join the question queue, you may press star, then one on your telephone keypad. She do 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 make MacMolan, CEO of Metal's Acquisitions Limited. Please go ahead.

Mike MacMolan: Thank you very much and thank you everyone for joining us in particular in Australia on a very busy results day.

Mike MacMolan: We'll try not to keep everyone for too long.

Mike MacMolan: So myself and Mournaia, if I will be doing the talking on this conference call, so Mournaia, you can go forward to the slide as if everyone can read the disclaimer at the Euleria.

Mournaia: So, you know, look everyone knows where, you know, we've got an asset in West New South Wales, super high grade, you know.

Mournaia: even as a back 1.1 billion US today, based on where the share price is.

Mournaia: And it's a very well established mind. We don't really need to sort of go through the detail of the operations too much today. But, you know, we think we've got one of the better copper assets around as you'll see from the financial results I think they speak for themselves. So, we can go to the next slide.

Speaker Change: Good morning

Speaker Change: Again, from a year ago, what did we say we do this, is what have we done, we've sort of picked all the boxes.

Speaker Change: I just checked our shares from a year ago or up precisely 0.09% so I'm not so sure that actually taking the boxes as a matter of us, but we have delivered on everything we said we would do in the last year and a bit. Next law of thanks.

Speaker Change: You know, we've put out our formal guidance into the marketplace. Now I would say to people that guidance is based on the information we had at hand actually from a year ago, the end of August last year.

Speaker Change: And as you will see from our production results and some of the things we're doing, we're getting increasingly more confident in our ability to meet and potentially go a little bit beyond that. So you can see there over the next.

Speaker Change: A couple of years we sort of ended up, you know, above the 50,000-toned copper mark. Again, we have only been able to base that on reserves. We have now inferred material in there. We have cut yourself apart.

Speaker Change: which is predominantly inferred, we are drilling that out right now. We do see that it's having very good potential to add a little bit more, and I think some of the productivity improvements.

Speaker Change: and mind design changes that we've been doing with some of these double lip stopes that have allowed the site to.

Speaker Change: Pull a bit more high-grade copper forward, you know, we are feeling increasingly more confident that we may be able to potentially do a little bit better than that over that medium term.

Speaker Change: I'll see you next slide, please.

Speaker Change: Again, from the highlights more and I will go to all these in great detail, but a strong corner for Q2. So again, we're sitting around about midpoint of guidance.

Speaker Change: up to the heart, obviously Q2 was stronger than Q1, so sequentially we're building through the year, strong cash balance.

Speaker Change: You know, we've increased the mind life several long, you know, mind life now, which I guess was one of the things that we said we'd do at the start of the sexic sides.

Speaker Change: And as I said, God ensues gradually, kicking up over the years as we sort of.

Speaker Change: Catch up on some of the backlog of development that we inherited as the grilling is showing towards the circuit back into this deck.

Speaker Change: We are seeing significantly more company units as the mine goes deeper, so we're expanding the Albany. So that's all looking pretty good for our future production. So next slide please.

Speaker Change: Safety, look, this is a working progress. We have seen the trip roll down a bit.

Speaker Change: Thanks for watching, see you in the next one.

Speaker Change: And we're very big part of the community. We operated, you know, we are the last to deploy.

Speaker Change: We're about 80% less than usual now. We provide a lot of funding into the town, both through donations, but also just our economic activity there.

Speaker Change: And I think that's a key thing for us out in Toba where our main approval authority is the Koba Shai Council that the people in charge of approving projects for us.

Speaker Change: I'm the community that we interact with and impact with. So we think that's a great relationship and it does make CSI a little bit unique in much of the strata of your excellent.

Speaker Change: So if we can keep going to the next slide, they're more.

Morning: I'm going to hand over the morning for all the financial numbers now. There's a lot of numbers here but I think the underlying story is very strong as you will hopefully pick up as you go through this over to you morning.

Morning: Alright, thanks, Mick, good evening, morning, everyone. I'll take you through there at the next couple of slides, size 9 to 15, which covers the...

Morning: [inaudible]

Morning: Starting on site 9, we have obviously the financial results over the weekday. Also a quick note that we have reported new installers, so all amounts are new installers in this otherwise shown.

Nick: All the great work that Nick has spoken about in terms of the operational side for the half and meeting our goals are reflected in the half-year results. We've resulted in some recording school for the mind on the Mac ownership.

Nick: We are comparing the first half of 2004 to the preceding half of 2003.

Speaker Change: And you will know the online items I consider it a bit in comparison.

Speaker Change: Including the net revenue of 182 million dollars US or 172 million Aussie for the six months. This is up to some 29 percent.

Speaker Change: compared to the preceding half.

Speaker Change: off the back of obviously it's quite the increasing corporate prices and sales, one in school to half.

Speaker Change: I should note that we didn't recognise the revenue and associated costs of sales.

Speaker Change: for the concentrate pre-cells to clean cool. I support it that the core leaves and as we did.

Speaker Change: Meet the requirements on the April 15th.

Speaker Change: So this has resulted in failed volumes increasing by about 5,000 tons and an additional revenue of 41 million dollars.

Speaker Change: for the half

Speaker Change: The increase revenue together with the reduced costs of sales and app and and selling expenses contributed to our very healthy underlying here at the of 91 million US dollars or 136 million Aussie for the half.

Speaker Change: More importantly, our underlying EVA-DAR margin increased significantly to 50%.

Speaker Change: For the half, mainly driven by a 20% increase in sales volumes.

Speaker Change: We accept more of our overall

Speaker Change: operating fixed costs and lower costs of sales as well. And as I mentioned, there was a 3% increase in the average real-life copper price for the six months compared to the preceding six months.

Speaker Change: Our statutory net loss of $95 million for the half was heavily impacted by an on-test.

Speaker Change: Change and see a value of financial instruments, so $19 million.

Speaker Change: which was mainly grown by the increase in the copper price compared to the preceding preceding path.

Speaker Change: It should be noted that the volatility around the fair value adjustments will be somewhat reduced, going forward with the redemption of the private and public warrants weeks accounted for about 36 percent of that hundred and nine million dollar fair value adjustments.

Speaker Change: which was re-bounded just before the redemption of those warrants.

Speaker Change: So I roll a record revenue and the line year with the staff for the asset on the map ownership with a very healthy and the line year with the margin of 50%.

Speaker Change: Moving on to slide 10. We provide a breakdown in the transfer staff-free net loss for the period that only the impact of the non-cash elements on the earnings.

Speaker Change: with statutory net income from operations of 46 million dollars shown there.

Speaker Change: The set-free earnings law is in fact by an eight-fiance in cost of $32 million. With interest expense of $21 million in a realised Hase Shlars off of $5 million for the half. With the remainder made up of non-recaring interest cost on the green court of the third settlement, payments and work in capital facility.

Speaker Change: I started a process house and we reported an underlying corporate cost of about 10 million dollars for the half.

Speaker Change: I'm Slides 11

Speaker Change: Here we show the reconciliation from the next set of earnings to the record, unlying EBITDA of $19 million.

Speaker Change: U.S. or 136 million Aussies as I said before. If we move from left to right on the graph, we start with the step-in-net loss and then adjust for tax.

Speaker Change: It finance expenses, that change of their value and financial instruments. Depreciation of authorization and then underlying adjustments relating to one of items running to the ASX IPO completed 30 in the year.

Speaker Change: In relation to the non-catch fair value adjustments of $99 million to main underlying drive a day.

Speaker Change: As I said at the Fair Value, change in the driven by a copper price. But also the increase in the reserves and the increase in life of mine as well, which would impact at that.

Speaker Change: And then the impacts of their value adjustments on their ages that remain outstanding included. As I know earlier, the big value of their value volatility is now being removed with the redemption of the private and public ones as well.

Speaker Change: On slide 12, our cash and cash problems have materially increased.

Speaker Change: by 174 percent from 32 million dollars at the previous data state.

Speaker Change: 31 December, to more than $88 million as a 30-June.

Speaker Change: 24

Speaker Change: From the specific and cash generation bar price, since we ended up with some Sydney million dollars of cash for more operations for the half.

Speaker Change: We'll see if a much near boost through the A6 IPO subsequent to 2023 year end, which raised $235 million, or the equivalent of $92 million after U.S. after cost.

Speaker Change: The rising of the equity provided us with some greater flexibility and a strong advantage sheet. And if that is the previous call, we are focused.

Speaker Change: on the certification of the data sheet and used utilizing the great cash flow generation from the operation, not only to grow production materially but for these interspirying capabilities at the same time.

Speaker Change: So since the beginning of the year, you can see they on the graph that we are certainly done just that in terms of we've repaid the different considerations of the game core, which is some $80 million.

Speaker Change: including the work capital of the S-15. We also are a capital of all of the S-15 of 25 million dollars and then some principal repayments beyond the senior debt of 16 million.

Speaker Change: for the half. We also pay significant one-off live entities in terms in the form of Stanford, which amounted to $23 million for the half as well.

Speaker Change: And then from a growth agenda perspective, we have a community exploration program. So we show the $3 million spend on exploration.

Speaker Change: And...

Speaker Change: And I also commend the development of the Vent Project, which will further support the expansion of the CSA copper mine and drive that 25% upless than production to 2026 based on the midpoint of guidance.

Speaker Change: In a quarter of a quarter of an idea, I'm going to install a cash and a third of the liquidity of around.

Speaker Change: 46 million dollars, which includes the Antron.

Speaker Change: 25 million dollars of voting facility and we also have some 21 million dollars of unsolved concentrate.

Speaker Change: Ready for shipment that 30 June 2024. So overall, we are on a very healthy cash flow position and continue to build our strong balance sheet.

Speaker Change: Moving on to start 13

Speaker Change: So here we show the interest bearing debt, waterfall, so they were stradowing this significant delivering that we have undertaken since June last year. And as you can see, we would pay some $160 million US interest bearing liabilities.

Speaker Change: I'll just starting out this.

Speaker Change: around $430 million of interest-perying dates with the acquisition, increasing to 31 December, and then a significant reduction of 29% to be around $320 million at 30 June 2024.

Speaker Change: Importantly with the significant cash generation for the half, we have already used our net debt position to turn $32 million US.

Speaker Change: We are looking for further, we are looking further into obviously some sort of certification and strengthening our balance sheet with our strong fleet cash flow and increasing production.

Speaker Change: I'm slide 14 as a result of a drive to reduce interest pain and I believe that you will note on the slide there that we have produced.

Speaker Change: Our net hearing ratio over the last six months by some 25 percent.

Speaker Change: from 41% to 31% as a 32-24.

Speaker Change: Furthermore, we provide an update on a dead profile day at the bottom of the slide day and you will note that more than 80% of the shared law repayments of the S&Ds have been made in 26 and 28.

Speaker Change: We're expecting to see that as announced on slide 15, in June we completed a reduction of some 15 million private and public ones.

Speaker Change: We're almost 100% redeemed through the cash-less redemption mechanism available to the company and we issued that 4.7 million saves through a dehumed some 15 million warrants. Our role this means that we have 74 million open-ish saves.

Speaker Change: On issue with still some financing warms outstanding and fully diluted securities now around that semi-acmillion shades

Speaker Change: Also noted, just confirming the net debt position in the $231 million, taking into account that strong build, strong cash build and repayment update over the half.

Operator: Thank you for sending by. This is the conference operator.

Operator: Welcome to the Metals Acquisition Limited half-year accounts conference call and webcast. 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 Q, 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.

Speaker Change: And with that, make a head of that for you.

Speaker Change: Yeah, thanks, Maureen. Just a couple of points. I'll also touch on there. So, if we look at the company from when we closed on buying them on for a month ago, we had about $1,450 million of interest bearing liabilities or net debt actually.

Michael McMullen: I would now like to turn the conference over to McMullen, CEO of Metals Acquisition Limited. Please go ahead. Thank you very much and thank you everyone for joining us in particular in Australia on a very busy results day.

Speaker Change: We're sort of hard back in that 14-month period. So, gearing, not just in the heart, but if we look at since we bought this mine, gearing has materially reduced in this business.

Speaker Change: We have a 50% EBITDA margin. I haven't searched for all of our peers, but I think we're probably at the frame of the pack there in terms of EBITDA margin from our operation.

Michael McMullen: We'll try not to keep everyone for too long. Myself and Mornay, our CFO, will be doing the talking on this conference call. Mornay, if you can go forward to the slide if everyone can read the disclaimer at your leisure. Everyone knows we've got an asset in Western New South Wales, super high-grade EV is about 1.1 billion US today, based on where the share price sits. It's a very well-established mind. We don't really need to go through the details of the operations too much today.

Speaker Change: I think the other point that's on one of those slides there is that it's all well and good to have in you, but if you spend it all in CapEx, it's not much good to share holders. We convert about 75% of our EVA data for cash flow at the Ops.

Speaker Change: Again, I haven't looked at all of our peers, but I'm pretty sure that's one of the, one of the better in the class.

Speaker Change: So, on a little bit perplexed with where our share price is today, as I said on 0.09% up in the last 12 months, when we've actually completely not fully delivered, but materially delivered the business.

Michael McMullen: But we think we've got one of the better copper assets around as you'll see from the financial results. I think that speaks for themselves. So we can go to the next slide there, Mornay. Again, from a year ago, what did we say we do versus what we've done? We've sort of ticked all the boxes. I just checked our shares from a year ago are up precisely 0.09%.

Speaker Change: I'm also going very well, 50% of the E-bidarmage, and I'm sure a few of you have got your count related already and working out what they are traveling E-bidarmage and isn't, I'm pretty sure you'll fall into the getting it's pretty low for the peagre. This is E-quality.

Michael McMullen: Not so sure that actually checking the boxes is not mattress, but we have delivered on everything we said we would do in the last year and a bit. Next slide, thanks. We've put out our formal guidance into the marketplace. Now I would say to people that guidance is based on the information we had at hand actually from a year ago, the end of August last year. And as you will see from our production results and some of the things we're doing, we're getting increasingly more confident in our ability to meet and potentially go a little bit beyond that.

Speaker Change: Long live super high grade, high margin asset, that's in a fantastic jurisdiction for permitting and operating. And we're getting a little bit frustrated with where the share price sits and so.

Speaker Change: You know, from a strategy point of view, I think, you know, clearly our number one goal is delivering any besting in the mind to if we can invest in the mind and grow value for shareholders by doing that. There's a very strong internal bit for capital right now. So, you know, I think the team at site would say, you know, you know.

Michael McMullen: So you can see there over the next couple of years we sort of end up above the 50,000 ton of copper mark. Again, we have only been able to base that on reserves. We have no inferred material in there. We have cute yourself up, which is predominantly inferred. We are drilling that out right now. We do see that as having very good potential to add a little bit more. And I think some of the productivity improvements and mind design changes that we've been doing with some of these double lift stopes that have allowed the site to pull a bit more high grade copper forward.

Speaker Change: compared to previous times we are investing in that mind with the view to getting a return out of a stronger turn.

Speaker Change: You know, what do we do? We pay down the debt, I think, we continue to.

Speaker Change: Make the business as strong as we possibly can't build as much cash in the business as we can.

Speaker Change: And look at some point, you know, well, I went into the night and bought three or four hundred thousand dollars with a stock a few weeks ago. But at some point, if we knew the business is being a really strong business, it's not the value.

Speaker Change: So I guess at some point one of the things we're buying is how to stop that.

Michael McMullen: We are feeling increasingly more confident that we may be able to potentially do a little bit better than that over that meeting terms. So, next slide there, please, Morne. Again, from the highlights, Morne, I will go to all these in great detail, but a strong corner for Q2. So, you know, again, we're sitting around about midpoint of guidance up to the heart. Obviously, Q2 was stronger than Q1. So, sequentially, we're building us through the year. Strong cash balance. You know, we've increased the mind life. So, very long, you know, mind life now.

Speaker Change: So I think we've done the team has done a great job getting this business sorted in the time frame.

Speaker Change: The other thing in that period, in that 12-14 months, is a copper price that's gone up 40 cents a pound.

Speaker Change: So, wait.

Speaker Change: We're a little bit perplexed with where we're trading, but I guess all I can do right now is just

Speaker Change: From the business as best as we can and sort that balance sheet out as much as we can and just make the story as simple as possible for people.

Michael McMullen: Which I guess was one of the things that we said we do at the start of this exercise. And as I said, guidance is gradually ticking up over the years as we sort of catch up on some of the backlog of development that we inherited as the grilling is showing towards the back end of this deck. We are seeing significantly more copper units as the mind goes deeper. So, we're expanding the all body.

Speaker Change: So, you know, following my view on life on that, we might just roll on, so again, we've put three year guidance out as I said earlier. This is really based on information from literally a year ago. I do think we're feeling increasingly comfortable and confident. I suppose it's the best way I could put it.

Speaker Change: I'm...

Speaker Change: We have been asked given the performance of the last quarter and sort of where we're tracking now, whether we'll change guidance for this year. I think we'll stick with where we are. These new double-ish stokes, we're on the second one since we've been working. But that's really a probably a story for when we review our guidance for next year as to, you know, what we'll do with that.

Michael McMullen: So, that's all looking pretty good for our future production. So, next slide, please. Safety, look, this is a work in progress. We have seen the tripper roll down a bit since the June quarter. And we're a very big part of the community. We operate in, you know, we are the largest employer. We're about 80% residential now. We provide a lot of funding into the town, both through donations, but also just our economic activity there.

Speaker Change: I would say, May and June really shows what this mine can do. We did 4,000 times the copper in May. We did 5,400 times the copper in June when this mine.

Speaker Change: is well run and things all come together. That's the sort of thing this mind can do so clearly.

Michael McMullen: And I think that's a key thing for us out in cova where our main approval authority is the cova shy council that, you know, the people in charge of approving projects for us are the community that we interact with an impact with. So, we think that's a great relationship. And it does make CSA a little bit unique in, well, much of Australia actually.

June: June was an exceptional man, but I think repeatable at times.

June: Really well above the runway of what we're selling people for guidance for this year.

June: We had C1 costs around about 1.6, the 1.5.1.6 people are those 2 months. So again, high fixed cost operation if we get the production out, that's what you're going to get.

Michael McMullen: So, if we can keep going to the next slide, their morning.

Morne Engelbrecht: I'm going to hand over to Morninga for all the financial numbers now. There's a lot of numbers here, but I think the underlying story is very strong as you will hopefully pick up as we go through this over to you, Morninga. All right. Thanks, Mick. Good evening, Morninga.

Speaker Change: Again, we announced some drill results after the cause of the cause, I'll talk roughly what does that all mean on this slide.

Speaker Change: This all body has been going.

Speaker Change: Well, really for 150 years, but in modern form, that since 1967

Morne Engelbrecht: I will take you through the next couple of slides, size 9 to 15, which covers the elements of behalf of financial results for 2024. And specifically, taking note that the presentations should be read in conjunction with the Phoenix 4D and the order to review first half financial statements, which were released in various markets. Starting on 5.9, we have obviously the financial results over view there. Also, a quick note that we've reported in US dollars, so all amounts are in US dollars and there's otherwise shown.

Speaker Change: We've sort of doubled the reserve life since we've had it again on data from a year ago. The drilling that we're doing now in sort of tedious north around where we're mining has extended the strife linked to the all-body 20-25%.

Speaker Change: What does that mean? That means we're getting more tons per vertical meter and that means we need to do less development to get our copper tons out.

Speaker Change: Or conversely, once we have this ventilation in place, we have a lot more tonnes of our animal, and we have the Vendevar animal.

Speaker Change: to be all the way to produce more. So...

Speaker Change: We're very excited about what this all body throws up, you know, we continue to announce drill results of, you know, 20 meters, a 10% class or 15, you know, 20 meters, a 15%.

Morne Engelbrecht: All the great work that Mick has spoken about in terms of the operational side for the half and meeting our goals are reflected in the half-year results, which resulted in some record earnings for the mine under the back ownership. We are comparing the first half of 24 to the preceding half of 23, and you will note all lines items are considered better in comparison, including the net revenue of $182 million US dollars, so the 272 million Aussie for the six months.

Speaker Change: The market seems to you all and because it sort of become more or less just to stand and see as they build us up, I would suggest if we were a standalone exploration company and now seeing those things with zero infrastructure to stop and probably double on the back of that, again, pretty frustrating that.

Speaker Change: People sort of y'all and when we put those kinds of drill results out when it truly is an amazing eye. And those kinds of results underpin our increasing confidence about being able to produce more out of this business and what perhaps we thought we could a year ago.

Morne Engelbrecht: This is up some 29%, 29% compared to the preceding half of the back of obviously slightly increasing corporate prices and sales volumes for the half. I should note the year that we did recognise the revenue and associated cost of sales for the concentrate presale to clinical as reported that the quarterly and actually that meet the requirements on the EPRS 15 revenue standards. This has resulted in sales volumes increasing by about 5,000 tonnes and an additional revenue of $41 million, for the Half.

Speaker Change: So with that, we might just go to the closing slide again.

Speaker Change: Very strong, strong 50% EB-Darmard and 70% of that's converted to cash flow. Material day, leveraging it at the business over the last half and we'll talk about months as well.

Speaker Change: So, operationally, we think things are going fantastically, are always more to do. But yeah, I think it's a great asset, and I think compared to our peer group, I think we have many attributes that are.

Morne Engelbrecht: The increase revenue together with the reduced cost of sales and atpan and selling expenses contributed to our very healthy underlying EBITDA of $91 million US dollars or $136 million Aussie for the half. More importantly, our underlying EBITDA margin increased significantly to 50 per cent for the half mainly driven by a 22 per cent increase in sales volumes which absorbed more of our overall operating fixed costs and lower costs of sales as well.

Chair Holders: You know, towards the top end of the peer group, all by our share cost. So with that, I'm going to hand over to Chair Holders. I'm happy to take questions.

Speaker Change: Thank you. With a love again, the question and answer session, the joint a question, you, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request.

Speaker Change: If you are using a speaker phone, please pick up your hands at before pressing any keys. To withdraw your question, please press star, then too.

Speaker Change: For a question comes from Daniel Morgan with Baron Joey, please go ahead.

Morne Engelbrecht: And as I mentioned there was a 3 per cent increase in the average real-life copper price for the six months compared to the preceding six months. Our statutory net loss of $95 million for the half was heavily impacted by non-cast change and fair value of financial instruments of $109 million which was mainly driven by the increase in the copper price compared to the preceding preceding half. It should be noted that the volatility around the fair value adjustments will be somewhat reduced going forward with the redemption of the private and public warrants which accounted for about 36 per cent of that $109 million fair value adjustments which was reevalued just before the redemption of those warrants. So overall record revenue and the lying EBITDA for the asset on the MAC ownership with a very healthy underlying EBITDA margin of 50 per cent.

Speaker Change: Hi, I'm Nick and Tim. So, my question just relates to can you give us a little bit of a sense of how the operations have performed, post the end of the quarter, please.

Speaker Change: Yeah, look again, we've sort of left our guidance where it is, so, you know, midpoint of the guidance is about 40 and a half thousand tons, which will come to be with that.

Speaker Change: I did say on the quarterly call, you know, just from in for scheduling a verb sort of high grades to oats.

Speaker Change: 2-3 will be slightly weaker than 2-2, like I'm, you know, 400 tonnes of copper and quite frankly, that's exactly what we can do. And it's all looks like this, but it's got this wrong. So, overall, you know, no real surprises, I think is the short answer.

Speaker Change: We will, so the one thing that we will see a bit more of now is we've done the geotech drilling out for that vent project and so development is convinced out there. So we will start seeing development leaders kick up as we get into that project and we are.

Morne Engelbrecht: Moving on to slide 10 we provide a breakdown then of the statutory net loss for the period only the impact of the non-cast elements on the earnings with statutory net income from operations of $46 million shown there. The statutory earnings was in fact by the financing cost of $32 million with interest expense of $21 million and they realised he sliced off of $5 million for the half with the remainder made up of non-recurring interest cost on the green quarter third settlement payments and work in capital facility. I should also point out that as part of the cost of sales number we reported an underlying corporate cost of about $10 million for the half.

Speaker Change: Moving ahead with that pretty quickly, that's probably the only sort of real change I think you'll see, no other surprise, I think that's ours.

Speaker Change: I am latest plans to potentially exploit QTS south up when we hear more on that potential project.

Speaker Change: Just quite soon, I think, we've sort of got the final thing in contractors. Look, I will make a decision in the next week or so, but I suspect it.

Morne Engelbrecht: Slide 11. Here we show the reconciliation from the net statutory earnings to the record underlying EBITDA $19 million US or $136 million as I said before. If we move from left to right on the graph we start with the statutory net loss and then adjust for tax net finance expenses net change of fair value in financial instruments. Depreciation of authorization and then underlying adjustments relating to one of items relating to the ASX IPO completed early in the year.

Speaker Change: There's a better than an even chance that perhaps we...

Speaker Change: We certainly have the people in the equipment to do it ourselves and I think the team that's side are getting increasingly more confident as they sort the bottom of them I now in their ability to execute that, but fairly soon we are doing a dual program to provide that to me as an indicator.

Speaker Change: This is 25 holes going out of that. We'd be about a half two thirds of the way through that. That will allow me to call it a reserve, which will allow me to then add it to God. It's not in our guidance right now.

Morne Engelbrecht: In relation to the non-cast fair value adjustments of $9 million to main underlying driver there as I said at the fair value change in the driven by the corporate price but also the increase in the reserves and therefore the increase in life of mine as well which would impact at that and then the impacts of fair value adjustments on the hedges that remain outstanding included there. As I noted earlier the big value of fair value volatility has now been removed with the redemption of the private and public ones as well.

Speaker Change: Ok, thank you for your respect, Bismillah.

Speaker Change: The next question, some Eric Linnell, with Coach Abank. Please go ahead.

Eric Linnell: Great, thanks a lot, Mick and team, appreciating my question. I had a couple of quick financial questions, but maybe just on the vent, can you remind us what the spend is there and kind of what the major deliverables we should expect throughout the end of the year?

Eric Linnell: [inaudible]

Morne Engelbrecht: On slide 12, our cash and cash problems have matured increased by 174% from $32 million at the previous balance date of 31 December to more than $88 million as of 30 June 24. From the significant cash generation by operations we ended up with some $70 million of free cash flow from operations for the half. We received a much near boost through the ASIC's IPO subsequent to 2023 year end which raised $325 million of the equivalent of $192 million US after cost.

Speaker Change: So, there's a slide in the quarterly deck that we put out that's got the detail on it, but it's around about 42 million Australian dollars, so not US, it's Aussie dollars.

Speaker Change: And that'll be sort of we start about drilling really about six months ago for five months ago And that'll go through to about mid-2026

Speaker Change: Ah, no.

Speaker Change: And more and I don't know how much we've spent on it, then the $22 million or the US that we've spent on it so far.

Speaker Change: And it's pretty good.

Speaker Change: Do you have the number of fans, but it's in that order, I think.

Morne Engelbrecht: The raising of the equity provided us with some greater flexibility and a stronger balance sheet and it started in a previous call where we are focused on the simplification of the balance sheet and utilizing the great cash flow generation from the operation not only to grow production materially but release our interest bearing liabilities at the same time. So since the beginning of the year, you can see there on the graph that we have certainly done just that in terms of we've repaid the deferred consideration to Glencore which is some $80 million including the work gap of 70 or 15.

Speaker Change: Yadva Priy, Klimaria, U.S.

Speaker Change: So the deliverables are the sort of components of that project are the geotech drilling to make sure the ground's good out there, which is sort of done.

Speaker Change: Then there's the development leaders to get out there, which, you know, we'd be on a halfway on of the first drive out there, we've got to do it across three or four levels. So, and then raise boring.

Speaker Change: We've just actually just closed the 10-drill for the race boring last Friday. On the top of my head I would have to think we'll be out there race boring. Early next year maybe somewhere in that order.

Morne Engelbrecht: We also repaid for the volatility of 25 million dollars and then some principal repayments down the senior debt of 16 million for the half. We also paid significant one-off liabilities in terms of the form of standard duty which amounted to $23 million for the half as well. And then from a growth agenda perspective we have commenced the exploration program so we showed that $3 million spent on exploration and I also commenced development after the end project which will further support the expansion of the CSA copper mine and drive that 25% uplift and production to 2026 based on the midpoint of guidance.

Speaker Change: [inaudible]

Speaker Change: Okay, great. Thank you. Appreciate that. And just on the concentrate sales. So, obviously, there was a bit delay because of the rail issues. I assume that's all been sorted out now and any views on Q3 in terms of time and shipments or what we can expect there?

Speaker Change: I think I don't have it.

Speaker Change: So let me take a look at that. Well I've been talking about the timing and shipments, but we still do have a favor to concentrate around.

Speaker Change: We produced a lot of content right. It's a good problem that, I guess. But more than I might, if you feel good about it.

Morne Engelbrecht: In the quarter of a more than $88 million of cash and further liquidity of around $46 million which includes the undrawn 25 million dollars of evolving facility and we also had some 21 million dollars of unsolved concentrate ready for shipment at 30 June 2024. So overall we are in a very healthy cash flow position and continue to build on our strong balance sheet. Moving on to flight 13 so here we showed the intersparing debt waterfall so demonstrating this significant delivery that we have undertaken since June last year and as you can see we would pay some $160 million US in intersparing liabilities after starting out with around $430 million of intersparing debt with the acquisition increasing to 31 December and then a significant reduction of 29% to be at around $320 million at 30 June 2024.

Speaker Change: Yeah, I don't think in some of the timing of the shipments we spoke about that, the Corly Coal.

Speaker Change: That has started to be sorted out, I think, in the call of that indicator, that will take some time to clear. But the confident by the end of September, we'll have most of that sort of back in time in terms of the sequence.

Speaker Change: with the trains, the shipping and obviously production as well. Maybe a little bit into October still in terms of clearing that sort of backlog. But like I said, we've got a lot of constraints on site, which is a good problem to have.

Speaker Change: At the moment, unless we indicate that we are able to recognize that review any event from those from those pre-cells. So overall we are still getting the cash in the door from that perspective.

Speaker Change: Okay, appreciate that. Thank you. And just a quick one on taxes. Any view on what we shouldn't model or think of a taxes for the rest of the year?

Speaker Change: All the way here, I mean.

Morne Engelbrecht: Importantly with the significant cash generation for the half we have reduced our net debt position to turn $32 million US. We are looking further into obviously some big simplification and strengthening our balance sheet with our strong feedback cash flow and increasing production. Slide 14, as a result of our drive to reduce interest bearing liabilities, you will note on the slide there that we have produced net gearing ratio over the last six months by some 25% from 41% to 31% as of 30 June 24.

Speaker Change: If we've recognized an expense day of about 7 million for the half, so I think.

Speaker Change: You know, full for the rest of the half.

Speaker Change: We do have a tech shield with the acquisition

Speaker Change: Of the mind, that tax shield, obviously, shields you from some of the text liabilities on a yearly basis. Not really sure, in terms of the quantum of that and how far that will extend them and of step will depend on the copper parts.

Speaker Change: As well, but we might tip into a slight tax payment by the end of this year, but again.

Speaker Change: That's if you roll forward sort of the last quarter going forward. So on balance in terms of where the cockpit passes now, open and expect this to be in a tax-paying position until the end of this year.

Morne Engelbrecht: Furthermore, we provide an update profile there at the bottom of the slide there, and you will note that more than 80% of the schedule repayments of the outstanding debt is to be made in 26 and 28 respectively.

Speaker Change: Okay, that sounds fantastic. I appreciate that all the hard back in the Q. Thanks.

Morne Engelbrecht: As announced on slide 15, in June, we completed a redemption of some 15 million private and public warrants with almost 100% redeemed through the cash flow's redemption mechanism available to the company, and we issued about 4.7 million shares to redeem some 15 million warrants overall. This means that we have 74 million ordinary shares on issue with still some financing warrants outstanding, and our fully diluted securities now around that 78 million shares. Also noted, just confirming the net debt position there up to $131 million, taking into account that strong cash build and repayment of debt over the half.

Speaker Change: Once again, if you have a question, please restar, then one. The next question comes from Paul Hissy with Moales. Please go ahead.

Paul Hissy: Thanks. Yeah, just wanted to expand a little bit on the forward sales, I'm just trying to understand that I guess the working capital moves and whether.

Paul Hissy: I mean, you know, clearly that the sales number in your quarterly is not the sales number that's been reflected in the P&L. So, you know, how much of that stockpile has been forward, how forward and how much of that is kind of a one-time deal. I'm just trying to understand.

Paul Hissy: I guess on a go forward basis, the relationship between the sales you reported you quarterly versus the sales that will manifest in the revenue line of your financials.

Michael McMullen: And with that, Nick, hand it back to you. Yeah, thanks, Maureen, and look just a couple of points. I'll also touch on there. So if we look at the company from when we closed on buying the mine 14 months ago, we had about $1,450 million in US dollars of interest bearing liabilities or net debt, actually, we've sort of halved that in that 14 months period. So gearing, not just in the half, but if we look at since we bought this mine, gearing has materially reduced in its business.

Speaker Change: Yeah, I think, obviously with the anomaly at the hearing that sort of, if you know, had a material difference between the caption and sales.

Speaker Change: To start with three replicas of additional cells, so that's sort of both back and along with production, matching up with the cells one in the…

Speaker Change: Going forward as I just said, by inner September, probably middle of October, we'll probably work back through that, that's that little offensive of the content right. And be on even a few and some sort of...

Michael McMullen: We have a 50% EBITDA margin. I haven't searched through all of our peers, but I think we're probably at the front of the pack there in terms of EBITDA margin from our operation. And look, I think the other point that's on one of those slides there is that it's all well and good to have in EBITDA, but if you spend it all in CapEx, it's not much good to shareholders. We convert about 75% of our EBITDA for cash for the ops.

Speaker Change: Having a healthy inventory of concentrate on site in the wearer hours versus port. This is what we're shipping out.

Speaker Change: To bring by sort of in the system, we're beginning of our target, we'll be in an event here in terms of having a normal runoff.

Speaker Change: Even three inches of the cut concentrate, rolling through in terms of having that balance balance right. So, I think coming this end up, you know, we'll be in full swing as close in terms of that sort of working capital movement.

Michael McMullen: Again, I haven't looked at all of our peers, but I'm pretty sure that's one of the better in the class. So I'm a little bit perplexed with where our share price is today. As I said, I'm 0.09% up in the last little month when we've actually completely not fully delivered, but materially delivered the business. Ops are going very well, 50% EBITDA margin. I'm sure a few of you have got to calculate it out already and working out what our trail in EBITDA margin is, and I'm pretty sure you'll find that again, it's pretty low for the figure. This is a quality, long life super high grade high margin asset that's in a fantastic jurisdiction for permitting and operating. And we're getting a little bit frustrated with where the share price sits.

Speaker Change: So I'll just speak a little bit more to go and since I've been in the September September but then by December you give I noticed that from my perspective by an issue with claims and stepping and stuff.

Speaker Change: So, we'll see higher sales.

Speaker Change: Because I mean really there's sales in them there's sales, right? There's the regular sales in them, there's the forward sales. So will we see forward sales as well at the end of September?

Speaker Change: Look at what we might do and as you can appreciate it, that's make us out of line. I mean currently we've got over 20,000 tons of constant trade store.

Michael McMullen: From a strategy point of view, I think clearly our number one goal is delivering and investing in the mind to, if we can invest in the mind and grow out if the shareholders by doing that, there's a very strong internal bid for capital right now. So I think the team that cite would say, you know, and compared to previous times we are investing in that mind with the view of getting a return out of a strong return.

Speaker Change: important in the wearouts.

Speaker Change: You know, we've obviously spent the cash, the cash.

Speaker Change: to actually mine and process the all to generate the concentrate. So if this is still that sort of amountable closer to the amount at the end of September, we would want to obviously get the cash and a door and obviously pay for that.

Speaker Change: the cost to get that cost right to that point in time.

Michael McMullen: What do we do? We pay down the debt, I think. We continue to make the business as strong as we possibly can, build as much cash in the businesses we can and look at some point. Well, I went into the market and bought three or four hundred thousand Aussie dollars with a stock a few weeks ago, but at some point, if we view the business as being a really strong business that has undervalued, well, I guess at some point one of the things we're buying is our own stock back.

Speaker Change: I mean, they must still be at the inner system that sort of imbalance that we need to check and some of the work in capital.

Speaker Change: Make sure we've got the cash cut in spot as well. But then going forward, bar any issues on shipping or trains, that should even out and we shouldn't be doing any pre-cells from that perspective going forward.

Speaker Change: We obviously can't pre-cell stuff that we haven't made.

Michael McMullen: So I think the team has done a great job getting this business sorted in the time frame. We just aren't being recognized in the marketplace for that right now. It does look like we're likely to get into the ASX 300 here in a few weeks' time. So we think that might be a good catalyst for the stock. The other thing in that period in that 12 or 14 months is copper price has gone up 40 cents a pound.

Speaker Change: So sure what we're trying to do with it.

Speaker Change: is get revenue in the door from stuff that we've made and pay the cost of making, not? So...

Speaker Change: My gap will still have a bit of that Stop sitting in inventory at the end of September, just given what the amount of September looks like.

Speaker Change: So yeah, I'm pretty sure they'll be that I guess an idea well with life to end up with time.

Michael McMullen: So we're a little bit perplexed with where we're trading, but I guess all I can do right now is just run the business as best as we can and sort that balance sheet out as much as we can and just make the story as simple as possible for people.

Speaker Change: at the end of every quarter carrying about 10 million dollars of inventory at most. Yeah. But what you would assume we can get it below that, like I think that's sort of about what you need to have sitting in the business.

Michael McMullen: So following my view on life on that, we might just roll on. So again, we've put three year guidance out. As I said earlier, this is really based on information from literally a year ago. I do think we're feeling increasingly comfortable and confident. I suppose it's the best way I could put it. We have been asked, given the performance, the last quarter and sort of where we're tracking now, whether we'll change guidance to this year, I think we'll stick with where we are, these new double estopes where we're on to the second one seems to be working.

Speaker Change: But clearly, you know, at the end of June, we had 58 million dollars worth now that's a bit much. So, we pre-sold 37 million of it, which is recognized in the E-Bidharic line here. We still act 21, which is still to touch.

Speaker Change: And right now, we have a baby that I think is about this footage and another one in the couple weeks. But yeah, what we're trying to do is align production, like you obviously can't sell stuff you haven't produced. I'm not sure if I'm a gentleman.

Michael McMullen: But that's really a probably a story for when we review our guidance for next year is to, you know, what we do with that. I would say main June really shows what this mine can do. We did 4,000 tonnes of copper in May. We did 5,400 tonnes of copper in June. When this mine is well run and things all come together, that's the sort of thing this mine can do. So clearly June was an exceptional month.

Speaker Change: So, all we're trying to do is catch up that lag of all we'll stop. All this value we've got sitting around, we want it to be dollars.

Speaker Change: Sure, no, no, no. I can completely understand that. I'm just just a reconciliation between the, the, say, the copper sold number you're quoting the quarterly.

Speaker Change: versus the I guess the

Speaker Change: The amount of tons you need to have sold to reach the revenue number when you come to the financials right. So I mean I'll be frank. I missed the discrepancy right, so my financials don't look anything like your real financials. Because I had your selling, you know, I just selling 16, not 21 tons of copper right. So just try and understand that I guess there.

Michael McMullen: But, you know, I think repeatable at times. Clearly well about the runway to what we're selling people for guidance for this year. Right, so we had C1 costs around about 161, 151, 162 for those two months. So again, high fixed cost operation, if we get the production out, that's what you're going to get. Again, we announced some drill results after the quarterly calls. I'll talk roughly what does that all mean on this slide.

Speaker Change: The accordion effect in your inventory there and whether or not we're trading a hole in the future, but clearly you had a big buffer to begin with that you're trying to work your way through. But I must admit, I didn't properly factor in those additional forward sales. On top of your, I guess, conventional sales for one of their words.

Michael McMullen: This all body has been going well really for 150 years but in modern format since 1967. We've sort of doubled the reserve life since we've had it again on data from a year ago. The drilling that we're doing now in sort of cutious north around where we're mining has extended the strife length of your body. 20, 25%. What does that mean? That means we're getting more tonnes per vertical meter. That means we need to do less development to get our copper tons out or conversely once we have this ventilation in place.

Speaker Change: Yeah, but you know again, because of the half we produced one I would have was not in half hours in terms of just under 2020.

Speaker Change: I'm just a simple bush, man's guy.

Speaker Change: You know, I look at it on the basis. Well, how much did we produce, assume we sold it all? How much money did we make on that? Then there's a working capital line that goes below that.

Speaker Change: But that's how I looked at the business right there. If you assume that we sell whatever we produce and there will be some sort of working capital adjustment somewhere in there.

Michael McMullen: We have a lot more tonnes available and we have the bend available to be able to actually produce more. So we're very excited about what this all body throws up. We continue to do an ounce drill results of 20 metres, a 10% plus or 15 metres, a 15%. The market seems to yorn because it's sort of become well, that's just a standard CSA drill result. I would suggest if we were a standalone exploration company announcing those things with zero infrastructure.

Speaker Change: That will work its way through the system. It's more and they said, you know, I think we were very back ended in the hard. If you want to think about it that way, you know, we produced a lot of the metal I've got us to do this slide now somewhere, but you know, we produced.

Michael McMullen: The stock can probably double on the back of that. Again, pretty frustrating that people sort of yorn when we put those kind of drill results out when it truly is an amazing line and those kinds of results. The pin increasing confidence about being able to produce more out of this business than what perhaps we thought we could a year ago. So with that we might just go to the closing slide again, a very strong 50% even damage and 70% of that is converted to cash flow.

Speaker Change: Whatever it would be, not quite half to forty forty-five percent of the total metal in the last two months of the heart, right?

Speaker Change: Sure. You end up with all stuff that you then can't get on a train and get on a boat. By the cut-off date, so it ends while we've done the pre-soluance. There's more to talk about. Back.

Speaker Change: I have to train publishing with orderly in the hall.

Speaker Change: There's been a lot of work out on, we've in terms of revenue recognition and the meeting doesn't make the standard for revenue recognition and the answer to this. So in an idea, we'd certainly return that we make and it'd be all about the end of the quarter and that's that.

Speaker Change: It's a big lumpy, right? So, it's nice to know that we're going to have to just be here and there.

Michael McMullen: Material deleveraging at the business over the last half and 12 months as well. So operationally we think things are going fantastically, always more to do. But yeah, I think it's a great asset and I think compared to our peer group, I think we have many attributes that are towards the top end of the peer group, all by our share course.

Speaker Change: Yep, thanks.

Speaker Change: The next question comes from David Radcliffe with global mining research, please go ahead.

Speaker Change: [inaudible]

Speaker Change: The next question comes from David Radcliffe with Global Mining Research. Please go ahead.

Michael McMullen: So with that, I'm going to hand over to chair holders. I'm happy to take questions. Thank you.

David Radcliffe: Hi, I'm sorry, I'm making more. So my first question is just on, if you come back to one of the thesis for the transaction, where there's obviously the big opportunity to cost out.

Operator: We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear it on acknowledging your request. If you're using a speaker phone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two.

David Radcliffe: You know, cost has been sort of moving the right way, but I thought maybe good to get a bit of an update on what cost you think still could come out of the business and if there are, or you largely sort of, you know, gone through what you saw as a key opportunity.

Daniel Morgan: First question comes from Daniel Morgan, but bear in jewelry. Please go ahead. Hi, Mick and Tim. So my question just relates to, can you give us a little bit of a sense of how the operations have performed? Post the end of the quarter, please? Yeah, look again, we've sort of left out guidance where it is. So, you know, midpoint of the guidance is about 40 and a half thousand tons. We feel comfortable with that.

Speaker Change: I'd say head count wise where there are about where we need to be. You know, again, Q1 we probably undershot on head count a little bit.

Speaker Change: So we're Q2 with added, I don't know, 20 up to back into the operation to make sure that we've always, you know, got operators.

Speaker Change: I think that that components done, I think commercial contracts where we're part of the way through, there's still a bit of work to be done there and more and I am the team that's sort of going through that.

Speaker Change: Some contracts we can really go, short notice others, you're sort of waiting for.

Michael McMullen: I did say on the quarterly call that, you know, just from the scheduling of the high raised hoops, Q3 will be slightly weaker than Q2. Like, you know, a few hundred tons of copper. And quite frankly, that's as accurate as we can be. And Q4 looks like 50 strong. So, but overall, you know, no, no real surprises. I think is the short answer.

Speaker Change: Yeah, the contractor rounds course.

Speaker Change: And you know, I've done a few of these turner-arms.

Speaker Change: You sort of get to a point where you can't really cut your way to the future profit of your I'd say, then you've got a great production and I would say that's the implication point where we're at. And we clearly saw that in May and June right week.

Speaker Change: You know, we look at the cash flow or even dial, I'll see you on whatever metric you want to look at. When we get that mind running at those levels,

Michael McMullen: We will, so the one thing that we will see a bit more of now is we've done the GRTEC drilling out for that bent project. And so development is commenced out there. So we will start seeing development need as pick up as we get into that project. And we are, you know, moving ahead with that pretty, pretty quickly. That's probably the only sort of real change. I think you'll see no other surprises. I think that was.

Speaker Change: Then that's really your cost-out, I just want to see one really drops.

Speaker Change: That's where we are. We need to get more production out of this thing, both.

Speaker Change: from what we're doing in the rest of the mind, plus the incremental staff like you can see our papa.

Speaker Change: That's the key, right? And...

Speaker Change: So I know you're not a big fan of EBDA, and I know you've actually stuck that metric in there of our EBDA, the cash conversion for you. I think that's the other key thing to use when not having to spend every dollar we make on campus.

Michael McMullen: And latest plans to potentially exploit QTS South Upper, when might we hear more on that potential project? This is quite soon, I think. We sort of have got the final thing from contractors. Look, I, you know, will make a decision in the next, I don't know, week or so, but I suspect that there's a better than even chance that perhaps we certainly have the people and the equipment to do it ourselves.

Speaker Change: Okay. Thank you then. I think the numbers are trying to get the reconcil the revenue.

Speaker Change: So it's really helpful to get the sales number of couple of times sold because that sort of helps the square that away. But in terms of how should we be thinking about this what a normal inventory level should kind of be? I mean, if you just 100,000

Michael McMullen: And I think the team at side are getting increasingly more confident as they saw it. The bottom of the mine out in their ability to execute that. But fairly soon we are doing a drill program to upgrade that to measure and indicate. There's, there's 25 holes going into that. We'd be, I don't know, half two thirds of the way through that. That will allow me to call the reserve, which will allow me to then add it to guidance. It's not in our guidance right now, but.

Speaker Change: Roughly 150,000 times a kind of year and that sort of spread between, I guess, the mine and the port are on the way. But, you know, what is sort of a normal kind of level that we should be thinking of? Is that sort of, you know, a month's worth of car or the such like?

Speaker Change: I guess we don't get the granularity on where it sits, and that's causing a lot of us to, I guess, not be out there, so maybe exactly where the imagery's coming from.

Michael McMullen: Okay, thank you for your respect, is my.

Speaker Change #100: I'd like it to be zero, but like I say, I'll cut that thing.

Speaker Change #101: And we'll in your installments with the B-in-B-Trip, probably.

Eric Winmill: The next question comes from Eric Winmill.

Morne Engelbrecht: Let's go to the bank. Please go ahead. Great. Thanks a lot, Mick and team, appreciating my question. I had a couple of quick financial questions, but maybe just on the vent raise, can you remind us what the spend is there and what the major deliverables we should expect throughout the end of the year? I'm sorry. Congratulations. Sorry not that much. Yeah, so there's a slide in the quarterly deck that we put out that's got the detail on it, but it's around about $42 million Australian dollars, so not US, it's Aussie dollars.

Speaker Change #101: More than I can do better than that, I'm sure we can.

Speaker Change #102: Yeah, look, I think, you know this.

Speaker Change #102: You know, it's, we do about two times a week.

Speaker Change #103: I think if you were around that sort of shipload at any one point in the system all a little bit more, I think that's probably what you're going to get to, so that's about it's going to take a little bit more time.

Speaker Change #103: You know, it's about two and a half thousand tons of copper.

Speaker Change #103: It's about that sort of number of things, so maybe a little bit more than a tablespoon. You know, it's probably not going to be much.

Morne Engelbrecht: And that'll be sort of we start about drilling really about six months ago, for five months ago, and that'll go through to about mid 2026. And more and I don't know how much we've spent on it, but the two to three million dollars Aussie or maybe US that we've spent on it so far. Yeah, and do you have the number of hand there, but it's in that order, I think. Yeah, that's pretty clean idea.

Speaker Change #103: So this can be the LDF apps.

Speaker Change #104: Alright, thank you all, a positive note.

Speaker Change #105: I'm giving you a stretch target, more no. I think it's short. And let's just happen to strike it that you loaded on the very last day of a reporting period. I don't think it's that we're going to be zero. It's always going to be something.

Morne Engelbrecht: US. So the deliverables are the sort of components of our project, the GTX willing to make sure the ground's good out there, which is sort of done. Then there's the development meters to get out there, which, which, you know, we'd be I don't know halfway on of the first drive out there. We've got to do it across three or four levels, so and then raise boring. We've just actually just closed the tender off for the raise boring last Friday off the top of my head. I would think we'll be out there raised boring early next year, maybe somewhere in that order.

Morne Engelbrecht: Okay, great. Thank you.

Speaker Change #105: There's always going to be some working capital floating around in the business.

make McMullin: This concludes the question and answer session. I would like to turn the conference back over to make McMullin for any closing remarks. Please go ahead.

McMullin: Well, thanks everyone. I know it's a very busy reporting day here. So, if anybody's got any questions, we're happy to take them offline as well.

Speaker Change #108: But, you know, I didn't, I think the opposite doing very strongly, and we still see a bit of room for improvement here, going forward. Clearly, if we can get production up, you can see the impact on, see why I need the dark, red, cast, blown, everything, so that's really the key first, where we are now.

Morne Engelbrecht: Appreciate that. And just on the concentrate sales, so obviously there was bid delay to the rail issues. I think that's all been sorted out now and any views on Q three in terms of time and shipments or what we can expect there. Yeah, look, I think we have a, what? Well, I can talk about the timing shipments, but we still do have a favor to concentrate around. We, you know, we produce a lot of concentrate.

Speaker Change #109: Yes, concludes today's conference call.

Speaker Change #110: You may disconnect your lines. Thank you for participating and have a pleasant day.

Morne Engelbrecht: So it's a good problem to have, I guess, but more or less, you talk about it. Yeah, look, I think in terms of the timing of the shipments, we spoke about that the quarterly call. That has started to be sorted out. I think in the call that indicated that will take some time to clear, but we're confident by the end of September. We'll have most of that sort of back back in time in terms of the sequence with the trains, the shipping and obviously production as well.

Morne Engelbrecht: Maybe maybe a little bit into October still in terms of clearing that sort of backlog. But like me said, we've got a lot of concentrate on site, which is a good problem to have. At the moment, and as we indicated, we are able to recognize that revenue and any event from those from those pre sales. So overall we still get in the cash in the door from that perspective. Okay, appreciate that.

Morne Engelbrecht: Thank you. And just a quick one on taxes, any view on what we should model or think about taxes for the rest of this year? Oh, look, we've recognised and expense the off about $7 million for the half. So, I think, you know, for the rest of the half, we do have a tax shield with the acquisition of the mine. That tax shield, obviously, shields you from some of the tax liability on a yearly basis.

Morne Engelbrecht: Not really sure in terms of, you know, in terms of the quantum of that and how far that will extend them and of step will depend on the copper parts as well. But we might tip into a slight tax payment by the end of this year. But again, that's if you roll forward sort of the last quarter going forward. So, on balance in terms of where the copper parts is now, I wouldn't expect this to be in a tax paying position at the end of this year. Okay, fantastic. I appreciate that. I'll head back to the queue. Thanks. Once again, if you have a question, please press star then one.

Paul Hissey: The next question comes from Paul Hissie with Moilis. Please go ahead. Thanks. Yeah, just wanted to expand a little bit on the forward sales. I'm just trying to understand that I guess the working capital moves and whether, I mean, you know, clearly that the sales number in your quarterly is not the sales number that's been reflected in the PNL. So, you know, how much of that stockpile has been forward and how much of that is kind of a one-time deal.

Paul Hissey: I'm just trying to understand, I guess, on a go-forward basis, the relationship between the sales you reported you quarterly versus the sales that will manifest in the revenue line of your financials. Yeah, I think obviously with the anomaly at year end that sort of had a material difference between production and sales. To start with, we recognize those additional sales, so that's sort of boiled back in line with production matching up with the sales volume there.

Paul Hissey: Going forward, as I just said, by end of September, probably middle of October, we'll probably work back through that, that that's what I'm in terms of the concentrate and beyond even keel in terms of having a healthy inventory of concentrate on site in the warehouse versus port, which is what what we're shipping out. So, I think by sort of end of September, beginning of October, we'll be in an even keel in terms of having a normal runoff inventory in terms of the concentrate running through in terms of having that balance balance right.

Paul Hissey: So, I mean, come in December, you'll, you know, will be in full swing of suppose in terms of that sort of working capital movement. So, I'll suspect a little bit more to go in terms of end of September, September, but then by December, you won't notice that from that perspective by any issue. So, with trains and stepping on stuff. So will we see higher sales, really there's sales and then there's sales, right, there's the regular sales and then there's the forward sales.

Paul Hissey: So will we see forward sales as well at the end of September? Look, we might do, as you can appreciate, as Mick is our client, I mean currently we've got over 20,000 tons of concentrates still important in the warehouse, we've obviously spent the cash, the cash to actually mine and process the all to generate the concentrates. So if there's still that sort of amount or close to that amount at the end of September, we would want to obviously get the cash in the door and obviously pay for the cost to get that cost straight to that point in time.

Paul Hissey: So I think that there might still be at the end of September that sort of imbalance that we need to check in terms of the work in capital and making sure we've got the cash balance right as well, but then going forward by any issues on shipping or claims, that should even out we shouldn't be able to, we shouldn't be doing any presales from that perspective going forward. Paul, many maps, I just clarify a little bit, we obviously can't pre-sell stuff that we haven't made, so we're always trying to do is get revenue in the door from stuff that we've made and pay the cost of making, right?

Paul Hissey: So my gap deal is we'll still have a bit of that stuff sitting in inventory at the end of September, just given what the month of September looks like. So yeah, I'm pretty sure there'll be that, I guess in an ideal world we'd like to end up with at the end of every quarter carrying about $10 million dollars of inventory at most. Sure. Yeah. Or cheerleaders, if we can get it below that, like I think that's sort of about what you need to have sitting in the business, but clearly at the end of June, we had $58 million dollars worth, now that's a bit much.

Paul Hissey: So we pre-sold 37 million of it, which is recognised in the EBITDA argument line here. We still have 21, which is still too much. And right now, yeah, we don't have a spare bit, I think there's a boat just leading another one in a couple of weeks, but yeah, what we're trying to do is align production. Like you obviously can't sell stuff, you haven't produced, unless you're a magician. So all we're trying to do is catch up that lag of all this stuff, all this value we've got sitting around, we want it to be dollars.

Paul Hissey: Sure. No, no, no, completely understand that, I'm just just the reconciliation between the copper sold number you quote in the quarterly versus I guess the amount of tons you need to have sold to reach the revenue number when it comes to the financials, right? So I mean, I'll be frank, I missed the discrepancy right, so my financials don't look anything like you're real financials, because I just selling, you know, I just selling 16, not 21 tons of copper, right?

Paul Hissey: So just trying to understand, you know, I guess the accordion effect in your inventory there and whether or not we're creating a hole in the future, but clearly you had a big buffer to begin with, that you're trying to work your way through, but I must admit I didn't appropriately factor in those additional forward sales on top of your, I guess, conventional sales for one of their work. But you know, again, for the half we produce, whatever it was, nine and a half thousand times, you know, just under 20, if I'm just a simple bush, math guy, you know, I look at it on the basis, well, how much did we produce, assume we sold it all, how much money did we make on that?

Paul Hissey: Then there's a working capital line that goes below that, but that's how I look at the business right. If you assume that we sell whatever we produce and there'll be some sort of working capital adjustment somewhere in there, that will work its way through the system, as Morne said, you know, I think we were very back ended in the half, if you want to think about it that way, you know, we produce a lot of the metal, I've got us to the slide there somewhere, but you know, we produced whatever it would be, not quite half to 45% of the total metal in the last two months of the half, right?

Paul Hissey: But, sure, you end up with all the stuff that you then can't get on a trade and get on a boat by the cut-off date, so hence why we've done the $3,000 more talk about that, between publishing the quarterly and the half, there's been a lot of work going on with in terms of revenue recognition and the meeting doesn't meet the standards of revenue recognition and the answer is, so in an idea, well, you know, we've fairly returned that we make and it'll be on a boat by the end of the quarter and that's that, it's a bit lumpy, right? So, we're going to have the adjustment here in there. Thanks.

David Radclyffe: The next question comes from David Ratcliffe with Global Mining Research. Please go ahead. The next question comes from David Ratcliffe with Global Mining Research. Please go ahead. Hi, hi, sorry, Nick, I'm on. So my first question is just on, if you come back to, you know, one of the thesis for the transaction was obviously the big opportunity for cost out. You know, cost had been sort of moving the right way, but I thought, you know, maybe good to get a bit of an update on what costs you think still could come out of the business and if there are, or you largely sort of gone through what you saw as a key opportunity.

David Radclyffe: I'd say headcount wise we're there or thereabouts where we need to be, you know, again, Q1, we probably undershot on headcount a little bit. So we Q2, we've added, I don't know, 20 up to, back into the operation to make sure that we've always, you know, got operators. I think that, that component is done. I think commercial contracts where we're part the way through. There's still a bit, still a bit of work to be done there.

David Radclyffe: And more on A and the team are sort of going through that. Some contracts we can really go through short notice. Others are sort of waiting for, you know, the contractor runs course. And you know, you know, I've done a few of these turnarams. You sort of get to a point where you can't really cut away the future property, to further profitability, right? So then you've got to grow production. And I would say that's the inflection point where we're at.

David Radclyffe: And we clearly saw that in May and June, right? We, you know, we look at the cash flow or even the R or C1, whatever metric you want to look at. When we get that mine running at those levels, and then that's really your cost output, is your C1, really drops. That's where we are. We need to get more production out of this thing, both from what we're doing in the rest of the mind, plus the incremental stuff like you to yourself, Upper.

David Radclyffe: That's the key, right? And I know you're not a big fan of EBITDA, and I know you've actually stuck that metric in there about EBITDA, the cash conversion for you. I think that's the other key thing news, we're not having to spend every dollar we make on Capix. Okay, thank you then. I think the numbers are trying to get the reconciled revenue. So it's very helpful to get the sales number of copper times sold, because that sort of helps us square that away.

David Radclyffe: But in terms of how should we be thinking about what a normal inventory level should kind of be? I mean, if you do 100,000, roughly 150,000 times a kind of year, and that's sort of spread between, I guess, the mind and the port or on the way. But yeah, what is sort of a normal kind of level that we should be thinking of? Is it sort of, you know, a month's worth of coin or the such like?

David Radclyffe: Because I guess we don't get the granularity on where it sits, and that's causing a lot of us to, I guess, not get estimate exactly where the inventory's currently are. I'd like it to be zero, but like I said, I think 10 million US dollars worth of inventory, probably more than I don't know if we can do better than that. I'm not sure we can. Yeah, look, I think, you know, we do about two trains with, you know, at full tilt.

David Radclyffe: So, you know, I think, I think if you're around that sort of ship loads at any one point in the system, or a little bit more, I think that's probably what you're going to get to. So, that's about 11,000 tons. So, that's about, you know, so about two and a half thousand tons of copper. So, you know, it's about that sort of number, I think. So, maybe a little bit more than any family and make, but, you know, it's probably not going to be much, much more than that.

David Radclyffe: But that's sort of the, I don't think you can get away with less than that, because you need 11,000 tons sitting at port ready for for the next ship, right? So, there's going to be there or thereabouts.

Michael McMullen: All right, thank you, I'll pass it on. I'm giving you a stretch target more than that. Yeah, I think it's just happened to strike it that you, that you load a boat on the very last day of a reporting period. I don't think it's ever going to be zero is the short answer. There's always going to be some, there's always going to be some working capital floating around in the business.

Operator: This concludes the question and answer session.

Michael McMullen: I would like to turn the conference back over to Mick McMillan for any closing remarks. Please go ahead. Well, thanks everyone. I know it's a very busy reporting day here. So, if anybody's got any questions, we're happy to take them offline as well. But, you know, I, again, I think the opposite doing very strongly and we still say a bit of room for improvement here going forward. Clearly, if we can get production up, you can see the impact on C1, the DAR free cash loan, everything. So, that's really the key first where we are.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.