Q3 2024 Metals Acquisition Ltd Earnings Call

Speaker Change: Thank you for standing by. This is the conference operator. Welcome to the metal acquisition limited Q3 2024 conference call and webcast. As a reminder, all participants are in listen only mode and the conference is being recorded.

Speaker Change: After the presentation, there'll be an opportunity to ask questions. To join the question queue, 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: I would now like to turn the conference over to McMullen, CEO of Metal Recquisition Limited. Please go ahead.

Mcmullen: Thank you, and thank you everyone for joining. I'll be presenting the slides today along with our CFO Morne Engelbrecht.

Mcmullen: So, this is our Q3 Coralary Results presentation and we'll give a bit of an update on our exploration activities.

Mcmullen: As usual we've got our disclaimer at the front that this presentation has been lodged on the SX platform and you can read that at your lecture leisure.

Mcmullen: I would characterize the quarter as another business as usual corner.

Mcmullen: the team delivered a very strong result of just over 10,000 tons of copper, and a head grade of 4% milled. I think after our very strong Q3, there were some questions around, whether we could sustain that sort of 4% plus head grade in the answer is yes.

Mcmullen: C1 came in at the bottom end of the range with recent regard to a non-idential planned U.S., which is continuing a downward trend and Morne will talk about how we managed to arrive at that.

Mcmullen: We have a clear part by the 50,000 tons plus of copper out of this mine here within the next couple of years.

Mcmullen: We again had a very strong EBITDA margin through the year, about 50% and we convert about 77% of that margin to cash.

Mcmullen: Post the recent equity race, we've got to perform a liquidity of about $226 million.

Mcmullen: which is well over $300 Australian dollars, again, all numbers in this presentation are in US dollars unless we specifically would call them out, but it is a very large liquidity position for a company of our size, provides us with a lot of optionality.

Mcmullen: So I'd say it was a good court, another business, a usual court.

Mcmullen: and you know, despite production being down slightly quarter and quarter, our C1 was also down. And we guided the market to being Q3 just with the sort of scheduling of the stopes down slightly. I mean we expect Q4 to be the strongest quarter of the year for us actually.

Mcmullen: We realised boarded the spot price, you know, so the price is going down a bit during the court on court over periods, but we boarded the get spot.

Mcmullen: and as I said, we expect you to be our strongest quarter.

Mcmullen: I am...

Mcmullen: We have a very strong liquidity position, as I said, we ended the quarter Q3 with about 81 million US dollars of cash up to paying off some debt. We are again tracking towards the midpoint of guidance as we've guided people towards around that 40 and a half thousand tons of copper.

Mcmullen: and again, Copper Rays, be hanging in there strongly and around about that 4%.

Mcmullen: On the exploration funnel, talk about we've had some really good success here. Choose yourself up, I think you need to confirm some high-grade copper hits as well as some zinc.

Mcmullen: We are drilling out much of the inferred which allows us to incorporate that into our reserves. And we've actually had some really good success in stamping out into the virgin country to really expand our resources.

Mcmullen: and we spend about $2 million in 2-3 on expiration.

Mcmullen: I'll be capital projects of the van project as well on the way. That's integral to sort of getting our production up well over that 50,000 tons of copper level.

Mcmullen: and Julius Alvarpe to commence in Q4, well actually it's commenced this morning where we took the first cut out of that take off drive to head out towards that deposit.

Mcmullen: We invested just under 30 million US dollars in capital projects again. We've guided the market to 52 million US for the year and we continue to trap sort of bang on where that number was.

Mcmullen: and then post-corder, obviously, we raised 150 million Australian dollars in equity. That's due, even with the balance sheet, there's a lot of flexibility to pursue strategic opportunities and also to retire that measurement in debt.

Speaker Change: I'm going to hand over to Morne, I'll see if I would talk about a couple of financial slides and over to you.

Morne Engelbrecht: Thanks, Mick, good evening, morning, everybody. I'll be taking you through the slide in the next slide as well, which covers the...

Morne Engelbrecht: Caspho waterfall for the quarter and again in U.S. dollars and a quick recap on the

Morne Engelbrecht: We've seen the equity race as well and then I'll cover some productivity slides later on.

Morne Engelbrecht: Also, please note that all these numbers are unordered and we have more detail in our operational financial performance noted in the quarterly report released today as well.

Morne Engelbrecht: On slide sticks, overall we have a very healthy, performal liquidity as McMullen mentioned, as a 30 September, for around $26 million in the capital.

Morne Engelbrecht: This includes the most recent successful equity race completed after the Korean, to its provided a boost to the MacBanashik, off around 150 Aussie 103 US before costs.

Morne Engelbrecht: and that's positioned us in a position of strength and further boosted by the fact that we had an undrawn revolving facility of $25 million.

Morne Engelbrecht: On-site consult, concentrate, ready to be shipped, our sending QP payments, and also the total listed investment and polymetals which total around 17 million US dollars that contributed to that liquidity.

Morne Engelbrecht: If we look at the operational corporate side of the Coral and Coral movement, there are a few key drivers there to keep in mind.

Morne Engelbrecht: that impacted the cash flow for the quarter firstly.

Morne Engelbrecht: You will remember that in previous quarter we solved concentrated at a critical shipment after a material build-up of inventory, this meant that more than 2,000 tonnes of copper were sold in the June quarter, that shipped in the Sub-Sams September quarter, we've all of that cashed over the rest of the June quarter, that's meant that around $25 million of cash.

Morne Engelbrecht: was captured in the June quarter that would have otherwise been recognized in the September quarter. In saying that, we still had a very healthy free cash flow from operations of around $30 million for Q3.

Morne Engelbrecht: An important point to notice that we have now also largely worked through that backlog of concentrate that we spoke about previous in the previous quarter.

Morne Engelbrecht: with the closing volume of unsolved concentrate representing about $9 million.

Morne Engelbrecht: U.S. as a 30 September, which is a line of where we saw it reducing to by the end of this quarter. So for the December quarter, we would expect that the copper tonne sold should be in the same ballpark as a tonne's produced for the quarter or things being equal.

Morne Engelbrecht: Second C, we further reduced our senior debt by another $8.1 million over the quarter, without senior facility now setting around $166 million in U.S. dollars.

Morne Engelbrecht: Down another 5% over the quarter and then with the equity raised, we also have a pro-form in our tiering ratio, 30 September of around 16%.

Morne Engelbrecht: The third point I wanted to make here so we paid interest of around $9 million over the quarter, with...

Morne Engelbrecht: about 5 million US rail-ladings of the amazing index facility, which is the high cost element of our debt stack. We focused on a specific in the reason they put your rate which I'll cover in the next slide.

Morne Engelbrecht: The other key elements of the cash flow note is the sustaining capex as McMuncians at around 13 million dollars, which is largely in line with Q2 and also in line with our broader capex guidance 2024 of around that sort of 50 million US.

Morne Engelbrecht: So, in summary, we are in an excellent position from a bandage sheet, a strength point of view. We've deal with the bandage sheet and a hefty ability to reduce our high cost debt and continue to generate strong free cash flow from our operations as well.

Morne Engelbrecht: on slide 7.

Morne Engelbrecht: as we have planned earlier in the year.

Morne Engelbrecht: A couple of our strategic goals.

Morne Engelbrecht: for 2024, with to not only simplify but also deliver the balance sheet. We have to live on these goals but not only reducing our neck yearning by more than 6% since the start of 2024, but also simplifying our balance sheet by redeeming our private and public warrants early in the year.

Morne Engelbrecht: So, more as we announced in the 9th of October we completed our successful placement as we noted over around $150 million of the $100 million U.S.

Morne Engelbrecht: The placement, as I said was extremely, our supporters from both new and existing is two strong sophisticated investors.

Morne Engelbrecht: and I'm going to try an offshore, which we are very thankful for.

Morne Engelbrecht: We are now well equipped to further optimise a vanishing through the retirement of the existing $145 million and the following is an index facility at the earliest practical dates with 16 June 2025.

Morne Engelbrecht: being the backstop date for that. While also providing additional flexibility to pursue strategic in our GANIC growth opportunities.

Morne Engelbrecht: um

Morne Engelbrecht: I suppose the key piece of feedback asked me now to do in the calls with the equity raise as well is from my investors over the last year was around our cost of that and in particular the amazing facility which carries a minimum interest on around 13%

Morne Engelbrecht: and with that increasing to 17% of the copper price attributes to below $3.40 per pound. So at 13% this takes up around $19 million of our cash every year. So definitely worthwhile in terms of being a creditor from a capital race point of view to obviously race the equity and pay that date back as soon as we can.

Morne Engelbrecht: So, to put this in context, we currently pay around 7.8 percent on how seen the facilities. That's quite a big difference in terms of opportunity for us to reduce our overall debt cost.

Morne Engelbrecht: We do need consent from the amazing dead provider to repay the debt before the 16th of June, 25. So, so, failing that we will definitely be targeting the repayment of that debt on the 16th of June next year.

Morne Engelbrecht: So, the other way, the debt will be retired by then, so in summary, with the great support from our new and existing channels we now in a very strong and commanding position.

Morne Engelbrecht: and arguably we are in the best position from a vanishing point of view since the inception of the company.

Morne Engelbrecht: and as we noted, we've got some $26 million U.S. of performal liquidity, performal neck yearning down to 16% and we have the cash and I've done a sheet of retire that I cost it and also provide that flexibility even when we need it.

Speaker Change: So with that, Nick Cole, I'll hand back to you.

Nick Cole: Thank you, Morne, and I think you've only got to look at the cash waterfall to see the interest that's gone out the door to understand why.

Nick Cole: We've taken the proactive steps of rising that equity.

Nick Cole: in order to, you know, I think get a debt facility, or see as a debt facility in place, that are more reflective of the high credit quality that we are today versus when we close on the acquisition.

Nick Cole: So moving on to the operational side, again, strong quarter, you know, business is usual for us. I think just over 10, 10 times the copper, C1, again, came down, you know, we saw a reduction in mining unit rates.

Nick Cole: Total cash cost of about $2.70 a pound, which is pretty consistent with the previous quarter. And as I said, we brought their cheap spot price, give or take a few cents a pound, sometimes a little better, sometimes a little worse.

Nick Cole: So we had 30 million dollars of operating pre-casual, which just continues to show, you know, the strong cash flow generation potential of this asset.

Nick Cole: and again, Q4, we do expect it to be the strongest quarter of the year. We sort of expect to exit the year and in the fourth quarter, more or less, at the run rate of midpoint of guidance for next year already, so, you know, that's an encouraging sign, I think.

Nick Cole: and again after sort of a week of grading Q1, which was sort of partly planned because of the series we were morning.

Nick Cole: and then we had the change of my plan to focus our efforts in areas that you know gave us the best bang for a buck I suppose you could say and again round that 4% head grade for the corner.

Nick Cole: which is sort of as planned, we are getting better delusion control actually due to better mining practices and so that's hoping a bit on the road as well.

Nick Cole: I hadn't had some commentary that we're mining above reserve grade and yes we are that's sort of the plan but when the areas we're mining we are seeing better grade out of it than the plan.

Nick Cole: I, if you recall the 2023 reserve was the first sort of new reserve, this mine's had in the very long period of time. We did adjust the modifying factors.

Nick Cole: quite a bit and perhaps we've been a little bit heavy on the dilution modifying factored because we're not seeing that amount of dilution when we're more in this stuff now. And so in the 2024 hour we'll look to address that.

Nick Cole: and perhaps that has a positive impact on the drive.

Nick Cole: The only interesting thing on this slide, you know, is development leaders picked up again.

Nick Cole: we've had some commentary around Q12 that perhaps we aren't doing the development that's required. Just given the drop in the development leaders, we had guided to development leaders picking up in the third quarter and that's precisely what's happened.

Nick Cole: and Partly, the Reduction and Development Leaders. It's required is the new mind plan where we're focusing our efforts.

Nick Cole: in a couple of areas where also, as you'll see in the expiration section, you're seeing significantly more striking from the old body in Jesus North and therefore tons for vertical meter up picking up.

Nick Cole: which means you actually need less development to get your all times out and then the last impact obviously is the end project.

Nick Cole: As per the plan, we expect to see development leaders continue to pick up a little bit, but good result, by the team, to have a 60-on training cruise quarter on quarter, as we move to the new plan.

Speaker Change: I might let you take the cost section of the slides here.

Speaker Change: So great, thanks, Mick. So on site 10, we're covering the process of mining costs for more than mine turn respectively.

Speaker Change: First, the processing cost for turn, more than Q3 was around $26 for turn, which was around 18% lower than Q2.

Speaker Change: with the key difference being a 10-day shutdown Q2 which impact at the previous quarter, while processing rates for Q3 were pretty stable at 21,000 tonnes for the quarter. Going forward, we would expect this to stabilize at the Q3 levels, and as we maintain operational consistency.

Speaker Change: On the mining cost per time comparison we were 7% lower, the previous quarter mainly due to a high portion of the developing leaders incurred in the quarter, with the developing leaders as McMunc is mentioned up 64% from Q2.

Speaker Change: Again, going forward with the commencement of both the QTS South Upper and the Vend Project, I will expect a level of development meters to increase which will drive further the level of capitalised cost from that perspective.

Speaker Change: is going to slide in the cabin of the Carver G&A in the developing cost per meter.

Speaker Change: on the G&A side of things that we're noting that we're getting more consistent.

Speaker Change: on this metric with the main driver for the G&I being being

Speaker Change: Flightly High, then previous quarter being the one-off adjustments we made in the previous quarter which was the reallocation of some of the consumables.

Speaker Change: The look captured in G&A that should have been captured in the mining and proceeds in Cossot.

Speaker Change: We are now better managing and reporting those those costs from an operational point of view So again going forward I would expect these costs to be consistent with Q3 or things being equal

Speaker Change: So, um...

Speaker Change: On the other side, developing costs per meter, all the increase from the previous quarter represents an average of the previous quarter, the three quarters and the slightly elevated due to not only the higher the developing meters, as mentioned before, but we also have a slight increase in the equipment and workforce.

Speaker Change: to cater for the needs of elephants that are as commands, but also obviously increasing the production rates as well, or keeping that distance as well, we develop the KT-Self-Up and the main project as well.

Speaker Change: I'm...

Speaker Change: Slide 12, so this is moving to time-small clean-ploy, we do notice that the increase in the metric albeit this is due to increase in mining, headcounts, I mentioned previously by around 5% this is to ensure the carries from all positions to keep adaptant assistance, to carry out as we carry out the highly loss of development.

Speaker Change: the Staining CapEx decrease slightly over the quarter.

Speaker Change: Again, last year, during my Diamond Drawling event expansion, we continued to spend capital and cordon swift. Our previous time, as we said, around that sort of $50 million US for 2024, so a consistent cordon cordon cordon.

Speaker Change: So overall the main focus here is on consistency in our operations and that's assisting to drive down.

Speaker Change: Of course, increased efficiencies.

Speaker Change: while it remains to key development projects that will materialy drive and increase our production of around 25% over the next couple of years.

Speaker Change: So, really consistency is the key and as we previously mentioned, we do have a large amount of time in the fixed costs, so the more consistent you can get and the more you can increase production, the better from a cost per time point of view, obviously. Look at that, Michael, I'll hand that to you for the remainder.

Michael: Thanks for what I, and I would just know in terms of Tunt Mill.

Speaker Change: as we get better at dilution control. I'll always rather hold less tons of high rate material off the whole than just hauling barren dirt up so again, if we can continue to drive dilution down at the same time that high-head rate, you know, we may not actually mill as many tons, but as long as we get the copper out, that's a better outcome for a section.

Speaker Change: Moving on to the next slide, slide 13, and we've just put out a more full-sem-expiration release that has these diagrams in a quarter format so you can see them. So, we have delivered a significant resource and reserve upgrade last year.

Speaker Change: What's still to come? Well, we continue to drill a way, obviously our reserves are only based on measuring the decay that we have, you know, significant amount of inferred. And then that green material there, which is mineralised, so it doesn't quite make it into a resource.

Speaker Change: I will answer a few of these slides, but I know you can see there are this couple drill holes that have skewed off to the left, which is the southern side of QTS North, and if you refer to the exploration release we put out, you can see the impact of those.

Speaker Change: They have extended the strike length of Julius North-Bove-Bove.

Speaker Change: 25%, and one of those holds the furthest one out, man, is to get 13.3 metres at 9.2% copper, another 4.9 metres at 10.9% copper. So, pretty exciting stuff, actually, that the team at side are discovering there, and this all body clearly is not closed off in any way, shape or form, and we've been very successful at expanding that resource, and it continues to throw up the kind of high-grade results that we've become a bit accustomed to, but perhaps are actually still quite special if you aren't working at CSA.

Speaker Change: So just looking at the slides, the drilling is very much being focused on.

Speaker Change: on converting that in third mineralisation and pushing the reserve or the material available for reserve down.

Speaker Change: and, you know, again, super high-grade material. You can see that our red material is the measure that our inches indicated and the yellow is inferred, and they just cut off the RLs and their flat lines, as we drill sort of the bottom of the indicator and then the inferred, that just pushes your measure and indicated further down. And again, we continue to see very strong results. You know, we always have something that's around 10 to 15 meters and 10 plus percent copper, which is exceptional, and that high-grade core.

Speaker Change: is present there, you know, allows us to mine all through the cycle. You know, we always have a very high grade zone that we can always mine no matter what.

Speaker Change: So, cut your central is our other rule body, 20% of our metal, again, you can see here that with, you know, it's a very lateral sort of, you know, classification system and we've been quite successful in drilling down into the infern, towards the bottom of the infern, and getting those sort of, you know, well, in fact, this.

Speaker Change: There's an interval there that's about 25 meters at 5 or 6% copper, true with the which is probably 15 meters, but still it's a probably broader interval that we used to seeing how the QTO central and then you've got your more typical 6-7 meter intervals at 10 or 11% copper, which in most other minds people would be doing, getting very excited about for us, it's just another day at CSA.

Speaker Change: So the drilling has gone very well, we continue to expand both expand the resource, but also convert all this in third material to indicate it measured.

Speaker Change: We've talked about this for a while. We've been drilling it. It is narrow and it's three-four meters wide, but it is very high-grade. So again you can see there that field was always three-four and eight meters at 17%.

Speaker Change: is shallow down 150 metres below surface.

Speaker Change: It's about 600 meters, laterally from the day-clone to access to just north.

Speaker Change: and you can say we've elected to self-perform this work.

Speaker Change: We have all the flavors on the side.

Speaker Change: and I'm told that we took the first cut out of that this morning actually so we started development. We expect around about 10 months to first all put up to now this thing. It is not connected to the rest of the mind, it is not included in any of our guidance.

Speaker Change: and the majority of that material is in third, but it's sort of a weak aspect to be mining a hundred thousand, it's time to lower out of this thing, it's a five, six percent copper.

Speaker Change: I'll say you can work out what we think we're going to produce out of this thing.

Speaker Change: in about a year. We're just under a year. So pretty exciting stuff. First of all, what do you just been open up here at CSA for some time? So we're pretty excited about this thing.

Speaker Change: We do have that high-grade thing, mineralisation of the surface, so over the east and west loads, you know the old mine.

Speaker Change: which we continue to drill out. We do have a zink load that's up over the top of QG itself. Again, it's narrow, but very high grade.

Speaker Change: and we intend to access this through this development that we're actually just starting today. And we have an agreement with Polymittals to be able to toll-free that material up at the end of the end of the mill. And it does look like Polymittals are funded to get going and should be going.

Speaker Change: Sometime in Q2, I think, next year, which will give us an outlet for that thing material.

Speaker Change: As some of you would know, we produce a very clean, copper concentrate at high recovery, 97, 98% copper recovery. We don't want to send this in stuff to our plant, so this was a great solution for sexually. As Morne noted, our little investment in polymetals is well in the running, so that's pretty pleasing as well.

Speaker Change: Safety in TSS update so safety we're gradually turning the corner on the triper. We would like to see it as a luller. I would note that some...

Speaker Change: in terms of recordable injuries, you know, the trickers being driven by by the young.

Speaker Change: The rates that we had back in March and April , we've significantly cut the number of recordable injuries in the last four or five months. It's just the one-year trailing annualised effect that is continuing to sort of see it up. So, as we move forward and we move out of that period from earlier in the year, we encounter, we expect to see this thing come down fairly quickly.

Speaker Change: No reportable incident, so pollution events or license breaches or anything during the report. I think that's evidence of the very strong community commitment that we have.

Speaker Change: We are about to commence stage 10 lift, which we'll sort of see.

Speaker Change: the capital, you know, that we've been the kind of sort of start flowing through, we've been spending a little bit on there on where we thought we'd be for capital, but you know, we've stayed to be back on the trend long to that, which is really just interesting.

Speaker Change: Um...

Speaker Change: So in terms of, you know, what's the look forward everyone thinks about, well, that's great, you know, you've delivered a good quarter again. We keep getting told consistency is the key, so look, we are delivering consistently.

Speaker Change: where we're on track to deliver at the midpoint of guidance for this year and you know we have obviously the productivity improvements that we're doing, the ventilation project and sort of midpoint of 2026 guidance is just over 50,000 tonnes. Cheer yourself up, I'm not currently in our guidance and I'll give you some indications of where that might come out, but we have now started that project. So you know we're feeling quite confident about that pathway to plus 50.

Speaker Change: and we do know that the processing plant will have or what we've rather than manualised 80-hour times the copper which is the same place.

Speaker Change: and we construct your handlet, it's just a question of getting you all out of the mind. And that's why we're doing some of these projects. So, you know, ventilation is really critical for us. But also, GDSF, upper, which is not connected to the vents at the bottom of the mind, is also quite critical for us as well.

Speaker Change: So, you know, in terms of our potential, you know, this is where we see our production going, you know, clearly our C1 as volume goes up, you know, should come down a bit further from where we are.

Speaker Change: and I was more known to carry it out in the afternoon right now so we're out of our 16%

Speaker Change: which is a very comfortable level for us. You know, we think we're in a great position actually.

Speaker Change: and having options is great.

Speaker Change: and having lots of liquidity gives us, you know.

Speaker Change: Lots of opportunities to do things, but clearly we would like to retire that measure and get at the first possible opportunity we can.

Speaker Change: and so we're back in terms of summary, you know, I think we're operating the mind very safely, we've got to tend much. It was a live, you know, I think we're looking at the mind a bit differently, the mind has been the case for the last generation, really.

Speaker Change: We have significantly delivered the balance sheet and we managed to get into the IS-6, 300 glass quarter in the previous quarter into a few of the Russell in the season U.S.

Speaker Change: So we are delivering on our strategic goals, you know, I think as I said two-four.

Speaker Change: I should be in a little bit stronger, Korra.

Speaker Change: and again I keep getting told that it was a little disappointing when we delivered a very strong Q2 and so that we had some commentary when you can't repeat that. Well actually we can repeat that, not only can we repeat it but we can do a little better now as we get our arms around the mind and I'd say Robin the site seems to have done a great job.

Speaker Change: Stabilising the business now, that's the phase of operations we're in, we've gone through the sort of the large turn around and significant change of sight. I would say we're now in the Stabilisation phase of the operation and it's just consistent delivery is the key from here.

Speaker Change: with that I'm happy to turn over and take questions.

Speaker Change: Thank you. We'll now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging you request.

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

Speaker Change: Our first question is from Cam Catalano with Wilson Advisory to go ahead.

Speaker Change: Good morning McMullen, I'm here for a good corner, it's not to say the end

Speaker Change: Operations, as you say, are sharing some of this ability. Just a couple of questions, firstly, just on your development methods, obviously, that the step that you're mostly talking about is the capital development methods, written in your release, if you add in the operating development methods, the last two quarters is still a bit below, the prior two quarters before that, is that just my plan rather than sort of development limits is, I'll leave it there and ask the second question as well.

Speaker Change: Yeah, it is my plan. Related and partly related to the...

Speaker Change: and the double-lift scope strategy that the team with employment and it's so it actually requires less operating meters per autumn. So, you know, yeah, like the short answer is we're doing the development that we have to do to get the autumn there.

Speaker Change: But...

Speaker Change: yeahso and

Speaker Change: And just to go to the KTS upper, you've mentioned a few times that obviously it's inferred, it's not included in your guidance and your waterfall chart makes clear the potential for upside to overall capacity from material coming out of that longer term, but in the median turn, you know, once you sort of get out there, you know, I think it's, you know, back end of next year. Would material from that potentially add to your near term guidance or just displace other material from that sort of two, three year guidance top figures.

Speaker Change: No, the benefit of this thing is it's completely additive, we're not mill constrained and so yeah, this would be on top of it.

Speaker Change: on the current gardens.

Speaker Change: and then last question, Nick, obviously it's been a little bit of press around sort of talking about your involvement or otherwise in nervous call vote, I wonder if you're in a position or anything about that.

Nick Cole: I think we've been clear that we look at every opportunity, you know, if it's copper in a decent jurisdiction, we look at everything. I'd say not everything fits our criteria in terms of, you know, sort of value. So, and sometimes things are competitive processes, and so we're very value-focused, right? So, as, you know, I'm sure you were aware from an other process. You know, hard to say where you land on any of these things right, we always say where we're active across lots of different things, but our fundamental thing is value for shareholders, right? So,

Nick Cole: and I think it's a very competitive and difficult to get to value.

Speaker Change: The next question is from Daniel Morgan with Baron Joey, please go ahead.

Daniel Morgan: Hi, Michael Morne. First question is, just simple one, have you initiated discussions with Sprot over the social media change out? I appreciate it. I show a time since you rose the equity.

Speaker Change: Short-answer is yes, there's ongoing discussions actually with all over the land the group.

Speaker Change: and again, to be clear, as we said, when we launched that equity race, this was not a land-degree driven equity race, this was a MAC proactive.

Speaker Change: Opportunity, you know, we've helped you know by having the cash in the balance sheet, put us in the best position to have that conversation with Sprot. So yeah, it's a work in progress.

Speaker Change: And you mentioned just a discussion brought over the rest of the learning group, which you think that you do that after the discussions with the Sprot and the MZP concluded, or is it a parallel?

Speaker Change: Well, both is the short answer, you know, like when you have the amount of liquidity we have, I guess.

Speaker Change: you have a lot of options so you know I think we.

Speaker Change: and we want to be in a position of strength. When we have those conversations and look when we put the current lending stack in place, I'm not sure we're in a position of strength.

Speaker Change: and so you end up with, you know, I think the feedback we've had from investors is being...

Speaker Change: the cost of the amazing depth, so you're not so much.

Speaker Change: but also the complexity on that debt stack. So what we're trying to solve for is, is, you know, a cost, but the we'd like to solve for simplicity. So, you know, I know what Morne would like to see on the debt stack, but yet look they're on going like conversation, so comfortably go ahead of the detail.

Speaker Change: I appreciate that. Just pivoting to the ops, so you've obviously flagged and got it for a better year in 2025 and beyond. But in 2025, it simply is going to the production growth expected to come from mostly tons. So far, the better production as you highlight has come from grid.

Speaker Change: Simulograde, Slotning Mortuns, but as I say, we expect a sort of exit to call this year.

Speaker Change: at the midpoint of next year's guidance already or so.

Speaker Change: It's not like we're sort of having to do a huge step change in order to get there.

Speaker Change: Yes, so that would imply that tons of this kind of quarters should lift them or we're just saying in September.

Speaker Change: Failets.

Speaker Change: would be rides as well. Let's see how we go.

Speaker Change: but yeah, I think it's sequentially, you know, we'd expect to see slightly more tons. I would note though, if we can continue to get dollars and under better control.

Speaker Change: It's metal times that I'm worried about, so you might not need to get moral time that if we can continue to squeeze that dilution it.

Speaker Change: Sure, and just on that delusion.

Speaker Change: Is there any way you can quantify the delusion that comes you've been experiencing recently what first is what you've embedded in the reserves, just to give a feel for the potential. Upside, we're talking about with the grades that we've looking at on the reserve, Greg.

Speaker Change: Yeah, we're probably saying 10-15% less dilution than expected.

Speaker Change: So, you know, the previous reserve was at 4% we were typically mining 3.7 3.8, we then reduced reserve grade 3.3, give or take.

Speaker Change: and now we're sort of seeing a bit high grade. So yeah, I think we're likely the work hasn't been finished yet, but if we squeeze that delusion in a bit, you will expect to see the grade go up a bit.

Speaker Change: Thank you, and then last question, just what is the expected timeline on the cutoffs for drilling, and the next resource reserve update, just.

Speaker Change: and Rittering now.

Speaker Change: Okay, thank you so much McMullen and Morne.

Speaker Change: The next question is from Kim Hops with can of cord. Please go ahead.

Kim Hops: Hi, guys.

Kim Hops: Let's just know how it was just around the mine tons, this is a small tons, it's the first quarter I guess it's been lower. Is that a draw on stocks and just not in, I guess, from previous sight, this is going to feel like you had a whole heap of stock oil capacity, but just talking to lifting that mine tonage next quarter.

Speaker Change: Yeah, I need to be milling a bit of stock we can.

Speaker Change: between everything we've tried and I've probably got 40,000 tonnes of stock all between the bins in front of the mill and the stock bowls on the ground, probably yeah and an idea will buy and exactly the tonnes that we mill doesn't always quite work out like that.

Speaker Change: In terms of, I think it's the June quarter numbers that you've reported, I think there's quite a few regions to those numbers, recoveries, they cover sold.

Speaker Change: is a few other different cases, which one's definitely true to some of those, I think, TCRC's went out.

Speaker Change: Yeah, it's somehow coming over there, so...

Speaker Change: In the June quarter, as you remember, we brought out our quarterly, which was, you know, some to the timing was before sort of the half-year report and reporting the additional pre-sold

Speaker Change: I'm going to report to the court, it's an include that those pre-sold funds and obviously the associated costs that go with that. So if you look at the half year report.

Speaker Change: and we issued for the June half year. You will know that those have been updated in the June half year report. So all we've done is basically just fall back those in terms of the calling and business while to make the match up to the half year numbers in terms of that sort of timing difference with the pre-celled tons.

Speaker Change: and then I think perhaps finally, in terms of future stuff, offer cash burn that we'd expect on a quarterly basis, this is a couple of million dollars a quarter to the fair to look out there.

Speaker Change: Yes, that's probably not far from my two to my maybe three when it starts picking up, you know, it'll be

Speaker Change: That's takeoff point, you know, is it does interact with the rest of the mind about the first out of 125-150 metres.

Speaker Change: Once we get out there with service or we can toy and do an event rise out there.

Speaker Change: and that allows us to go independent firing so it'll be quite slow for that first, you know, I don't know, 150 meters of development.

Speaker Change: and because we're self-performing the work, we can sort of, you know, use that fleet in other parts of the mind and use that some of those people in other parts of the mind. So, certainly a significantly lower cash burn than if we were using a contractor for a road business, it's actually going to be relatively inefficient for a while until we can get out there. And actually, because we can use those people on other things, it'll be relatively nominal for a while anyway.

Speaker Change: Yes, yes, brilliant. It's nothing I did for me. Thanks, Ross.

Speaker Change: The next question is from Eric Winnow with Bank of Nova Scotia. Please go ahead.

Eric Winnow: Great, thanks a lot, Mick and team for taking my questions, they just see the results out. I think a lot of my questions have been asked already, but maybe just quickly on the zing mineralization, the upper zones, I assume you'll be mowing that with your crews, you can use contractors there with what's the plan.

Speaker Change: Yeah, well that actually is one of the reasons we've gone out of hiding in tedious South Africa, because it's all up in the same area, so we're not quite ready to sort of get going on that zinc ironing yet, we just want to focus on future South Africa first, but yeah, that's the plan as we can flick those crews and that fleet between those two opportunities right in the upper part of the mind eventually.

Speaker Change: Okay, great. Thank you. Appreciate it. And just on slide 17, you talked about the tailings. Any additional detail there in terms of additional lifts or you mentioned here this northern tailings facility?

Speaker Change: So we've got the stage team list that we're about to start on.

Speaker Change: You can see in the background that photo is a light brown-ebooking thing over on the top right there. That's the north facility that the state government owns. We don't actually own that. So there is an ongoing conversation about.

Speaker Change: I think they'd quite like to see us take that, I think subject to the agreement we can get around historical liabilities, you know, that potentially is an option for us for the next lift.

Speaker Change: um

Speaker Change: Okay, great. Thank you. Really appreciate it. All right. We'll congratulate the quarter and I'll hop back in the queue. Cheers.

Speaker Change: there.

Speaker Change: Thanks again, if you have a question, please press star of N1. The next question is from Paul, who is dealing with molest Australia. Please go ahead.

Paul: Thank you, Robert. This is a couple of questions from me, Mick and Morne, what is the official sort of capacity on the meal at the moment? I know you've resolved some constraints with access to water, etc. Just trying to think about how the growth arrives over the next couple of years, clearly there's some more resources coming online and better underground productivity. What's the plant currently capable of building?

Speaker Change: Yes, full of depends which bit of the plant, but I guess the weight in the back end can...

Speaker Change: and can do 80,000 tons of proper year.

Speaker Change: and we have, you know, run up when we have the ore and the ore, we have run as that rate, you know, for days on end. So it's not like a theoretical capacity. So 80,000 ton of copper is the shore answer. Tron ends.

Speaker Change: 1.82 million times a year, depending on what we're feeding into it, water capacity is actually our first constraint.

Speaker Change: with the water that we've got from pollinators now about 1.7 million times a year is where we could get to. And if you look at the guidance that we put out and the tank report that's out there, which is...

Speaker Change: is a year and a bit out of date now, so we, the current guidance has been getting to about 1.45 million times a year.

Speaker Change: ah

Speaker Change: Okay, thank you. Just a quick question on TCRC, maybe this is a bit mechanical, but do you guys pay a fixed rate through the year and then that sort of gets reset at the start of every new year with benchmark discussions or can you just talk us through TCRC?

Speaker Change: Yeah, look, it's actually a very good question, so we are on a, as people know, you know, we really cut the off-sake agreement to a very, you know, proper mark and arm's link off-sake.

Speaker Change: and we are on annual benchmark TCRC. We were in LA, we could few weeks ago.

Speaker Change: Hard to say where TCRC will send all the customers to the company.

Speaker Change: in my mind on thinking 40 and 4 for next year could actually be lower we've seen negative TCRCs in the spot market. But at 40 and 4 more now I think we worked out with be saving around about 9 cents a pound of SZM come Jan. Yeah, that's right.

Speaker Change: Yo!

Speaker Change: The net number and wherever you go, that's the number you pay for the whole 12-month period, right?

Speaker Change: that's right, and it's the normal benchmark TCRC that settles with China. It could well settle lower than it, quite frankly, would not be surprised if it's 30 and 3 or 25 and 2.5 but in my 9, I ran 44.

Speaker Change: I'm just to be concerned, but clearly we're going to see a pretty substantial click off our C1, come down here, 9 cents a pound, maybe a little more.

Speaker Change: Yep, great. And then just one last question for me that's around the capital rise and the funding I guess.

Speaker Change: I'll just want to give you a chat a little bit more about the timing when y'all think it's perhaps sounded the question partly earlier when you said.

Speaker Change: you're having this money in the bank, puts you in a stronger position to go and talk to your lenders. But I guess I was particularly interested in the comment you might around.

Speaker Change: You know, having the additional capital to provide greater flexibility to pursue strategic inorganic growth opportunities. Do I take that to mean that, you know, the cash is there to pay the measurement in finance when you can, but if an amazing deal comes along beforehand, then repaying the med debt goes back down the priority list and you utilize this capex for a deal. I just wanted to try and unpack, I guess, the priorities there and particularly in light of your commentary.

Speaker Change: I think this cash is the amount for repaying that as an intracellity and again I wouldn't want to presuppose anything but if we were to find an amazing opportunity and if it was great value and if it required capital we probably do that as a sort of standalone exercise I guess.

Speaker Change: because you wouldn't want to cut out the other side of something, whatever you did, if you did something. And you still haven't sold for the amazing depth package. So I think we're pretty clear that's what it's for. Obviously we're always going to want to maintain optionality.

Speaker Change: I think there's a very clear use of proceeds for that timing and it's just a question around timing whether we can negotiate something earlier or as Morne said the long stop date is June of next year, that's what it's therefore.

Speaker Change: The next question is from Hayden Barstow with Argonaut, please go ahead.

Speaker Change: Good morning, McMullen, I just clarify on the tracking and the times of the haul. You should have told about this quarter after quarter, really, it does seem to be still the limiting impact.

Speaker Change: So, it's more around your confidence of what you've actually done, and obviously having more people on soccer helps a bit, but just getting those tons out of the whole of the pathway to increase it out over time, just get a feel for where we're at now, and we can get to a bit of the next year's day on tracking times and where can you push the capacity limitation to go away from that to something else.

Speaker Change: Yeah, well...

Speaker Change: is tracking the times, but it's also having the times of hour or so, it's that whole combination element and soothe the viability.

Speaker Change: um

Speaker Change: I think we've had a big focus on delusion control because there's just no point tracking barren waste up the hole, like it just ultimately we will become ventilation constrained and so tracking barren dirt up the hole just takes ventilation away from tracking or like it's pretty simple.

Speaker Change: So we've got a big focus on it, and it's consistency. I'd say the quarter was pretty good from that point of view. I'd always rather track less dirt at high grade than the other way.

Speaker Change: I think that got the bottom of the mind, you know, the developments caught up, you know, when we got the mind, you know, a bit behind a development, we sort of caught up, we've got the bend established down the bottom, the secondary bend down there, so that's quite helpful. These double-ish stoves have been actually a bit of a game changer for us just in terms of.

Speaker Change: actually cutting them out of operating development that's required for all time.

Speaker Change: which speeds up our cycle, which allows us to get more dirt out, it's also reduced develop delusion. So, yeah, we just expect to see a gradual tick-up in trucking movements going up, but I do, you know, I'm always telling people, no point trucking bearing dirt up the whole, right like if we can not truck it, we shouldn't do it.

Speaker Change: So, I think we'll just expect to see over 2-4 in the 2025, just a gradual increase in volume, you know, trucking volume. But again, if they can continue to squeeze that delusion down and keep the side at a revolve floor, or be in our increase it, that's a pretty good result already.

Speaker Change: I'm just on the upper stuff, the heat mineralisation is not in the way or anything. We have to mine some of it and stop by what is probably not going. Or is it just only separate? No, it doesn't matter.

Speaker Change: Now, it's a separate lens that suits out there, that we don't have to tackle it. In fact, the more I'm playing, it's done with the QG itself.

Speaker Change: and it's admittedly based on those we've heard, but you know, clearly we're not developing it without a mine plan. You know, specifically exclude that zinc material, so that'll just all be upside when we get there. I think polymethyls, you know, I think I think I've been making sure that I'll be ready to take material. And we won't be out there before then.

Speaker Change: i

Speaker Change: This concludes the question and answer session. I'd like to hand the conference back over to Nick McMullen for any closing remarks.

Nick McMullen: Yeah, look, I think I'd just like to, you know, congratulate the team at soaring.

Nick McMullen: with the strong result again.

Nick McMullen: Again, it's all about consistency. We've moved into that consistency phase, squeezing, you know, increased production out of this thing.

Nick McMullen: and look as you can see from the exploration results, this is a phenomenal all-body that has a lot more to give. And so, we expect to be able to be here for a long, a bit of time, mighting as thing.

Nick McMullen: and I hope that people are starting to get a feel now that Q2 wasn't just a sort of a one-off. We continue to be pretty strong here and delivery and just expect to see this production take up. And we're very excited about QDS out there.

Nick McMullen: This is a whole new sort of mining area that we're opening up completely just connected to the rest of the mine. All those constraints we've talked about, you know, vans, trucking, access, etc., all don't apply it. It's easier to self up. So, actually, we're pretty excited about that thing that, you know, this time next year, we should have some production coming out of and it's completely out of give to our current guidance. So, thanks everyone for your time and we'll talk to you again at the next score. Thank you.