Q4 2024 First Quantum Minerals Ltd Earnings Call
Thank you for standing by. This is your conference operator. Welcome to the First Quantum Minerals fourth quarter 2024 results conference call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions.
These actions greatly stabilize the business and we remain thankful to our investors for their ongoing support through this period and the range for the year.
Yeah.
Through the 'twenty 'twenty four for yeah, our financial stability allowed investment into the consent. She has three expansion, which has delivered strong tangible progress on the project and in addition, we were able to realize the commercial production milestone of enterprise.
Nonetheless, it was also essential that consensus and try to deliver strong operating performance and it is pleasing to report that we exceeded on our copper and gold production guidance for 'twenty 'twenty, four two which really will cover shortly in his remarks.
More importantly, the initiatives that we took to improve operational performance has set us up well for 2025 for continued safe productivity in Zambia.
Yeah.
Beyond continuing this operational performance our priorities for this year are very clear.
Number one to deliver on the consensus yes three expansion.
On this I will provide more detail when I review our outlook at the back end of today's call.
Number two to continue additional initiatives to further strengthen the balance sheet too, which Ron will speak on.
And number three to make progress towards resolution in Panama.
Speaker Change: I will provide a brief update on this topic and the pet health Detroit in Zambia, as well the corporate update before I hand, the call over to Rudy.
I was in Panama with the board of directors at the end of January.
Speaker Change: We continue to engage with industry and ministerial officials, including hosting a tour at Cobre, Panama for the minister of environment and Minister of public security in January.
Speaker Change: We continue to await approval of the preservation and safe management program that will allow the export of concentrate their minds on thought.
Speaker Change: We have not yet met with President Milena President remains focused on advancing social security legislation in the country, but has made public comments that he intends to address the issue of the mine in early 'twenty 251, social security is resolved.
Speaker Change: In the meantime.
Speaker Change: Panama and niche Knight initiated an environmental order with the release of the terms of reference on January six.
Speaker Change: The purpose of the audit will focus on assessing the current state of the facility's potential involvement.
Speaker Change: And the theory remediation and restoration measures as well as determining the real.
Speaker Change: Cost of saturation of mining area and the main from these costs.
Speaker Change: The terms of reference acknowledges that environmental restoration of the mining areas of complex and long term projects, which will recall use of effective implementation and rigorous monitoring to achieve sustainable results.
Speaker Change: The public consultation period for the terms of reference concluded last week and we await further instructions from the ministry of environment.
Speaker Change: We do welcome the environment to audit and we are prepared to cooperate fully.
Speaker Change: Company oil prior to its operations with transparency and in full compliance with international Environmental standards and we are confident the results of this environment or it will demonstrate the world class nature of Cobre Panama.
Speaker Change: With regards to our ICC arbitration. This was initiated under the previous government, which changed in July of last year following the elections.
Speaker Change: The new government brought in new counsel and requested for more time from the arbitration Tribunal.
Speaker Change: Based on these circumstances the tribunal unilaterally decided that final here should be held in February 2026.
Speaker Change: The company reiterates that arbitration is not the preferred outcome and that we prefer to sit down with the new president to discuss the money.
Speaker Change: Which he has indicated he will do in early 2025.
Speaker Change: We remain committed to open dialogue and to be being part of the solution for the country and the Panamanian people.
Speaker Change: On to Zambia, where the rainy season has started and walk the curry, but light water levels are replenishing they do remain at low levels compared to previous years.
Speaker Change: As such the company is not planning for the hydro electricity power generation sources within the country to return to normal output levels. This year.
Speaker Change: To address the probable shortfall the company has put sourcing plans in place for 2025 to ensure that reliable electricity supplies available for operations, including the start up of the Constancia is three expansion project.
Speaker Change: With these sourcing plans for power importance at this stage, we expect that 20 to 25 will be similar to 2020 full whereby our Zambian operations should experience minimal material interruption.
Speaker Change: From a restriction.
Speaker Change: With our fourth quarter results, we also announced that Bob Harding will retire, but the oncoming I'd give me my and Ken Mccarthy will take out or as the company's independent Chair Board.
Speaker Change: So off of my personal thanks to Bob for his guidance knowledge and impact on the board over the years, including the last two uses.
Speaker Change: During periods of challenge and change for first quantum.
Speaker Change: I certainly wish Bob a happy retirement.
Speaker Change: Kevin has been and I believe we'll do it with the board since 2021 and look forward to working with him more closely in his new role as chair.
Speaker Change: With that I would like to now hand, the call over to Rudy to review the operations.
Rudy: Thank you Justin Thank you everybody for joining our call.
Speaker Change: As a result of several operational initiatives last year.
Speaker Change: Essentially <unk> demonstrated strong results in 2024 and.
Speaker Change: And we will be maintaining this operational focus to deliver on our guidance for 2025.
Speaker Change: Ken century benefited from improved grade control practices, allowing it to achieve its highest annual copper production since 2021 and several initiatives are sentinel allow the mine to achieve record expert mining volumes in 2024.
Speaker Change: For the year total copper production, excluding cobre Panama.
Speaker Change: 431000 tonnes, approximately 14% higher than the prior year and exceeded the upper end of our guidance of 420000 tonnes.
Speaker Change: Gold production for the year was 139000 ounces also exceeding the upper end of our guidance of 135000 ounces.
Speaker Change: Well 2020 for nickel production of 24000 tons felt comfortably within our guidance range.
Speaker Change: For the fourth quarter total copper production was 112000 tons.
Speaker Change: The decline quarter over quarter after an exceptional performance in quarter three.
Speaker Change: Zambia's energy situation remained challenging through the quarter. However, the company's proactive strategy of securing complementary pillar.
Speaker Change: Primarily by the Southern African powerful allowed the company to maintain normal operations with minimal power interruptions.
Speaker Change: Albeit slightly higher cost.
Speaker Change: At <unk>, we had another solid quarter recording copper production of 48000 tons.
Speaker Change: Feed grades remain high as we continued to exit at a higher volume of mixed ore from 915 cutback that allowed for the mixed them sulfide most remain swaps during the quarter.
Speaker Change: This was mitigated by lower throughput as both circuits under wind plant maintenance shutdowns.
Speaker Change: In the quarter and return to its normal circuit configuration in January 2025.
Speaker Change: Since an older reported copper production of 57000 tons in the fourth quarter.
Speaker Change: <unk> seen from previous quarters, mainly due to lower costs.
Speaker Change: We call it.
Speaker Change: We continue to make good.
Speaker Change: Brokerage leaching design throughput capacity is stable with December reporting the highest monthly throughput since October 2022.
Speaker Change: The development of stage, three wisdom cut back and the decommissioning of input crusher. One two months of his central allowed for increased availability of softer material improved availability of the primary crushers and improved fragmentation of the whole.
At enterprise nickel production was down quarter over quarter, producing approximately 5700 tonnes of nickel.
Speaker Change: During the quarter sources of nickel sulphide ore was impacted by wizarding, an alteration in the fault line in the southern wall of the pit.
Speaker Change: As such the enterprise flotation circuit was switched to drink Cup holders in December.
Speaker Change: While the full data was mined through and the oldest material was stockpiled sympathy for blending with deflation nickel sulfide.
Speaker Change: Nickel ceded.
Speaker Change: Also the MTA was mined out.
Speaker Change: At Cobre Panama.
Speaker Change: Continue with in this maintenance work for asset preservation.
Speaker Change: Along with volume into up to ensure compliance to the environmental and social impact study for the project.
Speaker Change: Continued top of thousands of cars on site.
Speaker Change: And we will adjust the level of employment in our cordless study continues on with Mcdonalds and Panama.
Speaker Change: Thank you and I'll now hand, the call over to Brian to review the financials.
Brian: Thank you Rudy.
Brian: On the market side, the copper price was strong early in the fourth quarter supported by anticipated U S fed rate cuts and Chinese stimulus measures.
Brian: Copper prices pulled back in early November reaching a low of $3.95 per pound following the U S elections and concerns around the potential terrorists.
Brian: Overall realized prices were 2% lower than in Q3.
Brian: While demand remains strong we expect continued price volatility as the market tries to get a feel for how broad and extended the potential tariffs and associated trade wars might be.
Brian: Quarter over quarter at revenue and EBITDA were down, 2% and 13% respectively.
Brian: This was due to lower copper and gold sales, coupled with higher unit costs at central all in enterprise.
Brian: Q4, net earnings attributable to shareholders was 19 $9 million with adjusted earnings per share of <unk> 14 cents.
Brian: Was the second consecutive quarter and the green since Cobre, Panama entered preservation and safe management.
Brian: Onto costs, where performance continues to be strong.
Brian: Copper seaborne costs were up 7% at $1 68 per pound.
Brian: Due to slightly lower production volumes and increased tolling costs at Sentinel.
Brian: This was mitigated by reduced drawn a panic and cheap and lower fuel costs, which lags behind crude oil prices by about two months.
Brian: Remaining input prices were stable.
Brian: Zambian power rates were in line with Q3 as our Zambian team continues to effectively manage the PA restrictions in country.
Brian: On a full year basis, it was pleasing to see copper cone cost of $1.74 per pound.
Brian: Below the bottom end of the revised guidance.
Brian: It is worth noting that excluding cobre, Panama, a full year of copying the cost what it was at its lowest level since 2021.
Brian: This cost performance was driven by strong copper and gold production.
Brian: With elevated gold prices, which more than offset the six cents impact of third party power rates in Zambia.
Brian: Moving onto guidance.
Brian: While cash cost guidance for 'twenty, four 'twenty 'twenty, five and 'twenty twenty-six benefited from increased gold volume and price assumptions. This was offset by the impact of Zambian important pockets of approximately seven cents per pound.
Brian: As well as expected higher labor and maintenance costs.
Brian: With respect to capital expenditures 2025, Capex increased to one three to $1 $45 billion.
Brian: Especially with the $100 million of expenditures carried over from 2024.
Brian: In addition, the guidance reflect some cost pressures.
Brian: Also within the three year guidance at approximately $400 million in capital expenditures related to the S. Three expansion and $325 million related to mining fleet replacement that can sachi.
Brian: On to the balance sheet.
Brian: Net debt decreased in the fourth quarter by $61 million to $5 5 billion.
Brian: It was very pleasing to see the consistent operational performance led to this reduction in net debt even as we continue to find a major capital expansion project and Cobre, Panama P. S N M costs.
Brian: Net debt also benefited from reduced working capital levels with cash received from previous quarters late sales increase Sam N V. A T receipts and the timing of payables.
Brian: Liquidity increased during the quarter remained strong at $1 $6 billion.
Brian: This comprises of $112 million in cash.
Brian: $750 million of Undrawn revolver.
Brian: Okay.
Brian: During the call that some of the hedges that we previously put in place rolled off.
Brian: This element of Coty, and fully realized hedge gain of $13 million and $34 million respectively.
Brian: We've maintained our hedging approach from last year with protection from downside copper prices.
Brian: The period of expenditures and ramp up of the S. Three expect chip.
We now have roughly 50% of our copper sales hedged via collars through to the end of 2025 with new hedges recently added for 2026.
Brian: Of the 90% about 2026 production remains exposed to spot prices.
Brian: It is not yet since we completed the comprehensive refinancing and it is pleasing to say that was stuck to the plan.
Brian: Maintaining cost discipline skin via program and extending the tried and facility.
Speaker Change: As Tricia noted in his opening remarks, we continue to look at additional initiatives to further strengthen our liquidity and balance sheet.
Speaker Change: With a range of options in front of US which include that potential minority stake in the Zambian business.
Speaker Change: This process is ongoing and as such we won't be making further comments with regard.
Speaker Change: That concludes the finance section I'll now hand, the call back to trust them.
Ron: Thank you Ron.
Ron: Before handing the call up for Q&A I would like to review the guidance we provided in January.
Ron: And she guidance reflects a conservative ramp up profile for the new 25 million ton per annum concentrate or three expansion project.
Ron: A presentation has several pictures of the progress on the build and commissioning process that saw it.
Ron: The project remains on schedule for completion by midyear and with such a training of the workforce is focused on ensuring a smooth ramp up of the new concentrator.
Ron: The conservatism that is applied to forecast production from the Constancia has three expansion is however relate it to the big profile the surface stockpile that would be initially through the plant.
Ron: As these stockpiles have been sitting on surface for several years with the potential impact of weathering, we have prudently apply to consider great protocols of this material.
Ron: And while lower grade the cost of moving this material will be reduced.
Ron: It is already Boston and its surface elevations.
Ron: We remain on schedule for pre stripping in the South East dome and the higher grade ore from this section of the deposit will be fit into the plant starting in 2020 seven.
At Sentinel, we have accelerated mining in stages, three and four in order to smooth out the production profile and derisk future or supply.
Ron: These actions are responsible if they will assist in achieving an optimal and sustainable balance of grades and volumes during the loss of the mine.
Ron: However, they will initially be some higher volumes of Oxford always some transition material to work our way through.
At enterprise the focus for 2025 will be on optimizing the development of the pit to supply feed volumes to the plants.
Ron: We've mined through the Hollywood that area on the southern wall, and additional and deeper reverse circulation drilling underway to broaden out your logical understand after wouldn't be a reason for us.
Ron: I would like to end my prepared remarks by directing more thanks to the team at first quantum for their hard work. This past year and also to our shareholders for their ongoing support 20.
Ron: 2024 was a challenging year, but I'm optimistic about the outlook for 2025.
Ron: We are focused on our main priorities for this year firstly towards resolving the situation in Panama, We continue on our public outreach programs to educate dependent mine, even public about the benefits of cobre, Panama that mining of natural resources in an environment for mentally and socially responsible manner is a necessity for the country and our modem lives.
Ron: We also look forward to constructive discussions with the government for resolution of the situation.
Speaker Change: Secondly, as Ron mentioned, we will continue with the proactive management of our balance sheet and liquidity position.
Speaker Change: Thirdly, as Rudy mentioned, we will continue our focus on safe and productive operational performance.
Speaker Change: And finally in Zambia delivery of the consent. She has three expansion project in mid 2025 will be an inflection point for the company that will enhance our financial resilience and support continued growth.
Speaker Change: Thank you this brings our prepared remarks tune and operator, we can open the call for Q&A.
Speaker Change: Thank you we will now begin the analyst question and answer session.
Speaker Change: Analysts are permitted to ask one question and one follow up and are welcome to rejoin the queue. If they have more.
Speaker Change: To join the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request if.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing any keys.
Speaker Change: To withdraw your question. Please press Star then two.
Speaker Change: We'll pause for a moment as callers join the queue.
Speaker Change: And the first question will come from Auris welcomed al with Scotia Bank. Please go ahead.
Auris: Hi, good morning, and thanks for the update questions around out Panama situation I'm, just curious given that the social security issue isn't.
Speaker Change: Really felt yet.
Speaker Change: And now the canal has become a focal point as well do you still anticipate sort of resuming or starting negotiations at the end of the first quarter or could this timing now slip into later in the year.
Morris: Hi, Morris.
Morris: Thanks for the question, yes, the President's been clear as he was at the end of last year and then into this year that for him the social security matter comes first and the main topic would follow directly thereafter.
Morris: Originally the timing of that the government had wanted to pass in December and certainly.
Morris: They're optimistic forecast in January.
Morris: We don't want to say as far as I understand the current state to sit at the moment. The 200 articles of the draft Bill was passed at the end of last week in the first committee. The first round and there's two subsequent rounds of debate. So there's somewhat through that the next stage of that debate happens in the National Assembly and if the Lady.
Morris: Dislikes and passes to FID and it goes for the final food round. So.
Morris: The president has been clear in telegraphing that that needed to happen first.
Morris: And then onto the mine I think in regards.
Morris: <unk> ran the canal, we would just say, we're absolutely focused on making progress towards resolution and to work constructively with the government and in the.
Morris: The mine prevents provides a lot of opportunity in terms of underlying the economy.
Morris: <unk> and so on in the country. So.
Morris: So at this stage, we see progress and we see it moving forward, we continue to hold to our expectations around our reaching resolution as soon as possible.
Speaker Change: And just as a quick follow up if I may just a five month delay on the ICC final arbitration hearing I guess to February of next year do you think that impacts the pace of negotiations. This year, just given it would seem to ease the pressure short term.
Speaker Change: No look I think the key.
Speaker Change: What's happened is that the new government is coming in July and I, there's been a change in.
Speaker Change: Management has also been a change in in.
Speaker Change: There are legal with buses and so as I approached the panel.
Speaker Change: I think the Panama was very clear and handing that back that they were.
Speaker Change: They accepted that but.
Speaker Change: Would hold toward taught a resolution timeframe now and that was the move to February 2026, and in terms of the work that needs to happen for each party submission and so on that continues to be held so I don't see that shifting the grand very much.
Speaker Change: Okay. Thank you very much.
Edward Goldsmith: The next question will come from Edward Goldsmith with Deutsche Bank. Please go ahead.
Edward Goldsmith: Thanks, just two questions from my side, especially on the Cobra, Panama, how should we think about the time frame for approval of the preservation and safe management program and the environmental audit to begin and then secondly can you give an update on how you're thinking about the balance between financing options versus partnering and sale options going forward.
Edward Goldsmith: It's.
Edward Goldsmith: Sure It would I'll hand, the second question too wrong, but on the first one look.
Edward Goldsmith: P N S. M plan, we submitted early last year and understanding it's being well reviewed but really the situation. When the timing is that it's in line with the prisons policy to get through social security first we wouldn't we would point out the importance of that program are these urgent.
Edward Goldsmith: See around ensuring the ongoing environmental stewardship of the saw it and that's it integrity, we were able to show that to the minister of environment and the Ministry of public security when they came to the site at the end of last month and you know.
Edward Goldsmith: That is important beyond the status of the mind those interim measures do you need to pass so that we can be more of the spending beyond that as Rudy said, we have 300 people and thoughts in that cost needs to be borne we cannot do that indefinitely.
Edward Goldsmith: Without losing to remission, which is the affordable once I'm trying to peanuts and coming in place and being approved so we would say that's always do need to be considered now an approved imminently. So there's clarity on that resolution and so on and step would logically.
Edwin: Hi, Edwin tend to your second question on the balance sheet.
Edwin: First point to make is that we come from a very strong starting position. We ended Q4 with $1 $6 billion of liquidity and even more pleasingly, we actually saw it go down through the course of Q4 and liquidity increase through the course of Q4 as we look ahead to 2025, we have a range of options ahead of US you alluded to the minority stake sale.
Edwin: In Zambia, and certainly serious engagements continues in that respect the way that that up against a range of other options here that you saw us last year access the bond market you saw us last year entering to Prepays. Those same options continue to be there for ups for us together with a range of other financing options such really about progress.
Edwin: <unk> a variety of initiatives that as they come to fruition.
Edwin: Considering the pros and cons of each from both a financial perspective, and a strategic perspective, and we'll work hard on that through the course of this yet.
Edwin: The next question will come from Marcio for Rod with Goldman Sachs. Please go ahead.
Marcio: Thank you good morning, everyone.
Speaker Change: Just in terms of when you got sort of the last call you mentioned that you'd expect.
Speaker Change: You'll have a final resolution or potential deal by the end of December.
Speaker Change: I'm trying to understand if there's any potential timeline it feels like you're not in a rush you'll have all the options. What did you have a certain timeline to win.
Speaker Change: Besides the wellheads for lots, which to my knowledge States say okay. Thank.
Speaker Change: Okay.
Speaker Change: Thanks, Marcio, Ron will you take that question.
Speaker Change: And lastly, I think we've been consistent throughout that any arrangements, we enter into in Zambia will be for the next 25 years, so rather than rushing to specific timeline, we have to be take the time and engage with counterparties on what is a large and complex business. So it does take time, let's see if there is an alignment to route the right sort of agreements all of that work for us that with our counterparts.
Speaker Change: That work for the government of Zambia, and that's how we're approaching it you know if and when we get to that point, then, we'll we'll announce that to the market, but we're not putting specific timing.
Speaker Change: And data to make sure it has to be done by X or Y date, its really about getting to the right agreements rather than a quick agreement.
Speaker Change: Okay. Thank you and just a follow up it seems.
Speaker Change: It feels like you're still.
Speaker Change: The rainy season is still ongoing has been relatively okay, but you also guided for a continuation of that.
Speaker Change: Our software and then she so, especially when Bob and so forth, but just trying to understand what it is but at least what you actually have to go above the 40% threshold.
Speaker Change: In terms of total imports and how confident you are you can keep operational item, we still just slightly different velocity quite a spiritual.
Speaker Change: Yeah.
Speaker Change: Thanks, Marcio I can take that one so look we've been proactive in securing supplementary powers. We were through the course of 'twenty four and yes, we were only halfway through the rainy season. So far it seems relatively on track with withdraw it really January and then wait to like January the rainy sees.
Speaker Change: We lost three sort of March April and then you really see the big inflows into Kariba. Following that is that rainfall comes down from Angola. So I'm not here to predict that rainfall. We just put in place a responsible strategy in order to ensure that we have the power available and we have upside from.
Speaker Change: Matt in terms of additional hydro electric supply them that's great.
Speaker Change: We've taken a conservative lawn and that would include making sure we've got power for the.
Speaker Change: There's three expansion at Constancia.
Speaker Change: Yeah.
Speaker Change: The next question will come from Chris Leslie loved FEMA with Jefferies. Please go ahead.
Speaker Change: So operator, hi, guys. Thanks for taking my question, maybe just to follow up on the power situation in Zambia. So you you're saying they released today that anticipating a water levels over the course of the year, you'll have enough supplementary power to meet the demand that you have including with the ramp up of BS III expansion and the <unk>.
Speaker Change: Second half of the year, but then if we think about 2026 in your.
Speaker Change: And you're operating car and you see one cash cost guidance, what are you assuming about paraben availability and how.
Speaker Change: How should we think about kind of the potential.
Speaker Change: Potential variability around that depending on the hydro power levels in 2026. Thanks.
Speaker Change: Thanks, Kris Ron do you want to take that one yes, Chris I guess, it's Tristan touched on our conservative approach to sourcing pilot. We've also taken a pause.
Speaker Change: Salvatore to costing costs in respect of cost guidance assumes the same in 2025 cost problem.
Speaker Change: The fall of 2020 that through the course of 2026, we continue to have that seven cents per pound.
Speaker Change: Pound of copper in the past a lot costs as Tricia noted, if we see stronger rains and withdrawal and more hydroelectric power through the course of 2026, you'll see that reduced and that'll be upside on the cost guidance that you're currently sitting with.
Speaker Change: Okay. Thanks for that and then secondly on the hedging strategy I would assume that if Cobra panamax comes back online or when it comes back online.
Speaker Change: This strategy will then shift back to a spot market exposure or will you continue to hedge after the mine has restarted.
Speaker Change: Brian I can tell you that one sure Chris and just to comment in general how we think about hedging I mean alcohol as a company is to enhance the long term for investors copper exposure, but we also want to take the conservative approach in terms of how we manage the balance sheet.
Speaker Change: The timing of the hedge hedges that we've got in places not so much driven by cobre, Panama, but really the delivery of the three project is that really ramped up through the second half of this year and then we start to get the benefits of the higher grade ore into next year that will shape. The the hedging book I'd say with.
Speaker Change: When it comes to the hedges reasonable rate and really it's that management of the balance sheet, while we deliver capital project, that's drive that timing rather than cobre, Panama specifically.
Speaker Change: Our goal remains to get back to an unhedged position.
Speaker Change: Great. Thank you for that I appreciate that.
Speaker Change: The next question will come from Lawson Winder with Bank of America Securities. Please go ahead.
Speaker Change: Yeah. Thank you, operator, Hello Trust and Ryan and team Thanks for the update today so.
Speaker Change: Wondering about the Cobra, Panama public outreach that you guys have been doing I think its a great initiative and I was just curious if that's turned out any areas of weakness on which you think either first quantum or the government of Panama could could've proof in terms of communicating the benefits of the mine to.
Speaker Change: To the public whether it's operating hiring or or otherwise. Thanks.
Speaker Change: Yes.
Speaker Change: Sure Lawson thanks so.
Speaker Change: So absolutely we acknowledge particularly.
Speaker Change: Around the condition that led to the suspension of communications to broader society in Panama small.
Speaker Change: When we were low in missing and not where they should be and that's beyond the communities around the mine and really into the into the city, but also into a different democratics young young people University and so on and so we've really stepped up that effort.
Speaker Change: And are included in that $12 million a month spend is.
Speaker Change: A lot of effort going out into those communities. So we had some 40000 people come through in various interactions are the direct visits to the sites or through public phase a and engagement in universities at social events in work without people on the ground.
Speaker Change: Not just on the mind body and broader society beyond that we've had some 300000 engagements.
Without virtual tour on the website and its always a just steps in a pathway we need to continue their education continue the engagement as we go through the process towards resolution from where we are now I think we are seeing a bit of a shift in the narrative.
Speaker Change: Not just on economy, and unemployment and the impact that that's having on Panama and the role that the mine can play but beyond that also is excellent.
Speaker Change: Having natural resources available and the response the opportunity that responsible mining can provide to it an economy to society.
Speaker Change: He's he's gathering, but we need to keep working hard on us we need to keep a reinforcing the messages and also speaking with detractors, we've been reaching out to them. So that they have a technical basis for understanding and that's also helping on some of the the fight and use some of the misrepresentation that was the previously.
Speaker Change: At least there is a technical and a ineffectual places to discussion.
Speaker Change: Okay. Thanks for that that's helpful.
Speaker Change: My follow up absolutely.
Speaker Change: Absolutely.
Speaker Change: The streaming financing options that Ryan you mentioned on your your slide on a potential third party.
Speaker Change: Sources of financing so.
Speaker Change: So just first of all to clarify I assume that means a precious metal byproduct stream and then and then secondly.
Speaker Change: At what stage are these discussions and how would you say that that type of financing ranks versus the others highlighted in that slide and then I would note. Obviously I mean, I think you have an existing byproduct precious metal.
Speaker Change: Streaming arrangement that.
Speaker Change: It would be fairly described as quite successful. So you thought there would be very helpful. Thanks.
Sure.
Lawson Winder: Please go ahead, yeah, Hi, Lawson so.
Speaker Change: So yes, you're correct, we do have a large byproduct.
Lawson Winder: Credits in the form of gold at <unk>. So I think it what it means is as we look at the full list of available options with fortunate to be one of those companies that has a wide range of options and because of that goal that includes streaming that being said I wouldn't read into that that you know we're going to do a stream or that's number one on the list that slide it just highlights.
Lawson Winder: Highlights Theres a range of options, we consider all of those options will advance some of them. Some of those will just remain kind of backups will advance variety of them and when you get to the finish line on each of them.
Lawson Winder: It's really up.
Lawson Winder: Up at your other alternatives and say, which is the most attractive.
Lawson Winder: Put capital how does that align with what our strategic goes up.
Lawson Winder: Great. Thank you.
The next question will come from Iona muscle loss with Morgan Stanley. Please go ahead.
Speaker Change: Thanks very much for the presentation of the first question is on B S. III project, where you reiterated commissioning in H tools. This year can you remind us how long its going to take to get the full nameplate capacity and related to that when do you expect to be out the outside the law.
Speaker Change: Great. So quietly zone in which case, you get both higher throughput and higher grades.
Speaker Change: Thanks.
So we will finish.
Speaker Change: We will complete construction by mid 2025, and the commissioning and ramping up through the second half of the year. As you say look I think we expect by the end of the year to sort of be at 89. He was sent level that kind of level in terms of our ambitions and we're putting a lot of effort into the operational readiness that is training.
Speaker Change: The workforce <unk> b to be ready to receive the plant I was there at the end of January walking around and it's a very good state of progression. We were commissioning the major substation and then several substations behind that really the main work is on piping and electrical in terms of man hours left but it was a good.
Speaker Change: Allocation of resources towards that we've got all the major equipment on site, yes, a couple of pumps here and there.
Speaker Change: So we feel very good about that pathway and also about the ramp up thereafter.
Speaker Change: In terms of the great profile that would deliver those stockpiles.
Speaker Change: And the bile pool on a whole, but just on the flat across from the other side of the pits and stuff.
That's an opportunity to take low cost feed.
Speaker Change: And so the bulk of material that we're pushing through the 24 million tons of additional sulfide material pool that we seem to to pour into.
Speaker Change: To the the new concentrator.
Speaker Change: And then over time as we continue the pre strip at South East doing we will expose hardly at all there in south east time, but continuing to take feet from mine pit, which continues through the loss of the mine to be an important source of ore. So the grade profile, we expect to improve.
Speaker Change: From the second.
Speaker Change: Second half back end of 2026.
Speaker Change: It comes through in the stripping is complete and southeast all of them.
Speaker Change: And in 2027, as we've put into our guidance and we really start to see the benefit of that.
Speaker Change: Okay. That's very clear thank you very much and just a follow up.
Speaker Change: It seems the situations of hydro power situation in Zambia remains challenged at least for one more year you have been pursuing options one power sourcing by our Ppas, how is that progressing and if you were to sign.
Speaker Change: A 15 year PPA agreements, how should we think about the cost of flower is it comparable to what you're baking into the guidance for 25 or could you see potentially another step off thank you.
Speaker Change: Thanks, Yannis Ah Yeah look we just so I think what we would say is given that we're only halfway through the rainy season that we we plan conservatively and so that's why we put that forth.
Speaker Change: Like Curry, but was held low last year because of the drawdown and also because they were doing work on the plunge pool behind the behind the wall that work is now complete.
Speaker Change: But you know they need they'll probably need.
Speaker Change: Couple of seasons of rainfall to really recharge kariba are in the absence of record years.
Speaker Change: We plan for that Conservative basis, we are working with third party power.
Speaker Change: Support always agreements had implied in these or extensions, they're all plugged into the southern African power pool across various sources are in the region and then beyond that we working with our for example, our total.
Speaker Change: Energies and also chaired energy on a longer term project.
Speaker Change: Oh, sorry, and a wind power that project, we expect to be commissioned and running around 2027 and 2028 are in terms of when we would see the outflow which was around 430 megawatts.
Speaker Change: The next question will come from Ian Rossouw with Barclays. Please go ahead.
Ian Rossouw: Thanks, Tim Yeah, two questions from me just on the enterprise looking at your.
Speaker Change: All in sustaining cost guidance.
Speaker Change: It currently seems like the nickel prices below the bottom end of that range. So it suggests that you'll use it.
Speaker Change: Mind will be cash negative.
Speaker Change: Can you maybe talk about what options you have I mean would you consider slowing that down in treating more copper and copper ore.
Speaker Change: Obviously, it seems like you're opening in the pits.
Speaker Change: In later years to bring cost down materially where you you will most likely be generating cash, but just trying to get a sense of what the options. They're all they're all there if prices stay low.
Speaker Change: Secondly, just on this.
Speaker Change: This.
Speaker Change: <unk> D T on gold Dore.
Speaker Change: What's how confident are you that that Oh.
Speaker Change: Cool.
Speaker Change: It will be reinstated or that suspension will be reinstated.
Speaker Change: You can actually start selling a cold again.
Speaker Change: Sure.
Speaker Change: Ron do you want to take that.
Speaker Change: That question the first one sure Hi, Ian.
Speaker Change: The nickel cost guidance is $5 to 650 per pound for this year, that's a C. One basis and you're right. The all in cost of 750 925 is above where the nickel prices. Currently the Ludwig noted you didn't see that full quite materially in 2026, and 2027, where the midpoint is around $6 or below.
Speaker Change: Current nickel prices are and what that is is that they have to write up the pet this year to work through some of the more oxidized material and will continue then to see the cost profile step down as we get into as we work through that and also open up better grades and so you know.
Speaker Change: That cost profile once we're in that 2026 27 period as strong. So at this stage no plans to change the operational approach in setting our approach around our enterprise.
Speaker Change: Yeah and on the go to export maybe.
Speaker Change: So we've had the conversations with government always in Zambia in January I'm speaking with the President we feel comfortable with that it's not just a consensus that was affected. It was also the gym produces in and so it's a broader perspective, but the conversations around that pretty clear. So we do expect this suspension to be.
Speaker Change: Reed reinstated.
Speaker Change: No.
Speaker Change: Do you think that still happens in Q1, so you can sell cold in Q1.
Speaker Change: Ron Yeah, Yeah, and I think we'd be confident that happened in Q1, I mean, we would know it actually as it's currently set up we sell most of our gold Dore to the bank because that's the way I can not <unk>.
Speaker Change: But certainly we think it's important that that is removed any interactions you've had with government. So far suggests that will get moved in the near term.
Okay alright, thank you.
Speaker Change: Okay.
Speaker Change: The next question will come from Anita Soni with CIBC World markets. Please go ahead.
Anita Soni: Good morning, Tristan Ryan and team. So just a couple quick questions. The first one a follow up on the extension of course, the ICC arbitration hearing is that the final date to which it could be pushed you or could you see that pushed for that.
Speaker Change: Hi, Anita Yeah, that's the final day.
Anita Soni: And then the second question, a little bit more big picture.
Speaker Change: With the comments coming out from the U S. President round, the Panama Canal have you seen any change in the government sentiment towards the mine and what I'm thinking about it either you know trying to find alternative sources of revenue.
Speaker Change: And also how they think about critical minerals, considering other countries are pushing to get their critical minerals policy at this stage, though if you could just provide any color that would be appreciate that I'm just trying to see if theres any read through to cope at Cobre Panama.
Speaker Change: Sure.
Speaker Change: Look what we've decided that we were absolutely focused on making progress towards resolution in Panama.
Speaker Change: We continue to work very constructively with the government.
Speaker Change: And we continue with our responsible stewardship of cobre, Panama towards reaching a solution that is in the best interest of that.
Speaker Change: The covenants people, that's really fun because.
Speaker Change: Alright, thank you.
Speaker Change: Yeah.
Speaker Change: The next question will come from Craig Hutchison with TD Cowen. Please go ahead.
Craig Hutchison: Hi, good morning.
Craig Hutchison: My question is actually a grandma grain production profile for gold.
Craig Hutchison: More elevated than I would expect for the next few years, just given the limited reserves I'm just curious whether the production profile extends much beyond 2027.
Craig Hutchison: With the reprocessing.
Craig Hutchison: <unk>.
Speaker Change: And I guess the second question would you guys consider a gold prepay.
Speaker Change: The potential to be a material amount to go.
Speaker Change: Yeah.
Speaker Change: Craig It's got to get questions on well from a crime and yeah. We are very enthused with the copper production is coming to an end and we will see we expect the second half of this year, but gold production.
Speaker Change: On so we've just commissioned the carbon in Leach plant there and we received approval for mining of the Oriental here at the end of last year, so that activity will get underway and.
Speaker Change: We don't have a full state there just because of the location and drilling and so on but we do expect it to be ongoing and contribute to production this year and to next year and.
Speaker Change: Beyond 2027, I think it starts to look more cloudy. So that's really a timeframe at the moment.
The prepay you're right that is an option to us. So we talk in the slide about one of the options available to us being copper prepays like we did last year, but absolutely as demand in the market for all Prepays, but again it just comes back to look at each opportunity for financing and they just weighing up the cost of capital of each.
Speaker Change: Okay, great. Thank you.
Speaker Change: Yeah.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Mr. Tristan Pascoe for any closing remarks. Please go ahead Sir.
Tristan Pascoe: Thanks, operator, and thank you to everybody for joining the call and thanks for your time and your interest and we look forward to speaking to you again at the next opportunity.
Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for your participation and have a pleasant day.
Tristan Pascoe: Yeah.
Tristan Pascoe: [music].
Tristan Pascoe: Hum.
Tristan Pascoe: [music].
Tristan Pascoe: Uh huh.
Tristan Pascoe: [music].