Q2 2025 Teck Resources Ltd Earnings Call

Ladies and gentlemen, thank you for standing by. Welcome to text second quarter 2025 earnings release conference. Call at this time, all participants are in listen-only mode. Later, we will conduct a question and answer session to join the question queue. You may press star then 1 on your touchtone phone. Should anyone need assistance during the conference call they may signal an operator by pressing star then 0 on the telephone.

This conference call is being recorded on Thursday, July 24th 2025.

I would now like to turn the conference over to Emma Chapman, vice president West relations. Please go ahead.

Unknown Executive: Good morning, everyone, and thank you for joining us for Teck's second quarter 2025 conference. This quote contains four looking slides. Actual results may vary due to various risks and answers. Teck does not assume the obligation to update any photo keepsites.

Emma Chapman: Thank you, operator. Good morning, everyone. And thank you for joining us for

Quarter 2025.

Emma Chapman: Today's call contains forward-looking statements.

Actual results may vary due to various risks and uncertainties.

Unknown Executive: Please refer to slide 2 for the assumptions underlying our forward-looking statement. We will reference long gap measures throughout this presentation. Explanations and reconciliations are in our MD&A and the latest press release on our website.

Emma Chapman: Effect is not assume the obligation to update any form of statements.

Emma Chapman: Please refer to slide 2 for the assumptions underlying a forward-looking statements.

Emma Chapman: You will reference non-gaap measures throughout this presentation.

Emma Chapman: Explanations and reconciliations are in our mdna and the latest press release on our website.

Emma Chapman: On today's call, Jonathan Price, our CEO, will start with highlights from our second quarter.

Emma Chapman: On today's call Jonathan Pryce. Our

Jonathan Pryce: CTO will start with highlights from our second quarter.

Unknown Executive: Crystal Prystai, our CFO, will follow with a financial and operational review of the quarter.

Unknown Executive: Jonathan will then wrap up with closing remarks and a Q&A.

Crystal Press: Crystal press start our CFO will follow with a financial and operational review of the quarter.

Jonathan Price: With that, over to you Jonathan. Okay, thank you, Emma, and good morning, everyone.

Crystal Press: Jonathan will then wrap up with closing remarks and a Q&A session.

Jonathan Pryce: With that over to you, Jonathan.

Jonathan Price: Now, before we get into the quarter, I would like to take a moment to acknowledge the incident earlier on Tuesday at one of our peers' operations in the northwest of our home province of British Columbia. Our thoughts are with the three workers that remain in the underground work area, as well as their families, friends, and colleagues, and the emergency response teams, and we hope for their safe and speedy rescue.

Crystal Press: Hey, thank you, Emma. And good morning everyone.

Speaker Change: Now before we get into the quarter, I would like to take a moment to acknowledge the incident earlier on Tuesday, at 1 of our peers operations in the northwest of our home province of British Columbia.

Jonathan Price: So turning to our second quarter 2025 results, starting with highlights on slide four. Overall, we are advancing our strategy of copper growth while returning cash to shareholders. Our profitability improved compared to the same period last year to $722 million of adjusted EBITDA. We had strong performance in our Zinc segment, with Red Dog sales above our guidance range and a significant improvement in our Zinc net cash unit costs, as well as another quarter of profitability in cash generation and trails. Across our established operations, production is on track to meet our annual guidance. At QB, we had previously noted that we would be at the lower end of our guidance of around 230,000 tonnes for the year.

Speaker Change: Our thoughts are with the 3 workers that remain in the underground work area as well as their families friends and colleagues, and the emergency response teams, and we hope for their safe and Speedy rescue.

Speaker Change: So, turning to our second quarter of 2025 results, starting with highlights on slide 4.

Speaker Change: Overall, we are advancing our strategy of copper growth while returning cash to shareholders.

Speaker Change: Our profitability improved compared to the same period last year to 722 million of adjusted ebit da

Speaker Change: we had strong performance in our zinc, segment with red dog sales above our guidance range, and a significant improvement in our zinc, net cache unit costs,

Speaker Change: As well as another quarter of profitability and cash generation and Trail.

Speaker Change: Across our established operations production is on track to meet our annual guidance.

Jonathan Price: Whilst the team is working hard to achieve this, we acknowledge that there could be risk from possible external factors or, of course, any delay from the TMF development work. As a result, we've revised our outlook for QB to 210,000 to 230,000 tonnes for the year, but continue to target design rates by year end.

Speaker Change: At QB, we had previously noted that we would be at the lower end of our guidance of around. 230,000 tons for the year.

Speaker Change: While the team is working hard to achieve this. We acknowledge that there could be risk from possible, external factors, or, of course, any delay from the TMF development work

Jonathan Price: Earlier today, we announced that the board has sanctioned the Highland Valley Copper Mine Life Extension Project in British Columbia for construction. This is foundational to our strategy to double copper production by the end of the decade. Given the strong demand for copper as an energy transition metal, the project will generate compelling returns, with an IRR far surpassing our cost of capital and secure access to this critical mineral for the next two decades. The project extends a core asset to 2046, with average annual copper production of 132,000 tonnes over the life of mine. We are continuing to return significant cash to shareholders with elevated daily share buying levels in the quarter resulting in a total of $487 million or 9.8 million Class B shares.

Speaker Change: As a result, we've revised our outlook for QB to 210 to 230,000 tons for the year, but continue to Target design rates by year end.

Speaker Change: earlier today, we announced that the board has sanctioned the Highland Valley copper, my life extension project in British, Columbia for construction,

Speaker Change: This is foundational to our strategy to double copper production by the end of the decade.

Speaker Change: Given the strong demand for copper as an energy transition. Metal, the project will generate compelling returns with an irr far surpassing our cost of capital and secure access to this critical mineral for the next 2 decades.

Speaker Change: The project extends a core asset to 2046 with average annual copper production of 132,000, tons over the life of mine.

Jonathan Price: Year-to-date, we have returned a total of $1.1 billion to our shareholders through dividends and share buybacks, and we have completed approximately 70% of our authorized $3.25 billion buyback, which is the equivalent of $2.2 billion.

Speaker Change: We are continuing to return significant cash to shareholders with elevated. Daily share buying levels. In the quarter. Resulting in a total of 487 million or 9.8 million class beef shares.

Speaker Change: Year to date. We have returned a total of 1.1 billion dollars to our shareholders, through dividends and share BuyBacks. And we have completed, approximately 70% of our authorized 3.25 billion buyback, uh, which is the equivalent of 2.2 billion dollars.

Jonathan Price: Finally, we are maintaining the resilience of the business, including through our strong balance sheet, which enables us to navigate uncertainty and continue to create value. We currently have $8.9 billion in liquidity, including $4.8 billion in cash.

Speaker Change: Finally, we are maintaining our the resilience of the business.

Speaker Change: In cash.

Jonathan Price: Turning to slide five, we continue to be committed to safety and sustainability. Across the operations that we control, our high potential incident frequency rate remained low in the first half of the year at 0.09, below our 2024 performance of 0.12.

Speaker Change: Turning the slide 5, we continue to be committed to safety and sustainability.

Jonathan Price: I would like to take a moment to acknowledge that a fatality occurred on April 22nd at Antamina in which Teck holds a non-controlling interest. We are deeply saddened by this event and offer our condolences to the family, friends and colleagues. Teck fully participated in the investigation, which was led by the team at Antimena, and learnings will be shared across our company and across the sector.

Speaker Change: Across the operations that we control are high potential incident frequency rate. Remained low in the first half of the year at 0.09 below our 2024 performance of 0.12.

Speaker Change: I would like to take a moment to acknowledge that the fatality occurred on April 22nd at antamina in which Tech holds a non-controlling interest.

Speaker Change: We are deeply saddened by this event and offer our condolences to the family friends and colleagues of the deceased.

Speaker Change: Tech fully participated in the investigation which was led by the team at antamina and learning will be shared across our company and across the sector.

Jonathan Price: We were honoured to be named as one of Corporate Nights 2025 Best 50 Corporate Citizens in Canada. It's the 19th consecutive year that we've received this recognition, which is based on an evaluation of up to 25 sustainability indicators, including board diversity, resource efficiency, financial management, sustainable revenue and sustainable investment.

Speaker Change: We were honored to be named as 1 of corporate Knights 2025 best 50 corporate citizens in Canada.

Speaker Change: It's the 19th consecutive year that we've received this recognition which is based on an evaluation of up to 25 sustainability. Indicators, including, for diversity resource, efficiency financial management, sustainable revenue and sustainable Investments.

Jonathan Price: So now turning to QB on slide six. QB's second quarter performance was impacted by the ongoing TMF development. We're advancing multiple TMF development initiatives to improve sand drainage rates and accelerate mechanical movement of sand to achieve steady state operation. This work impacted Mill on line time in the quarter as previously disclosed.

Speaker Change: so, now turning to QB on slide 6,

Speaker Change: QB, second quarter performance was impacted by the ongoing TMF development work.

Speaker Change: we're advising multiple TMF development initiatives to improve sand, drainage rates and accelerate mechanical movement of sand to achieve steady state operation,

Jonathan Price: The plan post-QB2 construction pace of TMF development was based on design assumptions for sand drainage rates that have subsequently proven unachievable. Modifications to cyclones alone, while showing an improvement in sand drainage rates, were not sufficient to allow us to fully catch up on TMF development work in the quarter. As a result, we're implementing a range of additional measures to improve sand drainage rates and accelerate the mechanical movement of sand, including enhanced sand placement techniques and optimization of the grind size of the concentrates.

Speaker Change: This work impacted Mill online time in the quarter as previously disclosed.

Speaker Change: The plan, post qb2, construction pace of TMF development was based on design assumptions for sand. Drainage rates that have subsequently proven on achievable

Speaker Change: Modifications to Cyclones alone while showing an improvement in sand, drainage rates were not sufficient to allow us to fully catch up on TMF development, work in the quarter.

Jonathan Price: Importantly, the TMF development work and the transition from starter down to regular, ongoing sand lifts, is a one-time milestone related to the ramp-up of the operation. When it is completed, the TMF development work will be behind us for the life of the While the TMS development work will continue in Q3, we continue to target design rates by the end of the year. Throughput increased from the prior quarter, and we expect to see consistent grades of approximately 0.61% in the second half of the year. Work is ongoing to improve recoveries by year end, which will also be helped by more consistent mill run time.

Speaker Change: As a result, we're implementing a range of additional measures to improve sand drainage rates. And accelerate, the mechanical movement of sand including enhanced sand placement techniques, and optimization of the grind size of the concentrator.

Speaker Change: Importantly, the TMF development work and the transition from starter damn to regular ongoing sand lists is a 1-time milestone related to the ramp up of the operation.

Speaker Change: When it is completed, the TMF development work will be behind us for the life of the facility.

Speaker Change: Well, the TMF development work will continue in. Q3, we continue to Target design rates by the end of the year.

Speaker Change: Throughput increased from the prior quarter. And we expect to see consistent grades of approximately 0.61% in the second half of the year.

Jonathan Price: The outage of the shiploader at QB's port facility announced on June 2nd is expected to be extended into the first half of 2026. We have been successfully shipping Concentrate through our alternative port arrangements and have maximised shipments to local customers so there has been no production impact. Alternative sales logistics have had some incremental impact on our net cash unit costs, which is expected to be approximately 10 US cents per pound. We had a good step up in molybdenum production as a result of some key process improvement initiatives implemented during the quarter. We expect to continue to see molybdenum production improvements and we continue to target design throughput and recoveries of the moly plant by year end.

Speaker Change: Work is ongoing to improve, recoveries by year end, which will also be helped by more consistent Mill runtime.

Speaker Change: The outage of the ship loader at QB's. Port facility announced on June 2nd, is expected to be extended into the first half of 2026.

Speaker Change: We have been successfully shipping, concentrate through our alternative Port arrangements and have maximized shipments to local customers. So there has been no production impact.

Speaker Change: Alternative sales logistics have had some incremental impact on our net cash unit costs, which is expected to be approximately 10 US cents per pound.

Speaker Change: We had a good step up in maliban production as a result of some key process improvements initiatives implemented during the quarter.

Jonathan Price: Once we have completed the TMF development work, QB will be able to run at steady state, showcasing it as a Tier 1 asset that will be a cornerstone of Teck's portfolio for generations. We continue to work on defining the most capital-efficient and value-accretive path to future growth of QB through optimisation of the mill and low-capital de-bottlenecking opportunities that could collectively increase throughput by a further 50 to 25%. The foundation of QB is its large, long-life deposit that can support multiple expansions, and it offers multiple potential paths to create value for our shareholders, including assessing adjacencies or synergies with Coyoacan.

Speaker Change: We expect to continue to see maliban and production improvements and we continue to Target design, throughput and recoveries of the Molly plants by year end.

Speaker Change: Once we have completed the TMF development work QB, will be able to run. Its steady state showcase, showcasing it as a tier 1 asset. That will be a Cornerstone of tech portfolio for Generations.

Speaker Change: We continue to work on defining the most Capital efficient, and value accretive path to Future growth of QB, through optimization of the mill and low Capital Deb, bottlenecking opportunities. That could collectively increase throughput by a further 50 to 25%.

Jonathan Price: The operation also has the advantage of a very low strip ratio, which enables competitive all-in sustaining costs.

Speaker Change: The foundation of QB is its large long life deposits that can support multiple expansions and it offers multiple potential paths to create value for our shareholders, including assessing agencies or synergies with coyotes.

Jonathan Price: We successfully achieved completion testing requirement under QB's $2.5 billion U.S. dollar project finance facility earlier this year, which provides independent verification, confirming the robustness of the design, construction, and operational capacity. and we have a tax stability agreement in place through 2037. Taking all these factors into account, we are well positioned to generate significant future cash flows from this Tier 1 asset for decades to come.

Speaker Change: The operation also has the advantage of a very low strip ratio which enables competitive all-in sustaining costs.

We successfully achieved completion. Testing requirement under QB's 2.5 billion. US dollar project Finance facility earlier this year, which provides independent verification confirming the robustness of the design construction and operational capacity.

Speaker Change: And we have a taxability agreement in place through 2037.

Speaker Change: Taking all these factors into account, we are well positioned to generate significant future cash flows from this Tier 1 asset for decades to come.

Jonathan Price: Turning to the My Life extension at Highland Valley on slide 7. Highland Valley is Canada's largest copper mine and a core asset in our portfolio and we are excited to announce the sanction of the Highland Valley Copper Mine Life Extension or HBC MLE project. This is a lower-risk and lower-complexity brownfield project that is 100% owned by Teck. The MLE is an extension of the operation to 2046, and is expected to produce 132,000 tons of copper per annum on average over the life of mine. Based on additional technical and engineering work, we have optimized the project.

The turning to the money life extension at Highland Valley on slide 7.

and a core asset in our portfolio and we are excited to announce the sanction of the Highland Valley copper, my life extension, our HBC mle project,

Speaker Change: This is a lower risk and lower complexity Brownfield project that is 100% owned by Tech.

Speaker Change: The mle is an extension of the operation to 2046 and is expected to produce 132,000, tons of copper per Anum, on average over the life of mine.

Jonathan Price: As a result, the project capital estimate for the sanction is $2.1 to $2.4 billion Canadian dollars in nominal terms. Compared with our prior estimate of 1.8 to 2 billion Canadian dollars, this now includes project-level contingencies, accounts for inflation, input cost escalation, and the impact of potential tariffs on construction materials, and reflects the accelerated procurement of mobile equipment originally planned for later project phases. It also incorporates additional scope and indirect contract requirements identified through ongoing project refinement. The MLE project consists of development of site infrastructure and facilities, grinding circuit upgrades, increased tailing storage capacity, and enhancements to power and water systems, as well as a mine pushback that requires additional waste stripping to access high quality resources within the valley pit.

Based on additional Technical and Engineering work. We have optimized, the project as a result, the capital estimate sanction is 2.1 to 2.4 billion Canadian dollars in nominal terms.

Speaker Change: Compared with our prior estimate of 1.8 to 2 billion Canadian dollars is now includes project level contingencies accounts for inflation input cost escalation and the impact of potential tariffs on construction, materials, and reflects the accelerated procurement of mobile equipment's. Originally planned for later project phases.

Speaker Change: It also incorporates additional scope and indirect contractor requirements identified through ongoing project refinements.

Jonathan Price: The project economics are attractive, including generating a robust internal rate of return that is significantly above our cost of capital, and a project net present value using an 8% – sorry, a positive net present value using an 8% discount. The capital intensity of the project is expected to be low at US$11,500 to US$13,200 per ton of copper on an annualized basis. Overall, we expect to generate significant EBITDA and cash flows over the life of Mike. We have operated Highland Valley for decades and have successfully executed several mine life extensions there.

Speaker Change: The MLA project consists of development of site infrastructure and Facilities, grinding circuit upgrades increased tailing storage capacity, and enhancements to Power and Water Systems. As well as the Mind push back that requires additional waste, stripping to access high-quality resources within the valley pit.

Speaker Change: The project economics are attractive including generating a robust internal rate of return. That is significantly above our cost of capital and a project, Net Present Value, using an 8%. Sorry, a positive Net, Present Value using an 8% discount rate.

Speaker Change: The capital intensity of the project is expected to be low at 11,500 to 13,200 US dollars per ton of copper on an annualized basis.

Overall, we expect to generate significant ebit, and cash flows over the life of mine.

Jonathan Price: And importantly, project readiness for construction has been confirmed through independent assurance activities, including an external construction readiness assessment and a review of the technical scope, capital cost estimate, and execution strategy and planning. We are well positioned for solid project execution of the Highland Valley Mine Life Extension with a strong and experienced team in place, all major permitting complete, engineering nearly 70% complete, and all contracting and permitting well advanced. Construction mobilization is underway. We plan to start construction in a few weeks, and we look forward to delivering on this value-accrued project.

Speaker Change: We have operated Highland value for decades and have successfully executed several, My Life Extensions there.

An importantly project Readiness for construction has been confirmed through Independent Insurance activities, including an external construction Readiness assessment and a review of the technical scope Capital cost estimates and execution, strategy and planning.

Speaker Change: We are well positioned for solid project. Execution of the Highland value my life extension with a strong and experienced team in place. All major permitting complete, engineering nearly 70% complete and all Contracting and permitting. Well, advanced

Construction mobilization is underway. We plan to start construction in a few weeks and we look forward to delivering on this value. Recruited project.

Jonathan Price: We have summarised the changes to our guidance on slide 8. Production changes are driven by the revised outlook for QV based on the TMS development. We had previously noted that we would be at the lower end of our guidance of around 230,000 tonnes for the year.

Speaker Change: We have summarized the changes to our guidance on slide 8.

Speaker Change: Production changes are driven by the revised outlook for Cuvee based on the TMF development work.

Jonathan Price: While this is still possible, we acknowledge that there could be risk from possible external factors or from any delay to the TMF development work. As a result, we have revised our outlook for QB to 210 to 230,000 tonnes for the year, but continue to target design rates by year end.

We had previously noted that we would be at the lower end of our guidance of around 23,000 tons for the year, what this is still possible. We acknowledge that there could be risk from possible external factors or from any delayed to the TMF development work.

Jonathan Price: Production guidance for all other operations is maintained. As such, the impact of the revised QB outlook is the only driver of flow through changes to total copper production, moly production and therefore net unit cash costs.

Speaker Change: As a result, we have revised our outlook for QB to 210 to 230,000 tons for the year, but continue to Target design rates by year end.

Jonathan Price: We have also incorporated the increase in copper production in 2028 and the start of the growth capital investment associated with the sanction of the Highland Valley Copper My Life Extension Project. Please refer to the MD&A for further details.

Production guidance for all other operations is maintained as such the impact of the revised. QB Outlook is the only driver of flow through changes to Total copper production, Molly production, and therefore net unit cash costs.

Speaker Change: We have also Incorporated the increase in Copper production in 2028. And the start of the growth capital investment associated. With the sanction of the Highland Valley copper my life extension project,

Speaker Change: Please refer to the mdna for further details.

Jonathan Price: Turning to the near-term growth on slide 9, our ongoing growth trajectory is underpinned by our established portfolio of operating minds.

Speaker Change: Turning to the near-term growth on slide 9.

Jonathan Price: The sanction of the HBCMLE project is foundational to our copper growth strategy and a significant milestone in the growth of Teck's copper production into the future. A high-returning greenfield project with Zafranal in Peru and San Nicolas in Mexico are progressing as planned, and we are targeting sanctioned readiness by year-end. So for now, we initiated Advanced Early Works in May, following receipt of the Advanced Works Permit in April. This will enable construction to start immediately following project sanction. We are targeting receipt of the construction permit of Stage 8 approval, first of two approvals required in Q3, and the earliest date for a potential sanction decision is late in 2025.

Speaker Change: Our ongoing growth trajectory is underpinned by our established portfolio of operating mines.

A sanction of the hvc mle project is foundational to our copper growth strategy and a significant milestone in the growth of text copper production into the future.

Speaker Change: Our high returning, Greenfield project is zapan Allen Peru and Saint Nicholas in Mexico are progressing as planned. And we are targeting sanctioned rediness by year end.

Speaker Change: Is that for now we initiated Advanced early Works. In May following a receipt of the advanced Works permit in April, this will enable construction to start immediately following project sanctions.

Jonathan Price: San Nicolas, engagement with government authorities and other stakeholders is ongoing to support our permit applications. We plan to complete the feasibility study in the fourth quarter, which is the earliest date the project could be positioned for a potential sanctions decision following the receipt of necessary permits. These projects are significantly less complex and smaller in scope than QB with lower capital intensities, attractive project economics, and well-balanced risk-return profiles. In addition, we are working to define the most capital-efficient and value-accretive path for further growth of QB through optimization of the mill and low-capital-V bottlenecking opportunities that could increase throughput by 15 to 25 percent.

Speaker Change: We are targeting receipt of the construction permits of stage, a approval. First of 2, approvals required in Q3. And the earliest date for a potential sanction decision is late in 2025

Speaker Change: Saint Nicholas engagement with government authorities and other stakeholders is ongoing to support our permit applications.

Speaker Change: The earliest type of project could be positioned for a potential, sanctioned decision, following the receipts necessary permits.

These projects are significantly less complex and smaller in scope than QB, with lower Capital, intensities, attractive project economics, and well-balanced risk return profiles.

Jonathan Price: Our priority at QB remains completing the ramp-up, but optimization plans are also progressing. Detailed planning for de-bottlenecking is underway.

In addition, we are working to define the most Capital efficient and value accretive path, for further, growth of QB to optimization of the mill and low capital V, bottlenecking opportunities that could increase throughput by 15 to 25%.

Jonathan Price: This should enable us to submit the Declaration of Environmental Impact or DEA permit application in the second half of All of our growth projects must meet stringent criteria, delivering attractive risk-adjusted returns and competing for capital in alignment with our capital allocation framework. Overall, we expect to be able to double copper production by the end of the decade, with a path to annual copper production of up to 800,000 tonnes through these near-term projects.

Speaker Change: Our priority at QB remains completing the ramp up but optimization plans are also progressing detailed planning for debottlenecking is underway.

Speaker Change: This should enable us to submit the Declaration of environmental impact or deer permit application in the second half of the year.

Speaker Change: All of our growth projects must meet stringent criteria, delivering attractive, risk, adjusted returns and competing for capital in alignment with our Capital allocation framework.

Unknown Executive: With that, I will now hand the call over to... Thanks, Jonathan.

Overall, we expect to be able to double copper production. By the end of the decade, with a path, to annual copper production of up to 800,000 tons through these near-term projects.

Crystal Press: With that, I will now hand the call over to Crystal.

Crystal Prystai: Good morning, everyone. I will start with our second quarter 2025 financial performance on slide 11. Our adjusted EBITDA increased by 3% in the quarter compared to a year ago to $722 million, primarily due to another profitable quarter from trail operations, lower smelter processing charges, and reductions in corporate overhead costs, partially offset by lower copper and zinc prices, and higher operating costs at Highland Valley due to increased production. The improved performance from trail operations reflects the implementation of initiatives to improve profitability and cash flows, including increasing by-product revenue. While the current low smelter processing charges are a headwind for trail, Teck overall has a net benefit from them.

Crystal Press: Thanks Jonathan. Good morning, everyone.

Crystal Press: I will start with our second quarter, 2025 financial performance on slide 11.

Crystal Press: Our adjusted evaa increased by 3% in the quarter compared to a year ago to 722 million. Primarily due to another profitable quarter from Trail operations, lower smelter processing, charges and reductions in corporate overhead costs.

Partially offset by lower copper and zinc, prices and higher operating costs at Highland Valley due to increased production. And at QB

Crystal Press: The improved performance from Trail operations, reflects the implementation of initiatives to improve profitability, and cash, flows including increasing byproduct Revenue.

Crystal Press: While the current low smelter processing charges are a headwind for Trails Tech overall has a net benefit from them.

Crystal Prystai: We successfully reduced our corporate overhead costs by 21%, reflecting our ongoing efforts to reduce costs across our business. continue to expect lower annual corporate overhead costs compared with 2024. Importantly, we continue to return cash to shareholders, with $548 million returned in the second quarter. This includes $61 million of base dividends and $487 million of share buybacks, which equates to 9.8 million shares and reflects elevated daily share buying levels through the quarter. Year-to-date, we have returned over $1.1 billion to our shareholders.

Crystal Press: We successfully reduced, our corporate overhead costs by 21% reflecting our ongoing efforts to reduce costs across our business.

Crystal Press: We continue to expect lower annual corporate overhead costs compared with 2024.

Crystal Press: Importantly, we continue to return cash to shareholders with 548 million returned in the second quarter.

Crystal Press: This includes 61 million of Base dividends and 487 million of share BuyBacks, which equates to 9.8 million shares, and reflects elevated. Daily, share buying levels, through the quarter.

Crystal Prystai: Turning to slide 12, which summarizes the key drivers of our financial performance in the second quarter compared to the same period in 2024. Our adjusted EBITDA increased by $19 million to $722 million, driven by another profitable quarter from trail operations, lower smelter processing charges, reductions in corporate overhead costs, and lower royalties. It also reflects higher sales volumes and an increase in commodity prices for our byproducts and positive foreign exchange impact. Trails improved results reflect higher by-product production volumes such as silver, germanium, and indium, and higher refined lead production as compared with the year ago. These factors were partially offset by a $91 million reduction in settlement pricing adjustments and higher operating costs at Highland Valley due to increased production and at...

Crystal Press: Year to date. We have returned over 1.1 billion to our shareholders.

Crystal Press: Turning to slide 12 which summarizes the key drivers of our financial performance in the second quarter compared to the same period in 2020.

Our adjusted ibida increased by 19 million to 722 million driven by another profitable quarter from Trail operations. Lower shelter processing, charges reductions in corporate overhead costs and lower royalties.

It also reflects higher sales, volume and an increase in commodity prices for our byproducts and positive foreign exchange impacts.

Crystal Press: Trails improved results, reflect higher, byproduct production volume, such as silver, germanium and indium, and higher refined lead production, as compared with the year ago.

Crystal Press: These factors were partially offset by a 91 million dollar reduction in settlement pricing adjustments and higher operating costs at Highland Valley due to increased production. And at QB

Crystal Prystai: Now looking at each of our recording segments in greater detail, starting with Copper on slide 13. In the second quarter, gross profit before depreciation and amortization from our copper segment declined by 3% to $673 million compared with the same period last year, primarily due to lower copper prices and higher operating costs, partially offset by increased co-product and by-product revenues from zinc and molybdenum and lower smelter processing charges. Copper production remains similar to the same period last year at 109,000 tons. At QB, no online time was impacted by the TMF development work required to complete the wrap-up of the operation as expected.

Crystal Press: now, looking at each of our recordings in Greater detail and starting with copper on slide 13,

Crystal Press: In the second quarter gross profit before depreciation and amortization from our copper segment declined by 3% to 673 million compared to the same period last year.

Primarily due to lower copper prices and higher operating costs. Partially offset by increased co-product and byproduct revenues from zinc, and malebe and lower smelter processing charges.

Crystal Press: Proper production remains similar to the same period last year at 109 thousand tons.

Crystal Prystai: Our established operations are performing in line with guidance and our outlook remains on track for the balance of the year. Production improved significantly at Highland Valley, driven by higher grades and mill throughput as we advanced mining in the Lornax Pit. Production at Antimina was lower, reflecting a shutdown of approximately one week due to the fatality. as well as the processing of a lower proportion of copper only ore as expected in the mine. The site returned to full production. Parmesan de Coyo had higher production in the quarter, driven by higher grades and recoveries, as water availability improved compared with the same period last year, which was impacted by drought.

Crystal Press: At QB know, online time was impacted by the TMF development, work required to complete the wrap-up of the operation as expected.

Our established operations are performing in line with guidance and our Outlook remains on track for the balance of the year.

production improved significantly at Highland, Valley driven by higher grades and male throughput as we Advanced mining, in the Lorex pit,

Crystal Press: Production at antamina, with lower reflecting, a shutdown of approximately 1 week due to the fatality.

Crystal Press: As well as the processing of a lower proportion of copper only ore as expected in the mine plan.

Crystal Press: The sight returned to full production in June.

Crystal Prystai: The improved performance in Q2 2025 was despite maintenance at the SAG mill for approximately one month for repair. The operation has been running at full rate since it successfully restarted at the end Our net cash unit costs improved by 14 cents U.S. per pound to $2.02 U.S. per pound. While cost of sales increased, particularly at QB and Highland Valley, this was more than offset by increased by-product credit. significantly higher zinc revenue from Atamina, and additional molybdenum revenue from Highland Valley. as well as much lower smelter processing costs. In the quarter, we see labor agreements at QB and Carmen de Andecoyo.

Crystal Press: A higher grades and recoveries as water availability, improved compared with the same period last year, which was impacted by drought conditions.

Crystal Press: The improved performance in Q2 2025 was despite maintenance at the SAG Mill for approximately 1 month, for repairs.

Crystal Press: The operation has been running at full rates since it successfully restarted at the end of June.

Crystal Press: Our net cash unit costs, improved by 14 cents, us per pound to $22 us per pound.

Crystal Press: While cost of sales increased particularly at QB and Highland Valley. This was more than offset by increased byproduct credits, including significantly higher zinc revenue from antima and additional malebe revenue from Highland Valley and QB as well as much lower smelter processing costs.

Crystal Prystai: QB's third labor union by the new three-year collective bargaining agreement in early April, completing all labor negotiations for QB's workforce and ensuring that labor agreements are now in place through 2028 across our QB operations. At CDA, both union contracts were ratified in June and July, with each covering a three-year period. Looking forward, we continue to target design rates at QB by the end of this year. We also continue to expect higher quarterly copper production at Highland Valley through the balance of this year as we process increasing proportions of higher grade Glorinex ore. As mentioned earlier, we've updated our annual production and unit cost guidance based on our revised QB operational outlook.

Crystal Press: In the quarter, we saw labor agreements at QB and Carmen to and coil.

Crystal Press: TVs, third labor union. Applied a new 3-year collective bargaining agreement, in early April. Completing all labor negotiations for QB's Workforce and ensuring that labor Agreements are now in place through 2028 across our QB operations,

Crystal Press: At CDA both Union contracts were ratified in June and July with each covering a 3-year period.

Crystal Press: Looking forward. We continue to Target design rates at QB, by the end of this year.

Crystal Press: We also continue to expect higher quarterly, copper production at Highland Valley through the balance of this year. As we process, increasing proportions of higher grade, Lorex or

Crystal Prystai: Copper production has been revised to 470 to 525,000 tons, and copper net cash unit costs have been revised to $1.90 to $2.05 US per pound.

Crystal Press: As mentioned earlier, we've updated our annual production and unit cost guidance based on our revised QB operational Outlook.

Crystal Prystai: Turning now to our Zinc segment on slide 14. Performance in our Zinc segment was very strong in the second quarter. Our profitability in Zinc improved substantially with a 137% increase in gross profit before depreciation and amortization, compared with the same period last year, to $159 million. This improvement was driven by higher by-product revenues as a result of our updated operating strategy at trail and lower operating costs. Red Dog performed well despite lower grades that we expected in the mine plan. Red Dog sales of 35.1 thousand tons were higher than our guidance range of 25 to 35 thousand tons due to the timing of sales.

Proper production has been revised to 470 to 525,000 tons and copper net cash unit costs. Have been revised to 1.90 to $2.05 us per pound.

Crystal Press: Turning now to our thanks segment. On slide 14.

Speaker Change: Performance in our zinc segment was very strong in the second quarter, our profitability and zinc improved substantially with 137%, increase in gross profit before depreciation and amortization compared with the same period last year to 159 million.

Speaker Change: This Improvement was driven by higher byproduct revenues, as a result of our updated operating strategy at Trail and lower operating costs.

Red Dog performed well despite lower grades that we expected in the mine plan.

Crystal Prystai: Our net cash unit cost for zinc improved significantly, decreasing by $0.20 U.S. per pound to $0.49 per pound, primarily due to lower smelter processing charges and higher byproduct credit. At Trail Operations, profitability was strong in the quarter, reflecting our updated operating plan to improve profitability and cash flow generation in challenging smelter market conditions. We have curtailed our refined zinc production and increased production of byproducts such as silver, germanium, and other critical metals compared with the same period last year.

Speaker Change: Red Dog sales of 35.1 thousand. Tons were higher than our guidance range of 25 to 35,000 tons due to the timing of sales.

Speaker Change: Our net cash unit cost for zinc improved significantly, decreasing by 20 cents us per pound to US 49 cents, per pound, primarily due to lower, smelter processing charges and higher byproduct credits

Speaker Change: At Trail operations, profitability with strong, in the quarter, reflecting our updated, operating plan to improve profitability and cash flow generation. In challenging, smelter market conditions.

Crystal Prystai: We also implemented cost reductions in Q4 of 2024, the benefit of which Overall, this strong performance led to a 13% improvement in our gross profit margin before depreciation and amortization for our zinc segment, 28% compared to the same period last Looking forward to the third quarter, we expect zinc and concentrate sales from Red Dog of 200,000 to 250,000 tons, and with Red Dog shipping season commencing on July 11th, we expect reductions in Red Dog inventory in the third quarter, reflecting the normal seasonality of sales. Our annual production and unit cost guidance for our zinc segment is...

We have curtailed our refined zinc production and increased production of byproducts, such as silver germanium, and other critical Metals, compared with the same period last year.

Speaker Change: We also implemented cost reactions in Q4 of 2024, the benefit of which continued into Q2.

Speaker Change: Overall, this strong performance led to a 13% improvement in our gross profit margin before depreciation and advertising for our zinc segment, 28% compared to the same period last year.

Speaker Change: Looking forward to the third quarter. We expect zinc and concentrate sales from Red Dog of 200 to 250,000 tons, and with red, dog shipping season, commencing on July 11th, we expect reductions in Red, Dog, inventory in the third quarter reflecting, the normal seasonality of sales.

Crystal Prystai: With zinc in concentrate production of 525,000 to 575,000 tons, refined zinc production of 190,000 to 230,000 tons, and net cash unit costs of US $0.45 to $0.55 per pound.

Our annual production and unit cost guidance for a zinc segment is unchanged with zinc and concentrate production of 525 to 575,000 tons, refined zinc, production of 190 to 230,000 tons and net cash unit costs of us, 45 to 55 cents per pound.

Crystal Prystai: Looking at our cash returns to shareholders on slide We continue to build on our strong history of cash returns to shareholders. We have returned a total of approximately $6 billion since 2020. This includes over $1.1 billion year-to-date, reflecting elevated daily share buyback levels in the second quarter.

Speaker Change: Looking at our cash returns to shareholders on slide 50.

Speaker Change: We continue to build on our strong history of cash returns to shareholders. We have returned a total of approximately 6 billion since 2020.

Crystal Prystai: We have now completed $2.2 billion, or approximately 70% of our $3.25 billion authorized buyback, leaving approximately $1 billion remaining. And with the strong cash flow generation potential of our business, we could see further cash returns to shareholders in line with our capital allocation framework. We remain committed to returning between 30% and 100% of future available cash flows to our shareholders.

This includes over 1.1 billion, year-to-date reflecting elevated daily share buyback levels in the second quarter.

Speaker Change: We have now completed 2.2 billion or approximately 70% of our 3.25 billion. Authorized buyback leaving approximately 1 billion, remaining.

Speaker Change: And with the strong cash flow generation potential of our business. We could see further cash returns to shareholders in line with our Capital allocation Frameworks.

Speaker Change: Future available cash flows to our shareholders.

Crystal Prystai: Looking now at our balance sheet on slide. We remain focused on maintaining the resilience of our business, including the strength of our balance. As of yesterday, our cash balance remains significant at $4.8 billion, and our liquidity is strong at $8.9 billion. We also continue to maintain investment grade credit rating.

looking now, at our balance sheet on slide 16,

Speaker Change: we remain focused on maintaining the resilience of our business, including the strength of our balance sheet,

Speaker Change: As of yesterday, our cash balance remains significant at 4.8 billion and our liquidity is strong at 8.9 billion.

Crystal Prystai: We have moved into a small net debt position in the quarter as we've continued to deploy the proceeds from the sale of the steelmaking coal business to shareholder return. But we do expect a release of working capital bills of Red Dog Inventory to unwind in the third quarter, reflecting the normal shift. Since 2024, we have reduced our debt by $2 billion U.S. and our $1 billion U.S. outstanding term notes are long dated. We made a semi-annual repayment of $147 million US on the QB Project Finance Facility in the quarter. And through these payments, we are further deleveraging our balance sheet on an ongoing basis.

Speaker Change: We also continue to maintain investment grade credit ratings.

Speaker Change: We have moved into a small net debt position in the quarter as we've continued to deploy the proceeds from the sale of the steel making coal business to shareholder returns.

But we do expect a release of working capital builds of Red, Dog. Inventory to unwind in the third quarter. Reflecting the normal shipping season.

Speaker Change: Since 2024, we have reduced our debt by 2 billion dollars us and our 1 billion dollar US outstanding term notes are elongated.

Crystal Prystai: Our near-term growth projects, including the HVC MLE project, remain well funded and we are strongly positioned for continued value creation as we execute on our strategy.

Speaker Change: We made a semiannual repayment of 147 million us on the QB project, Finance facility in the quarter. And through these payments, we are further deleveraging our balance sheet on an ongoing basis.

Jonathan Price: With that, I'll turn it back to Jonathan. Thanks, Crystal. On slide 18, we remain focused on our priorities to create value for our shareholders. Completing the TMS development work at QB and ramping up the operation, targeting design rates by year end. Driving operational excellence, including growing our copper production, reducing our unit costs and improving our margins. Continuing to return cash to our shareholders through execution of our authorized share buyback program and through our base dividend, and progressing our value-accretive near-term copper projects to create options for our next phase of copper growth. and maintaining the resilience of our business, including our strong balance.

Speaker Change: Our near-term growth projects including the hvc mle project remained. Well funded, and we are strongly positioned for continued value creation as we execute on our strategy.

Jonathan Pryce: With that. I'll turn it back to Jonathan.

Jonathan Pryce: Thanks Crystal, uh, on slide 18. Uh, we remain focused on our priorities to create value for our shareholders.

Jonathan Pryce: Completing the TMF development work at QB and ramping up the operation. Targeting design rates by year end.

Jonathan Pryce: Driving operational excellence including growing our copper production, reducing our unit costs and improving our margins.

Continuing to return cash to our shareholders. Through execution of our authorized share buyback program and through our base dividend

And progressing of value accretive near-term, copper projects to create options for our next phase of copper growth.

Jonathan Price: We are committed to continuing to balance investment and growth in copper with cash returns to shareholders.

And maintaining the resilience of our business, including our strong, balance sheet.

Jonathan Price: Turning to slide 90, we can continue to significantly impact the accretive growth potential of our metrics on a per share basis. Last year was a ramp up of QB and with a significant portion of our $3.25 billion share buyback completed, we increased our copper production per share by 54% compared to the prior year. By 2026, our copper production per share could increase by a further 33% to 50% as we stabilize QB at full production while completing the remaining authorized share buyback.

Jonathan Price: And our corporate production per share could increase substantially beyond that as we bring on near-term value-accretive growth projects, and this does not consider the impact of any further share buybacks that could be authorized under our capital allocation framework given the strong cash flow generation potential of our business. Our copper production has the potential to increase rapidly long-term on a per-share basis.

Jonathan Price: So thank you.

Unknown Executive: And with that, operator, please open the line for questions. Certainly. To join the question queue, please press star then one on your touchtone phone. You will hear a tone acknowledging your request.

Unknown Executive: We ask that you please limit yourself to one question and one follow-up. If you're using a speakerphone, please ensure you lift the handset before pressing any keys. If you wish to remove yourself from the queue, you may press star, then two.

Orest Wowkodaw: The first question comes from Orest Wowkodaw with Scotiabank. Please go ahead. Hi, good morning. Some questions on QB2, please. Firstly, the tailings issue that's limiting throughput and then the new investment required here. Is there any knock on impact to 2026? I mean, will tailings still be a constraint next year?

Jonathan Price: Hi Orest, thank you for that question. Yes, as you point out in the current quarter and to some extent as well expected in Q3, the TMS development work has been limiting online time for QB. Actually throughput at the plant and the recoveries of the plant have been good considering these constraints, but online time is an issue. Our expectation here Orest is that we can work through the TMS development issue and put that behind us so that it won't deconstrain operations on an ongoing basis. On that basis and based on what we see in terms of throughput and recoveries and grade of course, the operation we have maintained our guidance for 2026.

Jonathan Price: But of course, you know, as we noted, we'll continue to monitor the progress of the TMS development work through the balance sheet. Is there potentially more investment required in the tailings next? At this point, we've guided to the incremental capital spend for this year. We don't expect additional investment next year. We expect normal operating conditions around the CMF and its ongoing development, but we don't expect to signal additional capital, essentially, as we have done in the current.

Jonathan Price: Okay. And just, I mean, given the state of the ramp up, I mean, at this point, I'm having trouble understanding how realistic it is for QB to even reach the low end of its guidance for 26. I mean, that would imply monthly production required of 23,000 tons a month. The operation hasn't done that in a single month to date. What, at this point, what gives you confidence that you can exit the year anywhere close to that kind of run rate? Yeah, so our view, Orest, is that when we can put the TMS issue behind us, and we can therefore improve the online time at the plant, that we see from a throughputs, recoveries, and grade perspective, the potential to deliver on the guidance for 2026.

Jonathan Price: So these are assumptions that we are able to underpin by operating parameters that we have experienced and delivered at the plant. Of course, it requires us to run the operation consistently through the year to achieve those numbers. They're consistent with design, of course. And at the low end of the range, you know, we have seen operating results already that give us confidence that those numbers are achieved. As you can imagine, we continue to interrogate both the operational parameters at QB and we continue to interrogate the forward guidance for QB. But at this point in time, we don't see any changes to 2026 and believe with a period of consistent operation without the constraints of TMF development that we can move forward and deliver.

Orest Wowkodaw: Okay, thank you.

Matthew Murphy: The next question comes from Matthew Murphy with BMO Capital Markets. Please go ahead. Hi, I have a question just on the pace of CapEx this year. So first half of the year, you've done almost 700 million CapEx, that's growth and sustaining, not including capitalized stripping. And then your guidance is around 2.4 billion, if I'm not mistaken. And so you have to spend 1.6 to 1.8, call it, back half of the year. Am I thinking about that right?

Jonathan Price: Yeah, I'll let Crystal speak to the details behind that. Of course, you know, we have increased our capital guidance for the second half of the year, in large part based on the sanctioning of HVC MLE, which goes to both capitalized stripping, but it also, of course, goes directly to the growth capital, as well as some of the additional capital that we've just discussed for TMS development at the QB. But Crystal, over to you. Yeah, thanks, Matt, for the question. You're right. So it's year to date, we've spent $700 million on capital expenditures, excluding capitalized stripping.

Crystal Prystai: And our total for the year is at the low end $2.3 billion. So that, you know, that's a reasonable run rate. In terms of what you're thinking, that would put us around $1.6 billion over the second half of the year. Again, a large portion of that is in relation to growth. And that number, again, has increased because it previously didn't include the sanctioned capital associated with HVC MLE over the balance of year. So we have now embedded that spending for the second half of the year. And that's why I think you're seeing that increase in the run rate.

Crystal Prystai: Of course, we also have embedded the TMS expected costs associated with that work into the plan. And you'll see, you know, some of that coming through in the third quarter as well.

Crystal Prystai: Okay, yeah, it's just the magnitude of the step up. I mean, do you worry about being able to get that done this year? Or are there some big ticket items in there that you're confident you'll see that that spend and is a lot of the tailing spend therefore, you know, yet to come in the back half of the year? Yeah, I think the run rate is reasonable. We've done a detailed scrub through the projects to understand exactly what, you know, what is remaining ongoing. We do have a few larger projects in the sustaining side that we expect to kick off, including, you know, the Antimina tailings lift associated with the MineLife extension.

Crystal Prystai: We have the QB truck shop that we're continuing construction on. We also have some demobilization of facilities as we move the next phase of mining there. So, that, in addition to HVC MLE, which, of course, we have a, you know, a rigorous schedule associated with the project and the CapEx that we've articulated is in line with that schedule. And then, in the context of TMF, we have spent half to date. We haven't disclosed what that figure is, but we can get that out to folks as required, but do expect that spending.

Unknown Executive: Transcription by Trans-Expert at Fiverr.com Okay, thank you. Thanks Matt.

Carlos de Alba: The next question comes from Carlos de Alba with Morgan Stanley. Please go ahead. Yeah, thank you. Good morning, everyone.

Carlos de Alba: On QB, could you please provide a little bit more comments around the ship loader repairs? How long would it take? you have already started. And also, if there is any, maybe you mentioned this, but I might have missed it. If there is any impact on CAPEX that are material because of the repair. Yeah, Carlos, thank you. Thank you for that question. As you know, we disclosed the challenge with the shiploader back in June of last year. Essentially, the cause for that was a brake failure on the shuttle, which caused an overextension of the shiploader and, of course, some damage associated with that.

Jonathan Price: It took some time to be able to access the shiploader to even assess the repair work, and that was because we were required to apply for and obtain some marine permits. The assessment of that damage is ongoing, and the repair plans are being finalized associated with that work as well. As we've said, we do think that's going to be an extended shutdown now that will extend into the first half of 2026. We haven't got a finalized capital number for that repair at this point in time because that assessment is ongoing. You know, importantly, as we've said, the work on the shiploader and the downtime of the shiploader is not impacting our production here.

Jonathan Price: As you'll recall, previously, we had in place trucking arrangements while we were awaiting the completion of the shiploader originally that was allowing us to move material to either smelters in Chile or to other ports in Chile. We've just reactivated that, and we have that truck and fleet operating daily, so no production constraints, and that's allowed us to minimize any buildup in inventory.

Jonathan Pryce: We have that trucking fleets operating daily so so no production constraints and that's allowed us to so to minimize any buildup in inventory at the port.

Carlos de Alba: All right, fair enough.

Jonathan Pryce: All right fair enough and then just if.

Carlos de Alba: And then just, if I may, a second question just on the on the sequence of the projects for For Safranal and San Nicolás, while both are likely to be sanctioned or may be sanctioned by the end of this year, the earliest, is it fair to think that Safranal probably is ahead and maybe will be developed earlier? I mean, I think it's fair to say that Zafranal is more advanced in terms of its in terms of the permitting status in terms of the construction readiness of that team, for example. However, you know, we consider both of those to be options.

Jonathan Pryce: If I may a second question just on the on the sequence of the projects for them.

Jonathan Pryce: For suffering that and suddenly collapsed.

Jonathan Pryce: While both are likely to be central or may be sanctioned by.

Jonathan Pryce: By the end of this year at the earliest you can start to think that suffer now probably is a hit and maybe will be developed area.

Jonathan Pryce: So I mean, I think it's fair to say that Zaffar nowadays more advanced.

Jonathan Pryce: In terms of it's a in terms of the permitting status in terms of the construction readiness of that team. For example, however, you know we consider both of those to be options Huawei, saying, we would like to get them ready for sanction by the end of the year of course those are decisions that are yet to be taken and then there's a <unk>.

Jonathan Price: While we're saying we would like to get them ready for sanction by the end of the year, of course, those are decisions that are yet to be taken. And there's a, you know, a range of factors that will play into those decisions.

Jonathan Pryce: The factors that will play into those decisions. So you know I wouldn't give any particular guidance now on the sequencing of those projects think of them as options that we have in the portfolio as we look to derisk and predict from progressed those options to the point that we could take sanction decisions when ready.

Jonathan Price: So, you know, I wouldn't give any particular guidance now on the sequencing of those projects. Think of them as options that we have in the portfolio as we look to de-risk and progress those options to the point that we could take sanction decisions when ready.

Carlos de Alba: Thank you very much. Thanks, guys.

Speaker Change: Thank you very much and with them, but thanks.

Carlos: Thanks Carlos.

Craig Hutchinson: The next question comes from Craig Hutchinson with TD Cohen. Please go ahead. All right, good morning, guys. I'm just on the Highland Valley extension. Now that you guys have made a final investment decision, is there a plan to file a technical report? And just maybe as an interim, can you give me a sense of what throughput you're looking at to achieve that annual production rate of 132,000 tons a year? Yeah, so we will, we will publish a technical report. We expect that to happen in August of this year. And of course, you'll get all the detail associated with that.

Speaker Change: Our next question comes from Craig Hutchison with TD Cowen. Please go ahead.

Craig Hutchison: Hi, good morning, guys.

Craig Hutchison: Just on the Highland Valley extension now that you guys have made a final investment decision is there a plan to file a technical poor.

Craig Hutchison: And just maybe as an interim can you give me a sense of what throughput you're looking at to achieve that annual production rates of 133000 tons and tons of years right.

Craig Hutchison: Yeah. So we we will we will publish the technical report, we expect that to happen in August of this year and of course, you'll get all the details associated with that the throughput through the life of the the future mine will be variable of course is gonna be a productivity all with mining you'll you'll see it all disclosure that we go through various.

Jonathan Price: The throughput throughout the life of the future mine will be variable, of course, it's going to be a product of the ore we're mining, you'll see in our disclosure that we go through various phases here, where we're mining different pits, of course, there's different ore hardnesses associated with the ore coming from those pits. So there'll be variable throughput is the answer and variable grade, of course, that goes with that. And Craig, we did disclose in our investor day in November what a production profile would look like for HVC Emily.

Craig Hutchison: Phases, yet, where we're mining different pitch of course, there's different ore hardness is associated with the ore coming from those pits. So there'll be variable throughput is the is the answer and variable right of course that goes with that.

Craig Hutchison: And Craig we did disclose in our Investor day in November.

Craig Hutchison: Gotcha.

Craig Hutchison: What about like French because he Emily I just encourage you to go back and look at that.

Jonathan Price: So I just encourage you to go back and look at that as you think about it, it shows the very. Because I guess they get to the 132,000 tons per year, you know, I would assume the throughput has to be materially higher just based on your reserve grade unless I'm I mean, I think we are adding capacity to the circuit. We're adding mills there to increase the throughput of material and also to improve recoveries of material, I should say. I mean, you know, last year, you saw our production at HPC come in, you know, just below 100,000 tons.

Craig Hutchison: It shows the variability.

Craig Hutchison: Because I guess, we get to the 132000 tons per year, you know I was assuming the throughput has to be truly higher just based on your reserve grade unless I'm missing something.

Craig Hutchison: I mean, I think we are adding capacity to the circuit, we were adding mills that are to increase the throughput of material and also to improve recoveries are material.

Craig Hutchison: So I mean, you know last year you saw production at H B C come in just below 100000 tons. This year of course that production guidance is materially higher you know and in the sort of 141 50 range. So you see there but year on year currently b through the operations.

Jonathan Price: This year, of course, that production guidance is materially higher, you know, in the sort of 140, 150 range. So you see variability year on year currently through the operations at HPC and that's been driven this year by the processing of additional Lawn-X ore and I think that's what you should expect going forward is variability depending on the ore type that's dominating mill feed at any point in time.

Craig Hutchison: H B C and that's been driven this year and the processing of additional vault XOR and I think that's what you should expect going forward is it variability depending on the oil type thats a dominating mill feed at any point in time.

Jonathan Price: And then just on QB, how are the recoveries progressing and are you guys... Do you feel like you'll be through the transitional or this quarter, or is that still kind of, you know, lagging? Yeah, look, I'll just ask Sherhzad to talk about that in terms of the transition or where we are on recoveries and the work we're doing there to continue to drive those higher. Thanks, Craig. Craig, as we had noted last year that we did expect lower recoveries in the first half as we were dealing with more transition ores, and our recovery performance was just slightly below what we had expected due to the inconsistency in the first half of the down days.

Speaker Change: Okay, and then just on Cuba.

Craig Hutchison: The recovery is progressing are you guys.

Craig Hutchison: Do you feel like you'll be through the transitional ore this quarter or is that still kind of I.

Craig Hutchison: I didn't before.

Craig Hutchison: Yeah look I'll, just ask because that to talk about that in terms of the in terms of the transition or where we are on recoveries and the work we're doing that continue to drive those higher.

Craig Hutchison: Craig.

Craig Hutchison: Kind of as we had noted last year that we did expect lower recoveries in the first half as we were dealing with more a transitional ores and are recovering performance was just.

Craig Hutchison: Slightly below what we had expected due to the.

Craig Hutchison: Inconsistency in the first half of the down days, we do expect to have better quality ore in the second half with the higher grade and higher recoveries.

Craig Hutchinson: We do expect to have better quality ore in the second half with a higher grade and higher recoveries, and the transition ores will be variable, but yes, we expect a lot less transition ore in the second half and in 2020. All right, thanks, guys. Thanks, Craig.

Craig Hutchison: And the transition ores will.

Craig Hutchison: The variable, but yes, we expect a lot less very transitional ore in the second half and into 2026.

Craig Hutchison: Alright, thanks, guys.

Craig Hutchison: Thanks, Greg.

Myles Allsop: The next question comes from Myles Allsop with UBS. Please go ahead. Yeah, just a couple of questions.

Speaker Change: The next question comes from Myles Allsop UBS. Please go ahead.

Craig Hutchison: Yes.

Craig Hutchison: Yes.

A couple of questions maybe system to be in and collapsing, which I mentioned it in your presentation.

Jonathan Price: Maybe first on QB and Koyawase, as you mentioned it in your presentation. It sounds like discussions are not happening at the moment. Is that right, or is there any progress in terms of looking at that option seriously? Look, there are discussions regarding QB Koyawase. I'm not going to go into those because, of course, they're confidential in nature. But as we've said before, we recognize the potential of the opportunity there for synergies. We will always do what's in the best interest of our shareholders in that regard. As you can see, right now, we have our hands full with ramping QB up to a steady state, which has to be our priority here to ensure we get stable production there and the cash generation that this asset is capable of delivering.

Craig Hutchison: Hum.

Craig Hutchison: Sounds like discussions are not happening at the moment is that right or is there any progress in terms of looking at that option series.

Craig Hutchison: Seriously.

Craig Hutchison: Look they're they're all discussions regarding Q be quite a while I'm not going to go into those because of course they are confidentially.

Craig Hutchison: Confidential in nature, but as we've said before we recognize the potential of the opportunity there for synergies.

Craig Hutchison: We'll always do what's in the best interests of our shareholders in that regard.

Craig Hutchison: As you can see right now we you know we have a handful with ramping to be up to steady state, which has to be a priority here to make sure. We get a stable production there and then the cash generation that the fact that capable of delivering but you know as I as I mentioned.

Jonathan Price: But as I mentioned, in parallel, we continue to think about and continue to discuss the potential synergies there.

Craig Hutchison: In parallel we continue to.

Craig Hutchison: Think about continued to discuss the potential synergies there but.

Jonathan Price: But I won't unpack those discussions given their confidentiality.

Craig Hutchison: The taxes discussions given that given that confidential.

Jonathan Price: And then just going back to the two issues at QB, why is it taking a year to fix the shiploader if it's overextended, it's a new shiploader, seems an awful long time and obviously there is a meaningful OPEX impact. And with the tailings, when will, when are you hoping to get that complete? Is it right to assume that that will be sorted largely by the end of this year or is that going to drag?

Craig Hutchison: And then just going back to two issues at QB.

Craig Hutchison: Why is it taking a year to fix the ship loader. If it gets extended the new ship loader seems an awful long time, and obviously there is a meaningful opex impact and we'd see the tailings.

Craig Hutchison: When will when are you hoping to get that complete as it rises that that will be sorted largely by the end of this year or is that going to drag.

Jonathan Price: So, I'll hand the question over to Ian Anderson in a moment. I'm just going to talk about tailings. I mean, of course, given the fact that we have maintained our guidance for 2026, our expectation is that we put the TMS issues behind us this year, and, you know, that's what we're providing for in our guidance. So, as I mentioned, you know, it's sort of a one-time event associated with ramp-up, and when we get through that phase of work, we move into a steady-state operation. So, it's not something, you know, we expect to be plaguing this operation indefinitely at all.

Craig Hutchison: So oh, Oh, how's the ship over that question over to Ian I understand at a moment. So I'm just going to talk about tailings I mean of course, given the fact that we have maintained our guidance for 2026, our expectation is that we put the CNS.

Craig Hutchison: Issues behind Us this year and that's about where we are providing for in our in our guidance.

Craig Hutchison: So as I mentioned, you know, it's sort of a one time event associated with ramp up and when we get through that phase, where we move into a steady state operation. So it's not something we expect to be plaguing. This operations and definitely a tool. It's something we expect is a you know it's a discrete piece of work we will get there.

Jonathan Price: It's something we expect is a, you know, it's a discrete piece of work. We'll get that resolved and move past it, and then we'll be able to, you know, secure the online time essentially that we need from this operation unimpeded.

Craig Hutchison: Resolved to move off of it and then we'll be able to.

Craig Hutchison: Secure the online telling them essentially that we need for this operation unimpeded.

Ian Anderson: Ian, would you like to make some comments just on the shiploader? Sure. Thank you very much, Miles, for the question. So, despite the fact that we said it would conclude in the first half of 2026, that's not saying that it will, in fact, conclude. At this point, we're really carefully defining the nature of that work. So as a result of the break failure, of course, we have to assess all of the structural elements, make sure that that ship loader is returned safely. And similarly, that we complete all the work to get it back into the right.

Speaker Change: Do you like to make some comments just on the on the ship loader.

Speaker Change: Sure. Thank you very much Myles for the question. So despite the fact that we said it would conclude in the first half of 2026, that's not saying that it will in fact take a year and at this point, we're really carefully defining the nature of that work. So as a result of the brake failure of course, we have to assess all of the structural elements ensure that that.

Speaker Change: [noise] floaters returned safely and similarly, we complete all the work to get it back in great condition, and so little progress that project as we go of course, you are dealing with maritime authorities that can cause permit delays and we certainly want to be cautious about how we deal with.

Ian Anderson: And so we'll progress that project as we go. Of course, you are dealing with maritime authority. That can cause permit delays. And we certainly want to be cautious about how we deal with. I want to make sure that that continues at pace, but at the same time, the nature of the incident demands it to take that long to process.

Speaker Change: So I want to make sure that that continues ace, but at the same time the nature of the incident.

Speaker Change: Yeah.

Speaker Change: Okay. Okay.

Speaker Change: Yeah.

Bill Peterson: The next question comes from Bill Peterson with JP Morgan.

Bill Peterson: The next question comes from Bill Peterson with Jpmorgan. Please go ahead.

Bill Peterson: Please go ahead. Yeah, hi. Good morning, everyone, and thanks for taking the questions. On the higher CAPEX guide for Highland Valley Mine Life Extension relative to last year's strategy day, it looks at around 15 to 20 percent higher. Can you provide additional color or breakdown between materials inflation, contingencies you mentioned, or any other factors? And then, is there any read through for project sanctioning for Zapernal or San Nicolas, for example? Should we expect some more sort of double digit increase at this stage, just to be prudent, or any read through at all?

Bill Peterson: Yeah, Hi, good morning to everyone and thanks for taking the questions on the on the higher Capex Guide for Highland Valley Mine life extension relative to last year strategy day looks at looks at around 15% to 20% higher can you provide additional color or breakdown between materials inflation contingencies, you mentioned or any other.

Bill Peterson: Factors and then is there any read through for project sanctioning.

Bill Peterson: For now or send Nicholas for example, should we expect a similar sort of double digit increase at this stage.

Bill Peterson: Just to be prudent.

Bill Peterson: Any read through at all thanks.

Jonathan Price: Thanks. Yeah, look, so on the HVC piece, I mean, I won't specifically, you know, give that breakdown, but as I mentioned, there's a range of things in there. I mean, it's project level contingency, it's inflation, it's cost escalation, it's the potential for tariffs on construction materials, which we think is a real driver, of course, particularly between the US and Canada. So that is something that we've reflected here. Importantly, as I mentioned, it's also the acceleration of the procurement of mobile equipment that we've brought forward from later project phases, and that materially de-risks the project and the rate at which we'll be able to essentially access the Valley pit for the long term.

Bill Peterson: Yeah look so strong the HBC based I mean, one specifically.

Bill Peterson: Give that breakdown, but as I mentioned, there's a range of things in there I mean, each project level contingencies inflation is called that escalation is the potential for terrorists on construction materials, which we think is a real drive us of course, particularly between the U S and Canada. So somebody is something that we've reflected yet importantly, as I mentioned, it's also the acceleration.

Bill Peterson: As the procurement of mobile equipment.

Crystal Press: We brought forward from later project phases that materially de risks the project at the rates at which we'll be able to essentially access the valley pit for the bolt too. So you know those those are important derisking elements in and all of you I'm also a crystal just to comment on some of the process.

Crystal Prystai: So, you know, those are important de-risking elements in our view.

Crystal Prystai: I'll also ask Crystal just to comment on, you know, some of the process by which we looked at this capital spend through the, you know, through the investment approach here that we've taken and, you know, our determination to ensure that we give robust capital numbers that can be delivered. Sure, no problem. Thanks, Bill. We've advanced this project through the final stages of our project delivery framework, as well as through our governance processes, including through our investment committee. Those processes embed the final project requirements, the construction readiness, probabilistic modeling around various facets of the estimates involved.

Crystal Press: Which we looked at this capital spend through the through the investment approach here that we've taken and you know all our determination to ensure that we give robust capital numbers that can be delivered.

Crystal Press: Sure no problem.

Crystal Press: Like we said fastest project with the final stages of our project delivery framework as well as through our governance processes.

Crystal Press: Maybe those processes and that the final project refinement construction readiness, a probabilistic modeling around area.

Crystal Press: Yes.

Jonathan Price: And as well, we had detailed independent assurance provided on many areas of the business plan, as well as in the context of construction readiness. So, all of those are learnings that we took. project that we've committed to embedding as we go forward and into future projects, including an HPC MLE. And the conclusion of that work ahead of sanction has led to the capital range that we're disclosing, of course, in addition to the factors that John noted in the context of what's embedded into that.

Crystal Press: And as well we had a detailed independent assurance provided on many areas.

Crystal Press: One as well.

Crystal Press: Construction readiness. So all of those are learnings that we get from E project that we've managed to embedding ethical already into future projects, including an H E. M. L. E N that conclusion about work ahead of us.

Crystal Press: The capital range that where we're disclosing all of course in addition to the factors that John.

Crystal Press: In the context of what that means.

Jonathan Price: So I think, Bill, do you have any read through for future? Yeah, I was just gonna pick up on that. Look, you know, every project has its own characteristics. We will take the same approach with future projects that Crystal just outlined in terms of, you know, using independent assurance, taking probabilistic modeling to ensure the full range of, obviously, economic outcomes associated with the project, but also the full range of potential input assumptions here, which go to capital, because we need to ensure that we're reflecting uncertainties or known unknowns in the project as we're setting forth the assumptions here.

Crystal Press: So I think bill we don't have any read through for future. Yeah. Yeah, I was just going to.

Crystal Press: I'm just going to pick up on that look at every project has its own characteristics. We will take the same approach with future projects Crystal just outlined in terms of you know using independent insurance, taking a probabilistic modeling to ensure the full range of obviously economic outcomes associated with the project, but also the full range of potential <unk>.

Crystal Press: Which assumptions here, which which go to capital because we need to ensure that we are reflecting.

Crystal Press: Uncertainties or no not those in the project is where we're setting forth the assumptions here, but again as I mentioned each product has its own unique characteristics. So I don't think you should take a direct read through from that but what I can say is we will apply the same rigorous approach is that for an hour. So I think that we've applied to HBC.

Jonathan Price: But again, as I mentioned, each project has its own unique characteristics. So I don't think you should take a direct read through from that. But what I can say is we will apply the same rigorous approach as Aphrodite and Sandvik that we've applied to HRSA.

Bill Peterson: Well understood. Thanks for that.

Crystal Press: Well understood. Thanks for that my next question.

Unknown Executive: My next question, not something the team's talked about recently, but as new range, the potential project in the U. S. This any update on where that project stands in terms of permitting community engagement, and I guess an opportunity to potentially move faster than what appears to be a pretty strong support within the U. S. in terms of permitting and promoting domestic production. Yeah, look, I mean, you know, that remains an interesting option for us. It's clearly further out than the, you know, than Zafranal or San Nicolas here in the schedule. I think the key for us there is to define what is the right project, what is the configuration that will deliver the greatest value in the event that project's developed.

Crystal Press: The team talked about recently, but.

Crystal Press: As new range, the potential project and new address this any update on where that project stands in terms of permitting and community engagement and I guess the opportunity to potentially move faster even than what appears to be a pretty strong support within the U S in terms of permitting and promoting domestic production.

Crystal Press: Yeah look I mean, you know that that remains an interesting option for us. It's clearly further out than the you know then zephyr in Idaho, Assam Nicola CA in the schedule I think the key for US there is to define what is the right project. What is the configuration that will deliver the greatest value in the event that projects are developed in basketball, we're doing now and if it.

Unknown Executive: And that's the work that we're doing now. And of course, you have to define that before you can start to approach the permitting process in any detail.

Crystal Press: So you have to define that before you can start to approach the permitting process in anyway.

Unknown Executive: So I think that's a conversation for later. Bill, we have our hands full with other things right now, but we do continue to work that in parallel. Well understood.

Crystal Press: So I think that's a conversation for later Oh, we have a handful with other things right now, but we do continue to work on it we've got an apparel.

Unknown Executive: Thanks for your insights.

Crystal Press: Understood. Thanks for your insights.

Crystal Press: Thank you.

Chris LaFemina: The next question comes from Chris LaFemina with Jefferies. Please go ahead. Hi, thanks for taking my question. I just wanted to ask about first on the incremental CapEx for QB for the TMF. How do you decide whether you're going to include CapEx in the project CapEx or in sustaining? Because I would think if you're spending money to ramp the project to full capacity for whatever reason, that would have been part of the project CapEx. I understand it's really just a question of semantics, but when we think about the capital intensity of the project, why wouldn't that be part of the project CapEx rather than sustaining?

Speaker Change: The next question comes from Chris <unk> with Jefferies. Please go ahead, hi, Thanks for taking my question I just wanted to ask about first on the.

Speaker Change: The incremental capex for QB for the Tms, what how do you how do you decide whether you're going to include Capex in the project capex or in sustaining because I would think.

Speaker Change: If you're spending money to ramp the project to full capacity for whatever reason that would've been part of the project Capex I understand it's really just a question of semantics, but when you think about the capital intensity of the project why wouldn't that be part of the project capex rather than sustaining.

Crystal Prystai: I will hand the semantics question over to Crystal. Hi Chris, thanks for the question. In the context of PMF, when we thought about the gross capital for the project, of course there was, you know, construction costs associated with that built into the project capital that we reported against in our results over a number of years. I think the pieces that I add to why it's now sustaining, I mean, firstly, we're running the operation and we're producing copper, so I think these things are no longer growth capital. We did expect to spend on the TMF, but that amount, as I mentioned, is more significant than we expected as we are now moving significantly more sand further distances than we expected for mechanical movement.

Crystal Press: That'd be semantics question over to Crystal.

Speaker Change: I think there's a question.

Crystal Press: In the context of T M as well.

Crystal Press: Thought about the growth capital for the project of course, there was no.

Crystal Press: So construction cost associated without Pilkenton project capital that we did it again in our results. So far Oh, yes, I think the pieces that I add to why it all sustaining I mean, firstly for running the operation that we're producing copper. So I think it you know these things.

Crystal Press: We're no longer a CRO.

Crystal Press: Capital.

Crystal Press: Exactly.

Crystal Press: But that amount as I mentioned is more significant than we expected as we are now.

Crystal Press: Significantly more sand further distances than we expected for mechanical need.

Crystal Prystai: And a related cost of that is the expected cost. And I think at this point, it doesn't make sense to include that in growth capital and it becomes part of the sustaining capital of the project.

Crystal Press: And a related cost about an exotic Austin I think at this point it doesn't make sense.

Crystal Press: Uh huh.

Speaker Change: Hi, Paul.

Chris LaFemina: Okay, that's fair enough.

Speaker Change: Okay. That's fair enough and then secondly, just on the ship loader do you have any insurance related to the issues there or is it all when you take it.

Ian Anderson: And then secondly, just on a shiploader, do you have any insurance related to the issues there? Or is it all on you? Thank you.

Ian Anderson: Ian, do you want to comment on that as well? Yes, certainly we are investigating the root cause and we'll understand based on that what the next step is. Yes, we do have insurance coverage and that includes interruption, so we're going to continue to address that. Thank you, Chris. Thank you.

Speaker Change: Ian do you want to comment on that as well, yes, certainly we are investigating the root cause and Oh.

Speaker Change: Well understand based on that what the next steps.

Speaker Change: Insurance, Yes, we do have insurance coverage.

Speaker Change: Interruption.

Speaker Change: Okay, great. Thanks.

Speaker Change: Thank you Chris.

Speaker Change: Thank you yeah out of time for further questions I will now hand, the call back over to Jonathan for closing remarks. Please go ahead.

Unknown Executive: We are out of time for further questions.

Jonathan Price: I will now hand the call back over to Jonathan Price for closing remarks. Please go ahead. Thank you, Operator, and thanks again to everyone for joining us today.

Jonathan Pryce: Thank you operator, and thanks again to everyone for joining US today, we look forward to welcoming many of you to our <unk> site visits on November 4th of this year. Please reach out to women shopping at our IR team for further information on the site visit or of course, if you have any follow up questions on the quarter. So thank you and enjoy the rest of your day.

Jonathan Price: We look forward to welcoming many of you to our QB site visit on November 3rd and 4th of this year. Please reach out to Emma Chapman and our IR team for further information on the site visit, or, of course, if you have any follow-up questions on the quarter.

Unknown Executive: So, thank you, and enjoy the rest of your day.

Speaker Change: Okay.

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

Speaker Change: This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

Speaker Change: Yeah.

Speaker Change: [music].

Thank you for watching.