Q1 2025 First Quantum Minerals Ltd Earnings Call
Operator: Thank you for standing by.
Thank you for standing by this is the conference operator.
Operator: This is the conference operator. Welcome to the First Quantum Minerals Limited First Quarter 2025 Results Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero.
Come to the first quantum minerals from the dead horse to water, but.
25 results conference call.
All participants are in listen only mode and the conference is being recorded.
After the presentation, there will be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance during the conference call you May signal, an operator by pressing Star then jail.
Bonita To: I would now like to turn the conference over to Bonita To, Director, Investor Relations. Please go ahead.
I would now like to turn the conference over to Benita to director of Investor Relations. Please go ahead.
Bonita To: Thank you, operator, and thank you, everyone, for joining us today to discuss our first quarter results. During the call, we will be making forward-looking statements. As such, I encourage you to read the cautionary notes. that accompanied this presentation are MDNA and the related news.
Benita: Thank you operator, and thank you everyone for joining us today to discuss our first quarter results.
Benita: During the call, we will be making forward looking statements and as such I encourage you to read the cautionary notes.
Benita: That accompany this presentation, our MD&A and the related news release.
Bonita To: As a reminder, the presentation is available on our website and that all dollar references are in U.S. dollars unless otherwise noted.
Benita: As a reminder, the presentation is available on our website and that all dollar references are in U S dollars unless otherwise noted.
Tristan Pascall: On today's call are Tristan Pascall, our Chief Executive Officer.
Benita: On today's call are Tristan Pascal, our Chief Executive Officer.
Tristan Pascall: Ryan MacWilliam, our Chief Financial Officer, and Rudi Badenhorst, our Chief Operating Officer.
Ryan McWilliams: Ryan Mcwilliams, our Chief Financial Officer, and Rudy Baton Horse, our Chief operating officer.
Tristan Pascall: And with that, I will turn the call over to Tristan for opening remarks. Thank you, Bonita, and thank you, everybody, for joining us today on our first quarter update. It's been an eventful period since our Q1 results. Uncertainty from shifting trade policy has increased concerns about global growth. While there is not a material direct impact on our business from the tariffs, and we continue to see strong physical demand for copper in the current market, the potentially weaker outlook for global growth reinforces our focus on lean and safe operations, and continuous work to strengthen the balance sheet and drive cost and capital distribution.
Justin: And with that I will turn the call over to Justin for opening remarks.
Ryan McWilliams: Okay.
Speaker Change: Thank you Vanessa and.
Speaker Change: And thank everybody for joining us today on our first quarter update.
It's been an eventful period since our Q1 results.
Speaker Change: Uncertainty from shifting trade policy has increased concerns about global growth.
Speaker Change: Well there is not a material direct impact on our business from the tariffs and we continued to see strong physical demand for copper and the current market the potentially weaker outlook for global growth reinforces our focus on lean and safe operations and continuous work to strengthen the balance sheet and drive.
Speaker Change: Cost and capital disciplines.
Tristan Pascall: Since November 2023, we have taken deliberate and strategic actions to safeguard our business and protect the long-term growth of the company in a potential scenario of a significant slowdown. This included a $500 million copper prepay agreement in February of last year and we are pleased to announce with our first quarter results that we have supplemented this agreement with another three year term for an additional $500 million copper prepay. During the quarter, we also successfully completed an additional U.S. $1 billion note offering that allowed us to retire a portion of our 2027 notes. We also implemented a copper hedging strategy that we have actively used for over a year.
Speaker Change: Since November 2023, we have taken deliberate and strategic actions to safeguard our business and protect the long term growth of the company.
Speaker Change: A potential scenario of a significant slowdown.
Speaker Change: This included a $500 million copper prepay agreement in February of last year, and we are pleased to announce with our first quarter result that we have supplemented this agreement with another three year term for an additional $500 million copper prepay.
Speaker Change: During the quarter. We also successfully completed an additional U S 1 billion dollar note offering that allowed us to retire a portion about 2027 nights.
Speaker Change: We also implemented a copper hedging strategy that we have actively over.
Speaker Change: Over a year.
Tristan Pascall: Additionally, our meaningful gold production from Consanche and Guild McCrane will also act as a natural hedge in a potential broad downturn. Whilst our financial initiatives are important actions in building our resilience, the strength of the company's business has always been with the quality of our assets. This is embedded in the culture of First Quantum, from overseeing construction and expansions, right through to lean and safe production. The company has consistently demonstrated our ability to deliver strong results through our consistent track record in operational excellence and continuous improvement. and we remain on track for 2025 for continued safe productivity in Zambia.
Speaker Change: Additionally, a meaningful gold production from Concentrix and Gilbert Goldman Crane will also act as a natural hedge in a potential broad downturn.
Speaker Change: Whilst our financial initiatives are important actions in building our resilience the strength of the company's business has always been with the quality of our assets.
Speaker Change: This is embedded in the culture first quantum from overseeing construction and expansions right through to lean and safe production.
Speaker Change: The company has consistently demonstrated our ability to deliver strong results through our consistent track record in operational excellence and continuous improvement.
Speaker Change: And we remain on track for 2025 for continued safe part of it could be in Zambia.
Tristan Pascall: to which Rudi will cover in his operational review.
Speaker Change: To which really will cover in his operational review.
Tristan Pascall: In Panama, the country made progress on social security reform during the first quarter and passed legislation on March 18. As well, President Melino made public comments that he will approve the shipment of the copper concentrate and the restart of the power plant. Whilst we continue the process of these approvals. With the President's public comments, we engaged in constructive arbitration discussions with the government's legal counsel. On April 2nd, the company terminated its ICC arbitration and suspended the FTA arbitration. and we are committed to engaging with the government and the people of Panama on resolution for the Cobra Panama mine.
Speaker Change: In Panama the country made progress on social security reform during the first quarter and pass legislation on March 18.
Speaker Change: As well President Molina I made public comments that he will approve the shipment of the copper concentrate and the restart of the power plant.
Speaker Change: We continue.
Speaker Change: Because of these approvals with the President's public comments, we engaged in constructive arbitration discussions with the government legal counsel.
Speaker Change: On April 2nd the company terminated its ICC arbitration and suspended the F. T. I arbitration and we are committed to engaging with the government and the people of Panama on resolution for the Cobre Panama mine.
Tristan Pascall: In the meantime, the company continues with its public outreach within the country on the benefits of the mine. Cobra Panama remains an important and strategic resource of copper, which is a critical metal for the renewable energy transition and ongoing upliftment in developing economies. The mine has always operated in an environmentally and socially responsible manner and has the potential to employ over 5,000 additional Panamanians and create over 40,000 direct and indirect Panamanian jobs. Cobra Panama was purchasing approximately $20 million per week from Panamanian companies and would have provided over $500 million in taxes per year. in taxes, royalties, and social securities to the country.
Speaker Change: In the meantime, the company continues with its public outreach within the country on the benefits of the mine.
Speaker Change: Cobre, Panama remains an important and strategic resource of copper, which is a critical metal for the renewable energy transition and ongoing uplift meant and developing economies.
Speaker Change: The mine has always operated in an environmentally and socially responsible manner and has the potential to employ over 5000, additional panamanians and creates over 40000 direct and indirect Panamanian jokes.
Speaker Change: Cobre, Panama was purchasing approximately $20 million per week from Panama, and even companies and would've provided over $500 million in taxes per year.
Speaker Change: In Texas royalties and social securities to the country.
Tristan Pascall: Since the suspension of operations in November 2023, as ordered by the previous government, the country of Panama has lost over $750 million in accumulated contributions to government and $1.5 billion in expenditures with local companies.
Speaker Change: Since the suspension of operations in November 2023, as ordered by the previous government. The country of Panama has lost over $750 million in accumulated contributions to government and $1.5 billion in expenditures with local companies.
Tristan Pascall: I would like to reiterate that the company is committed to a fair and transparent process towards an equitable resolution for COVID-19. The country of Panama and its people.
Speaker Change: I would like to reiterate that the company is committed to a fair and transparent process towards an equitable resolution for coke.
Speaker Change: The country of Panama and its people.
Tristan Pascall: On to Zambia, and whilst the rainy season brought steady rainfall, the reservoir levels at Lake Kariba currently remain at relatively low levels, and a return to normal hydroelectricity power generation will take time. As such, the company continues to proactively manage supplementary power arrangements and has sufficient import arrangements in place until the end of 2026 to cover 60% of the power needs of our Zambian operations, including the Consanche S3 expansion.
Speaker Change: On to Zambia, whilst the rainy season brought steady rainfall the reservoir levels like Kariba currently remain at relatively low levels and a return to normal hydro electricity power generation will take time.
Speaker Change: As such the company continues to proactively manage supplementary power arrangements and has sufficient import arrangements in place until the end of 2026 to cover 60% of the pound's needs about Zambian operations, including the concerned she has three expansion.
Tristan Pascall: With our first quarter results, I am pleased to share that Mr. Peter Buzzi and Ambassador Brian Nichols have been nominated to be appointed at our upcoming Annual General Meeting in May. Mr Buzzi has shared with him over 25 years in capital markets experience, whilst Ambassador Nichols previously served as the United States Assistant Secretary of State for Western Hemisphere Affairs with over 35 years of experience in international relations, crisis management and trade development across Latin America, Africa and Asia.
Speaker Change: With our first quarter results I'm pleased to share that Mr pay the buzzy and invested a Brian Nichols have been nominated to be.
Speaker Change: At our upcoming annual general meeting in May.
Speaker Change: Mr Buzzy with him over 25 years and capital markets experience, whilst ambassador Nichols previously served as the United States Assistant Secretary of state for Western Hemisphere fears.
Speaker Change: With over 35 years of experience in International Relations crisis management, and trade development across Latin America Africa and Asia.
Tristan Pascall: I would also like to personally thank Andrew Adams and Joanne Warner, who will both be retiring at our IGM.
Speaker Change: I would also like to personally thank Andrew Adams, and Joanne Warner who will both be retiring at the AGM.
Rudi Badenhorst: With that, I would like to hand the call over to Rudi to review the operation. Thank you, Tristan, and thank you, everybody, for joining our call today. As Tristan mentioned, we had the seasonal impact of rainy season in Zambia during the... And it was pleasing to see that the mitigation that we conducted over the last few years on dewatering and added pumping capacity with minimal impact on our operations from the weather. operation in Zambia in the first quarter. The imported power contracts that we initiated last year allow for non-interruptions of both the ambient operation and the outdoor operation.
Speaker Change: With that I will hand, the call over.
Speaker Change: To review the operations.
Speaker Change: Thank you Justin and.
Speaker Change: And thank you everybody for joining our call today.
Speaker Change: Our system mentioned, we had the seasonal impact of rainy season in Zambia.
Speaker Change: And it was pleasing to see the domestic.
Speaker Change: Okay got it over the last few years on dewatering and added pumping capacity.
Speaker Change: Minimal impact on our operations from the weather.
Speaker Change: Okay.
Election in Zambia.
Speaker Change: On the first quarter.
Speaker Change: The imported power contracts that we initiated last year.
Speaker Change: Interruptions of both Zambian operations.
Rudi Badenhorst: In addition, given the volatility of the copper price since the end of the quarter, the operational side of the business is focusing on lean and safe cost-efficient operations. At Kinsanchi, we produced 47,000 tons of copper during the first quarter. slight decline from the fourth quarter due to lower feed grades, as the swap of the mixed and sulphide moulds that allowed for higher volume.
Speaker Change: In addition, given the volatility of the cobalt price since the end of the quarter. The operational side of the business is focusing on lean and safe cost efficient operations.
Speaker Change: Concerning <unk>, we produced 47000 tons of copper during the first quarter.
Speaker Change: A slight decline from the fourth quarter due to lower feed grades.
Speaker Change: As the swap of the mixed and sulfide moles that allowed for higher volume.
Rudi Badenhorst: In the fourth quarter, return to normal by the end of last. Gold production continued to be strong with nearly 30,000 ounces produced in the first quarter. While the gold production, along with the strong gold price, provided a nice time for us during the quarter.
Speaker Change: In the fourth quarter, a return to normal by the end of last year.
Speaker Change: Gold production continued to be strong with nearly 30000 ounces produced in the first quarter.
Speaker Change: While the gold production along with the strong gold price provided a nice.
Speaker Change: During the quarter.
Speaker Change: Copper cone cash cost of one.
Rudi Badenhorst: Pardon the interruption. The deteriorating audio quality is making it challenging to understand the presenters. We are going to pause for a moment to switch to our backup. We will turn the whole music on while we do that. Gold production continues to be stronger, nearly 30,000 ounces produced in the first quarter. while the gold production along with a strong gold price Please resume where you left off. Sorry. Thank you for your patience. Gold production continues to be strong with nearly 30,000 ounces produced in the first quarter of the year. while the gold production along with a strong gold price provided a nice tailwind for us during the quarter.
Speaker Change: Pardon the interruption that deteriorating audio quality is making it challenging to understand the puts centers, we are going to pause for a moment.
Speaker Change: Doing well.
Okay.
Speaker Change: We will tend to hold music on why did we do this.
Speaker Change: Old production continued to be strong with nearly 30000 agents used in the first quarter.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: While the gold production, along with a strong gold price.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Hmm.
Speaker Change: Please.
Speaker Change: Are you left off sorry, Thank you for your patience.
Speaker Change: Thank you.
Speaker Change: Gold production continues to be strong with nearly 30000 ounces produced in the first quarter.
Speaker Change: While the gold production along with a strong goldfus provided a nice tailwind for us during the quarter.
Rudi Badenhorst: Copper C1 cash cost of $1.34 per pound was $0.13 per pound. quarter-over-quarter due to lower copper production, along with higher... We remain well on track for 2025 production guidance of 160 to 190 tons of copper and 100 to 110,000 ounces of coal.
Speaker Change: Copper cone cash cost of $1.
Speaker Change: <unk> 34 per pound was <unk>.
Speaker Change: Quarter over quarter due to lower copper production, along with higher smelter costs, we remain well on.
Speaker Change: On production.
Speaker Change: Guidance of 160 to 190.
Speaker Change: Copper and 100 to 110000 ounces of gold.
Rudi Badenhorst: There is a six-week maintenance shutdown of the shelter in the current quarter.
Speaker Change: It is a shale killed six week maintenance shutdown of the shelter in the current quarter.
Rudi Badenhorst: Over to Sentinel. The operation reported 46,000 tons of copper in the first quarter. approximately 10,000 tons lower than the previous quarter, while cash costs increased to $2.55 a ton as a result of the lower production volume.
Speaker Change: At the same time all the.
Speaker Change: The operations reported 46000 tonnes of copper in the first quarter.
Speaker Change: Approximately 10000 tons lower than the previous quarter, while cash cost increased used of $2 55.
Speaker Change: As a result of the lower production volumes.
Rudi Badenhorst: During the quarter, monitoring of the ball malls identified early symptoms of fatigue related to weakening of flange balls on the mall shelf. This phenomena is appearing in some mills around the world of similar age by the same manufacturer. We are working closely with the original equipment manufacturer as well as specialist engineering consultants to minimize the impact of the maintenance for the city. We continue to expect Sentinel to achieve its 2025 production guidance of 230,000 tons.
Speaker Change: During the quarter monitoring of the bold moves into.
Speaker Change: In the slide early symptoms of fatigue related to weakening loss Lanzhou bolt on more shelves.
Speaker Change: This phenomena is appearing in some malls around the world of similar age by the same manufacturer.
Speaker Change: We are working closely with the original equipment manufacturer.
Speaker Change: As well as specialists engineering consultants to minimize the impact of the maintenance for the city.
Speaker Change: We continue to expect <unk> to achieve its production guidance of 200 230000 tons.
Rudi Badenhorst: Four-day full maintenance shutdown of the Sentinel plant is planned in the second quarter of 2025. followed by tailings thickener upgrades in the second half of 2020. There will be a continued focus at Sentinel to increase throughput. and to drive lean and safe, cost-effective operations. Additionally, grades are expected to be higher in the second half of the year, and as such we expect steady improvement of copper production over the course of the year. for the first quarter of 2025.
Speaker Change: A four day full maintenance shutdown of the seasonal plant is planned in the second quarter of 2025.
Speaker Change: Followed by tailings thickener upgrades in the second half of 2025.
Speaker Change: It will be a continued focus at Sentinel to.
Speaker Change: The increased throughput.
Speaker Change: And to drive lean and safe cost effective operations.
Speaker Change: Additionally, grades are expected to be higher in the second half of the year and.
Speaker Change: And as such we expect steady improvement of copper production over the course of the year.
Speaker Change: For the first quarter of 2025.
Rudi Badenhorst: Enterprise produced 4,600 tons of nickel, a 25% increase over the previous quarter due to the ramp-up in ore supply to the plant. has been mined through the difficult fault zone that impacted the fourth quarter last year. Guys, we'll have a quarter of a quarter as a result of... and proportion of transitional or nickel cash cost of $4.78 per pound was 16 cents higher than the previous quarter due to higher freight 2025 production guidance remains unchanged at 15,000 to 25,000 tons of nickel.
Speaker Change: Enterprise produced 4600 tonnes of nickel at 25% increase over the previous quarter due to the ramp up in oil supply to the plant.
Speaker Change: As we mine through the difficult fault zone that impacted the fourth quarter last year.
Speaker Change: Rates were lower quarter over quarter as a result of it.
Speaker Change: And proportion of unreasonable Nicole cash cost of $4 78 per pound was <unk> 16 cents higher than the previous quarter due to higher freight costs.
Speaker Change: Page 25 production guidance remains unchanged at 15 to 25000 tonnes of nickel.
Rudi Badenhorst: for the full maintenance shutdown of the enterprise plant is planned in the second quarter of this year. The focus for 2025 will be on ore quality and grade control through ongoing reverse circulation drilling.
Speaker Change: For the full maintenance shutdown of the enterprise loans is planned in the second quarter of this year.
Speaker Change: The focus for 2025.
Speaker Change: No all quality and great.
Speaker Change: Through ongoing reverse circulation drilling.
Rudi Badenhorst: over to Cobra Panama. which has been in preservation and safe management since November 2023. costs in the first quarter were approximately $13 million per month and expected to remain in this range until formal approval is received for export of copper concentrate.
Speaker Change: Over to Cobre Panama.
Speaker Change: Which has been in preservation and safe management since November 2023.
Speaker Change: Costs in the first go to approximately $13 million per month and.
Speaker Change: And expect it to remain in this range until formal approval is received for explorer copper concentrate.
Rudi Badenhorst: and the Restore of the Power.
Speaker Change: And the restart of the pump.
Ryan MacWilliam: Thank you and I will now hand the call over to Ryan to review the financials. Thank you, Rudi. On the market side, copper prices were solid during the quarter, on the back of a tight concentrate market. Prices have fallen post-quarter end. U.S. tariff announcements have reduced the outlook for global economic growth. We expect continued volatility ahead, given the uncertainty around trade policy. but it is pleasing to see the continued strong physical market in China. The LME price averaged $4.24 per pound during the quarter. This was up 2% from Q4, albeit materially below the U.S. COMEX benchmark price due to potential tariffs on copper imports into the U.S.
Ryan McWilliams: Thank you and I will now hand, the call over to Ryan to review the financial potential.
Ryan McWilliams: Thank you Rudy.
Ryan McWilliams: On the market side.
Ryan McWilliams: Rice's was solid during the quarter and the back of a tight concentrate market.
Ryan McWilliams: Prices have fallen post quarter end U S tariff announcements have reduced the outlook for global economic growth.
Ryan McWilliams: We expect continued volatility ahead, given the uncertainty around trade policy.
Ryan McWilliams: It is pleasing to see the continued strong physical market in China.
Ryan McWilliams: Now, let me price averaged $4 24 per pound during the quarter.
Ryan McWilliams: This was up 2% from Q4, albeit materially below the U S. <unk> benchmark price due to potential tariffs on copper imports into the U S.
Ryan MacWilliam: Quarter over quarter, revenue was down 5%. which resulted in the 17% fall in EBITDA. The reduction in revenue was driven by lower copper and gold sales. which was somewhat mitigated by higher prices for both minerals.
Ryan McWilliams: Quarter over quarter revenue was down 5%.
Which resulted in a 17% fall in EBITDA.
Ryan McWilliams: The reduction in revenue was driven by lower copper and gold sales, which was somewhat mitigated by higher prices for both molecules.
Ryan MacWilliam: Q1 Net Loss Attributable to Shareholders was $23 Million Onto Costs Copper C1 costs were up 16%. to $1.95 per pound, driven by Sentinel's low production and stockpile drawdowns, along with higher Zambian employee and maintenance costs. This was partially offset by stronger gold prior product sales from Kinsanchi, which reduced overall C1 cash costs by $7.6 billion. Remaining input prices were stable, including Zambian pyro.
Ryan McWilliams: The Q1 net loss attributed to shareholders was $23 million.
Ryan McWilliams: Onto costs.
Ryan McWilliams: <unk> costs were up 16%.
Ryan McWilliams: So $1 95 per pound driven by seasonally lower production and stockpile drawdowns, along with higher Zambian employee and maintenance costs.
Ryan McWilliams: This was partially offset by stronger gold byproduct sales from Consensually, which reduced overall cone cash costs by <unk> <unk>.
Ryan McWilliams: Remaining input prices were stable, including Zambian power rates.
Ryan MacWilliam: On to the balance sheet, where we've remained active in our management of liquidity and debt maturity.
Ryan McWilliams: Onto the balance sheet, where we've remained active in our management of liquidity and debt maturities.
Ryan MacWilliam: We were pleased to complete an opportunistic $1 billion senior unsecured notes offering on the 5th of March. The timing was driven by both favorable spreads. and the high yield market backdrop at the time. The proceeds were used to reduce near-term maturities by $750 million and enhance liquidity by $250 million. This new bond extends our debt maturity profile up to 2033.
Ryan McWilliams: We were pleased to complete an opportunistic $1 billion senior unsecured notes offering on the fifth of March.
Ryan McWilliams: The timing was driven by both favorable spreads.
Ryan McWilliams: And the high yield market backdrop at the time.
Ryan McWilliams: The proceeds were used to reduce near term maturities are $750 million and enhance liquidity by $250 million.
Ryan McWilliams: This new bond extends our debt maturity profile out to 2033.
Ryan MacWilliam: After the quarter-end, we also entered into a supplemental three-year, $500 million prepayment for future copper deliveries at spot market prices. Similar terms and a repayment profile to the previous repayment. These combined actions increase our short-term liquidity by about $750 million.
Ryan McWilliams: After the quarter end, we also entered into a supplemental three year $500 million prepayments for future copper deliveries at spot market prices with similar terms and a repayment profile to the previous prepayments.
Ryan McWilliams: These combined actions increase our short term liquidity by about $750 million.
Ryan MacWilliam: We continue to explore other initiatives to strengthen our balance sheet, including a potential minority partnership in our Zambian base. Net debt increased in the quarter by $257 million to $5.8 billion. This increase was mainly due to unfavourable working capital movements and capital spend. These working capital movements were driven by higher trade receivables due to late March shipments and the impact of underlying copper price fluctuations on our provisionally priced sales. We expect this to unwind through quarter two.
We continue to explore other initiatives to strengthen our balance sheet, including a potential minority partnership in our business.
Ryan McWilliams: Net debt increased in the quarter by $257 million to $5 8 billion.
Ryan McWilliams: This increase was mainly due to unfavorable working capital movements and capital spend.
Ryan McWilliams: These working capital movements were driven by higher trade receivables due to late March shipments and the impact of underlying copper price fluctuations on our provisioning price sales.
Ryan McWilliams: We expect this to unwind through quarter two.
Ryan MacWilliam: Equity remains strong at $1.6 billion at quarter end, comprising of $743 million in cash and $880 million of undrawn revolve. We also continue our hedging strategy from last year, with a realized gain of $3 million for the quarter. Since inception in Q2 2024, the total program gain is $38 million. More than half of our copper sales are hedged via collars for the rest of 2025 through to June 2026. with an average floor of $4.14 per pound and cap of $4.75 per pound. This strategy stabilizes cash flows from a material portion of our production, while we complete S3 and focus on resolution in Panama.
Ryan McWilliams: Liquidity remains strong at $1 6 billion at quarter end comprising of $743 million in cash and $880 million of Undrawn revolver.
Ryan McWilliams: We also continue our hedging strategy from last year with a realized gain of $3 million for the quarter.
Ryan McWilliams: Since inception in Q2 2020 for the total program gain is $38 million.
Ryan McWilliams: More than half of our copper sales are hedged via collars for the rest of 2025 through to June 2026 with.
Ryan McWilliams: With an average floor of $4.14 per pound and cap of $4 75 per pound.
Ryan McWilliams: This strategy stabilizes cashflows from a material portion of our production, while we complete a street and focus on resolution and Panama.
Ryan MacWilliam: So in summary, our financial focus is on ensuring strong cost and capital discipline. We're continuing to extend our debt maturity profile. Maintaining a strong liquidity position. and on benefiting from the Hedge book in play. all of which puts us in a solid position to deal with any future volatility.
Ryan McWilliams: So in summary, our <unk>.
Ryan McWilliams: Natural focus is on ensuring strong cost and capital discipline.
Ryan McWilliams: We are continuing to extend our debt maturity profile.
Ryan McWilliams: Our strong liquidity position.
Ryan McWilliams: And on benefiting from the hedge book in place.
Ryan McWilliams: All of which puts us in a solid position to deal with any future volatility.
Tristan Pascall: I'll now hand the call back to Tristan. Thank you, Ryan.
Justin: I'll now hand, the call back to Justin.
Justin: Thank you Ron.
Tristan Pascall: Before opening the call for Q&A, I would like to provide an update on the progress of the Consantia S3 expansion. During the quarter, 20% of major systems at the 25 million tonne per annum concentrator began early commissioning in parallel with the completion of... The majority of the 33 kV distribution network and substations were energised, which allowed for the SAG mill and gearless mill drive to be commissioned. In addition, water was introduced to the site for the raw water pond and process water tank. Remaining construction work continues with a focus on completing the remaining piping and electrical scope.
Justin: Before opening the call for Q&A I would like to provide an update on the progress of the consensus is three expansion projects.
Justin: During the quarter, 20% of major systems is the 24 million ton per annum concentrated began early commissioning in parallel with the completion of construction.
Justin: The majority of the 33 K the distribution network and Substations, we are in the jaws, which allow for the Sag mill and gearless mill drives the condition.
In addition, what it was introduced to the solid for the rural water column and process.
Justin: Remaining construction work continues with a focus on completing the remaining piping and electrical in particular.
Tristan Pascall: By the end of the quarter, the project achieved 83% construction completion. Configuration of the plant control system achieved 84% completion, and operational readiness, which includes onboarding and training of the workforce, reached 75% completion. We continue to make good progress on the S3 expansion project at Kinshanshi and it remains on budget at $1.25 billion and well on track for completion by mid-year.
Justin: By the end of the quarter. The project achieved 83% construction completion configuration of the plant control system achieved 84% completion and operational readiness, which includes onboarding and training of the workforce reached 75% completion.
Justin: We continued to make good progress on the history expansion project at <unk> and it remains on budget at 125 billion and well on track for completion by midyear.
Tristan Pascall: In closing, I would like to reiterate our key priorities for this year. Firstly, towards resolving the situation in Panama, and we look forward to constructive discussions with the government for a resolution of the situation. Secondly, along with the actions taken today, we will continue with the proactive management of our balance sheets and liquidity positions. Thirdly, we will continue our focus on safe and lean productive operational performance. and finally, the successful delivery of the Consange S3 expansion project. I remain confident in the outlook for the company. Our financial actions, along with other initiatives forthcoming, have provided the company with meaningful headroom in our balance sheet, and our operations remain steady.
Justin: In closing I would like to reiterate our key priorities for this year.
Justin: Firstly towards resolving the situation in Panama, and we look forward to constructive discussions with the government for a resolution to the situation.
Justin: Secondly, along with the actions taken to date, we will continue with the proactive management of our balance sheet and liquidity position.
Justin: Thirdly, we will continue our focus on site and lean productive operational performance.
Justin: And finally, the successful delivery of the consensus is three expansion projects.
Justin: I remain confident in the outlook for the company.
Justin: Natural actions along with other initiatives forthcoming have provided the company with meaningful headroom in our balance sheet and our operations remained steady.
Justin: I'll go and lead the <unk>.
Tristan Pascall: The start-up of the S3 expansion at Consanche is only a few months away and will be a turning point for the company, returning it to a position of free cash flow generation. Over the last 18 months, the company has become more efficient and focused, and this has prepared us well for any challenge, including those presented to us by the current macroeconomic environment. We will continue to take active, proactively. strategically and always with a long-term view.
Speaker Change: Startup of the S three expansion.
Speaker Change: <unk> is only a few months away and will be a turning point for the company returning it to additional free cash flow generation.
Speaker Change: Over the last 18 months the company has become more efficient and focused and this has prepared us well for any challenge, including those presented to us.
Speaker Change: While the current macroeconomic environment, we will continue to take active proactively.
Strategically and always with a long term view.
Tristan Pascall: Thank you.
Speaker Change: Thank you this brings our prepared remarks and operator, we can open the call for Q&A.
Tristan Pascall: This brings our prepared remarks to an end.
Operator: Operator, we can open the call for Q&A. Thank you.
Operator: We will now begin the analyst question and answer session. Analysts are permitted to ask one question and one follow-up, and are welcome to return to queue if they have more. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two.
Speaker Change: Thank you we will now begin the analyst question and answer session.
Speaker Change: Melissa are permitted to ask one question and one follow up and they're welcome to rejoin the queue if they have money.
Speaker Change: He joined the question queue you May Press Star then one on your telephone keypad.
Speaker Change: I live here in town acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any kidney.
Speaker Change: They try a question. Please press Star then two.
Enrique Marquez: The first question comes from Enrique Marquez with Goldman Sachs. Please go ahead. Hi, thanks for taking my question. Um, we heard the Panama's president addressing the nation yesterday regarding the mine situation. Thank you.
Speaker Change: Our first question comes from and we came up with Goldman Sachs. Please go ahead.
Speaker Change: Hi, Thanks for taking my question we'd.
Speaker Change: We've heard the Panama, Brexit and addressing the nation yesterday regarding the main situation potential.
Speaker Change: Solutions is always a time line to get the solution by end of the year would.
Speaker Change: Would be great. If you could give us more color on exactly these options are.
Speaker Change: Timeline of feasible.
Speaker Change: And if you don't mind actually reopens by end of the year, how long should it take to fully ramp up.
Speaker Change: Thank you.
Tristan Pascall: Thanks Enrique, thanks for the question and also thank you to your team for publishing your explanatory notes on the comments by the President of Panama on Tuesday. We did see some misunderstandings of the English translations in some news wire, those have been corrected but your note was very helpful. and the President's Statement. So in terms of his statement, President Melino has been consistent in saying that he will address the issue of the mine following social security, and I think those comments on Tuesday reinforced that. He did talk about various routes for resolution. At this stage, we think it's too early for us to comment on that, and we certainly welcome the President's comments around that once suspension of arbitration is in place, he would make a call for the parties to engage in dialogue, and certainly we will engage in that dialogue.
Speaker Change: Thanks, Enrique Thanks for the question and also thank you Jyoti for publishing your explanatory notes on the comments for the President's Panama Tuesday.
Speaker Change: Did see some misunderstanding of the English translations in some newswire always has been.
Speaker Change: <unk> corrected, but you will note was very helpful. Tom.
Speaker Change: And the President Simon so in terms of his statements.
Speaker Change: Milena has been consistent in saying that you will address the issue of demand following social security and I think those comments Tuesday reinforce that you did talk about various routes.
Speaker Change: Fourth resolution at this stage, we think it's too early for us to comment on that and we certainly welcome the President's comments.
Speaker Change: The suspension of all pricing is in place.
Speaker Change: Mike coal for the parties to engage in dialogue and certainly we will engage in that dialogue.
Tristan Pascall: But in terms of what the outcome will be, we think it's too early for us to comment on at this point in time. In terms of dates and ramp-up, certainly we would be interested in getting the matter resolved as quickly as possible.
Speaker Change: But in terms of.
Speaker Change: What the outcome will be.
Speaker Change: We think it's too early for us to comment on at this point Paul.
Speaker Change: In terms of dice and ramp up in Sydney.
Speaker Change: Would be interested in getting the matter resolved as quickly as possible in terms of ramp up to get our view was it would take six to nine months to get to around 80% of throughput on the process plants, but to get to 100 million tonnes per annum that loss value optimization will be fairly involved.
Tristan Pascall: In terms of ramp-up, our view was it would take six to nine months to get to around 80% of throughput on the process plant, but to get to 100 million tonnes per annum, that last stage of optimisation will be fairly involved and take a further degree of time to get there.
Speaker Change: All right.
Speaker Change: Further degree of time to get there.
Speaker Change: Thank you.
Speaker Change: Okay.
Orest Wowkodaw: The next question comes from Orest Wowkodaw with Scotia Beck. Please go ahead. Hi, thanks. Just following up on the previous question. Is there any exact timeline at this point where you expect those negotiations to begin on on a restart?
Speaker Change: The next question.
Speaker Change: Question comes from our swap it out at Scotia Bank. Please go ahead.
Speaker Change: Hi, Thanks, just following up on the previous question is there any exact timeline at this point, where you expect those negotiations to begin on the on a restart.
Tristan Pascall: Hi, Orest. Thanks for the question. No, not particularly. What we did hear from the President and consistent with his previous comments is that once suspension of arbitration was in place that he would call for dialogue between the parties. We're ready for that dialogue. I think it's important to the country of Panama, to the people of Panama, that we get on with that. You know, we did put aside and suspend the arbitrations, we consistently repeated that arbitration is not our preferred course of action. comes to resolution would be in the best interests for the benefit of the public.
Speaker Change: Hi hours Thanks Luke.
Speaker Change: Thanks for the question no its not particularly what we did hear from the president and consistent with its previous comments is.
Speaker Change: One suspension of arbitration was in place that he would call for dialogue between the parties.
Speaker Change: We're ready for that look I think it's important to the country of Panama the people at Panama that we get on with asset.
Speaker Change: We did put the size and suspend the arbitrations.
Speaker Change: Consistently repeated that arbitration is not at all.
Speaker Change: Our preferred course of action and to.
Speaker Change: Come to resolution would be in the best interest for the benefit of the country.
Orest Wowkodaw: So as a follow up, is there anything left for First Quantum to do in terms of meeting the president's request in order to engage in discussions? No, not on our side as far as I'm aware, Orest. Okay, thank you.
Speaker Change: So as a follow up is there anything left for first quantum to do in terms of meeting the President's request in order to engage in discussions.
Speaker Change: No not on our side as far as on layoffs.
Speaker Change: Okay.
Speaker Change: Thank you.
Matthew Murphy: The next question comes from Matthew Murphy with BMO Capital Markets, please go ahead. Hi, um, yeah, it kind of feels like, uh... things are starting to progress on the Panama front. How does it make you think about the partner and sale options at this point? Is that kind of on hold and you see how Panama hands out over the next few quarters or is it still a priority to? to further improve the balance sheet. Thanks, Matthew.
Speaker Change: The next question comes from Matthew Murphy with BMO capital markets. Please go ahead.
Speaker Change: Hi, yeah, it kind of feels like a.
Speaker Change: Things are starting to to progress on the Panama front, how does it make you think about the partner and say all options. At this point is that kind of on hold and you see how our Panama pans out over the next few quarters or is it still a priority too.
Speaker Change: To further improve the balance sheet.
Speaker Change: Yes.
Ryan MacWilliam: I assume you're talking about the Zambia partnership.
Speaker Change: Thanks, Matthew I assume you're talking about the Zambia partnership Ron do you want it yet.
Ryan MacWilliam: Ryan, do you want to take that question? Sure. Hi, Matt. The Zambia partnership is really discussions or a reflection of a broader strategic desire to work more with partners, whether it's the right partner that makes sense for us and them. So we wouldn't tie it specifically to any discussions or progress around Panama. It's really that broader strategic initiative that catalyzed the partner in Raventhorpe, that catalyzed the partner with Rio Tinto in La Granja, and the fact that Zambia has made really positive strides in recent years to reform its mining sector has attracted interest from different parts of the world, and we are seeing if that might eventuate into a sensible partnership.
Speaker Change: Right.
Ron: Sure Hi, Matt.
Speaker Change: Zambia partnership Israeli disc.
Speaker Change: Discussions are a reflection of a broader strategic desire to work more with partners, where there's the right partner that makes sense for us and them.
Speaker Change: We wouldn't tied specifically to any discussions will progress through Panama, it's really that broader strategic initiatives that capitalize the partner in Ravensthorpe, then capitalize the pod with Rio Tinto Gronya and the fact that Zambia had really positive strides in recent years to reform. Its mining sector has attracted interest from different parts of the world and we are seeing.
Speaker Change: If that might eventuate into sensible partnership.
Ryan MacWilliam: At this stage, while the discussions continue, we still have to go through those and see where they get to, and if at the end of them there's something that makes sense for us, makes sense for Zambia, and makes sense for a potential partner, and then we'll update it in due course.
Speaker Change: At this stage, while the discussions continue we still have to go through the eyes, and see where they get to and if at the end and then there's something that makes sense for us it makes sense for Zambia. It makes sense for potential partner and then we'll update you in due course.
Ryan MacWilliam: Okay, and then just as a follow-up, does the gold price make you think about options with your gold exposure to improve the balance sheet? Yeah, go ahead, Ron. Certainly, the gold price hitting record high has provided an important tailwind on our costs. We saw a 7 cent benefit in Q1 relative to Q4 last year in our C1 cost due to that increase in gold price, coupled with the strong gold production coming out of Kitanchi and increasingly out of Guelmigrain with the CIL plant up online there. And yes, there are a range of financing options available to us.
Speaker Change: Okay, and then just as a follow up does the gold price make you think about options with the with your gold exposure to improve the balance sheet.
Speaker Change: Yes go ahead Ron.
Ron: Yes, so certainly the gold price hitting record highs as provided an important tailwind on our costs. We saw a <unk> <unk> benefit in Q1 relative to Q4 last year and I'll see one cost due to that increase in gold price coupled with the strong gold production coming.
Speaker Change: Coming out of <unk> and increasingly out of golf mcgrane with the CIL plant up online there.
Speaker Change: And yes, I mean, there are a range of financing options available to us he sold through the course of this quarter.
Ryan MacWilliam: You saw through the course of this quarter, we issued the bond, we've done a copper prepay. There are options around gold, where it's gold prepay, gold streams, and other tools in the toolbox. And I think whenever you're sitting with... High Quality Assets and two strategically important commodities, you're going to have a wide range of options and that's what we've demonstrated and which we expect will continue to be the case going forward and indeed pleasing to see the strong gold price that we've seen in recent months.
Speaker Change: The bonds were down the copper prepay their options around gold gold prepay gold streams and other tools in the toolbox and I think whenever you're sitting with her.
Speaker Change: High quality assets and two strategically important commodities, you're going to have a wide range of.
Speaker Change: <unk> and that's what we've demonstrated and which we expect will continue to be the case going forward.
Speaker Change: Indeed pleasing to see the strong gold price that we've seen in recent months.
Speaker Change: Okay.
Ioannis Masvoulas: The next question comes from Ioannis Masvoulas with Morgan Stanley. Please go ahead. Hello, thank you for taking my question.
Speaker Change: The next question comes from Ireland facility.
Speaker Change: Morgan Stanley. Please go ahead.
Speaker Change: Yes, Hello, Thank you for taking my question.
Tristan Pascall: Looking at the developments in Panama feels like things are moving in the right direction, but I wanted to ask you, now that you have discontinued the ICC process and suspended the FTA arbitration, what's your legal recourse going forward if things do not progress the way you anticipate? Hi Ernest. Yeah, thank you. So we've been very willing to do that and to take those courses of action to open space for engagement and the suspension of arbitration provides the opportunity for engagement, for dialogue with the government of Panama. The suspension can be continued through requests from both parties and certainly we would be constructive in that process but in the long term all our legal rights are protected and ultimately there can be a reversion back to arbitration.
Speaker Change: Looking at the developments in Panama feels like things are moving in the right direction, but I wanted to ask you now that you have discontinued the ICC process and suspended the FTA arbitration, what's your legal recourse going forward.
Speaker Change: <unk> do not progress the way you anticipate.
Speaker Change: Hi.
Speaker Change: Thank you. So we have been very willing to do that and to take those courses of action to open space.
Speaker Change: For engagement and.
Speaker Change: The suspension of arbitration provides the opportunity.
Speaker Change: For engagement.
Speaker Change: Dialogue with the government of Panama.
Speaker Change: Suspension can be continued through requests from from both parties and certainly we would be constructed in that process, but oil in the long term all our legal rights are protected and.
Speaker Change: Ultimately that can be reversion back to arbitration again that slowdown through the outcome we would seek.
Tristan Pascall: Again, that's not our preferred outcome. We would seek to get to resolution through engagement.
Speaker Change: To get to resolution three.
Speaker Change: Through engagement.
Tristan Pascall: Very clear, thank you.
Speaker Change: Very clear thank you.
Speaker Change: Yes.
Lawson Winder: The next question comes from Lawson Winder, Bank of America Security. Please go ahead. Good morning. Thank you very much, Operator. And then hello, Tristan, Rudi, and Ryan. Thank you for today's update. Wanted to ask about Panama as well. It makes a lot of sense that you've gone ahead and suspended the arbitrations or put one on hold and cancelled the other. The other parties involved have not yet done so and it seems the government of Panama is willing to engage as long as First Quantum is willing to take this step. Is that a fair statement or is there still an expectation that the government would like to see some of the other arbitrations suspended as well?
Speaker Change: The next question comes from Lawson Winder at Bank of America Securities. Please go ahead.
Lawson Winder: Good morning, Thank you very much operator, and then Hello, Tristan Roedean Ryan. Thank you for today's update wanted to ask about.
Speaker Change: Panama as well.
Speaker Change: It makes a lot of sense that you have gone ahead and suspended the <unk>.
Speaker Change: Arbitrations are put one on hold and canceled the other.
Speaker Change: The other parties involved have not yet done so and it seems the government of Panama is willing to engage as long as first quantum is willing to take those steps.
Speaker Change: Is that a fair statement or is there still an expectation that the government would like to see some of the other arbitration suspended as well.
Tristan Pascall: Thanks, Lawson. I'm speaking only from what we see publicly, public statements, because we can't speak for the government of Panama, but my understanding from the President's comments over the course of the week is that they are looking for those other suspensions. Certainly from our side, we believe we've done everything to get ready for those, to prepare the ground for that engagement, and certainly we're ready. and April for those engaged. Yeah, your openness to communicate with the government has been, I think, very helpful.
Speaker Change: Yes, Thanks, Lawson and look up.
Speaker Change: You know I'm speaking R&D from what we see publicly.
Speaker Change: Public statements, because we cant speak for the government of Panama, but my understanding from the President's comments over the course of the wages.
Speaker Change: Looking.
Speaker Change: For those other suspensions.
Speaker Change: We.
Speaker Change: Certainly from our side, we believe we have done everything to get ready for us.
Speaker Change: To prepare the ground for that engagement and Sydney Radian.
Speaker Change: For those of you guys can still take place.
Speaker Change: Yes, you eat your openness to communicate with the government has been I think very very helpful.
Rudi Badenhorst: I wanted to also just follow up on the power situation in Zambia. So 60% imported, I think, is the highest that you guys have ever done historically. Is there room to keep moving that up should that situation arise? And could you maybe also give us some color on where the power is coming from and then how you think about those current options today and how those might potentially increase should that need arise? Thanks, Lawson.
Speaker Change: I wanted to also just follow up on the power situation in Zambia. So.
Speaker Change: 60% imported I think is the highest that you guys have ever done historically is.
Speaker Change: Is there room to keep moving that up should that situation arise.
Speaker Change: And could you maybe also give us some color on.
Speaker Change: Where the power is coming from and then how you think about those current options today and how those might potentially increase should that need arise.
Wilson: Thanks, Wilson really do you want to take that one yes.
Rudi Badenhorst: Rudi, do you want to take that one? Yeah, no problem. Hi, Lawson. Thanks for the question. The rain season in Zambia is lingering somewhat, as of last week we still had a 100 millimetres of vent at northwest province, so the rain is lasting a little bit longer. We've seen very, very good river flows in the northern part of the Zambezi. Last week 2,900 kilometres a second, whilst Big Falls is still sitting at about 2,200. So there's still quite a lot of water that needs to come down over the next month or a bit into Kriba, and we look forward to see what that does to the lake level.
Speaker Change: So.
Speaker Change: Thanks for the question.
Speaker Change: The rainy season in Zambia is lingering somewhat.
Speaker Change: So last week was still 100 millimeters of into northwest Bhavan. So is there any.
Speaker Change: Is lasting a little bit longer we've seen very very good.
Speaker Change: Flows in the northern part of the <unk>.
Speaker Change: Vesey last week 2019, it gives a second wells be closed is still sitting at about 2200.
Speaker Change: So there's still quite a lot of water that needs to come down over the next month month and a bit into <unk>. We look forward to see what that does to the lake levels.
Rudi Badenhorst: However, you know, when we are fully aware that one season is not going to resolve it. and we expect to see the emergency power restrictions and the obviously then the broadly importation of power. not seizing until sort of second half of 2026. Deliberately, as a result of that, we've taken preemptive steps to secure power through third-party imports, other than Zesco, because Zesco is importing as well, all the way through to Q1-27. Thank you. Principally, that sits at around 60%. of our power needs will then be directly imported through third party providers and the remainder comes from ZESC.
Speaker Change: Yeah.
Speaker Change: When we.
Speaker Change: Fully aware that one seasonal lift in Arizona.
Speaker Change: And we expect to see the emergency powers frictions.
Speaker Change: Obviously, then the broadly importation of power.
Speaker Change: Not seeing until sort of second half of 2026.
Speaker Change: And this delay.
Speaker Change: Deliberately as a result of that we strike a preemptive.
Speaker Change: Steps to secure.
Speaker Change: Sure <unk>.
Speaker Change: To imports other than <unk> importing as well all the way through to Q1 'twenty seven.
Speaker Change: And.
Speaker Change: Principally that.
Speaker Change: Around 60%.
Speaker Change: O olive.
Speaker Change: Our balance needs will be and then I think the importers.
Speaker Change: Can you provide us.
Speaker Change: The remainder comes from Cisco.
Rudi Badenhorst: The contract that we have in place at the moment for that duration does allow for upside and we're quite comfortable that if there's any need for additional power that we would be able to secure that without too much of an issue. The power originates mainly as far as our direct imports through those providers from South Africa, Mozambique, a little bit from Malawi. There's some interconnectors being finalized from Tanzania, which opens up really a big power source from Ethiopia coming through into Tanzania and Zambia over the next two years. And along with that, you're well aware of the fact that we've entered into an arrangement with total energy for 430 megawatts of wind and solar power.
Speaker Change: The contracts that we haven't licensed the moment for that.
Speaker Change: Does allow for upside.
Speaker Change: And we're quite comfortable.
Speaker Change: If there is any need for additional.
Speaker Change: As we will be able to secure that without too much of an issue.
Speaker Change: The region is mainly.
Speaker Change: As far as direct imports through those providers from South Africa.
Speaker Change: <unk>, a little bit from Malawi.
Speaker Change: There is some interconnect is being finalized from Tanzania, which opens up really big power source from Ethiopia coming through into Tanzania, Zambia over the next two years and along with that you are well aware of the fact that we've entered into an arrangement.
Speaker Change: Arrangement with total energy for 430 megawatts of wind and solar power that comes into effect towards the end middle of 'twenty six all the way through to 2008.
Rudi Badenhorst: That comes into effect towards the middle of 26 all the way through to 28. We've secured 100 megawatts of solar power to a baseload of 25 megawatt coming into play in the third quarter of this year from within country, solar and Kariba. and we continue to invest into the grid in Zambia to stabilize. Voltage, and how SESCO protect their grid against fluctuations from interconnectors to neighboring countries.
Speaker Change: We secured 100 megawatts of.
Speaker Change: All about <unk>.
Speaker Change: <unk> of 25 megawatts coming into play in the third quarter of this year from within country.
Speaker Change: Executing EBA.
Speaker Change: Oh.
Speaker Change: And we continue to.
Speaker Change: Invest into the grid in Zambia stabilized voltage.
And to help Cisco predicting.
Speaker Change: Against fluctuations for interconnect is too to neighboring countries.
Myles Allsop: The next question comes from Myles Allsop at UBS, please go ahead. Great, thank you. Could you just confirm whether the environmental audit has started yet? I presume it hasn't because I can't see any sort of comments around it and how long will that take? Thanks Myles. So the status of the environmental audit was that the terms of reference went through public consultation back in February and we understand now those terms of reference are in the process of being finalised. The logistics around appointment of the company involved, the auditor, currently sit with the regulator and we're waiting to hear back on in terms of the formal notification around who that is and the timetable for that.
Speaker Change: The next question comes from Myles Allsop UBS. Please go ahead.
Myles Allsop: Okay. Thank you could you just.
Speaker Change: Just confirm whether the environmental audits has started yes, I presume that hasn't second Sydney.
Myles Allsop: So the comments around that and how long will that take.
Speaker Change: First question.
Speaker Change: Yes.
Speaker Change: Thanks Mark.
Speaker Change: Hi, This is environmental order was that the terms of the reference went through public consultation back in February and we understand now as Tim referenced are in the process of being on Lloyd's the logistics around the appointment of the company currently of the company all the water.
Speaker Change: Currently sit.
Speaker Change: The regulator and we're waiting to see.
Speaker Change: Backhaul and simple.
Speaker Change: Notification around who that is.
Speaker Change: And before that in the meantime, we have had a codesa audit that is.
Rudi Badenhorst: In the meantime, we have had a CADESA audit, that is the Miamba Mente, the Ministry of Environment's independent audit that came through last month and completed their regular audit of the site on environmental matters. Their finding was that Cobrapanoa was 100% compliant on all environmental obligations. We've provided that audit publicly on the website, it's available to see, but in the meantime, yes, Myles, we're waiting to hear back from government on that.
Speaker Change: But maintain the ministry of environment.
Speaker Change: Independent order that came through last month.
Speaker Change: And completed the regular ordered on the thoughts on environmental matters. This finding was that cobre, Panama was 100% compliance on all environmental obligations, we provided audits public.
Speaker Change: Publicly on the website is available to see but in the meantime, yes, Myles we're waiting to hear back from governments.
Rudi Badenhorst: the wider audit environment.
Speaker Change: The water.
Speaker Change: Excellent.
Rudi Badenhorst: You mentioned earlier around this ball mill issue potentially at Sentinel, could you just provide a little bit more detail around that and what the scenarios are, will this potentially result in an extended outage or can it be managed within a normal maintenance schedule? Rudi, could you take that one, please? Thanks, Dalton.
Speaker Change: And then you mentioned earlier around this ball mill issue potentially Sentinel could you just provide a little bit more detail around that and what the scenarios are.
Speaker Change: It's potentially.
Speaker Change: Results in the extended outage or.
Speaker Change: Can it be managed within the normal schedule.
Speaker Change: Sure really could you take that one please.
Bill: Thanks Bill.
Rudi Badenhorst: I don't see him. The fatigue relates to the bolts. on the shell of the mole flanges, not the mullet shell. And the money relates to the BOMO entrant 2 on the discharge end. Our condition monitoring team picked it up quite early, so intervention is opportune. We're working with the OEMs and other specialists to understand the core reason for the phenomenon. So in the meantime, however, it's a nuisance downtime of the bore mill, where the sag continues to run during this downtime. Thus, times per hour through that specific mill train is just lower for the period the bore mill stands.
Steve: Hello, Steve.
Steve: This relates to the bulbs.
Steve: On the shell of the most lenses not the mill itself.
Steve: And remind me relates to the ball mill and trying to on the discharge and <unk>.
Steve: Our condition monitoring team picked it up quite early so intervention as of June and we are working with the Oems and other more specialist who understand the core reason for the phenomenon.
Steve: So in the meantime.
Steve: Nissan Nissan's downtime of the bowl more with the site continues to run during this downtime.
Steve: <unk> tons per hour through the specific more brine.
Steve: Aloha.
Steve: For the period the vulnerable stands it's not a complete outage.
Rudi Badenhorst: It's not a complete outage. And, you know, going forward, we're confident that we'll address the mill bolt issue. And we don't foresee an extended downtime on the year.
Steve: Going forward.
Steve: With confident that we will address the low bolt issue.
Steve: We don't foresee an extended downtime.
Steve: On the year.
Steve: Okay.
Dalton Baretto: The next question comes from Dalton Baretto of Canaccord Genuity. Please go ahead. Thanks, Alvaredo. Good morning, Tristan and team.
Speaker Change: The next question comes from Dalton Barreto with Canaccord Genuity. Please go ahead.
Steve: Thanks, operator, good morning team.
Tristan Pascall: Just staying in Panama here, Tristan, I understand that for the FDA arbitration, the suspension isn't sort of a permanent thing and that you have to keep renewing it. Can you tell me how often you have to renew it and what you'd need to see from the government of Panama to keep renewing it? Yeah, thanks Dalton. So we're very happy to put aside the arbitration. Again, it's not our preferred pathway and outcome. We want to be in engagement and we've given the space for that to happen. But yes, both parties would need to mutually agree and go back to keep moving forward and that's up to the parties as we intend to go forward together.
Steve: Just staying in Panama attrition I understand that for the FTA arbitration the suspension isn't sort of a permanent thing that you have to keep renewing it.
Steve: Can you tell me, how often you have to renew it and what you would need to see from the government of Panama to keep renewing it.
Speaker Change: Yes. Thanks Dalton, So we're very happy to put aside the arbitration again, it's not our preferred pathway and outcome, we want to be in engagement.
Speaker Change: And we've given the space for that to happen, but yes, both parties would need to mutually agree and go back to keep moving forward and that's up to the parties.
Speaker Change: We intend to go forward together.
Tristan Pascall: We would just need to see constructive progress. We have every reason to think that's the case and we note the President's comments this week in which he was saying that once all the suspension of arbitrations were in place that he would be calling for dialogue between the parties and we look forward to joining that dialogue. Great. Thanks, Tristan.
Speaker Change: We would just need to see constructive progress we have.
Speaker Change: Every reason to think that the case and we know what the President's comments this week in which he was.
Speaker Change: Saying that once.
Speaker Change: The suspension of arbitration through are in place that you would be calling for dialogue between the parties and we look forward to joining that outlook.
Speaker Change: Great. Thanks, Preston and then maybe just as a follow up on one of the things President Molina was adamant about on Tuesday night was that contract law would not be the pathway forward just given what's happened.
Tristan Pascall: And then maybe just as a follow-up, one of the things President Molina was adamant about on Tuesday night was that contract law would not be the pathway forward, just given what's happened. And there may not be a short answer to this, but can you sort of talk about what some of the legal pathways forward could be? Sure Dalton, thanks. Yes, the President did make those comments and I think he's been consistent in saying, you know, he's repeatedly said that any agreement will not relate to a contract law because Law 9 and then Law 4 or 6 have not been successful, they haven't proved to be durable.
Speaker Change: And they may not be a short answer to this but can you sort of talk about what some of the legal pathways forward could be.
Speaker Change: Sure Dalton. Thanks, Yes, the prison did make those comments since he has been consistent in saying.
Speaker Change: <unk> repeatedly said that any agreement will not relate to the two of contract law, because low noise and low for <unk> have not been successful they haven't proves to be durable.
Tristan Pascall: So in his comments, you know, I just point out, he also pointed out the economic impact to the country of the mine closure and, you know, that many well-paid jobs have been lost, particularly for young people. Suppliers have been badly affected and it's affected them. the country's economic outlook. We believe the President is looking for a solution that would be durable, which has not been the case with the previous... Contract Law Approach. Ultimately, we're in complete agreement. We will be focused on a legal solution that is durable and fair for both parties, for all parties involved, including the people of Panama.
Speaker Change: So he and his comments.
Speaker Change: I'll just point out you also pointed out the economic impact to the country of the mine closure.
Speaker Change: And that many well paid jobs have been lost particularly for young people.
Speaker Change: Supplies have been bad we expected and it's affected.
Speaker Change: The country's economic outlook.
Speaker Change: Believe the president is looking for a solution that will be durable.
Speaker Change: It's just not been the case with the previous quarter.
Alright, well approach.
Speaker Change: Ultimately we're in complete agreement, we will be focused on illegal solution that is durable and fair for both parties.
Speaker Change: Possible.
Speaker Change: <unk> the people of Panama.
Operator: But I think Dalton, at the moment, it's too early to comment on what the potential solutions might look like. This concludes the question and answer session.
Speaker Change: I think delta at the moment, it's too early to comment on what the potential solutions might look like.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Kristin Pascal for any closing remarks. Please go ahead.
Tristan Pascall: I would like to turn the conference back over to Tristan Pascall for any closing remarks. Please go ahead. Thanks Operator and I'd like to thank everybody for joining the call today for your interest and time and I look forward to speaking to you again at our next update.
Kristin Pascal: Thanks, operator, and I'd like to thank everybody for joining the call today for your interest and time and.
Kristin Pascal: Speaking to you again at our next update.
Speaker Change: Okay.
Operator: This brings to a close today's conference call. You may disconnect your lines.
Speaker Change: This brings to a close today's conference call. You may disconnect. Your lines. Thank you for participating and have a pleasant day.
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