Q1 2025 Metals Acquisition Ltd Earnings Call

Operator: Thank you for standing by, and welcome to the MAC Coppa Limited Q1 Results Call and Webcast. All participants are in a list...

Thank you for standing by and welcome to the Mack called the limited Q1 results call and webcast. All participants are in a listen only mode that would be a presentation followed by a question and answer session. If you wish to ask a question you will need to press the stocky fill it by the number one on your telephone keypad.

Operator: There will be a presentation followed by a question and answer session. If you wish to ask a question Starkey, followed by the number one.

Operator: I would now like to hand the conference over.

Mac Mcmillan: I would now like to hand, the conference over to Mr. Mac Mcmillan Cei. Please go ahead.

Michael McMullen: Mullen, CEO. Please go ahead. Thank you very much and thanks everyone for joining us on what is a busy reporting schedule given the shortened holiday period in Australia.

Thank you very much.

Speaker Change: Thanks, everyone for joining us on what is a busy reporting schedule given the short holiday periods in Australia.

Michael McMullen: I'm Mick McMullen, the CEO. I'll run through the presentation.

Speaker Change: On the bottom, let's say Oh I'll run through the presentation I'm joined by I'll say, if I had more of an angle breakthrough will talk to some of the slides on the financials.

Morne Engelbrecht: I'm joined by our CFO, Morne Engelbrecht, who will talk to some of the slides on the financial...

Michael McMullen: This deck has been released on the ASX along with our quarterly report this morning and as usual we've got the disclaimers and everything at the front you can all read at your leisure. So look, matte copper at a glance, we've got an enterprise value of around about US$940 million. We're sort of planning to get over 50,000 tonnes of copper. in the not-too-distant future on an annual basis. Very strong balance sheet. Obviously, we've announced the refinancing of the debt that we did during the quarter.

Speaker Change: This deck is been released on the ASX along with our quarterly report this morning.

Speaker Change: And as usual, we've got the disclaimers and everything at the front you can already that your actual Asia.

Speaker Change: So look Matt corporate or at a glance you know we've got an enterprise value of around about 940 million U S. We're sort of planning to get out of a 50000 tons of copper.

Speaker Change: In the not too distant future on an annual basis.

Speaker Change: Very strong balance sheets are obviously, we've announced the refinancing of the debt that we did during the quarter a more than I will run through that and just so everyone's clear with.

Morne Engelbrecht: Morne will run through that.

Michael McMullen: And just so everyone's clear, to make sure the market understands how many shares we've got in issue, 82.5 million shares in issue, about 3.18 million warrants at a strike of $12.50 a share. The gearing under 20% which is within our range of where we sort of target and we've got two key growth projects underway.

Speaker Change: I'm not sure the market understands how many changes with it and issue I do see what the Hoffman chazen issue about straight 0.1 8 million warrants at.

Speaker Change: I had a strike at $12 50 U S share.

Speaker Change: The gearing under 20%, which is within our range the way we set a target.

Speaker Change: And we've got two two key growth projects on the why the ventilation work, which is Oh, we'll talk about a lot of slides and then the really exciting news actually is the merit bond that we started.

Michael McMullen: The ventilation work which is we'll talk about later slides and then the really exciting news actually is the Merrin mine that we started rolling out in the marketplace during the last quarter and we've made some really good progress on that and so we've got quite a few slides on that as we we are quite excited about that thing. So going forward, first quarter is always our softest quarter. If you recall, the fourth quarter last year was a very strong quarter. And then obviously, you know, we then have to come through the sort of the January period where we push very hard in the back six weeks of last year.

Speaker Change: Rolling out in the marketplace during the last quarter and we made some really good progress on that and so we've got quite a few slides on that as we are quite excited about that.

Speaker Change:

So going forward, our first quarter is always al al last softest quarter.

Speaker Change: If you recall the fourth quarter last year was a very strong quarter.

Speaker Change: Obviously, you know we didn't have to come through the sort of the January period, where we pushed very hard in the back six weeks of last year, and and we typically say a little bit of seasonal variation, whether as well, which sort of summer storms.

Michael McMullen: And we typically see a little bit of seasonal variation in weather as well with sort of summer storms. It really is a function of where we are in the stope sequence, and we can see the stope sequence we have ahead of us right now. We've got a lot of large tonnage, very high-grade stopes that have been coming online over the last few weeks. and therefore you know we're not changing our guidance based on what we can see coming out of the ground ahead of time. C1 was still pretty decent at a $1.91 US a pound, total cash cost of about $2.47 a pound and a realised price of $4.04 a pound US for the quarter.

Speaker Change: It really is a function of us sort of way we are in the stope sequence.

Speaker Change: And you know, we can say Ah the stope sequence, we haven't heard of US right now we've got a lot of large tonnage very high grade stopes that have been coming on la and I over the last few weeks.

Speaker Change: And therefore, you know we're not changing our guidance based on what we can say coming out of the ground ahead of us.

Speaker Change: Say, one was still pretty decent of the bulk 91 U S pound.

Speaker Change: Total cash cost of about $2 47, a pound at a realized price of $4 four Pan U S. A for the quarter.

Michael McMullen: And if you read that little footnote there, we've had some questions from people about the impact of the hedges on received price and so we are now showing that received price net of hedges. I'll let Morne really go through all the balance sheet and the financials and liquidity, but you know, for this year, 43,000 to 48,000 tonne of copper is where the guidance sits. copper grade somewhere between 3.8% and 4%. And obviously, you know, we had a very strong grade profile during Q1. And growth capex of somewhere in the order of $20,000 to $25,000 in the US and sustaining at $40,000 to $50,000.

Speaker Change: And if you read that little footnote there. We've we've had some questions from people about the impact of the ages at Mercedes.

Speaker Change: And so we are now showing that receive products.

Speaker Change: Ms.

Speaker Change: I'll, let Mona I really go through all the balance sheet, and the and the financials and liquidity.

Speaker Change: But you know fiduciary.

Speaker Change: <unk> 43 to 48000 tons of copper as wave is where the garden seats.

Speaker Change: Copper grades some way between stripe or 94% and obviously you.

We had a very strong grade profile during Q1.

Speaker Change: And growth Capex of somewhere in the order of 20 to 25 million U S. Since the signing of 40 to 50.

Michael McMullen: And, you know, overall, we have seen some good tailwinds coming into this year from both exchange rate and TCRCs. And actually, for those of you who follow the market, we've seen actually spot copper treatment charges at negative $40 a tonne, which is sort of, you know, should indicate a pretty good annual benchmark settlement for next year, possibly even lower than where we currently sit. So that's been quite a good positive thing which I guess has obviously helped our C1 despite the lower volume during the quarter.

Speaker Change: And our overall AR, we have seen some good tailwind coming into this year from both exchange right and Stacy assays.

Speaker Change: And actually it's about it's if you follow the market, we've seen actually spot copper treatment charges are at negative $40 atop a which you sort of you know shooting.

Speaker Change: Should indicate a pretty good annual benchmark settlement for next year, possibly even lower than where we currently sit.

Speaker Change: So that's been quite a good positive thing, which I guess is obviously help desk. They won the spot the lower volume during the during the quarter.

Speaker Change: Safety, we like to talk about you know I would say I've said on calls in the past that you know, we had preferreds blaenau tie, but probably a little sticky I suppose.

Michael McMullen: Safety we like to talk about, you know I would say I've said on calls in the past that you know our triffer has been okay but probably a little sticky I suppose but now we're starting to see the benefit of all the hard work that the team inside have done with the triffer starting to trend down quite nicely and I think by the end of April we've ended up at around a triffer of around seven actually for the last 12 months so that's great.

Speaker Change: Now, we're starting to say the benefit of all the hardwood that that same inside of them.

Speaker Change: With the trip are starting to trend down quite nicely and I think by the end of April we've ended up with a rabbit a trip from around seven actually see it for the last 12 months.

Speaker Change: So that's great.

Michael McMullen: One of our big sustaining capital projects that we're doing is our tailing storage facility. So the stage 10 embankment, that's on track for completion in the fourth quarter of this year. Again, just for the Australians, we're an annual financial year, so in the December quarter. And that will provide us capacity out till about 2030. And so, you know, we are actually building all of that now. So we're well on track. We've had no reportable environmental incidents during the quarter. So from an ESG point of view, actually we've had a pretty good improvement on where we had been tracking before.

Speaker Change: One of our big.

Speaker Change: Sustaining capital projects that we're doing is that tailing storage facility.

Speaker Change: So the stage to an embankment.

Speaker Change: It's on track for completion in the fourth quarter of the XI or again just for the strides we're an annual financial year. So in the December quarter.

Speaker Change: And that will provide us capacity out till about 2030, and so you know we are actually building all of that now so way, we're well on track we've had no reportable environmental incidents during the quarter aside from an E. S. J point of view actually we've had a pretty good pretty good improving the way we had been tracking before.

Speaker Change: Our production look obviously, we sold production trend down as I said it was a combination of pushing.

Michael McMullen: Look, obviously we saw production trend down. As I said, it was a combination of pushing very hard during the fourth quarter. You can see there the December quarter numbers were very strong and probably a day and a half of production lost in February due to some summer storms, which again, if you think back to last year, exactly what we had that period. Grade was good. Head grade a bit over 4% copper and we expect to see the Q2 grade to be as strong if not a bit stronger. Again, really the increase in C1 was driven by volume.

Speaker Change: Pushing very hard during the fourth quarter you can see there in the December quarter numbers were very strong.

Speaker Change: And you know probably a diet of half of production lost in February due to some summer storms, which again, if you think back to last year.

Speaker Change: Xactly, what we had that that period.

Speaker Change: Gride was good side.

Speaker Change: The head grade B dive a full percent copper.

Speaker Change: And we expect to say that Q2 guide to be as strongly felt a bit stronger.

Speaker Change: And again really the increase in say one was driven by by volume at you know, we've always sort of say that fixed costs associated with 70% of out that volume, but we did have a bit of a win on the TCR cities.

Michael McMullen: We've always said that fixed costs are circa 70% of our volume but we did have a bit of a win on the TCRCs. In the word version of the quarterly that we put out, if you look at our production and cost in the month of March, as we did a lot of catch-up work in January after the very strong December quarter, if you look at the month of March, we produced just under 4,000t of copper and our C1 was around about USD$1.45 per pound. That gives you an indication of where we think the business should be and can be.

Speaker Change: And in.

Speaker Change: In the Wood division of the quarterly that we put out you know if you look at our production and cost in the month of March obviously, as we sort of did a lot of catch up work in them in January after the very strong December quarter.

Speaker Change: If you look at the month of March we produced just under 4000 tons of copper and assay. One was around about a $1 45 U S. A pound so that sort of gives you an indication of where we think the business should be and can be and again, it's it's really making sure that we have as a minimum two or three months really strong.

Michael McMullen: Again, it's really making sure that we have, as a minimum, 2 or 3 months really strong in a quarter.

Speaker Change: <unk>.

Speaker Change: In a quarter and actually this marinol and has the ability to sort of smooth out some of those ups and downs in the production cycle.

Michael McMullen: Actually, this Merrin mine has the ability to smooth out some of those ups and downs in the production cycle. So overall, you know, it was an okay quarter. We do expect always the March quarter to be our softest quarter, and that pattern has been maintained.

Speaker Change: So overall you know it was an okay quarter, we do expect the March quarter to be our softest quarter and that pattern has big my time.

Speaker Change: Lots going on on this slide here I guess, we've sort of again, we've had some questions from people around you know total capex and sort of what's in groceries and exploration and sustaining and.

Michael McMullen: Lots going on on this slide here. I guess we've sort of, again, we've had some questions from people around, you know, total CapEx and sort of, you know, what's in growth and exploration and sustaining. And Morne has done a great job on the graph on the left there, sort of trying to outline, you know, what we've spent the money on. You will note that sustaining CapEx, you know, has dropped down a fair bit, actually. We had a very strong spend on the Stage 10 capital expenditure during the December quarter. And so we're sort of ahead of the game there.

Speaker Change: And more and he has done a great job on the graph on the left there sort of trailing go out law and what we've spent the money on.

Speaker Change: You will note that sustaining capex.

Speaker Change: He has dropped out of favor it actually.

Speaker Change: We had a very strong Spain on the states chain.

Speaker Change: Capital expenditure during the December quarter our.

Speaker Change: And so there's sort of ahead of the guy and they are all size some of the timing of rebuilds.

Michael McMullen: Also, some of the timing of rebills has basically resulted in us needing to spend less capital. You can see there the growth CapEx was sort of pretty constant around about that four million dollars and what's in growth CapEx, so you know we don't put tailings dams into growth, that's in sustaining, but we do put our Merrimine expenditure and the capital vent project sits in there and then we've spent about just over a million dollars on exploration. development meters. So again, you know, we're starting to give a little bit more detail for people here as to, you know, where the development meters are going, or coming from.

Speaker Change: Has has basically resulted in us needing to spend less capital.

Speaker Change: You can say there the growth Capex will set a pretty constant around about that $4 million and Watson gross capex. So you know, we don't put tailings dams in the garage that since the signing.

Speaker Change: But we do put a marathon expenditure and capital named project sits in there.

Speaker Change: We spent about them just over a million dollars on on exploration.

Speaker Change: Development Natus. So again, yeah, we're starting to give it a little bit more detail for people here as to where the development meters of gowing, we're coming from.

Michael McMullen: And you can see here that That blue bar on the graph on the right is the Capital Vent Project, which we've spoken about as being very important for the future of the mine. You can see we're starting to ramp up the development meters there again, for those of you who've followed us for a while. As we turn off from the existing workings and head out to these things, the development rates are quite slow because we're interacting with the existing mine, and that's Merrin Mine. That's been the same, but as we get a bit further out, then we can start not interacting with the mine and we can really start ramping up those meters.

Speaker Change: And you can see here that some.

Speaker Change: That blue bar on the graph on the royalties is the capital then project, which.

Speaker Change: Which we've spoken about as being very important for the future of the mine you can see we are starting to ramp up the development latest there again for those of you who followed us for a while.

Speaker Change: As we turn off from the existing workings.

Speaker Change: And head out to these things the development rights are quite slowly because we're interacting with existing Marlin and thats marinol in N. The capital project.

Speaker Change: By staying the same but as we get a bit further out then we can stop not interacting with them all of them. We can really start ramping up that has made us and so that's really what you're saying in that graph.

Michael McMullen: That's really what you're seeing in that graph on the right. In addition to that, we did an extra 227m of capital development up in the Merrin Mine. If you think about total development for the business, we are actually starting to ramp up capital development quite a bit here. You will see why in the Merrin Mine. We've been able to do a lot of development meters with not a lot of equipment and for a pretty cheap cost.

Speaker Change: On the ROI.

Speaker Change: In addition to that we did an extra 227 meters of capital development up in the marathon.

Speaker Change: So if you think about total development for the business. You know we are actually starting to ramp up capital development quite a bit here and you will see why in the Marinol and that's actually we've been able to do a lot of development latest with not a lot of equipment, that's a pretty cheap cost.

Michael McMullen: So look, our goals are still the same, you know, it's really been consistent, safe, low-cost copper production. You know, we do want to advance our ventilation project, we want to get the mirror mine online and obviously the balance sheet. So, this sort of bridge gives you a bit of an idea of where we see the production coming from. So, for next year, 2026, midpoint of guidance around about 50,000 tonnes of copper, we see the Merrin mine being additive to that. We're getting quite excited about the Merrimine, as you're going to see in the next few slides.

Speaker Change: So look at golf as steel side.

Speaker Change: It's really been consistent site low cost copper production.

Speaker Change: We do want to advance had been licensed project, we want to get the mere mortal online in and obviously the balance sheet.

Speaker Change: So does this sort of bridge gives you a bit of an idea of where we see the production coming from I'm sorry for next year 2026 midpoint of guidance around about 50000 tons of copper out we say the marienbonn being additive to that.

Speaker Change: And.

Speaker Change: We're getting quite excited about the mayor of mall and as you can see in the next few slides.

Michael McMullen: So, targeting production from the fourth quarter, being the December quarter this year. This is everything from surface down to about 900 metres below surface. It's the Merrin mine, it's got a whole bunch of different deposits in there. making life easier, we just call it that. Not all of that is in JORC or SK 1300 resources but we have sufficient confidence in those mineralized estimates to make investment decisions and really that revolves around the age of some of the assay data and assay certificates with the resource and reserve QPs and the mine planning teams have done a Herculean effort here to digitize a lot of old data and to go and do check drilling and confirmation work which has taken quite some time.

Speaker Change: So targeting production from the fourth quarter being the December quarter. This year.

Speaker Change: This is everything from surface down to about 900 meters below surface.

Speaker Change: It's the Marinol and that's got a whole bunch of different deposits you name it.

Speaker Change: Just making life easier, we just call it that.

Speaker Change: Not all of that is in Georgia or S case, 800 resources, but we have sufficient competency nies.

Speaker Change: Mineralized estimates too to make investment decisions.

Speaker Change: And really that revolves around the age of some of the assay daughter and assays that you if it gets worse.

Speaker Change: The resource and reserve she pays and the mine planning teams have done a herculean effort here to.

Speaker Change: To digitize a lot of all data and to Gal do check drilling and confirmation with which has taken quite some time. It's you know this is data that's gone back out of a 40 years 50 years.

Michael McMullen: This is data that's gone back over 40 years, 50 years but actually we found a significant amount of mineralization that was sitting in there. most of it sitting very close to existing development. I try and break it down into the simplest form by saying there's really four separate components to this mine. There's the quite high-grade, narrow, 3-4m wide at 10-20% copper in that QTS South Upper, which is that little blob sitting right up on the top left of that page there, of that image. That's what we're driving out to now. Then there's a reasonably high-grade, 8-10% zinc with a little bit of lead and a high-grade zinc zone, which our plan is to mine that and truck that up to polymetals to the Endeavour mill for treatment.

Speaker Change: But actually we found a significant amount of mineralization that was sitting in there.

Speaker Change: Most of it's getting very close to existing development.

Speaker Change: I'll try and break it down into the simplest form by saying, there's really four separate components to this mine.

Speaker Change: There's the quite high right now three full made as why that 10% to 20% copper in that two to yourself Alba, which is that little blob sitting right up on the top left of that page they that in each.

Speaker Change: That's what we're driving out to now.

Speaker Change: Then days I reasonably high right sort of 8% to 10% zinc with a little bit late and.

Speaker Change: High grade zinc design, which our plan is to mine that and track that up to poly metals up to the endeavor mill for treatment.

Michael McMullen: We then have what we call a medium-grade copper ore body, which actually in terms of tonnage is the largest part, quite substantial, around about 2.5% copper. Then last is the mixed, which is a mixed copper-zinc material, which actually is starting to become reasonably sizeable as well. The beauty of this thing is that it is completely separate to the rest of the mine. We access it through the decline. It's 150 to 200 meters below surface. It's fantastic ground. The team that's up there is running as a separate operation and is doing development at a much faster rate than we currently can do at the bottom of the mine.

Speaker Change: We then have what we call the medium grade copper ore body, which actually in terms of tonnage is the largest part.

Speaker Change: Caught substantial ran about 2.5% cover.

Speaker Change: And then last ease the mixed which is a mixed copper zinc material.

Speaker Change: Which actually is starting to become reasonably sizable as well.

Speaker Change: The beauty of this thing is that it is completely separate to the rest of the mine.

Speaker Change: We access it through the de clawed its 150 to 200 meters below surface.

Speaker Change: Fantastic ground the team that's out there is running as a separate operation.

Speaker Change: And he's he's doing development at a much faster rate than we currently can do at the bottom of the mine, we really have no constraints apart from equipment and people.

Speaker Change: We've been spending a lot of time and saw it with the corporate team that over the last six weeks actually adding resources to this we've we've doubled the.

Michael McMullen: We've been spending a lot of time at site with the corporate team over the last six weeks actually adding resources to this. We've doubled the number of jumbos that are going in there and increasing the number of trucks, increasing the people, because quite frankly this is a lever we can pull very cheaply. Our cost per meter to develop is roughly one third of what it is at the bottom of the mine. As we've said often, the more you look, the more you find at CSA. I'll run through some of the things that we've found. We're on track for some production for copper out of this during the fourth quarter and we're actually quite excited about this.

Speaker Change: The number of Jamba as the going in there and increasing the number of trucks, increasing the people because quite frankly this is a lever we can pull very cheaply.

Speaker Change: Our cost to Meda to develop is roughly one third of.

Speaker Change: What are these at the bottom of the mine.

Speaker Change: And as we've said often United the more you look the more you find it say assai and I'll run through some of the things that we've found so again, we're sort of on track with some production for copper out of these during the fourth quarter.

Speaker Change: And we're actually quite excited about this so.

Speaker Change: <unk>.

Michael McMullen: View on the left is a surface plan, all that light grey looking stuff is the surface projection of the existing underground workings, Kutia South Upper is heading off to the left side of the page, Pink Panther is another deposit we've been drilling out from surface, and sort of that is the surface expression of the Maronite. As we have developed the drive out towards QTS South Upper we have discovered quite a bit of massive sulphide both copper and you can see in that in that actually that's the tag board Cuddy for independent firing there but you know that's about two and a half meters of high-grade massive sulphide for copper which was not in any of the models at all.

Speaker Change: View on the left is a surface plan all that light gray looking stop is the surface projection of the existing underground workings.

Speaker Change: Keith Yourself offers you know paying off to the to the left side of the pie Pink Panther was another deposit we have been drilling out from surface.

Speaker Change: And sort of is that as the surface expression of the marathon.

Speaker Change: As we have developed the drive out towards Q2 yourself out by we have discovered quite a bit of massive sulphide, both copper and you can see in that in that actually that's the Tagboard Cotter you for independent firing day about all that's about two and a half made is of high grade massive sulfide copper.

Speaker Change: It was not in any of the models at all.

Michael McMullen: We've also developed through some quite high-grade zinc and lead mineralization as well on the way We think there's a lot of opportunities to expand this. And as I've said, there's no real constraints, you know, in terms of going faster or doing more apart from people and equipment. So we now have independent ventilation that's been established there. So again, as you start developing out from the existing drives, it's slow, you're interacting with the rest of the mine. The team have managed to tap into an existing vent shaft out there that's not connected to the bottom of the mine.

Speaker Change: Also developed through some quite hard ride zinc and lead mineralization as well on the way out so.

Speaker Change: We think theres a lot of opportunity to expand this and as I've said does not real constraints.

Speaker Change: In terms of going faster or doing more apart from people and equipment. So.

Speaker Change: We now have independent ventilation, that's been established there. So again as you stop developing out from the existing drives it's slow you're interacting with the rest of them on the team have managed to tap into an existing bent shop out there that's not connected to the bottom of the mod.

Michael McMullen: And during the month of April, we've established independent ventilation and therefore independent firing. And now we can really ramp up development rates. Having said that, you know, one jumbo up here has been getting about the same amount of meters, more or less, as three jumbos at the bottom of the mine. So, and consequently, very cheap on a unit rate basis. So we're pretty excited about this area. You can see here, this is the drive going out to Kootia South Upper. And, you know, again, the more you look, the more you find. We drilled actually that vertical hole on the right is a geotech hole for where the vent rise was going.

Speaker Change: During the month of April we've established independent ventilation, and therefore independent firing and now we can really ramp up development rights, having said that one.

Speaker Change: One jumbo up he has been getting about the same amount of made us more or less as three jumbos at the bottom of the mall and so.

Speaker Change: And consequently, very cheap on a unit basis, so we're pretty excited.

Speaker Change: Started about this area you can say hey, this is a draw of going out to kill yourself.

Speaker Change: And you know again the more you look the more you find we drilled actually that vertical hole on the rod as J J called for the Big Boys was going any heat. The typical three to four meters at you know 10% to 20%.

Michael McMullen: And it hit the typical three to four meters at, you know, 10 to 20% copper mineralization. So all of a sudden we decided to go and drill some more holes up there. And guess what? We've extended that ore body vertically about 70 meters now. So. We knew enough to go to make the investment decision to go out there, but we knew everything was still open. As we go out there, we're finding more and more stuff, so we're pretty happy with the way that's all going.

Speaker Change: Copper mineralization. So all of a sudden we decided to go drill some old holds up there and guests walk with extended that ore body.

Speaker Change: About $70 million now so.

Speaker Change: We knew enough to go to make the investment season to go out there, but we knew everything was still open.

Speaker Change: As we go out there, we're finding more and more stuff.

Speaker Change: Pretty happy with the way that's all galley.

Speaker Change:

Michael McMullen: It really will be a separate mine to the rest of the mine, so again the existing mine is being accessed, the ore comes out through the haulage shafts. coming out through the decline. It's around about a six minute drive from the ore body to the ROMPAD and very low unit rates relative to what we currently cost us to mine and quite good grade as well actually and so you know we've been asked you know well how big could this thing be? Not all of it's in reserve, very little of it's in reserve in fact, not I think it's pretty topical right now, but this would be a woodlawn-sized mine.

Speaker Change: It really will be a separate mine to the rest of the mine. So again the existing mine is being access to the ore comes out through the Holy shops. This is coming out through the Declawed. It's around about a six minute drive from the ore body to so the ROM pad and very.

Speaker Change: Lower unit rates relative to what we currently see.

Speaker Change: So what we call system on.

Speaker Change: And quite good right as well actually and so you know we've been asked well how big could this thing be.

Speaker Change: Not all of it seen reserve very little of it's in reserve in fact bundle all of it is it actually Joel it's got so they'd have a resource.

Speaker Change: I think it's pretty topical right now, but you know this would be I Woodlawn saw is born.

Michael McMullen: but mostly copper with a bit of zinc as opposed to the other way. That's probably the most analogous thing I can give to people right now just for the mere in mind is that. This would be around about a woodlawn sized operation.

Speaker Change: But mostly copper with a bit of zinc as opposed to the other way.

Speaker Change: That's probably the most analogous thing I can give to people right now.

Speaker Change: Just for the Marinol and ease that this would be I ran about them are woodlawn sized operation.

Michael McMullen: So you can tell why we're quite excited about it and why we're throwing more resources at it as quickly as we can.

Speaker Change: So you can tell Huawei quite excited about them Huawei throwing more resources at it as quickly as we can.

Michael McMullen: ventilation project. So again, chugging along, you can see from that graph earlier that the development meters is really starting to ramp up in that thing. Still on track for Q3, the September quarter next year, for completion. This is really important for unlocking the bottom of the mine, allows us really for the bottom of the mine to get additional vent. And so, you know, in the immediate term, we're developing this Merrin mine, which will have a reasonably long life. But also, we haven't taken our eye off the ball for this thing, because this is actually really important for unlocking the bottom of the mine.

Speaker Change: The life and project. So again chugging, along you could see from that graph that earlier that the development meters is really starting to ramp up in that thing.

Speaker Change: Feel on track for Q3 September quarter next year. After completion. This is really important from walking the bottom of the mine allows us really to the bottom of the mine to get additional veins.

Speaker Change: And so you know.

Speaker Change: Immediate term, we're developing as Meera mine, which will have a reasonably long life.

Speaker Change: But also we've been attacking all off the ball for this thing because this is actually really important for unlocking the bottom at the moment.

Morne Engelbrecht: With that, I'm going to hand over to Morne and he can talk to people about the financial side of things. Right, thanks, Nick. Good evening, morning, everybody.

Speaker Change: With that I'm going to hand out of its more than I and he can talk to people about about the financial side of things.

Baker: Alright, Thanks Baker, good evening morning, everybody.

Morne Engelbrecht: Going to slide 15 now. We announced during March 2025, the very exciting news that we completed the refinance, as Nick said, of our debt structure with the recut of the senior debt facilities, including the early repayment of the mezzanine facility. Overall, we have significantly de-levered and simplified our balance sheet over the last year, reducing our net gearing by more than 50% to just under 20%, as Mick said, at the end of March 2025. Just to recap what has changed with the refinance, so as you would remember, we had the old facilities which were made up of the $159 million U.S.

Baker: I'm going to slide 15, now we announced during our March 'twenty 'twenty five the very exciting news a week.

Baker: Completed the refinance it it makes it although they structure with the re cut off the senior debt facilities, including the early repayment of the mezzanine facility.

Baker: Overall, we have as you know.

Baker: Significantly de live it to simplify our balance sheet over the last year.

Baker: Reducing our net gearing by more than 50% to just under 20%. This makes it at the end of March 2025.

Baker: And just to recap what what has changed with the refinance so.

Baker: As you remember we had the old facilities, which were made up of the $159 million U S term loan facility, there was a $25 million revolving credit facility.

Morne Engelbrecht: term loan facility, there was a $25 million revolving credit facility, $145 million mezzanine debt facility, and then a $45 million Aussie environmental bond that was provided by Glencore. The new facilities are made up of a $159 million term loan facility, a $125 million revolving credit facility, and a $45 million Aussie environmental bond now provided by three new Australian banks. Some of the key highlights of the refinance, it's really around, we've now fully repaid the mezzanine debt facility, so that's the $160 million that we've repaid on that facility which included the 4% premium and the interest to June.

Baker: $145 million mezzanine debt facility, and then a 45 million Aussie environmental bonds that would provide buccolingual.

Baker: The new facilities are made up of $159 million Timna and facility.

Baker: 125 million revolving credit facility.

Baker: And a 45 million Aussie dollar environmental gone now provided by three new is trending banks.

Baker:

Baker: What are some of the key highlights of the refinance them.

Baker: Really around you know we've now fully.

Baker: We paid the mezzanine debt facilities. So that's that's the $160 million that we'd be paying on that facility. We can put it to the 4% premium and the interest to June.

Morne Engelbrecht: We did extend the maturity of the old facilities as well, so both the term and the revolving facilities to March 2028. We increased the revolving credit facility by US$100 million to US$125 million, providing even greater flexibility and available liquidity. The refinance provides for a repayment holiday to 30 September 2025 and then also we've got a new repayment profile which reduces our repayments by $123 million by December 2026 when comparing the old versus the new repayment profile. Importantly, we also reduced the average weighted cost of debt by more than 30%, so that's sort of sitting at the end of May to sort of around that 6.84% on the senior debt we've got outstanding at the moment.

Baker: We did extend the maturity of the old facilities as well so both determine their long facilities to March 2028.

And we increased the revolving credit facility by a 102 million U S 225 million U S.

Baker: Providing even greater flexibility and available liquidity.

Baker: The refinance provides full repayments holiday to 30 September 25.

Baker: And then also we've got a new repayment profile, which reduces our repayments by $123 million by December 26, when comparing the old ER visit the new repayment profile.

Baker: Importantly, we also reduced the average weighted cost of debt by more than 30%. So that's sort of sitting in the box is sort of around that six points to eight 4%.

Baker: On the on the on the senior debt, we are outstanding at the moment.

Morne Engelbrecht: That sort of saving equates to about US$14 million per annum cash interest saving. And then finally, on the continuous copper payments to Glencore, we have maintained the contractual position that the continuous payments will not be payable before June 26, even if triggered other than from free cash flow after satisfaction of all of our operating costs, royalty, debt repayments and stream servicing.

Baker: That's sort of saving it equates to about 100.

Baker: So about 14 million U S a million and a cash interest saving.

Baker: And then finally on the contingent couple of payments to clinical with maintaining.

Baker: Maintaining the contractual position that the contingent payments will not be payable before June 26, I'm, even if triggered.

Baker: Other than for from free cash flow.

Baker: The satisfaction of all of the upfront costs royalty debt repayments and stream servicing costs.

Morne Engelbrecht: So overall, we are extremely pleased with the refinance position of the balance sheet and obviously very thankful for the great support that's been provided by our lenders in that regard. Moving to slide 16. and the all-important Cash Flow Waterfall. Just to go through a few key elements there. So, firstly, again, we had a very healthy free cash flow from operations there after sustaining capex of around $30 million for the quarter. You know, secondly, we paid that, as I said, $160 million to extinguish the mezzanine debt facility, which included that 4% premium, and then also the interest paid of around $9 million from 1 January to 16 June 25.

Baker: So overall, we are extreme.

Baker: Extremely pleased with the refinance position of the balance sheet and you know obviously very thankful for the great support that's been provided by owning this in that regard.

Baker: Moving to slide 16.

Baker: 16.

Baker: And the all important cash flow waterfall.

Baker: And just to go through a few key elements they sufficiently again.

Baker: We had a very healthy free cash flow from operations day, after sustaining capex of around $30 million for the quarter.

Baker: Secondly, we paid that doesn't sit down $60 million to extinguish the mezzanine debt facility with <unk>.

Baker: Included that focusing on premium and then also the interest paid.

Baker: Around 9 million from one January deceased in June 25, Thats included in that 60.

Morne Engelbrecht: That's included in that $160. You will note the interest there that we have from the senior facility of $3 million and as I said before, with the repayment of that mass debt, we're now saving around $14 million US per annum on interest on that. We also sold some concentrate at the port of just over 1,500 tonnes at the end of March. So that was just to align the production and sales from a cash point of view. We couldn't recognise it as revenue because it wasn't loaded on ship by the end of March, but that sort of happened in early April.

Baker: You will not be interested in that we have from the senior facility of $3 million.

Baker: And as I said before.

Baker: With the repayment of that May state are we now saying around 14 million.

Baker: They spend them on interest on that.

Baker: We also.

Baker: So there's some conflict concentrate at the port of just over one and a half thousand tonnes.

Baker: At the end of March so that let's just to align.

Baker: The production and sales from a cash point of view.

Baker: Albeit we couldnt recognize it as revenue because it wasn't loaded all shipped by the end of March but.

That sort of happened.

Baker: Early April.

Morne Engelbrecht: um So in summary, our senior facility now is sitting at $159 million. We threw down on about $66 million on the evolving facility. And then we had $75 million US of cash in the bank at the end of March as well. So that gives us that net debt figure of $150 million US. All in all we also had that very healthy liquidity of $153 million, so almost $245 million Aussie liquidity available to us at the end of March, and that sort of consisted of that undrawn revolving facility of $60 million. We also had outstanding QP receipts of $8 million, unsold concentrate of about $8.2 million, and that investment in polymetals, which has done really well for us at around $3 million US as well, that sort of contributed to that sort of liquidity.

Baker:

Baker: So.

Baker: And somebody else senior facility now is now sitting at sort of $159 million, we threw down on about 66 million notice on the revolving facility and then we had 75 million.

Baker: <unk> of cash in the bank at the end of March as well, so that gives us that sort of mid day.

Baker: The figure of $1 50.

Baker: And then in the U S.

Baker: All in all we looked at that very healthy liquidity amounted to $53 million, So almost 245 million Aussie.

Baker: Liquidity available to us in March and that sort of persist without that undrawn revolving facility of $60 million.

Baker: We will send them out.

Baker: Outstanding Q P receipts of 8 million unsold concentrate of about $8 2 million and that advancement and plenty of metals, which has done really well for us.

Baker: At around 3 million UA says well that sort of contributed to that that sort of liquidity.

Morne Engelbrecht: So overall, very strong and healthy bannersheet position, and with the completion of the refinance and obviously the repayment of the measuring. David Radcliffe, Paul Hissey, Samuel Catalano, Michael McMullen, David Radcliffe, Ben Lyons, Go to slide 17. This slide we've shown before, just showing our targets around production, cash costs and gearing. Mick has already covered off on how we are targeting significant growth through the execution of those two key projects in terms of the Merrin Mine and the Ventilation Capital Project, which will deliver at the end of this year and then Q3 next year and that will drive that targeted annual copper production above 50,000 tonnes.

Baker: So overall, a very strong and healthy balance sheet position and with the completed refinancing repayments is amazing in that facility. So that you know which will cause some significant cash interest savings for us going forward.

Baker:

Baker: Go to slide 17, I'm just.

Baker: The slides shown before we're just showing off target surround production cash cost cash cost and an and gaming.

Baker: Because its already covered off on how we are targeting significant growth through the execution of those two key projects in terms of the mayor of mine and the installation of capital projects.

Baker:

Baker: So which will deliver at the end of this year and then Q3 next year respectively.

Baker: And that will grow at that targeted annual copper production above.

Baker: 50000 tons.

Morne Engelbrecht: On the cost side of things, again, we've been chipping away at the cash cost there and C1 has reduced significantly, around 30% to $1.91 from the March quarter compared to June 23. And then as Nick has mentioned as well, the C1 in March with the production that's roughly 4,000 tonnes in March dropped to about $1.49 US per pound. So that's very pleasing to see and already demonstrates that we're sort of getting to that target of $1.50 that we have for 2025. And then with the refinance as we've sort of walked through, you know, that's reduced significantly from where we started out and, you know, that's sort of within our target range of just below 20%.

Baker: On the cost side of things again, we've been chipping away at the cash cost they and you can.

Baker: So you want to reduce.

Baker: Significantly you know around 30%.

Baker: $2 91 from the March quarter compared to June 23.

Baker: And then let's make this mentioned as well the C. One in March with the production that's roughly 4000 tons in March dropped to about $1 49 in the U S per pound.

Baker: So that's very pleasing to see and you know already demonstrates that we sort of getting to that target.

Baker: 150 that we have for 2025.

Baker: And then with the refinance as we are.

Baker: Sort of walk through them.

Baker: Yeah, that's that's that's reduced significantly from.

Baker: We started out in that sort of within our target range of just just to just below 20%.

Morne Engelbrecht: So all very pleasing and pleasing to see that all those metrics are going the right way and pleasing to see the progress there.

Baker: So very pleasing and pleasing to see that.

Baker: It's meant to extend the runway and the fees you can see the progress today.

Michael McMullen: And I'll go back to you, Mick. Sure, thanks for that. So, you know, look, I think in summary, you know, where we're executing on the plan, the base plan, maintaining guidance, we, you know, we expect to have a pretty strong second quarter based on the on the production profile we have ahead of us. Our investment in Polymetals has done really well. They look to be progressing well towards ramp-up. I guess we actually have some high-grade zinc material in the Merrin mine that we could mine quite quickly. We're just waiting to see how they go ramping up but again we would like to think that by the fourth quarter of this year we are shipping them some zinc mineralization for treatment.

Baker: And every bet to make.

Speaker Change: Cool thanks for that.

Speaker Change: So you know look I think in summary, where we're executing on the plan. The base plan are maintaining guidance are we you know we expect to have a pretty strong second quarter based on the.

Speaker Change: On the production profile, we have ahead of us.

Speaker Change: <unk> investment in poly metals has done really well you know as I look to be progressing well towards ramp up you know I guess, we actually have some hot zinc material in the Maryland law and that we could mine quite quite quickly are we just waiting to see how that guy ramping up but you know again, we would like to think that by the fourth quarter.

Speaker Change: This year we.

Speaker Change: We are shipping them some zinc mineralization for treatment, we have saw in that tolling agreement with poly metals, but that's you know.

Michael McMullen: We have signed that tolling agreement with Polymetals. Subsequent to the end of the quarter, I think on the 1st or 2nd of April, we invested another $2.5 million Australian dollars into Polymetals at $0.35. You know, they're trading it to 90-ish, so that's been a good return for shareholders. Overall, as I said, we're liking Merrin Mine more and more the more we look at it. The ease with which we can get stuff done. Our mining is never easy, but on a realty basis it is quite easy up there. It's very shallow, fantastic ground, really quick to develop stuff.

Speaker Change: Subsequent to the end of the quarter I think on the first or second of April we invested another two and a half million Australian dollars into poly metals at 35 St sum.

Speaker Change: But I'll try to get to 90, so that's been a good return for shareholders.

Speaker Change: And you know overall, we you know as I said, we we logging merit and more and more and more of the more we look at it the ease with which we can get stuff done their modeling is never easy.

But on a royalty basis Cds quite easy up there very shallow.

Speaker Change: Testing ground really quick to develop stuff.

Michael McMullen: We are finding more and more material up there that can go through either our plant or the mine. It is a woodlawn size mine, but predominantly copper. We're moving drill rigs out of the bottom of the mine. That'll give us more ventilation down there for production.

Speaker Change: And we are finding more and more material out there that can go through all of their out plant all the poly metals plant.

Speaker Change: And again you're not.

Speaker Change: He's I Woodlawn size mine, but predominantly copper.

Speaker Change: And.

Speaker Change: And you know, we'll try and as we sort of we've moving drill rigs out of the bottom of the mine.

Speaker Change: That'll give us more ventilation down made for production.

Michael McMullen: We've got a 12-year reserve life at the bottom of the mine anyway, but we want to pull those rigs up and put them up in the top part of the mine, in that Merrin Mine, so that we can start drilling that material out and getting it into reserves so that we can actually start talking about it in a bit more of a SK-1300 type manner. Overall, I think our employees have done a pretty good job. We obviously had a really strong December quarter and then we had a bit of catch-up work that we had to do during January and into February, but it is pleasing to see turnover stabilised.

Speaker Change: Got a 12 year reserve life at the bottom of the mine anyway.

Speaker Change: We want to pull those rigs up and put them up in the top part of the mall and that Merit bond. So that we can stop.

Speaker Change: Not material out and getting it into reserves. So that we can actually stopped talking about it in a bit more of a you know sort of.

Speaker Change: Escape Hood in 100 top manner.

Speaker Change: So overall you know look I think our employees have done a pretty good job. We obviously had a really strong December quarter, and then you know we had a bit of catch up work that we had to do during our January and into February.

Speaker Change: But it is pleasing to sort of say 10.

Speaker Change: And I have are stabilized.

Michael McMullen: We've seen, I think March was probably, if not the lowest, certainly one of the lowest turnover months we've had since we've owned the mine. Again, the safety has improved quite markedly.

Speaker Change: We've seen I think March is probably if not the lowest certainly one of them allow us to 11 months. We've had since we've owned them on and again the site. These improved sort of caught markedly.

Michael McMullen: With that, I'm going to hand it over for questions and I'm happy to take questions from anyone who'd like to ask something. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be dialed. If you wish to cancel your request, please press star 2. Please pick up the handset. Thank you. Our first question comes from Daniel Morgan from Barron Joey, please go ahead. Hi Mick, Morne and Tim. Probably first question just for Morne. Can I just confirm that from a cash flow perspective, your production and sales are aligned.

Speaker Change: So with that I'm going to hand, it over for questions and I'm happy to take questions from anyone who loved awesome.

Speaker Change: I think he if he wants to ask a question. Please press star one on your telephone and wait for your name has been there if.

Speaker Change: If you wish to cancel your request. Please press two and if you're on a speakerphone. Please pick up the handset to ask your question. Your first question comes from Daniel Morgan from Barricelli. Please go ahead.

Daniel Morgan: Uh huh.

Speaker Change: And Tim probably first question just for Mona.

Speaker Change: Can I just confirm that from a cash flow perspective.

Speaker Change: Your production in cells are Alonso on not that you sold.

Daniel Morgan: So I note that you sold you know, officially 1.2 thousand tons less copper than produced in the quarter, but you also got the 22 million dollar payment from Glencore. Is my interpretation correct? Basically, from a cash perspective, your production equals so. Yeah, I mean, that's, that's, that's typically how we try to run it on our courses, you know, It's difficult to make all the shipments sort of work out exactly in terms of the quarterly reporting. So, you know, in terms of the sales versus production, so if you look at what we pre-sold, you know, just over one and a half thousand tons, if you add that to the sales volume, you sort of get to the production volume.

Officially 1.2 thousand tons less copper than produced in the quarter, but you also got the $22 million payment from Glencore mm is my interpretation correct.

Speaker Change: Basically from a cash perspective your production.

Speaker Change: Equally so.

Speaker Change: Yeah I mean, that's that's that's typically how we try to run it on a on a cause.

Speaker Change: This.

It's it's it's a it's difficult to make all the shipments sort of work out exactly in terms of the quarterly reporting. So you know in terms of the sales versus.

Speaker Change: This is production. So if you look at what the pre sold.

Speaker Change: 1000 tonnes, if he had that to the sales volume that you sort of get to the production volume. So that's what I thought sort of tried to do on a quarterly basis, just to try and match the cash with the production.

Morne Engelbrecht: So that's what I sort of try to do on a quarterly basis is to try and match the cash with the production, you know, just to have that sort in terms of every quarter sort of matching up. So that's the aim. We can't recognise it as sales, I can't add it to the sales figure or the sales revenue and I can't add it to the free cashflow from operations. But, you know, until it's loaded onto the ship that I can add the cash to it. I do that, we do that to just to smooth out and make sure that we report to the market I suppose cash that reflects the production because obviously we've sunk the cost into that production already so that's the aim really.

Speaker Change: You know just to have that sort of consistency in terms of every quarter sort of batching up. So so that's that's the aim and we cant recognize it as a sell side kind of added to the sales figure.

Speaker Change: Oh, the Saudi Arabia, and an icon attitude that free cash flow from operations, but.

Speaker Change: You know until its loaded onto the ship can I have the cash to do it.

Speaker Change: I do that we do that too.

Speaker Change: Move out and make sure that we can report to the market I suppose cash central fixed production.

Speaker Change: Because obviously we stopped that.

Speaker Change: The costing to that production already so.

Speaker Change: That's that's the I'm really.

Morne Engelbrecht: That's clear.

Speaker Change: And that's that's clear.

Michael McMullen: And Mick, maybe going to Merrin. I think you indicate expectations of first ore at the end of 2025, Q4-ish, will you get any development ores as you go, is there any potential to pull a stope, or is it barren? I guess you've found stuff as you've been developing across. Yes, well, actually... that massive sulphide sitting in that cutty right there. You know, the short answer is we'll be able to pull development ore out. We actually already have. you know, I don't know, a dozen truckloads or half a dozen truckloads of fairly high-grade zinc-lead mineralisation sitting on the surface that we mine through as part of the development.

Speaker Change: And and Mick.

Speaker Change: Going to Marin.

Speaker Change: I think you indicate expectations of first ore at the end of 2025.

Speaker Change: Q4 ish.

Speaker Change: When you go to any development or as you go is there any potential to pull as a start up or is it barren I guess I guess, if you found stuff as you've been developing across.

Speaker Change: Ah, yes, well actually.

Speaker Change: That that massive sulfide sitting in that Cotter you right there.

Speaker Change: Look the short answer is we'll be all the KOL development or out we actually already have you know.

Speaker Change: <unk> thousand truckloads of half a dozen truckloads of fairly hard ride zinc lead mineralization sitting on the surface.

Speaker Change: That we mined through as part of the development.

Michael McMullen: So yeah, look, we're obviously going to be opportunistic and take it as quick as we can. Right now, polymetals isn't running, so that stuff's sitting on surface, but if we see copper mineralisation that, you know, is worthwhile taking, we'll obviously get that and we'll put it forward.

Speaker Change: So yeah look, we're obviously going to be opportunistic and take it as quick as we can right now poly metals isn't running so that stuff sitting on service.

But if we say copper mineralization that is with all taking we will obviously get that we'll put it through the plant.

Michael McMullen: And so I appreciate that the Merrin is still an evolving thing and certainty and you know hard numbers etc are difficult to talk to at the moment but you know what what tonnage would would you see as a success based on where you're sitting now for 2026 for example I'm talking or or tonnage and and where would it come from I mean you identified a few different areas of mineralization which have I guess different outcomes with grade and economic Yeah, actually, maybe that plan that's on that slide there would be good. QTS South Upper, you know, I think if we do, you know, somewhere, look, I'm hoping we can mine it a bit narrower than what the current plan is, but, you know, somewhere like 150,000 tonnes at...

Speaker Change: And so yeah.

Speaker Change: I appreciate that the Marin is still an evolving.

Speaker Change: [noise] uncertainty in hot numbers etcetera difficult to talk to at the moment, but.

Speaker Change: What what tonnage where would you see as a success based on where you're sitting now for 2026 for example, I'm talking or or tonnage and where would it come from and you identified a few different.

Speaker Change: Areas of mineralization, which have I guess different outcomes with great economics.

Speaker Change: It actually might be that plan, that's on that slide there would be good.

Speaker Change: Judy South pop up you know I think if we do some where it looked I'm, hoping we can mine at a bit narrower than what the current plan is but you know some way.

Speaker Change: 150000 tons that.

Michael McMullen: 5-6% copper out of that. maybe a little bit out of Pink Panther as well, it's lower grade, and then something like 150,000 tonnes of, call it 9% zinc, to truck up the road to polymetals. and I would think the sort of what we call the medium grade copper that stuff that's about two and a half percent that's actually a bit more bulk tonnage just not quite sure how much of that will get out next year but you know I don't know about a hundred maybe hundred and fifty thousand tons of that at two and a half something like that.

Speaker Change: All 6% copper out of that.

Speaker Change: Maybe a little bit out of Pink Panther as well I mean, it's.

Speaker Change: All right.

Speaker Change: And then something like 150000 tons at a call it 9% zinc.

To truck off the road to poly metals.

Speaker Change: And and I would think that's sort of what we call the medium grade copper that stuff that's about 2.5%.

Speaker Change: That's actually been more bulk tonnage just not quite sure how much of that will get out next year, but you know I don't know.

Speaker Change: Hundred maybe 150000 times or add it two and a half something all of that.

Michael McMullen: And just for clarity, these numbers you're providing, are these run rate numbers or is that what you would cumulatively, success would be for 2026 in the delivery? Run rate is higher than that, but you know, we won't... because we're getting into it towards the end of this year. We won't be at full run rate, you know, on average for next year. But, you know, that sort of number, I think we should be able to get out. Okay, thank you very much. I'll let others ask questions. Yeah, but again, you can see why we're pretty excited about this because it has the potential to add, you know, meaningful production to us.

Speaker Change: And just for clarity these numbers, you're providing these run rate numbers or is that what you would cumulatively success would be for 2026, and I havent seen delivery run rate is higher than that but we won't be because we're getting into it at the end towards the end of this year, we won't be at full run rate on average for next year.

Speaker Change: That's sort of number there I think we should be able to get out.

Speaker Change: Okay. Thank you very much I'll, let others ask questions yeah, but again, you can say well we are pretty excited about this because.

Speaker Change: It has the potential to add meaningful production to us.

Michael McMullen: And, you know, we've got estimates of what our mining costs will be, but, you know, we can look at what our cost per metre of development is, and it is one-third of what we're currently paying at the bottom of the mine, right, so, you know, two and a half, you know, our medium grade stuff at only two and a half percent copper, whilst not quite as exciting as four percent at the bottom of the mine. cost per tonne for that is very low and it's only going to cover your variable costs right like it doesn't cost us any more overhead or through the plant or overhead through you know G&A it's the same stuff same cost so Yeah, we think we can make quite a lot of money.

Speaker Change: And you know we've got estimates of what our mining costs will be but you know we can look at what our cost per later development. These any of these one third of what we're currently paying at the bottom of the mall at OXXO.

Speaker Change: Two two and a half you know our medium grade stuff at only two 5% copper was not quite as exciting as 4% at the bottom of the mine.

Speaker Change: Cost per ton for that is very low and it's only going to cover your variable cost strike like it doesn't cost us any more.

Speaker Change: Overhead all it through the plant overhead through Jay and I, It's the same stuff some costs out.

Speaker Change: Yeah, we think we can make quite a lot of money. So the other advantage of these marinol and he's obviously.

Michael McMullen: So the other advantage of this Merrin mine is obviously, you know, we've spoken about it at length. CSA Mine has these very high-grade stoping areas that when you're in them, it's fantastic. When you're not in them, it's less fantastic. We can produce anywhere from 2,000 tonnes of copper in a month to 5,500 tonnes of copper and whilst we can see the stoping profile and we're comfortable on an annual basis, clearly the market likes to see less volatility on a quarter by quarter basis, right? So one, we think we can make a lot of money out of this Merrin mine, so that's a great idea, you know, fantastic return for the capital deployed.

Speaker Change: We would spike in Nevada that links the suicide mine has these very high grade stoping areas.

Speaker Change: When you read them, it's it's fantastic when you're not in them.

Speaker Change: It's less fantastic, we can produce anywhere from 2000 tonnes of copper in a month to five and a half thousand tonnes of copper and about <unk>.

Speaker Change: And whilst we can say the stoping profile and we're comfortable for on an annual basis clearly the market likes to say less volatility on a quarter by quarter basis, I'd say, one we think we can make a lot of money out of these marathon. So that's a great audience.

Speaker Change: Fantastic return for the capital deployed.

Morne Engelbrecht: But secondly, we think it has the ability to allow us to smooth that production profile out and de-risk the operation because it's coming out of a different part of the mine. different means of getting out as well. So to me, that's actually a big advantage of this thing is it allows me to engineer out that inherent volatility that the CSA mine, like the current CSA mine has, right? Two advantages, I always like to make money out of things, but the second one is smoothing that volatility up is really important. Just on the fixed cost leverage in the business, is it fair to say that the mine is about break even at maybe 35,000 tonnes per annum of copper production, and then after that, that's your margin?

Speaker Change: Secondly, we think it has the ability to allow us to smooth that production profile out.

Speaker Change: <unk> reached the operation because it's coming out of different part of the mall and different different things are getting out as well.

Speaker Change: So to me that's actually a big advantage of this thing is it allows me to engineer out that inherent volatility.

Speaker Change: Assai more in like the currency assignment has wrong sorry.

Speaker Change: Two advantages otherwise like to make money out of things but.

Speaker Change: But the second one is smoothing that volatility is really important.

It was sorry to come back.

Speaker Change: Just on the.

Speaker Change: The fixed price leverage fixed cost leverage sorry on the business is it fair to say that the mine is about breakeven.

Speaker Change: Maybe 35000 tonnes per annum of copper production and then after that that's that's your margin is that a fair way of looking at it.

Morne Engelbrecht: Is that a fair way of looking at it? to be a lower number than that, Morne I'd be able to work it out for you, but I have done the exercise a while back, I would think... High 20s, 30, you know, probably the number. Thank you so much, El Paso.

Speaker Change: To be a lower number than that more and I'd be all the way to get out for you but.

Speaker Change: I have done the exercise the wall back I would think it's high.

Speaker Change: Slide 20.

Speaker Change: Yeah, probably the number.

Speaker Change: Thank you so much I'll pass on them.

Speaker Change: Thanks.

Speaker Change: Thank you. Your next question comes from Ben We'd from Wilsons Advisory. Please go ahead.

Ben Wood: Your next question comes from Ben Wood from Wilson's Advisory. Please go ahead. Hi Mick and Morne, positive to see you guys, the strong volumes coming through in March lead to those meaningful cost reductions that we were sort of basing into our forecast. My question sort of, so previous copper production guidance for calendar year 26, sitting between 48 and 53 kilotons. But I noticed in this release that you reference further down that there's a pathway to greater than 50 kilotons of copper equivalent production. And just sort of wondering, should we interpret this as perhaps a more conservative outlook in 26 for copper, but perhaps signaling a greater emphasis of zinc?

Ben Wedd: Good morning.

Speaker Change: Positive to see the strong volumes coming through in March led to those meaningful cost reductions in.

Ben Wedd: Is that.

Ben Wedd: Sort of baking into our forecast.

Question sort of a previous copper production guidance for calendar year, 'twenty six sitting between 48 and 53 kilo tons.

Ben Wedd: I noticed in this release that you've referenced that.

Ben Wedd: Further down that there's a pathway to greater than 50 kiloton copper equivalent production.

Ben Wedd: And just sort of wondering should we interpret this as perhaps a more conservative outlook.

Ben Wedd: In 2000 and seeks to cop out, but perhaps signaling a greater emphasis of zinc ore or how should we sort of.

Michael McMullen: Or how should we sort of interpret that wording? Well no real change to be honest with you. I think yeah we've obviously if we are you know when we put that guidance out originally we weren't planning on mining any zinc. Now we are planning on mining some zinc. We've also got the agreement in place with Polymetals so we've got an outlet for it. I think with what we see in this Merrin mine, we're feeling pretty comfortable. There's upside risk in that forecast. But, you know, it's a bit of an evolving thing, this Merrimon, right, like I think I'd rather get to the end of this year and then I can upgrade next year, if that makes sense.

Ben Wedd: Yes, and to interpret that way.

Ben Wedd: And well not real change to be honest with you I think yeah. We've obviously we are when we put that garden's had originally we weren't planning on mining any zinc.

Now we are planning on mining some zinc we've obviously got the agreement in place with poly metals. So we've got to get on the outlet for.

Ben Wedd: I think with between with what we see in this marathon with feeling pretty comfortable on that.

Ben Wedd: There is upside risk in that forecast.

Ben Wedd:

Ben Wedd: You know, it's a bit of an evolving thing as Meera monitor I'd like I'd think I'd, rather get to the end of this year and they're not gonna have right next year.

Ben Wedd: Makes sense.

Michael McMullen: Yeah, yeah, no worries. I'll develop mine by that stage, right? Then I'll have a much better idea. Excellent.

Ben Wedd: Yeah, Yeah, no worries, it's all developed Marlin bar that I draw. It then I'll have a much better idea.

Ben Wedd: [laughter].

Ben Wood: So just a second one as well, if I can. Previous sort of estimates with event projects sitting at about $40 million, there's sort of been $8 million spent on growth capex in the last two quarters, sort of implying about $34, $35 million less to the event project. Is that still on track? Yes, although I think it's 42 Aussie versus 8 US. you know so yeah that's right those numbers still sort of hold Yeah, yeah look again I think we may not have it in the deck, I think it's in the in the word version of the quarterly.

Speaker Change: Excellent. So just a second one as well if I can.

Speaker Change: The craziest sort of estimates with advanced projects sitting at about 40 million.

Speaker Change: Instead of being 8 million spent on growth capex in the last two quarters, it's kind of implying that 34 35 million less of event project is that still on track.

Speaker Change: Yeah, Yeah. So I think it's 42 Aussie this is U S.

Speaker Change: Oh, Yeah, sorry, Yeah, that's right.

Speaker Change: Instead of Hollywood.

Speaker Change: Yeah, Yeah look again, I think Oh, we might not have it in the deck I think it's in the in the web version of the quarterly the cost as we're doing more made is the more I might you you might have the exact number but I think we saw a reduction in the cost of the nadir of development come down a bit as we did more betas.

Michael McMullen: The cost as we're doing more meters, Morne you may have the exact number, but I think we saw a reduction in the cost per meter of development come down a bit as we did more meters, but yeah that's down to about $11,000 a meter. from twelve and a half. So look, the bigger components obviously is when you start, you know, we've got to do a bit more development, but there's some somewhat sizable vent fans that have got to be bought, so they're from memory. Don't hold me to it, but off the top of my head, there'd be four or five million dollars between those two there as like a one-off lump.

But yeah, that's that's down to about 11000.

Speaker Change: Dollars a meter.

Speaker Change: From 12 and a half.

Yep Yep Yep.

Speaker Change: But no that's about right, yes, yeah. So look the biggest components. Obviously is when you start when we got to do a bit more development, but there's.

Speaker Change: There's some somewhat sizable been fans that have got to be bought.

Speaker Change: Are there from memory.

Speaker Change: Don't hold me to it but off the top of my head that they'd be for $5 million between nicely. There is like a one off lump.

Ben Wood: And then there's the raise-boring work, which is the other sort of big component. All right, thanks, team. I'll hand it on. Thank you.

Speaker Change: And then there's and then there's a raise boring with which is the other sort of be comparable.

Tim: Alright, Thanks, Tim I'll hand, it on.

Speaker Change: Thank you. Your next question comes from David Ratcliffe, Some grants on mining research. Please go ahead.

David Radcliffe: Your next question comes from David Radcliffe from Global Mining Research. Please go ahead. Hi, good morning Mick and Morne. My question is just coming back to that profile again and maybe just thinking about the shaft production for the year, because it looks like you've got an average sort of north of 3,000 tonnes per day or hoisted. The MUN hasn't done that for a while, so maybe could you talk to the Outlook for this year and give us some more colour on how that profile looks, and maybe is there some more greyed upside there that gives you confidence in hitting your targets.

Hi, good morning, making more night my questions just coming back to that profile again, it maybe just thinking about the shelf production for the year because it looks like you've got a average sort of north of 3000 tonnes per day or hoisted.

Speaker Change: The month hasn't done that for a while so maybe could you talk to just set the outlook for this year and give us some more color on how that profile looks and maybe there's some more great upside there that gives you confidence in hitting your targets. Thanks.

Michael McMullen: Yeah, that's right. So again, look, we've been very clear that, you know, sort of when we bought the mine, let's, you know, dilution control and mining practices weren't know we're investing class I think is probably the best way to put it so the guidance for this year that we had for grade was I think it's on the front slide there 3.8 to 4 and obviously you know we're running at 4.1 yeah 3.8 to 4 so we are sort of seeing a little bit better grade so I've always rather haul less dirt for the same metal so what's likely to happen is you know round about that you know sort of 4%, maybe 4.1% for the year, and haul a little bit less dirt.

Speaker Change: Yeah, that's right. So again look we've we've been very clear that you know sort of when we bought the mine lets dilution control and mining practices.

Speaker Change: What we're investing class I think is probably the best way to put it.

Speaker Change: Im sorry, the guidance for this year that we had the grade was I think it's on the front slide David It was.

Three I to fall and obviously you know we're running at $4 one.

Speaker Change: Yeah threat for so we are sort of saying a little bit better right. So although wise, Rob a whole list are for the same metal.

Speaker Change: So what's likely to happen is you know round about that.

Speaker Change: Sort of.

Speaker Change: 4%, maybe four one for the year.

Speaker Change: And and and hold a little bit less to that's probably what we're where it looks like it's coming out.

Operator: That's probably where it looks like it's coming. Okay, that makes sense then. Thanks for that, I'll pass it on. Once again, if you wish to ask a question, please press star 1.

Speaker Change: Okay that makes sense and thanks, a lot I'll pass it on.

Speaker Change: Thank you.

Speaker Change: Once again, if you wish to ask a question. Please press Star One. Your next question comes from Tim Huff from Canaccord. Please go ahead.

Tim Hoffs: Your next question comes from Tim Hoffs from Countercord. Please go ahead. I was just wondering around the off-date terms that you've got for any zinc production that might have been produced through the tolling arrangement. Does that go through Glencore's current arrangement? No, not at this stage. So it is a tolling agreement. So as opposed to an or sale, so we will get Conn back, you know, to deal. We have not at this stage signed offtake. And you know, I've spoken about the copper market, you know, in terms of it's incredibly tight for Copper Conn. Actually, it's really tight for Zinc Conn as well.

Tim Huff: Hey, guys I was muted there.

Speaker Change: Just wondering around the AR the.

Tim Huff: Tech tenants that you've got for.

Speaker Change: Zinc production that might've been produced through the tolling arrangement does that guy for Ya Ling clause.

Tim Huff: Our current arrangement.

Speaker Change: No not at this stage. So it is a tolling agreement so as opposed to an old style.

Tim Huff: So we will get caught back up.

Speaker Change: Deal.

Speaker Change: We have not at this stage signed off site Ah and.

Speaker Change: Speaking about the copper market you know in terms of its incredibly taught for copper call actually has really taught for zinc con as well.

Speaker Change: Must admit I haven't looked for a few weeks, but zinc calling on spot will be if not below zero or pretty close to zero.

Michael McMullen: I must admit currently, if not below zero, pretty close to zero. And so we, our immediate focus has been to charge on out to get the high grade copper out there. Quite frankly, there's high grade Zinc we could take in a very short space of time, even quicker than the copper. But we have to wait for poly metals to be up and running, right? And let them get up and running and, you know, not try and force them, get them up and running. But that, we have a draft of the offtake, we'll be signing something in the not too distant future.

Speaker Change: And so we.

Speaker Change: Our immediate focus is being too.

Speaker Change: Charge on out to get the hydride copper at the quite frankly, there's this high grade zinc, we could type in a very short space of time, it quicker than the copper, but we have to wait for poly metals to be up and running right and let them get up and running and not trying to force them.

Speaker Change: Get them up and running but that office, we have a draft of the offtake, who will be selling or something in the not too distant future with them.

Michael McMullen: Okay, fantastic. Just to clarify that the copper is also separate to the CSA. Sorry, which copper? So the copper, any copper you might produce through polymetallic or going to poly... Yeah, that's right. Well, if we're sending copper ore up to polymetals, we won't recover the copper because their circuit's a zinc-lead circuit. So, you know, that's why we chose to send the zinc-lead ore up there. Anything that's got copper in it, that's going to run through our plant. I think that was it. Thank you.

Speaker Change: Okay Fantastic just to clarify that the copper is that also a separate to the CSA.

Speaker Change: It takes.

Speaker Change: Oh, sorry, we didn't go away.

Speaker Change: So the cop or any color you might produce through a poly metallic who'll go into play.

Speaker Change: Yeah, that's right well if if if.

Speaker Change: We're sending copper or up to polymer to poly metals, we won't recover the copper because it.

Speaker Change: They circuits zinc lead circuit.

Speaker Change: That's why you chose.

Speaker Change: The zinc lead or up there anything thats got copper in it that's going to run three airplanes.

Speaker Change: Right.

Speaker Change: I think that was it for me. Thank you.

Speaker Change: Thank you. Your next question comes from Eric Windmill from Scotiabank. Please go ahead.

Eric Winmill: Your next question comes from Eric Winmill from Scotiabank. Please go ahead. Great. Thanks very much, Mick and team for taking my question. Sorry if I missed it earlier. The line was cutting out a bit. But just on tariffs, I mean, are you seeing any issues in the supply chain or anticipating any major impacts, you know, in terms of cost or availability of consumables, things like that? Doesn't seem to be an issue for us right now. Obviously, look, it's a very unstable world. I think Morne and our general counsel did an amazing job, you know, getting our refinancing done.

Eric Windmill: Great. Thanks, very much Mick and team for taking my question I'm, sorry, if I missed it earlier the line was cutting out a bit but just on tariffs I mean are you seeing any issues in the supply chain.

Speaker Change: We're anticipating any major impacts.

Eric Windmill: Impacts you in terms of cost or availability of consumables things like that.

Eric Windmill: It doesn't seem to be an issue for US right now obviously look it's a it's a very unstable world.

Speaker Change: More than I and our general counsel.

Eric Windmill: We did an amazing job.

Speaker Change: Our refinancing done.

Michael McMullen: You know, notwithstanding the ups and downs in the market and everything, I sleep much easier knowing that we have all that liquidity and, you know, no near-term principal repayments. to weather any storms. I think that's more what we're gonna see. We haven't seen any like consumable or critical spare issues at this stage. Can't rule them out. It's probably more of a just a, what I would call a general market. uncertainty, right? That's been more of an issue for us. But as I say, I do sleep much easier having that refinance done. Okay, fantastic. No, appreciate that.

Speaker Change: Notwithstanding the ups and downs in the market and everything isolate much easier knowing that we have all that liquidity and no need to and principal repayments to weather any storms I think that's more what we're gonna say, we havent seen any.

Like consumable or critical spare issues at.

Speaker Change: At this stage can't rule them out.

Speaker Change: More of a just a what I would call a general market.

Speaker Change: Uncertainty right that's been more of an issue for us but.

Speaker Change: As a side I do sleep much easier, having having that breaks holiday and stuff.

Speaker Change: Okay Fantastic no I appreciate that thanks, very much I'll hop back in queue.

Operator: Thanks very much. I'll hop back in the queue. Cheers. Thanks. There are no further questions at this time.

Speaker Change: Thank you.

Speaker Change: There are no further questions at this time I'll now hand back to Mr. Mcmahon for closing remarks.

Michael McMullen: I'll now hand back to Mr. McMullen for closing. Look, I appreciate everyone. I know it's a really busy reporting period in Australia. You know, look, I think, I think, clearly, we, you know, if you asked me at the end of last quarter, which was our strongest quarter, what would I want? More copper is always the answer. Clearly, in Q1, more copper is the answer. I'll say the same thing at the end of Q2, just given the leverage we have to our fixed costs. But, you know, I think things are, we've got a really good runway ahead of us now for 2025 and into 2026.

Mr. Mcmahon: Look I appreciate everyone I know, it's a really busy reporting period in Australia.

Mr. Mcmahon: Look I think I think clearly we.

Mr. Mcmahon: You asked me at the end of last quarter, which was our strongest quarter what would I want more copper is always the answer clearly in Q1 more copper is the answer I'll say the same thing at the end of Q2, just given the leverage we have to add fixed cost, but I think things that we've got a really good runway ahead of us now for 2025 and into 'twenty six.

Michael McMullen: The major projects are all being executed. And, you know, look, the more we, we get into this Merrin mine, the more we really think that thing has got the ability to really move the needle for shareholders and, you know, cap it on that. You know, it's, if you can see our growth capex for this year, in total, that Merrin mine is circa AUD$25M. for that kind of production. It's a no-brainer for us to do it, right? And so we're very excited about it, but obviously not taking it off the ball with our Capital Bend project.

Speaker Change: The major projects are all being executed and look the more we the we get into these Mary Barra.

Speaker Change: The more we really think that thing has got the ability to really move the needle for shareholders and end.

Speaker Change: Capital map.

Speaker Change: If you can see our growth capex for this year in total that Marin launched a 25 million Aussie dollars.

Speaker Change: So that kind of production, it's a niobrara enough for us to do it right and.

Speaker Change: So we're very excited about it and but obviously not taking all possible without capital being projects you can say that.

Operator: You can see those development meters and that really starting to pick up. So thanks everyone. And we'll talk to you after Q2.

Speaker Change: Development late isn't that really starting to pick up so thanks, everyone and.

Speaker Change: We will talk to you after Q2.

Operator: And that does conclude our conference for today. Thank you for participating. You may now.

Speaker Change: And that does conclude our conference for today. Thank you for participating you may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: [music].