Q1 2025 Capstone Copper Corp Earnings Call
Operator: Good afternoon, ladies and gentlemen, and welcome to the Capstone Mining Corp. Capstone Copper Q1 2025 results conference. This time, all lines are in listen-only mode.
Good afternoon.
And welcome to the Capstone.
Hum.
Q1, 'twenty 'twenty conference call.
At this time all lines.
Yes.
Sure.
Operator: Following the presentation, we will conduct a question and answer session. At any time during this call, if you require immediate assistance, please press star zero for the operator.
Speaker Change: Following the presentation, we will conduct a question and answer session.
Speaker Change: Any change or any of these calls require immediate assistance.
Speaker Change: Operator.
Operator: This call is being recorded on Thursday, May 1, 2020.
Speaker Change: This call is being recorded Thursday may one 2020 that.
Daniel Sampieri: I would now like to turn the conference over to Daniel Sampieri, please go ahead. Thank you, Operator. I'd like to welcome everyone to Capstone Copper's Q1 2025 conference call. Thanks for joining us today. Please note that the news release and regulatory filings announcing Capstone Copper's 2025 first quarter financial and operational results are available on our website and on CDAR+.
Daniel Perry: I would now like to turn the conference I'll Requeue Daniel Perry. Please go ahead.
Speaker Change: Thank you operator, I'd like to welcome everyone to Capstone Koppers Q1, 2025 conference call. Thanks for joining US today. Please note that the news release and regulatory filings announcing capstone Koppers 2025 first quarter financial and operational results are available on our website and on SEDAR plus if.
Daniel Sampieri: If you are logged into the webcast, we will advance the slides of today's presentation, which are also available in the investors section of our website.
Speaker Change: You are logged into the webcast, we will advance the slides of today's presentation, which are also available in the investors section of our website.
Daniel Sampieri: I am joined today by our CEO, John MacKenzie, our President and Chief Operating Officer, Cashel Meagher, our SVP and Chief Financial Officer, Raman Randhawa, and our SVP Risk, ESG, and General Counsel, Wendy King.
John Mckenzie: I'm joined today by our CEO, John Mckenzie, our President and Chief operating Officer cash Omar our SVP and Chief Financial Officer, Robin Randhawa and R. S V P risk ESG and general counsel when became our head of Chile, Jim Whittaker and our head of technical services.
Daniel Sampieri: Our Head of Chile, Jim Whittaker, and our Head of Technical Services, Peter Amelunxen, are also available at the end of the call for questions. Following our brief remarks, there will be an opportunity for questions. Please note that comments made today on the call will contain forward-looking information within the meaning of applicable securities laws. This information, by its nature, is subject to risks and uncertainties, and actual results may differ materially from the views expressed today.
Speaker Change: Peter I'm alone and are also available at the end of the call for questions.
John Mckenzie: Following our brief remarks, there will be an opportunity for questions. Please.
Speaker Change: Please note that comments made today on the call will contain forward looking information within the meaning of applicable securities laws. This information by its nature is subject to risks and uncertainties and actual results may differ materially from the views expressed today.
Daniel Sampieri: For further information on the risks and uncertainties pertaining to our business, please see Capstone's most recent filings, which are available on our website at www.capstonecoffer.com and on CDAR+. And finally, I'll just note that all amounts we will discuss today are in U.S. dollars unless otherwise specified.
Speaker Change: For further information on the risks and uncertainties pertaining to our business. Please see capstone is most recent filings which are available on our website at www dot capstone copper dot com and on SEDAR, plus and finally I'll. Just note that all amounts discussed today are in U S dollars unless otherwise specified it is now my pleasure to turn.
John MacKenzie: It is now my pleasure to turn the call over to John MacKenzie. Thank you, Daniel. And hello to all of you dialing in from the Americas, Europe, Australia, and around the globe.
Speaker Change: The call over to John Mckenzie.
John Mckenzie: Thank you Daniel and Hello to all of you dialing in the Americas, Europe, Australia and around the globe.
John MacKenzie: We're pleased to present our first quarter 2025 results and achievements. Over the past three years, we've been in a period of significant transition at Capstone, building and ramping up mines. and Establishing Standardized Processes and Systems. Today, in this heightened global economic uncertainty, we are positioned well, with our ramp-ups behind us and no major expansionary projects underway. To date, we have not seen any material direct impact on our business from tariffs. We continue to see strong physical demand for copper in the current markets and believe that the medium and long-term fundamentals for the copper markets remain extremely attractive.
John Mckenzie: We're pleased to present, our first quarter, that's making 25 results and achievements.
John Mckenzie: Over the past three years of being in a period of significant transition that capstone.
John Mckenzie: Moving and ramping up the mines.
John Mckenzie: And establishing standardized processes and systems.
John Mckenzie: Today, the most heightened global economic uncertainty, we are positioned well with our ramp ups behind us and no major expansion projects underway.
John Mckenzie: To date, we have not seen any material direct impacts on our business from terrorists.
John Mckenzie: We continue to see strong physical demand for copper and the current market.
I believe that the medium and long term fundamentals for the copper market remains extremely attractive.
John MacKenzie: However, the uncertain outlook for global growth in the short term reinforces the importance of our ongoing focus on safety, operational execution, and maintaining a strong financial position. Over the remainder of this year, we're looking forward to demonstrating reliable copper production, lower costs, and increased cash flow generation, while continuing to advance our production growth project.
John Mckenzie: Oh, you bet, the uncertain outlook for global growth and the shorts. It reinforces the importance of our ongoing focus on safety operational execution and maintaining a strong financial position.
John Mckenzie: So for the remainder of this year, we're looking forward to demonstrate reliable copper production lower costs and increase cash flow generation, while continuing to advance our production growth projects.
John MacKenzie: starting with slide five. In Q1, our operations delivered consolidated copper production of 53.8 thousand tons at consolidated C1 cash costs of $2.59 per pound, which was in line with our expectations.
John Mckenzie: Starting with slide five.
John Mckenzie: In Q1 operations delivered consolidated copper production of $53 8000 tonnes at consolidated C. One cash costs of $2 59 per pound.
John Mckenzie: Which was in line with our expectations.
John MacKenzie: The Maintenance Heavy Quarter and an unplanned nationwide power outage in Chile. Q1 he continued to realize the benefits associated with the ramp ups at Montevideo and Montes Blancos with record sulphide production of 46,000 tons. This represents a 50% increase compared to Q1 last year. We've been pleased to see the performance at both assets meeting and exceeding expectations post-RAMPUP. I know that our teams are eager to continue demonstrating the ongoing potential of these mines, including at Montevideo, who remain hard at work preparing to execute on our Montevideo optimized project.
John Mckenzie: Maintenance heavy quarter.
John Mckenzie: An unplanned nationwide power outage in Chile.
John Mckenzie: In Q1, we continued to realize the benefits associated with the ramp ups at months of it in lots of spotless with record sulphide production of 46000 tons.
John Mckenzie: This represents a 50% increase compared to Q1 last year.
John Mckenzie: We've been pleased to see the performance at both assets meeting and exceeding expectations post ramp up.
John Mckenzie: I know that our teams are eager to continue demonstrating the ongoing potential of these mines, including a bunch of edge to remain hard at work preparing to execute a bunch of it at optimize projects.
John MacKenzie: At Prince of Ely, the challenges we experienced in the latter half of 2024 impacted the beginning of Q1. However, our team worked hard to remedy the situation by mid-quarter. We remain focused on the implementation of our Assets Integrity Program to deliver stable operations and to achieve the design throughput capacity. And at Kozerman, we saw another steady quarter with strong production and low unit costs.
John Mckenzie: In Pennsylvania, the challenges we experienced in the latter half of 'twenty 'twenty four impacted at the beginning of Q1.
John Mckenzie: However, our team worked hard to remedy the situation by mid quarter.
John Mckenzie: We remain focused on the implementation of our asset integrity program to deliver stable operations and to achieve the design throughput capacity.
John Mckenzie: And occasionally we saw another steady quarter with strong production and low unit costs.
John MacKenzie: On the corporate side, we're pleased to announce inclusion in the ASX 200 index during the quarter. Recognizing the continued success of our secondary listing in Australia after commencement of trading last year. We also took steps to improve our balance sheet strength and flexibility this quarter, completing an upsized offering of $600 million in senior unsecured notes. Our balance sheet is in excellent shape and we're committed to deleveraging further through internally generated cash flows.
John Mckenzie: On the corporate side, we're pleased to announce inclusion in the ASX 200 index during the quarter.
Recognizing the continued success of our secondary listing in Australia after commencement of traded last year.
John Mckenzie: We also took steps to improve our balance sheet strength and flexibility this quarter.
John Mckenzie: Keeping an upsized offering of $600 million in senior unsecured notes.
John Mckenzie: Our balance sheet is in excellent shape, and we're committed to deleveraging further through internally generated cash flows.
John MacKenzie: Turning to slide six. This here represents an inflection point for Capstone, confirmed by our reiterated annual guide. In 2025, we continue to target 220,000 to 255,000 tons of copper production. at cash costs between $2.20 to $2.50 per pound. This represents significantly higher production and lower cash costs compared to 2024. The chart on the right hand side of the page illustrates our EBITDA sensitivity at various copper prices based on the midpoints of our 2025 guidance, as well as upside related to MVO and Sanso Domingo at run rate production. This level of avatar generation will enable us to focus on generating cash to de-lever our balance.
John Mckenzie: Turning to slide six.
John Mckenzie: This year represents an inflection point for capstone.
John Mckenzie: The third bar reiterated annual guidance.
John Mckenzie: 2025, we continue to target 220 to 255000 tons of copper production at cash cost between $2 20 to $2 50 per pound.
John Mckenzie: This represents significantly higher production at lower cash costs compared to 2024.
John Mckenzie: So tell us on the right hand side of the page illustrates our EBITDA sensitivity at various copper prices.
John Mckenzie: On the mid points of our 2025 guidance as well as upsides related to M D.
John Mckenzie: So to me it's run rate production.
John Mckenzie: This level of EBITDA generation will enable us will enable us to focus on generating cash to delever, our balance sheet, which would enhance our financial position.
John MacKenzie: which will enhance our financial position and provide a strong platform to weather any macroeconomic volatility.
John Mckenzie: <unk>, a strong platform to weather any macroeconomic volatility.
Roland: And with that I'll pass over to Roland for our financial results.
Raman Randhawa: And with that, I'll pass over to Raman for our financial results. Thank you, John. We are now on slide seven. In Q1, we recorded copper production of 53.8 thousand tons, reflecting record sulfide production driven by the growing production from the Mantleberry Sulfide Concentrator. Strong copper sales along with a higher realized copper price of $4.36 per pound drove record quarterly revenue of $533 million. LME copper prices averaged $4.24 per pound in the quarter, up 2% compared to $4.17 in Q4. Despite volatility in LME copper prices of late, they currently sit at a similar level, just below $4.20 per pound.
Roland: Thank you John we are now on slide seven in Q1, we recorded copper production of $53 8000 tonnes, reflecting record sulphide production driven by the growing production from the Manto vary sulfide concentrator.
Speaker Change: Strong copper sales along with a higher realized copper price of $4 36 per pound drove record quarterly revenue of $533 million.
Speaker Change: Let me copper prices averaged <unk> 24 per pound in the quarter up 2% compared to $4 17 in Q4 <unk>.
Speaker Change: Despite volatility in copper prices of late the currently set at a similar level of just below <unk> 20 per pound.
Raman Randhawa: During Q1, we observed a significant premium emerge for the U.S. COMEX benchmark price. A small portion of our production in the form of PV into valley cathodes in the U.S. benefits from this premium, while the majority of our copper production is priced based on the LME. C1 cash cost of $2.59 per pound decreased by 10% compared to Q1 2020. This was driven by the ramp up of our mantelberry sulfide operation, which contributes some of our lowest cost production. as well as Mantles Blankles operating at name plate capacity, which led to sulfide cash costs decreasing from $2.55 per pound in Q1 2024 to $2.23 per pound in Q1 2025.
Speaker Change: During Q1, we observed a significant premium emerged for the U S Comex benchmark price.
Speaker Change: A small portion of our production in the form of PV tens of Allied capital. It's in the U S benefits from this premium.
Speaker Change: While the majority of our copper production is priced based on the army.
Speaker Change: Yeah.
Speaker Change: C. One cash cost of $2 59 per pound decreased by 10% compared to Q1 2020.
Speaker Change: This was driven by the ramp up of our Manto vary sulfide operation, which contributes some of our lowest cost production.
Speaker Change: As well as mental Blancos operating at nameplate capacity, which led to sulfide cash costs decreasing from $2 55 per pound in Q1 2024.
Speaker Change: $2 23 per pound in Q1 2025.
Speaker Change: As a result in Q1, we realized strong gross margins of $1 77 per pound or 41%.
Raman Randhawa: As a result in Q1, we realized strong gross margins of $1.77 per pound or 41%. Adjusted EBIT in Q1 of $179.9 million, more than doubled year over year by higher realized copper prices and the higher copper production. And lastly, we reported adjusted net income attributable to shareholders of $8.1 million or $0.01 per share in Q1 2025. Now that we have ramped up Mento Verde and Mentos Blancos, we booked depreciation of $120 million this quarter, which is a more appropriate run rate level when compared to the $68 million we recorded in Q1 2024. Meanwhile, now that we have seized capitalizing interest expense to the Monteverde development project, we also booked finance expenses of $37 million, compared to only $10 million last year.
Speaker Change: Adjusted EBITDA in Q1 of $179 9 million more than doubled year over year by higher realized copper prices and the higher copper production.
Speaker Change: And lastly, we reported adjusted net income attributable to shareholders of $8 1 million or <unk> <unk> per share in Q1 2025.
Speaker Change: Now that we have ramped up mento Verde Mentals blancos, we booked depreciation of $120 million this quarter.
Speaker Change: As a more appropriate run rate level when compared to the 68 million we recorded in Q1 2024.
Speaker Change: Meanwhile, now that we have ceased capitalizing interest expense to the Manto vary development project. We also booked finance expenses of $37 million compared to only 10 million last year under $37 million approximately $15 million of reoccurring noncash expenses like accretion of liabilities.
Raman Randhawa: Of the $37 million, approximately $15 million are reoccurring non-cash expenses like accretion of liabilities.
Speaker Change: Okay.
Raman Randhawa: Moving on to slide eight. Topical this quarter was of course a discussion around tariffs and the resulting impact in various areas of the global economy. While the situation continues to evolve, first we want to highlight that to date we have experienced no impact to our revenue as a result of tariffs. Meanwhile, currently the direct impact to our consolidated operating costs is expected to be minimal. Kintel Valley is our only operating house in the U.S. We have provided a breakdown of operating cost drivers at the site. After the review, we performed to determine the potential impact of terrorism.
Speaker Change: Moving on to slide eight.
Speaker Change: Topical this quarter was of course, a discussion around tariffs and the resulting impact of various areas of the global economy.
Speaker Change: While the situation continues to evolve first we wanted to highlight that to date, we have experienced no impact to our revenue as a result of tariffs.
Speaker Change: Meanwhile, currently has a direct impact to our consolidated operating cost is expected to be minimal.
Speaker Change: So values are only operating asset in the U S. We have provided a breakdown of operating cost drivers at the site.
Speaker Change: After the review, we performed to determine the potential impact of tariffs.
Raman Randhawa: As can be seen, a significant proportion of our costs, such as labour, diesel, contractors and services, and power, are not directly impacted by tariffs. Certain spare parts and grinding meat are examples of types of purchases that could be exposed. We estimate that the proposed tariffs announced today could have potential to increase the cost of goods at Pinot Valley Purchase in the U.S. by approximately 5% or 10 to 15 cents per pound of PV, reflecting the potential pass-through of tariffs incurred by suppliers. Efforts are underway to evaluate alternative options to mitigate these potential impacts. And on a consolidated basis, this would imply an impact of less than 1% or $0.02 per pound.
Speaker Change: As can be seen significant proportion of our costs such as labor diesel contractors and services empower are not directly impacted by tariffs.
Speaker Change: Certain spare parts and grinding meter examples of types of purchases that couldn't be exposed.
Speaker Change: We estimate that the proposed tariffs announced to date could have potential to increase the cost of goods.
Speaker Change: Valley person in the U S by approximately 5%.
Speaker Change: Our 10 to 15 per pound of PV.
Speaker Change: Reflecting the potential pass through of tariffs incurred by suppliers.
Speaker Change: Efforts are underway to evaluate alternative options to mitigate these potential impacts.
Speaker Change: And on a consolidated basis.
Speaker Change: Imply an impact of less than 1% or <unk> <unk> per pound.
Raman Randhawa: We will continue to monitor global inflationary impacts, but at this time we see ourselves tracking within our 2025 cash cost guidance.
Speaker Change: We will continue to monitor global inflationary impacts, but at this time, we see yourselves tracking within our 2025.
Speaker Change: Cash cost guidance range.
Speaker Change: Moving on to slide nine.
Raman Randhawa: Moving on to slide nine. On the left-hand side, we summarize our available liquidity, which as at March 31st, 2025, is greater than $1 billion. including $345 million in cash and short-term investments and $700 million of undrawn amounts in our corporate revolving credit facility. We finished a quarter with a net debt of $788 million, which modestly increased from $742 million at year-end, driven by a working capital draw of $46 million, largely related to a buildup of accounts receivable. In addition to non-reoccurring payments of $35 million for the final installment payment relating to the 2021 consolidation of the 100% interest in the San Domingo de Corus and $10 million to repurchase a portion of the royalty of San Domingo.
Speaker Change: On the left hand side, we summarized our available liquidity, which as at March 31, 2025 was greater than $1 billion.
Speaker Change: Including 345 million of cash and short term investments and $700 million of Undrawn amounts on our corporate revolving credit facility.
Speaker Change: We finished the quarter with net debt of 788.
Speaker Change: $788 million, which modestly increased from $742 million at year end driven.
Speaker Change: Driven by a working capital draw of 46 million largely related to a buildup of accounts receivable.
Speaker Change: In addition to non reoccurring payments of 35 million for the final installment payment related to the 2021 consolidation.
Speaker Change: Of the 100% interest in Santo Domingo, Dolores and $10 million to repurchase a portion of the royalty at San Juan Domingo.
Speaker Change: In Q1, we have continued to see our net leverage declined with a net debt to EBITDA ratio of one <unk>. The end of Q1 compared to $1 five X at year end.
Raman Randhawa: In Q1, we have continuously our net leverage decline with a net debt to EBITDA ratio of 1.3x at the end of Q1 compared to 1.5x at year end.
Speaker Change: Moving on to slide 10 now.
Raman Randhawa: Moving on to slide 10 now.
Speaker Change: Towards the end of March we announced the Upsized offering of $600 million of 675% senior unsecured notes. Due 2033. This was part of a debt refinancing transaction, we achieved the objective of replacing a higher cost.
Raman Randhawa: Towards the end of March, we announced an upsize offering of $600 million of 6.75% senior unsecured notes due 2033. This was part of a debt refinancing transaction which achieves the objective of replacing our higher cost amortizing and very restrictive Manto Verde Project debt facility with our lower cost, longer term, senior unsecured note while also increasing our pro forma liquidity. The new high-yield bond closed on March 25th.
Speaker Change: Amortizing and very restrictive Manto vary project debt facility with our lower cost longer term senior unsecured note, while also increasing our pro forma liquidity.
Speaker Change: The new high yield bond closed on March 25, we anticipate refinancing the Manto vary project finance Sicily to close in Q2.
Raman Randhawa: We anticipate refinancing the Manto Verde project finance facility to close in Q2. As a result, at the end of Q1, we repaid our corporate revolving credit facility in full. We expect to refinance the Mantoverde Project Facility during Q2 with the intention of repaying our 70% share out of cash. and a redraw on the RCF. Meanwhile, we expect our partner, MMC, to refinance their portion of that facility with a new loan at the asset level. Overall, this refund financing lowers our cost of debt.
Speaker Change: As a result at the end of Q1.
Speaker Change: We paid our corporate revolving credit facility in full.
Speaker Change: We expect to refinance mento Verde project's facility during Q2 with the intention of repaying our 70% sure out of cash.
Speaker Change: And Ah redraw on the Rcs. Meanwhile, we expect our partner MMC to refinance their portion of that facility with a new loan at the asset level.
Speaker Change: Overall, this refund financing lowers our cost of debt.
Raman Randhawa: Capital. In terms of our debt maturity screen, a simplified structure.
Speaker Change: Our capital and terms out our debt maturities, creating a simplified structure now I'll hand, it over to cash flow for the operations review. Thanks, Ron We're now on slide 11.
Cashel Meagher: Now, I'll hand it over to Cashel for the operations review. Daniel Moran, Unknown Executive, Adam Baker, Daniel Moran, James Whittaker, Paul Hissey, where we will first run through our chili offer. Overall, we're excited to see our recently ramped up projects operating in line with our expectations.
Speaker Change: We will first run through our Chile operations overall, we are excited to see our recently ramped up projects operating in line with our expectations.
Cashel Meagher: Unfortunately, in February, there was a nationwide power outage in Chile, which resulted in downtime at both Monteverde and Mentos Blancos. We are fortunate that the impact was limited to around two days, thanks to the hard work from our teams in Chile. Additionally, both assets had 5 days of planned maintenance in February, which is already a short time. In total, this resulted in about seven days of impact at both mines during the quarter, which explains the pullback in throughput for February. On operating days, we were pleased to see both Mento Verde and Mentos Blancos executing according to plan and look forward to seeing performance continue to improve throughout this year.
Speaker Change: Unfortunately in February there was a nationwide power outage in Chile, which resulted in downtime at both men to Verde in Mantas Blancos. We're fortunate that the impact was limited to around two days. Thanks to the hard work from our teams in Chile.
Speaker Change: Additionally, both assets had five days of planned maintenance in February which is already a shortcut.
Speaker Change: In total this resulted in about seven days of impact at both mines during the quarter.
Speaker Change: Which explains the pullback in through book throughput for February.
On operating days or we were pleased to see both mental Verde <unk> blancos executing according to plan and look forward to seeing performance continued to improve throughout this year.
Speaker Change: Starting with <unk>, we achieved.
Cashel Meagher: Starting with Manta Verde, we achieved. Continued improvements in sulfide production and costs driven by the ramp up of our Memento Verde sulfide concentrator. Total production yielded a record 22,540 tonnes of copper at C1 cash costs of $2.46 per payable pound. including a lower $1.53 per payable bound from the sulfide. plant throughput averaged above 31,000 tonnies per day during the quarter, with rates in January and March exceeding the nameplate capacity. partially offset by lower rates in February as previously outlined. Copper grades averaged 0.71% in the quarter, while sulfide copper recoveries continued their upwards victory, averaging around 82.3% in Q1.
Speaker Change: Continued improvements in sulfide production.
Speaker Change: And costs driven by the ramp up of our mental Bert a sulfide concentrate or total production yielded a record 22540 tonnes of copper at <unk> cash costs of $2 46 per payable pound.
Speaker Change: Including a lower dollars 53 per payable pound from the sulfides.
Speaker Change: Planned throughput averaged above 31000 tonnes per day during the quarter with rates in January and March exceeding the nameplate capacity.
Partially offset by lower rates in February as previously outlined.
Speaker Change: Copper grades averaged 71% in the quarter, while sulfide copper recoveries continued their upward trajectory averaging around 82, 3% in Q1.
Cashel Meagher: As mentioned, in February, we completed a planned five-day shutdown, which included liner changeouts on our mills, but we also continued to make further minor modifications to the flotation area to improve recovery. Currently, our focus is on operator training to respond to different ore characteristics as it is fed through the mill. We see ourselves starting to achieve our design recoveries within the second quarter. Q1 was expected to be the lightest quarter due to maintenance, as such, we expect copper production and cash costs to improve throughout the course of the year.
Speaker Change: As mentioned in February we completed the planned five day shutdown, which included liner change outs on our mills, but we also continued to make further minor modifications to the floatation area to improve recoveries.
Speaker Change: Currently our focus is on operator training to respond to different ore characteristics as it has fed through the mill.
Speaker Change: We see ourselves starting to achieve our design recoveries within the second quarter.
Speaker Change: Q1 was expected to be the lightest quarter due to maintenance as such we expect copper production and cash cost improved throughout the course of the year.
John Mckenzie: As John mentioned, our team is also eagerly awaiting the opportunity to execute execute on our mental Verde optimize project.
Cashel Meagher: As John mentioned, our team is also eagerly awaiting the opportunity to execute on our Mantoverde optimized project. We are advancing detailed engineering and preparing to start the project as quickly as possible once we receive a DIA permit amendment. expected around the middle of the year. We've been encouraged so far by individual peak daily throughputs in excess of 45,000 tonnies per day, and we look forward to de-bottlenecking the plant to achieve these rates consistently.
John Mckenzie: We are advancing detailed engineering and preparing to start the project as quickly as possible. Once we receive a TIAA permit amendment, which is expected around the middle of the year.
John Mckenzie: We've been encouraged so far by individual peak daily throughput in excess of 45000 tonnes per day, and we look forward to debottlenecking the plant to achieve these rates consistently.
Cashel Meagher: Armanto-Splanco's asset maintained momentum going into 2025 as highlighted on slide 12. Total sulfide and cathode production yielded 13,846 tonnes of copper at C1 cash costs of $2.43 per payable pound. Production and cash costs both improved significantly quarter over quarter, driven by successful ramp up of the concentrator in 2024. We've now sustained an average throughput of 20,000 tonnies per day at Mansos Blanco since November, excluding February due to the maintenance and power outage impact. It's great to see the overall variability of the milling process having been significantly reduced at this asset. We also benefited from strong grades to start 2025 at an average grade of 0.89% in Q1.
John Mckenzie: Our mental Blancos asset maintained momentum going into 2025 and as highlighted on slide 12.
John Mckenzie: Total sulfide and cathode production yielded 13846 tonnes of copper at <unk> cash costs of $2 43 per payable pound.
John Mckenzie: Production and cash cost both improved significantly quarter over quarter.
John Mckenzie: Driven by successful ramp up of the concentrator in 2024.
John Mckenzie: We have now sustained an average throughput of 20000 tonnes per day at Memphis Banco since November excluding February due to the maintenance and power outage impacts it's great to see the overall variability of the milling process, having been significantly reduced at this asset.
John Mckenzie: We also benefited from strong grades to start 2025 at an average grade of <unk>.
John Mckenzie: 89% in Q1.
John Mckenzie: Pinto Valley produce 10886 tonnes of copper at elevated C. One cash cost of three.
Cashel Meagher: Pinto Valley produced 10,886 tonnes of copper at elevated C1 cash costs of $3.2 billion. 84 per payable pound. During Q1, as shown on slide 13, as we discussed on our Q4 conference call, Pinto Valley experienced setbacks in the latter half of 2024 that continued into the first part of Q1. As a result, throughput averaged 50,000 tonneys per day in Q1. Some planned downtime due to electrical and mechanical issues that resulted in one of our six ball mills being down for the first half of the quarter. We were able to remedy these issues mid-Q1 and finished off the quarter with all mills turning at an average throughput in excess of 53,000 tonneys per day in March.
John Mckenzie: 84 per payable pound.
John Mckenzie: During Q1 as shown on slide 13, as we discussed on our Q4 conference call and Gabelli experienced setbacks in the latter half of 2024 that continued into the first part of Q1.
John Mckenzie: As a result throughput averaged 50000 tonnes per day in Q1 the.
John Mckenzie: Unplanned downtime due to electrical and mechanical issues that resulted in one of our six ball mills being down for the first half of the quarter, we were able to remedy. These issues mid Q1 and finished off the quarter with all mills turning in an average throughput in excess of 53000 <unk> per day in March.
Cashel Meagher: We are committed to the implementation of our asset integrity program. with the goal of improving the reliability of the plant to drive higher production and lower cost. We continue to expect copper production to be weighted towards the second half of the year, driven by grades and throughput, with lower first quarter as a result of the previously mentioned maintenance.
John Mckenzie: We are committed to the implementation of our asset integrity program with.
John Mckenzie: With the goal of improving the reliability of the plant to drive higher production and lower costs.
John Mckenzie: We continue to expect copper production to be weighted towards the second half of the year driven by great throughput with a lower first quarter as a result of the previously mentioned maintenance.
Cashel Meagher: Moving to slide 14, Cozumel delivered another solid quarter producing 6,524 tonnes of copper at C1 cash cost. of $1.28 per payable pound. In Q1, Kozeman Cash Costs benefited from improved contractor utilization, higher silver byproduct and a weaker Mexican peso and lower treatment charges, which continue to represent a tailwind for the remainder of 2025.
John Mckenzie: Moving to slide 14, Cozman delivered another solid quarter, producing 6524 tonnes of copper at cone cash costs.
John Mckenzie: Of $1 28 per payable pound.
John Mckenzie: In Q1, <unk> cash cost benefited from improved contract or utilization higher silver byproduct.
John Mckenzie: And a weaker Mexican peso and lower treatment charges, which continue to represent a tailwind for the remainder.
John Mckenzie: Of 2025.
Wendy King: Now over to Wendy for the sustainability review. Thank you, Cashel. We're now on slide 15. With a review of the progress we made on our sustainability priorities and targets to start off 2025. In Q1, we signed a 35-year water agreement with Econza to secure long-term water supply by reusing treated wastewater from Anafagasta. The project will also reduce marine discharge and increase water recycling and is expected to be operational in 2028. We continue to refine our approach to sustainability by adopting a water stewardship policy aligned with ICMM Water Stewardship Framework, as well as a tailings, leaching and waste rock management policy, expanding the scope of Capstone's tailing management framework.
Wendy: Now over to Wendy for the sustainability review.
Wendy: Thank you Kash health, we're now on slide 15, with a review of the progress we made on our sustainability priorities and targets to start off 2025.
Wendy: In Q1, we signed a 35 year water agreement with a contract to secure long term water supply by reusing treated.
Wendy: <unk> water from Anephric aster.
Wendy: The project will also reduce marine discharge and increase water recycling and is expected to be operational in 2028.
Wendy: We continue to refine our approach to sustainability by adopting a water stewardship policy aligns with IC wider.
Wendy: Water stewardship framework as well as its hearings leaching and waste rock management policy, expanding the scope of capstone sealing management framework.
Wendy King: These policies represent an important element of improving governance and accountability across all of our sites. This quarter, we continue to advance towards our sustainable development strategy goal of implementing the global industry standard for tailings management across all of our TSS by year-end 2028. We are tracking well compared to our internal forecast.
Wendy: These policies represents an important element of improving governance and accountability across all of our sites.
Wendy: This quarter, we continued to advance towards our sustainable development.
Wendy: <unk> implementation being the global industry standards for tailings management across all of <unk> by.
Wendy: By year end 2028.
Wendy: We are tracking well compared to our internal forecast.
Wendy King: In the area of climate, I'm particularly pleased by the installation of a solar array at our Pinto Valley mine, replacing some of our diesel generators with a renewable source of power. Additionally, at our Chile operations, 100% of our electricity use in 2024 was covered by Renewable Energy Certified Sources, as defined by the International Renewable Energy Certificate Standards. We had many opportunities to interact with our local communities and stakeholders this quarter, especially at Manta Verde, Pinto Valley and Santo Domingo. These initiatives are aligned with our newly adopted social performance standard, which governs community engagement across the company.
Wendy: In the area of climate, and particularly pleased by the installation of solar array at our Pinto Valley mine.
Wendy: Placing some of our diesel generators with a renewable source of power.
Wendy: Additionally, at our Chile operations, a 100% of our electricity use in 2024 was covered by renewable energy certified sources as defined by the international renewable energy Certificate standard.
Wendy: We had many opportunities to interact with our local communities and stakeholders this quarter, especially at <unk> de Pinto Valley insensitive mango.
Wendy: These initiatives are aligned with our newly adopted social performance standards, which governs community engagement across the company.
John MacKenzie: And with that, I'd like to pass it back to John. Thanks, Wendy. Turning to slide 16. Our goal this year is to realize the benefits from the projects we completed in 2024 while we focus on operational execution. This will provide us with a strong foundation to execute on our next phases of organic growth, as and when it makes sense for our company. We've outlined our sector-leading growth plans on the slide and some of the additional upside within our portfolio. Our first priority for growth is the Monteverde Optimised Project. An outstanding project with high returns, quick payback, and low capital intensity of only $7,500 per ton.
John Mckenzie: And with that I'd like to pass it back to John.
John Mckenzie: Thanks Randy.
John Mckenzie: Turning to slide 16.
John Mckenzie: Our goal this year is to realize the benefits from the projects. We completed in 2024, while we focus on operational execution and strengthening of the balance sheet.
John Mckenzie: This will provide us with a strong foundation to execute on our next phases of organic growth as and when it makes sense for our company.
John Mckenzie: With our cloud our sector, leading growth plans on the slide and some of the additional upside within our portfolio.
John Mckenzie: Our first priority for growth is the months of EDA optimized projects and outstanding projects with high returns quick payback and low capital intensity of only $75000 per ton.
John MacKenzie: We plan to finance this project through internally generated cash flows. This is the type of project we believe we can and should execute in almost any economic environment. We intend to proceed with this project following the receipt of a DIA permit amendment. filed in mid-2024, which we continue to expect around the middle of this year. At Fonso Domingo, we continue to progress with the assessment of the optimal financing structure for the project, including running a process to bring in a minority partner at the asset level. We're very encouraged by the progress we've seen so far.
John Mckenzie: We plan to finance this project through internally generated cash flows.
John Mckenzie: This is the type of projects, we believe we can and should execute in almost any economic environment.
John Mckenzie: We intend to proceed with this project following the receipts of the DAA permits amendments filed in mid 2024.
John Mckenzie: We continue to expect around the middle of this year.
John Mckenzie: That sensor Domingo, we continue to progress with the assessments of the optimal financing structure for the project.
John Mckenzie: Including running a process to bring in a minority partner at the asset level.
John Mckenzie: We're very encouraged by the progress we've seen so far.
John MacKenzie: Beyond these projects, we're spoiled for choice with optionality across our portfolio of low-risk, high-return projects. This includes another brownfield expansion at Montes Blancos. Flexibility in the MVSD district to unlock more copper and potentially byproduct cobalt production. and the potential development of another major copper district around our Pinto Valley Mine in Arizona.
John Mckenzie: Beyond these projects with spoiled for choice with Optionality across our portfolio of low risk high return projects.
John Mckenzie: This includes another brownfield expansion at Montrose Broncos.
John Mckenzie: Flexibility in the <unk> district to unlock more copper at potentially byproduct cobalt production.
John Mckenzie: And the potential development of another major copper district around our Pennsylvania mine in Arizona.
John MacKenzie: Moving to slide 17. We wanted to articulate the path forward for Santo Domingo as it pertains to what we need to see before a potential sanctioning decision. Our main goal with these criteria is to ensure we execute on the project when it makes sense for Capstone, while maintaining optionality and continuing to increase the value of the project. First, as I mentioned on the last slide, we believe a minority interest sell-down, possibly similar to what we were able to achieve with our 30% partner in Monteverde, is an attractive solution that balances the risks of the project.
John Mckenzie: Moving to slide 17.
John Mckenzie: We want to articulate the path forward for sensitive Ngos as it pertains to what we need to see the Florida potential sanctioning decision.
John Mckenzie: Our main goal with these criteria is to ensure we execute on the projects when it makes sense for capstone.
John Mckenzie: While maintaining optionality and continuing to increase the value of the project.
John Mckenzie: First as I've mentioned on the last slide.
John Mckenzie: We believe in minority interest sell down, possibly similar to what we were able to achieve with our 40% parts and much of it is an attractive solution that balances the risks of the project.
John MacKenzie: We're running a process, and it continues to progress well, with parties in Phase 2 of the process attending sites during the past few months. Once this process has run its course, we then look to ensure the optimal financing structure for the project. And we've already received early indications for a project finance facility of $1.1 to $1.3 billion. Before a potential sanctioning decision at Santo Domingo, we want to ensure our balance sheet is well prepared to support a new growth project. For us, this means our assets are operating at or near full production levels. Strong Liquidity and Net Debt to EBITDA Leverage Below One Time We made good progress on our balance sheets in Q1 and are focused on continued strengthening throughout 2025.
John Mckenzie: We're running a process and it continues to progress well with parties in phase III of the process attaining such during the past few months.
John Mckenzie: Once this process has run its course, we then look to ensure the optimal financing structure for the project.
John Mckenzie: And we've already received early indications for project finance facility of one one to $1 $3 billion.
John Mckenzie: Before a potential sanctioning decision essentially domingos.
John Mckenzie: To ensure our balance sheet is well prepared to support our new growth projects.
John Mckenzie: For us this means our assets operating X will be at full production levels.
John Mckenzie: From liquidity.
John Mckenzie: Net debt to EBITDA leverage below one times.
John Mckenzie: We made good progress on our balance sheets in Q1 and are focused on.
John Mckenzie: Continued strength throughout 2025.
John MacKenzie: Our fourth criteria is ensuring that the scope of the project is appropriately defined and optimised. We're targeting to achieve at least 40% detailed engineering this year, while we continue to advance various options to optimize key infrastructure and increase the value of the project with incremental upside opportunities. including potential additional copper production from Sierra Norte and oxide production. And as you've said on previous conference calls, we're also very mindful of the overall macroeconomic environment. which has come into increased focus today. The way we see it right now, that opens up a potential sanctioning window for Sunset Domingo, starting around the middle of 2026.
John Mckenzie: Our fourth criteria is ensuring that the scope of the project is appropriately defined and optimized.
John Mckenzie: We are targeting to achieve at least 40% detailed engineering this year.
John Mckenzie: While we continue to advance various options to optimize key infrastructure and increase the value of the projects with incremental upside opportunities.
John Mckenzie: Including potential additional copper production of series Naughty and oxide production.
John Mckenzie: And as we've stated on previous conference calls, we're also very mindful of the overall macroeconomic environments, which is coming through increased focus today.
John Mckenzie: The way, we see it right now that opens up the potential sanctioning windows sensor Domingo starting around the mid middle of 2026.
John MacKenzie: Plants of Domingo represents a transformative opportunity for Capstone, with the potential to take up production up to approximately 400,000 tonnes of copper per annum. at even lower consolidated costs. and with the capital intensity that compares favorably across our industry.
John Mckenzie: Pennsylvania represents a transformative opportunity for capstone.
John Mckenzie: With the potential to take our production up to approximately 400000 tons of copper per annum.
John Mckenzie: But even lower consolidated costs and with the capital intensity that compares favorably across our industry.
John MacKenzie: With that, I'll turn to slide 18 to conclude today's presentation. This quarter, we've begun to realize the benefits from the first phase of the transformation of capstone copper. of Tangible Delivery on our Peer-Leading Growth. Our focus on operational execution and balance sheet strength and flexibility means we're well prepared for the future. We extremely well position. become a leading, long-life, low-cost copper producer, playing an important role in supporting the world's decarbonization and electrification efforts.
John Mckenzie: With that I'll turn to slide 18 to conclude today's presentation.
John Mckenzie: This quarter, we began to realize the benefits from the first phase of the transformation of capstone copper with.
John Mckenzie: With tangible delivery on a peer leading growth.
John Mckenzie: Our focus on operational execution and balance sheet strength and flexibility means we're well prepared for the future.
John Mckenzie: We are extremely well positioned to become a leading long life low cost copper producer.
John Mckenzie: An important role in supporting the world's decarbonization and electrification efforts.
John MacKenzie: And with that, we're now ready to take questions. Thank you.
John Mckenzie: We're now ready to take questions.
John Mckenzie: Thank you.
Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number 1 on your touch-tone screen. You will hear a prompt that your hand is being raised. Should you wish to decline from the pooling process, please press the star followed by the number. If you are using a speakerphone, please lift the handset before pressing any button. One moment, please, for your first.
John Mckenzie: Okay.
Speaker Change: We will now begin the question and answer session should.
John Mckenzie: Should we have a question please press the star.
Speaker Change: And you touched on some you will ear problem situations.
Speaker Change: Should you wish to decline from the pruning process. Please press the star followed meeting in late June.
Speaker Change: We are using a speaker phone please.
Speaker Change: Before Chris.
Speaker Change: One the Lindsay for your first question.
Speaker Change: Your first question comes from Rs <unk> question.
Orest Wowkodaw: Your first question comes from Orest Wowkodaw from Thailand. Hi, good afternoon. Just on Manto Verde, it's nice to see the throughput performance reach nameplate, I guess, two out of the three months. What about recoveries? I mean, you're tracking kind of low 80s versus design of 87 to 91. I realize recovery is always sort of come last in terms of the debottlenecking optimization. But what do you think the timeline is to achieve that design recovery on a sustainable basis?
Speaker Change: Hi, good afternoon.
Mental Vergara: Mental vergara, it's nice to see the throughput performance.
Speaker Change: Reached nameplate I guess two out of the three months what is that.
Mental Vergara: Recoveries I mean.
Mental Vergara: Youre tracking kind of low <unk> versus design of 87 to 91, I realize recoveries always sort of come last in terms of the debottlenecking optimization, but.
Mental Vergara: What do you think the timeline is to achieve that desired recovery on a sustainable basis.
Mental Vergara: Yeah. Thanks for that question.
John MacKenzie: Thanks, Orest, for that question. It's now the major focus. I think we're very comfortable with the throughput rates. So obviously as you said, the next phase is getting the recoveries right and I think we're looking by the middle of this year to be up at design recovery, but perhaps if I can pass across to Cashel just to flesh that out a little bit. Yeah, it's a good, it's a good observation, Orest, exactly with in line with what John said, we believe, you know, in Q2, we're making good progress towards the recovery. I sort of will point out that we have been milling transition ore, and perhaps it was smoothed in the original model.
Mental Vergara: It's something we've obviously.
Mental Vergara: Now the major focus I think we're very comfortable with the the throughput rates.
Mental Vergara:
Mental Vergara: So obviously as you said the next phases.
Mental Vergara: Getting the recovery shot.
Mental Vergara: Okay.
Speaker Change: I think we're looking by the sort of middle of this year to be sort of outfits designed recovery, but perhaps if I can pass across to cash will just choose to sufficient answer a little bit.
Mental Vergara: Yes. It is.
Mental Vergara: It's a good observation or is it.
Mental Vergara: Exactly.
Align with what John said, we believe in Q2, we're making good progress towards the recoveries.
Mental Vergara: I will point out that we have been milling transition ore and perhaps it was smooth and the original model. So we're getting a little bit higher oxide as a component, which is biasing down that but we're working through that or now and so we see.
Cashel Meagher: So we're getting a little bit higher oxide as a component, which is biasing down that, but we're working through that ore now. And so we see naturally that maybe an 82.3 is actually a bit higher when you put it in respect to sulfide, 100% sulfide piped ores versus a little bit of mix in the upper benches on a couple of our satellite pits. So we, the team has said their work their way through that. And we continue with an education process with our operators on the different types of ores and reagent mixes. And we continue to work on our operational controls within the mill.
Mental Vergara: Really that may be an $82 three is actually a bit higher when you put it in respect to sulfide Hunter.
Mental Vergara: 100% sulfide.
Mental Vergara: Hi towards versus a little bit of mix in the upper benches on a couple of our satellite pits.
Mental Vergara: So we the team has said they are worked their way through that and we continue with an education process with our operators on the different types of boards and reagent mixes and we continue to work on.
Mental Vergara: Our our operational controls within the mill and so we're seeing improvements so like John said, we see yourself sort of getting there in the middle of this year.
Cashel Meagher: And so we're seeing improvements. So like John said, we see ourselves sort of getting there in the middle of this year.
Orest Wowkodaw: Thank you. And just as a follow up, I think John said you're now targeting Santo Domingo FID potentially by mid-26. If I'm not mistaken, that's probably a six month pushback from sort of previous expectations. Could there be further room to defer that if the just given the uncertain copper environment and macro economic uncertainty? Could that, you know, have you thought about actually just parking it for another year and just harvesting free cash flow? Yeah. I think, Orest, the way we look at it is, you know, we don't want to have multiple projects running at a time.
Speaker Change: Thank you and just as a follow up I think John said Youre now targeting Santo Domingo.
Speaker Change: Potentially by mid 'twenty, if I'm not mistaken, that's probably a six months push back from sort of previous expectations could there be further room to defer that if the just given the uncertainty.
While copper environment.
Speaker Change: Macro economic uncertainty.
Speaker Change: Could that have.
Speaker Change: Have you thought about actually just parking it for another year and just harvesting free cash flow.
Yeah.
Speaker Change: I think the way, we look at it as well.
Speaker Change: We don't want to have multiple projects running at a time.
John MacKenzie: So our next project is Montevideo Optimized. The returns on that project, IRR, is unbelievably good. And, you know, the cash it generates for us is fantastic. So, you know, we basically, we've got everything waiting for that. We're just waiting for the permit and we expect to get that, I think, sort of, as we've said, mid-year. We expect that to be sort of roughly in the region of, you know, sort of nine to 12 month execution period. I think Cashel mentioned we've already actually had some days of throughput at around 45,000 tons a day. So, you know, it's just making, getting the equipment there to allow us to do that on a sustainable basis.
Speaker Change: So our next project is months, a very optimized the the returns on that project.
Speaker Change: <unk> is unbelievably good and the cash it generates for us is fantastic.
Speaker Change: Basically we've got everything waiting for that is we just waiting for the permits and we expect to get that.
Speaker Change: I think sort of as you say midyear.
Speaker Change: We expect that to be sort of roughly in the region.
Speaker Change: Sort of nine to 12 months execution period.
Speaker Change: I think Kessel mentioned, we've already actually had some days of throughput at around 45000 tonnes a day. So just.
Speaker Change: Just making getting the equipment there to allow us to do that on a sustainable basis.
Speaker Change: So I'd be pretty uncomfortable about starting another project, where we <unk>.
John MacKenzie: I'd be pretty uncomfortable about starting another project while we're focusing our efforts on a ramp-up of a project. It's obviously a much smaller, much simpler project than Montevideo Optimized. That's why we're now saying that the sanctioning window will open probably around the middle of next year. But... And I mentioned all the sort of criteria we want to have in place, but that doesn't necessarily mean we will take the decision to proceed. There's nothing forcing us into a sort of construction decision at this point. So. You know, what all we're saying is that we will have everything that, right now we have, you know, we have the studies, we have the permits, the detailed engineering is well underway, which to me is sort of best practice in terms of, you know, ensuring we deliver the projects on budget and on schedule.
Speaker Change: Focusing our efforts on the ramp up of a project.
Speaker Change: Obviously, a much smaller much simpler project the months of May to optimized.
Speaker Change: So.
Speaker Change: That's why we sort of now saying that the sanctioning window will open probably around the middle ish of next year.
Speaker Change: But.
Speaker Change: I mentioned, all the sort of criteria, we wanted to have in place but.
Speaker Change: That doesn't necessarily mean, we will take the decision to proceed theres nothing, forcing us into a a sort of.
Speaker Change: Construction decision at this point.
Speaker Change: So.
Speaker Change: What we're saying is that we will have everything right. Now we have we have the studies we have the permits the detailed engineering is well underway, which to me is sort of best practice in terms of.
Speaker Change: Ensuring we deliver the projects on budget and on schedule.
John MacKenzie: You know, getting the financing in place, making sure we've got an optimized project. You know, I saw a study the other day that suggested that on major mining companies on average leave about half a billion dollars of NPV on the table by not properly optimizing the project design. So, you know, we want to extract every penny from this. So we're doing quite a bit of work around, you know, whether it's infrastructure optimization or process flow optimization, just making sure we've subjected every aspect of it to to sort of rigorous review. And, you know, once we've done all of that, we're then in a position where at any point, I would be comfortable, you know, sort of that the board is approached to take a decision on that project.
Speaker Change: Getting the financing in place.
Speaker Change: Making sure we've got an optimized projects and also a study the other day that suggests that there are major mining projects.
Speaker Change: Companies on average leave about half a billion dollars of NPV on the table by not properly optimizing the project design.
Speaker Change: We want to expect every penny from list.
Speaker Change: So we didn't quite a bit of work around with its infrastructure optimization of process flow optimization, just making sure we <unk>.
Speaker Change: Objected every aspect of it too to sort of a vigorous review.
Speaker Change: And once you've done all of that within in a position where at any point I would be comfortable.
Speaker Change: The board is approach to to take a decision on that project, but.
John MacKenzie: But, you know, there are other factors as well, we need to look at the rest of our portfolio, you know, how much cash is being generated? Are we comfortable with how each of our assets is performing? And obviously, the macro environments as well. You know, if But that said, it's not necessarily the case that. In a hard times or a bad time to start a project, sometimes those are the best times to start and build a project. with a view to actually bringing it on, you know, into the upturn. So, you know, we need to sort of carefully consider, you know, all of those parameters and then come to a decision that's sort of really in the best interest of the company and its shareholders.
Speaker Change: There are other factors as well we need to look at the rest of our portfolio.
Speaker Change: How much cash is being generated.
Speaker Change: Are we comfortable with how each of all of that.
Speaker Change: <unk> is performing and obviously the macro environments as well.
Speaker Change: Yes.
Speaker Change: But that said, it's not necessarily the case.
Hard times.
Speaker Change: With that Tom just started projects, sometimes those are the best times to start to build a project.
Speaker Change: With a view to actually bringing it on.
Into the upturn.
Speaker Change: So we need to carefully consider all of those parameters and then come to a decision thats really in the best interest of the company and its shareholders and as I say I think that that window will open in the middle of next year, but there's nothing that.
John MacKenzie: And, as I say, I think that that window will open in the middle of next year, but there's nothing that forces us to move at that point.
Speaker Change: <unk> forces us to move at that point.
Orest Wowkodaw: Thanks for the color.
Speaker Change: Thanks for the color.
Speaker Change: Sure.
Speaker Change: Yeah.
Dalton Baretto: Your next question comes from Dalton Baretto from Carnaport. Please go ahead. Thanks for taking my questions. Maybe I can stay on that same vein there that Orest wrapped up on in terms of timing. I know you just said that there's nothing sort of pushing you to take the sanction decision at that date. Do you have a sense for what other projects might be going ahead and whether actually getting contractors and so on might be a concern at that point in time? Yeah, it's an interesting question, Dalton. And, you know, that that's one of the the criteria that obviously we take into account, you know, sort of, end of the day, you know, within that region, there's a limited pool of A-grade contractors, A-grade engineers, etc.
Speaker Change: Your next question comes from Delta.
Speaker Change: Please go ahead.
Speaker Change: Yes.
Speaker Change: Thanks for taking my questions.
Maybe I can stay on that same vein there that <unk> wrapped up on in terms of timing I know you just said that there's nothing sort of pushing you to take the sanction decision at that date.
Speaker Change: Do you have a sense for what other projects might be going ahead, and whether actually getting contractors and so on might be a concern at that point in time.
Speaker Change: Yes, it's an interesting question Delta then.
Speaker Change: That's one of the criteria, that's obviously, we take into accounts.
Speaker Change: As of the end of the day.
Speaker Change: Within that region is limited pool of.
Speaker Change: A great contract is a great engineers et cetera.
John MacKenzie: I think we're very fortunate that we already have a project team that has multi-decade experience before they came across to Montevideo that now worked together for the past three years at Montevideo as a team. And so we'll be stepping across to do exactly the same thing at Santo Domingo. So I think we're in a much better position than most. We have already identified the most likely suppliers and contractors for that project. And You know, that that gives us a lot of confidence, but we obviously do need to make sure that, you know, what is the overall environment?
Speaker Change: We're very fortunate that we already have a project team that has multi decade experience.
Speaker Change: Before they came across two months of EDA that now work together for the past three years and months of Ed as a team.
Speaker Change: And so it will be stepping across to do exactly the same thing assumption domingos.
Speaker Change: I think we're in a much better position than most.
Speaker Change: We have.
Speaker Change: Already sort of identify the most likely.
Speaker Change: Those suppliers and contractors for for that project.
Speaker Change: And.
Speaker Change: That gives us a lot of confidence that we.
Speaker Change: Obviously, you do need to make sure that.
Speaker Change: What is the overall environment.
Speaker Change: What's what are the availabilities quite frankly, I think the current economic volatility.
John MacKenzie: What's what are the availabilities? Quite frankly, I think the current economic volatility is is likely to further I think actually Sanso Domingo is ahead of the pack in terms of readiness in Chile, in terms of sort of development. So we're kind of ready to pull the trigger, you know, if not now, just because we're carrying on with detailed engineering and a few government things that we'd like to have in place before we start a project. But I would say we're well ahead of pretty much all the other projects in that region. and I have a feeling that the current sort of macro volatility that we see is going to cause a lot of companies to sort of go pens down on their projects.
Speaker Change: Is is largely to further.
Speaker Change: I think.
Speaker Change: I think actually sensitive bingo's ahead of the.
Speaker Change: Ahead of the pack in terms of readiness in Chile.
Speaker Change: In terms of.
Speaker Change: Sort of development, so we kind of ready to pull the trigger.
Speaker Change: You know if not now just carrying onto the <unk> name and a few governance things, which we like to have in place before we start a project.
Speaker Change: I would say, we're well ahead of pretty much all the other projects in that region.
Speaker Change: And I have a feeling that the current students back volatility that we see is getting too.
Speaker Change: Cause a lot of companies to sort of good things down on their projects.
John MacKenzie: So I actually think, you know, we're likely to be. was a hit of the pack. terms of you know, access to all the resources that we need to build that project.
Speaker Change: So I actually think it will.
Speaker Change: Likely to be.
Speaker Change: As I say ahead of the pack in terms of.
Speaker Change: Access to all the resources that we need to build that project.
Speaker Change: Great. Thanks, Sean and then just as my follow up I'll stay on Saturday, Mango here and maybe a bit of a two part question here around the JV process.
Dalton Baretto: Great, thanks, John.
Dalton Baretto: And then just as my follow up, I'll stay on Santa Domingo here and maybe a bit of a two part question here around the JV process. First question is, I guess, you've talked in the past about maybe like a straight equity partner versus an infrastructure sharing agreement. And I'm just wondering, is there any reason you couldn't do both deals? And then part B of that is how do you plan to price in, you know, the upside with Sierra Norte and the oxides and so on when you when you go forward with this? Thank Both very good questions.
Speaker Change: First question is I guess, you talked you've talked in the past about maybe the straight equity partner versus an.
Speaker Change: Sharing agreement and I'm just wondering if is there any reason you couldnt do you both deals and then part B of that is how do you plan to price in.
Speaker Change: The upside with CRM, nor tan the oxides and so on when you. When you go forward with this thank you.
Speaker Change: Okay.
Speaker Change: Both very good questions.
John MacKenzie: I think yes, absolutely. You know, we need to look at all options. And I think I spoke a little bit about how we think about optimizing a project. And, you know, part of that is looking at each aspect of infrastructure, if we can. And if we can... you know, reach agreements to utilize existing infrastructure rather than build our own. Potentially, that's a better economic and risk outcome to us than doing it all ourselves. We need to properly evaluate that. In an ideal world, I'd say one would normally look to having, you know, one partner, but I've operated in many JVs where we've had multiple partners and it's really just about having the right sort of shareholders agreement, the right JV agreements and the right JV governance that ensures that things run very smoothly.
Speaker Change: I think yes, absolutely yeah, we need to look at all options and I think I spoke a little bit about how.
Speaker Change: How we think about optimizing the project.
Speaker Change: And part of that is looking at each aspects of infrastructure. If we can.
Speaker Change: And then if we can.
Speaker Change: <unk> reached agreements to utilize existing infrastructure on both our own.
Speaker Change: Potentially that's that's a better economic and risk outcome to US then to do it all ourselves we need to properly evaluate that.
Speaker Change: Yeah.
Speaker Change: And then in an ideal world, let's say, what one would normally look to having.
Speaker Change: One partner, but.
Speaker Change: Yeah I've operated in many JV with multiple partners and it's really just about having.
Speaker Change: The rights.
Speaker Change: So the shareholders' agreement through our JV agreements in the rock JV governance that ensures that the things run very smoothly. So I didn't really see any reason why we couldnt heads.
John MacKenzie: So I don't really see any reason why we couldn't have a combination of both a sort of... Equity Top Partner and an Infrastructure Partner. I think we're going to look at all of those options. And I think I've said before that the process that we're going through It's not a conventional sale process where you run an auction, you sell it and then you walk away. We're obviously going to be partnered up with our partners for the next 30, 40, 50 years in this district. We do need to be very thoughtful about how we set up that arrangement and make sure it's something that's not just good this month, but is good for the next multiple decades.
Speaker Change: A combination of both initiatives.
Speaker Change: Equity top partner and an infrastructure partner I think we're going to look at all of those options.
Speaker Change: And I think I've said before the process that we're going through.
Speaker Change: It's not a sort of conventional sale process with you.
Speaker Change: To run an auction and you sell it and then you walk away, we're obviously going to be partnered up with with our partners for the next 30 40 50 years in this district, we do need to be kind of very thoughtful about how we set up that arrangements.
Speaker Change: And make sure it's something that's not just good sort of.
Speaker Change: This month, but is good for the next sort of multiple decades.
Speaker Change:
Speaker Change: I think just on your question about sort of how we build in those that sort of future.
John MacKenzie: I think just on your question about sort of how we build in that sort of future value that's going to be created, you know, we need to think about that. We're obviously... It's very difficult to align the same level of technical work all at the same point. Today, we've also got a technical report that's out there, that's our base case feasibility. We've got a number of other opportunities that we believe are very high probability, but they still further back on the sort of technical development curve. So that's work that's to be done. And I think when we enter into the sort of final negotiations with a partner, that'll be part of the discussion as to how we think about value for those projects.
Speaker Change: Value that's going to be created.
Speaker Change: We need to think about that would obviously.
Speaker Change: It's very difficult to.
Speaker Change: Align the same level of technical work all at the same point.
Speaker Change: Today, We've also got a technical report that's out there that's our base case feasibility.
Speaker Change: We've got a number of other opportunities that we believe are very.
Speaker Change: High probability, but they they still further.
Speaker Change: Further back on the sort of development technical development curve.
Speaker Change: That's work to be done.
Speaker Change: And I think.
Speaker Change: When we entered into the sort of final negotiations with.
Speaker Change: No.
Speaker Change: A partner.
Speaker Change: That'll be part of the discussion as to how we think about.
Speaker Change: Value for those projects.
Speaker Change: Great. Thanks, John I'll jump back in queue.
Dalton Baretto: Great. Thanks, John. I'll jump back in.
Speaker Change: Your next question comes from Ralph <unk> from.
Ralph Profiti: Your next question comes from Ralph Profiti from... Please go ahead. Thanks, operator. And good afternoon, everyone. I want to come back to Monteverde. above design in January and March, and that included one day at 45,000 tonnes per day plus.
Speaker Change: From Stifel.
Speaker Change: Please go ahead.
Speaker Change: Thanks, operator, and good afternoon, everyone I wanted to come back to motto Verity.
Speaker Change: Above design in January and March and that included a one day at 45000.
Speaker Change: Tons per day, plus it begs the question cashless, John whether or not the base is higher.
Ralph Profiti: It begs the question, Cashel and John, whether or not the base is higher than the 32,000 tonnes a day? And are there any advantages to seeing not only if the base is higher, but stable at higher throughput ahead of Mount Overdei optimized and then mid-2025? I mean, maybe this is just a of scaling up would be potential, you know, after MVO, but just wondering if there's any advantage to seeing if that rate, if that stable rate is at a higher level.
Speaker Change: Then the 32000 tonnes a day and are there any advantages to seeing not only if the base is higher but stable at higher throughput ahead of mantle verity optimized in that mid 2025, I mean, maybe this is just a question of scaling up.
Speaker Change: We'll be potential <unk>.
Speaker Change: NPL, but just wondering if there is there any advantage to seeing if that if that rate. If that's stable rate is at a higher level.
Cashel Meagher: Thanks for the question and I'm going to ask Cashel just to respond to that. Yeah, hi Ralph. Yeah, I think you're on to it. Right now, our permit allows us basically to average 32,000 tons a day, and we expect to get that DIA modification in the middle of this year. And it ostensibly rates the throughput, the new permit at 45,000 tons a day average. However, we can peak out up to 55,000 tons a day. And so it's been very encouraging to see the performance of the crushing and grinding circuit and also the current installed capacity at our tailings that occasionally we can get to that volume metric that allows us to mill over 40,000 tons a day.
Speaker Change: Yeah. Thanks, Thanks, Ross for that question I would ask castle just to respond to that.
Speaker Change: Yes, Hi, Rob.
Speaker Change: Yeah, I think you're on to it right now our Kermit allows us basically to averaged 32000 tonnes a day and we expect to get that D. I a modification.
Speaker Change: In the middle of this year and.
Speaker Change: Eight abstentions bleed rates.
Speaker Change: Rates, the throughput and the new permit at 45000 tonnes a day average however.
Speaker Change: We can peak out up to 55000 tonnes a day.
Speaker Change: So it's been very encouraging.
Speaker Change: To see the performance of the crushing and grinding circuit and also the current installed capacity of our tailings that occasionally we can you know get to that volumetric that allows us to mill over 40000 tonnes a day.
Cashel Meagher: So while to be able to sustain an average of 45,000 tons a day will require the $150 million in capital, half of it is actually mining fleet that will deliver the ore. So that's one of our constraints. But it does give us the opportunity to exceed our sort of guidance that we put out. The midpoint would have suggested 30,500 tons a day this year. We're already exceeding that throughput of guidance in our first quarter. And it would give us the opportunity when we receive that permit to see if we can push higher in maybe the mid or high 30s.
Speaker Change: So while to be able to sustain an average of 45000 tonnes a day will require the $150 million in capital.
Speaker Change: Half of it is actually mining fleet that will deliver the ore. So that's one of our constraints.
Speaker Change: But it does give us the opportunity to exceed our sort of guidance that we put out the midpoint would've suggested 30500 tonnes. A day. This year, we're already exceeding that throughput of guidance in our first quarter and it would give us the opportunity when we receive that permit to see if we can pull.
Speaker Change: Higher.
Speaker Change: And maybe the mid or high thirties.
Cashel Meagher: But that remains to be seen. And it's a great option for us to have going forward and a great opportunity against our stated guidance. Okay, yeah, that's excellent. Very helpful.
Speaker Change: But that remains to be seen and it's a great option for us to have going forward and are great.
Speaker Change: Opportunity against our stated guidance.
Speaker Change: Okay, Yes.
Speaker Change: Excellent very helpful.
Cashel Meagher: And I want to come back to Matos Blancos also. And your presentation talked about the variability of milling having significantly been reduced in the last little while. And I'm looking at sort of the non throughput KPIs on sort of benchmarking the performance there and whether you can help me understand whether or not those are within spec, things like tons per day and mill availability. The answer is yes. Yes, sorry, John. Yeah, the answer is yes. We are sort of hitting every one of our ambitions at Mantos Blancos. I mean, the team's done an incredible job.
Speaker Change: I want to come back to Marshall's Blancos also in your presentation talked about the variability of milling, having significantly been reduced in the last little while and I'm looking at.
Speaker Change: Sort of the non throughput kpis.
Speaker Change: On sort of benchmarking the performance there and whether you cannot help me understand whether or not those are within spec things like tons per day and mill availability.
Speaker Change: Okay.
Speaker Change: Cash flow. So the answer is yes, yes.
Speaker Change: Yes, sorry, John Yes, Dave answers, yes.
Speaker Change: We are we were sort of hitting every one of our ambitions at Mantas Blancos and the team has done an incredible job.
Cashel Meagher: And to say that is partially the merit of the asset integrity program and system we've been implementing and its adoption by that management group. So we are replicating that at Pinto Valley. Pinto Valley is a bigger mine, more complex, but Mantos Blancos is the example of how you can turn around an old asset and make it reliable, get the availability you require as such to have the throughput design and meet that plant utilization, plant availability numbers as we sort of laid out our ambitions to be at the start of this asset integrity program. So we're super happy with the way it's been working out.
Speaker Change: To say that that's what that is.
Speaker Change: Partially the merit of the the asset integrity program and system, we've been implementing and its adoption by that management group.
Speaker Change: So we are replicating that at Central Valley, because he has a bigger mine more complex but.
Speaker Change: Metals Blancos is the.
Speaker Change: The example of how you can turn around an old asset.
Speaker Change: And make it reliable get the availability you require as such to have the throughput design and meet those.
Speaker Change: That.
Speaker Change: Plant utilization plan to be able ability numbers as we sort of laid out our ambitions to be at the start of this asset integrity program, but we're super happy with the way it's been working out.
Cashel Meagher: Good, good. Thank you. Very helpful answers.
Speaker Change: Okay. Good. Thank you very helpful answers.
Speaker Change: Your next question comes from Daniel Morgan from Byron Kelley. Please go ahead.
Daniel Morgan: Your next question comes from Daniel Morgan from Baron Joey, please go ahead. Hi John and Cashel. First question is just wondering whether you might be willing to share just an update on April around the grounds. Obviously April's now finished and whether you might have throughput numbers for different assets you might be willing to share and maybe just recovery at Manteverde. Cashel, close to you. Yeah, like, so as far as metal balances go, recoveries, sort of can't give those yet, because we get daily, so we get indication of which way they go, but we don't have our metal balances, that usually is a lagging metric that we get, you know, a week or two into the next month.
Jonathan Cashel: Oh, Hi, Jonathan Cashel.
Speaker Change: Question is I was just wondering whether you might be willing to share just an update on April around the ground. Obviously April is now finished and whether you might have thought.
Speaker Change: Numbers are different.
Speaker Change: Assets, you might be willing to share maybe just recovery at <unk>.
Speaker Change: Castle Quest to you.
Speaker Change: Yeah, like so as far as metal balances go recoveries.
Speaker Change: Can't give those yet because we get daily so we get indication of which way. They go but we don't have our metal balances thought usually it's a lagging metric that we get you know a week or two into the next month, but.
Cashel Meagher: But I can speak that more or less, our performance in Q1 has been repeated in April, and the throughputs are hitting sort of design capacities, as we sort of did in Q1 at Mantos Blanco, Cemento Verde, and of course, no one talks about Cozumel, but it's steady as it goes, and it continues to perform as designed. The way I would sort of describe Pinto Valley is sort of, we've sort of, we had a couple unplanned events again, where we had a little, while we exited Q1 at 53,000 tonnes a day, we rolled back maybe to about 50,000 tonnes a day in April, so, but now the plant's up and going again.
Speaker Change: But I can speak that more or less our performance in Q1 has been repeated in April and.
Speaker Change: The throughput are hitting sort of design capacities. So we sort of did in Q1.
Speaker Change: At Mantas Blancos meant to Verde and of course, no one talks about cozman, but it's steady as it goes and it continues to perform as designed.
Well the way I would sort of describe Pinto valley is sort of we've sort of.
Speaker Change: We had a couple of unplanned events again, where we had a little well we exited Q1 at 53000 tonnes a day, we rolled back maybe to about 50000 tons a day in April so.
Speaker Change: But now the plants up and going again.
Cashel Meagher: So, a little bit of a stutter step there at Pinto Valley, but the other assets are performing as designed. Okay, thank you very much.
Speaker Change: So a.
Speaker Change: A little bit of a stutter step there at Pinto valley, but the other assets are performing as designed.
Speaker Change: Okay. Thank you very much that's very helpful.
Emerson Vera: That's very helpful. And another question, I just note that within Manteverde, the cathode cost guidance is, you know, 410, 440 a pound. Obviously, the world economy is more uncertain, the copper outlook more uncertain as we stand here today. I'm just wondering, what would happen if you decided to maybe cease cathode production? You know, is that the true cost of cathode? Or, you know, just noting that the site costs obviously, including the sulphides, is a lot lower and you're making cash overall at the site. And I'm just trying to work out, I guess, how you might run your business in a lower copper price environment where we would see one.
Speaker Change: Another question I was just not the.
Speaker Change: And then <unk>.
Speaker Change: The cost guidance is <unk> 40, <unk> 40, a pound obviously the world economy is more on southern copper outlook for them.
Speaker Change: As we stand here today.
Speaker Change: Wondering what would happen if you decided to maybe six cathode production is that the true cost of cathode or and.
Speaker Change: And I'm, just noting that the soft costs, obviously, including the sulfides is a lot lower than youre, making cash over all of the sites and I'm just trying to work out I guess how are you.
Speaker Change: Mot run your business in a lower copper price environment, where we're going to see one thank you.
Speaker Change: Yeah. So it's a really good question.
John MacKenzie: Yeah, so it's a really good question. And, you know, I think. Today, the vast majority of our cash flows is obviously now going to be coming from the sulfides. You know, we do actually have the luxury where we can, should we choose to sort of wind back oxide production if we feel it's not going to be making a margin. Obviously, the first quarter at Montevideo was higher cost just because we were in some lower grade areas and we had some maintenance, but the other risk mitigation we took is we knew from our budgeting process that Montevideo cap loads were going to be in that sort of range which we mentioned.
Speaker Change: Yes, I think so.
Speaker Change: The vast majority of our cash flows is obviously not going to be coming from the from the sulfides.
Speaker Change: We do actually have the luxury where we can should we choose to sort of wind back oxide production. If we feel it's not going to be making a margin.
Speaker Change: Obviously, the first quarter with much of it it was higher cost just because we have some lower grade areas.
Speaker Change: And we had some had some maintenance.
Speaker Change:
Speaker Change: Other risk mitigation, we took because we knew from our budgeting process.
Speaker Change:
Speaker Change: Months of added Capex, we're going to be in that sort of range, which we we mentioned so we actually are.
John MacKenzie: So, we have a sort of overall general policy that we don't hedge unless it specifically makes sense for risk mitigation during the project construction or if we've got some very high cost production. This year, that was the case for Montevideo's cap load. So, we have hedged pretty much most of that production out with zero cost collars I think between $4.15 and $4.85 or $4.90. So, you know, we've sort of locked in the margin that we're making there. And we're locked in to make sure we're not losing money on on that production. And as we open up the sulphides, we're also finding we're opening up kind of more oxide and that that creates opportunity for us as well.
Speaker Change: We haven't sort of overall general policy that we don't hedge copper but.
Speaker Change: Yes.
Speaker Change: Specifically makes sense for risk mitigation during the project construction.
Speaker Change: If you have got some very high cost production.
Speaker Change: This year that was the case for four months of it is capex. So we have here.
Speaker Change: Pretty much most of that production outs.
Speaker Change: Zero cost collars I think between 450 and then.
Speaker Change: 485, and 490 <unk>.
Speaker Change: So we.
We are sort of locked in the margin.
Speaker Change: That we're making there.
Speaker Change: And locked in to make sure we're not losing money on that production.
Speaker Change: As we open up the sulfides. We are also finding we are opening up kind of more oxides.
Speaker Change: Great opportunity for us as well so.
Raman Randhawa: So You know, this is something we constantly monitor. One of the kind of restrictions we have a little bit is we need to pretty much on an annual basis lock in our acid purchases, sulfuric acid purchases. So once we've done that, you know, that kind of. not totally. We don't lock all of it in, we lock about two-thirds of it in. But it does mean that's the amount of oxide production that we've sort of committed to for the next 12 months. But obviously, that is the major cost element in generating that copper. And so we're able to have a pretty good idea as to what it's going to cost us.
Speaker Change: And it is something we constantly monitor.
Speaker Change: What are the kind of restrictions, we have a little bit as we need to pretty much on an annual basis lock in all asset instead of a pitch.
Speaker Change: Purchases sulphuric acid purchases.
Speaker Change: So once we've done that.
Speaker Change: That kind of.
Speaker Change: To not totally Brad lock all of it and we'll talk about two thirds of it in.
Speaker Change: It does it does mean that that's the amount of oxide production that we would sort of committed to for the next 12 months.
Speaker Change: But obviously that is the major cost elements in generating that copper.
Speaker Change: And so we're able to have a pretty good idea as to what it's going to cost us and hence.
Raman Randhawa: And hence, you know, make sure we We sort of protect ourselves in the downside, but leave ourselves the upside in terms of an opportunity for some additional margin. Raman, I don't know if there's anything you want to add to that. Yeah, thank you. Exactly.
Speaker Change: Make sure we.
Speaker Change: We.
Speaker Change: Jakes ourselves on the downside, but leave ourselves see upsides in terms of opportunity because of additional margin.
Robin: Robin I don't know if there's anything you want to add to that.
Speaker Change: Okay.
Speaker Change: No I was just down to I think your question. Initially was like is that guidance range kind of incremental basis, that's kind of sharing the mining costs. If you were truly word it kind of shut off the oxide.
Speaker Change: There are.
Speaker Change: No.
Speaker Change: True incremental basis. So there are some mining costs at our split between oxide and sulfide cash costs. If you only ran the sulfide you would see that costs go up slightly so that on an incremental basis actual cash costs were probably a little bit lower than the guidance just on the allocation basis.
Speaker Change: Yeah. Thank you exactly I mean, both of you have got to the answer I was looking for thank you.
Raman Randhawa: I mean, both of you have got to the answer I was looking for. Thank you.
Speaker Change: Your next question comes from James Mccutcheon from Citi.
Kate Mccutcheon: Your next question comes from Kate McCutcheon from Citi, please go ahead. Oh hi, evening. Just a couple of quick ones. So you had the QORES payment come out this quarter and you flagged the Minto obligations this year. Can you just call out any other cash outflows to come out over the year and also what do those Minto outflows sort of look like?
Speaker Change: Go ahead.
Speaker Change: Hi evening, just a couple of quick ones. So you had the chorus payment come out this quarter.
Speaker Change: And you flagged Midtown obligations. This year can you just call out any other cash outflows to come out over the year and also what do you.
Speaker Change: The main chart out play sort of look like throughout the year.
Robin: Sure Robin do you want to take that one.
Raman Randhawa: Raman, do you want to take that one? Yeah, I think the quarters was a big one. And we had this Anami royalty that we bought back this quarter. The rest of the year, we don't really have any other large one-offs. The mental, I think the short term next 12 months is about $17-18 million US. So you divide that by four quarters, right? So it's like four or $5 million. coming out.
Robin: Yes, I think the quarters was a big one and then we had the tsunami royalty that we bought back this quarter.
Robin: The rest of year, we don't really have any other large one offs. The minto I think the short term next 12 months is about $17 million to $18 million U S.
Robin: You divide that by four quarters right. So it's like $45 million.
Robin: Coming up but other than that no. Other one offs you should see it.
Raman Randhawa: But other than that, no other one-off issues. Okay, excellent.
Robin: Okay excellent and then just the nvme throughput opportunity that you spoke about earlier on the call before that Capex spend with the permitting I think youre expecting that maybe with Neely.
John MacKenzie: And then just the MVO throughput opportunity that you spoke about earlier on the call before that CapEx is spent. With the permitting, I think you're expecting that mid-year, we're nearly there, May. What is the update on the timing there or where you're Yeah, that's a good question.
Robin: What is the update on the timing that that presents.
Speaker Change: Yeah. That's a good question and maybe I'll ask Kessel just too. So I think we're very confidence about it but castle Joan just talk through sort of where we are and that type of thing protocols.
Cashel Meagher: And maybe I'll ask Cashel just to talk. I think we're very confident about it. But Cashel, do you want to talk through sort of where we are in that permitting process? Yeah, so we've gone through some Q&A periods, I think two back and forth with the the administrative departments that are handling the approvals. So, typically, we've been told under the process, because we submitted it sort of mid or late May, it was supposed to be 12 months, but we've sort of been telling everybody June or July, the middle of the year, simply because, you know, things sometimes take longer than they should.
Speaker Change: Yeah, So we've gone through some Q&A.
Speaker Change: Q&A periods, I think to back and forth with the the administrative departments that are <unk>.
Speaker Change: Handling the approvals.
Speaker Change: So typically we've been told under the <unk>.
Speaker Change: Process, because we submitted it sort of mid or late may it was supposed to be 12 months, but.
Speaker Change: But we've sort of been telling everybody June or July in the middle of the year simply because you know things sometimes take longer than they should so we're still expecting it all or indications in communications with them.
Cashel Meagher: So, we're still expecting it. All our indications and communications with the various authorities are indicating that it'll be expected, as expected, in the middle of the year, and we've answered all their queries and questions. So, we're looking forward to receiving it, and then to be able to utilize the installed capacity we have, and then the modifications and some of the metrics we see out of MVO, which is a terrific return on the capital we'll import.
Speaker Change: The various authorities are indicating that it'll be expected as expected in the middle of the year and we've answered all their queries and questions. So we're looking forward to receiving it and then to be able to utilize the installed capacity. We have and then the modifications and some of the metrics, we see out of <unk>, which is a terrific return.
Speaker Change: On the capital will import.
Speaker Change: Okay cool.
Speaker Change: <unk>.
Speaker Change: Your next question comes from Emerson.
Emerson Vera: Your next question comes from Emerson Vera from Goldman Sachs, please go ahead. Hello guys, good afternoon. Thank you for the opportunity. So I got two questions. The first one is on Pinto Valley, just running back of the envelope calculations here. I mean, for the mine to deliver on the upper range of the guidance in terms of CO1 cash cost, you would have to be running in the lower end of the guidance costs for the coming quarters. So just wanted to understand what can you think of Pinto Valley's CO1 cash costs compared to the guidance? Is it more likely that we see that figure reaching the top?
Speaker Change: Goldman Sachs.
Speaker Change: Please go ahead.
Speaker Change: Hello, guys. Good afternoon, taking four for Deborah acuity. So I've got two questions. The first one is on Pinto Valley.
Speaker Change: So running in back of the envelope calculations here.
Speaker Change: I mean for data for the mine to deliver on the upper range of the guidance in terms of Q1 cash cost you would have to be running in the lower end of the guidance cost for the upcoming quarters. So just wanted to understand what can we assume cost beta valleys tier one.
Speaker Change: <unk> cash costs.
Speaker Change: Compared to the guidance.
Speaker Change: Is it more likely that we see that figure reaching the top.
Emerson Vera: and up the garden. And even so, considering the potential cost increase due to the tariffs discussion.
Speaker Change: And the guidance.
Speaker Change: And they've been so considering that potential cost increase.
Speaker Change: Due to the dark kitchen.
Emerson Vera: So that's the first question.
Speaker Change: That's the first question and then the second one would it be.
Cashel Meagher: And then the second one would be on cash flow generation. You guys just mentioned that there was a slight increase in net debt on a quarter-over-quarter basis, and working capital was one of the reasons for that. So I just want to understand if that working capital dynamics should improve going forward. And then considering the ramp-up in prediction and lower costs, we should finally see net debt decreasing going forward. Thank you. Thanks, Samson. And on the first question, I want to ask Cashel to respond. I think it's very much a story of grade and throughput for Pinsa Valley as to why we confidence in the cost.
Speaker Change: Cash flow generation.
Speaker Change: You guys just mentioned that there was a slight increase in net debt.
Speaker Change: On a quarter over quarter basis, and working capital.
Speaker Change: It was one of the reasons for that so just want to understand.
Speaker Change: That working capital dynamics should improve going forward and then considering the ramp up in production and lower costs, we should finally see.
Speaker Change: Yeah.
Speaker Change: Net debt decreasing going forward.
Speaker Change: Thank you.
Speaker Change: Okay.
Speaker Change: Thanks.
Speaker Change: On the first question I want to ask castle to respond I think.
Speaker Change: I think it's very much a story of grade and throughput for Pennsylvania as to why are we confident in the cost.
Raman Randhawa: I'll ask Cashel to talk to that. And then I'll ask Raman just to respond on sort of what our expectations are in terms of bringing the working capital number down. Yeah, so it's, we've been to Valley, it's volume driven. One of the big variances or opportunities to reduce the cost per pound is the grade. And the grade in the first quarter is the lowest grade that we've budgeted to be mining this year. And then the grade goes up. And with that and improvements on throughput, we expect the cost unit costs to come down and fall within the guidance range.
Speaker Change: Cash, let's talk to that and then I'll ask Robin just to respond on sort.
Speaker Change: Sort of what our expectations are in terms of bringing the working capital number down.
Speaker Change: Yes.
Speaker Change: We've been to valley, it's volume driven one of the big.
Speaker Change: Variances.
Speaker Change:
Speaker Change: Opportunities to reduce the cost per pound is is the grade and the grade in the first quarter.
Speaker Change: It's the lowest grades that we've budgeted to be mining this year and then the grade goes up and with that and improvements on throughput. We expect the cost unit cost to come down and fall within the guidance range. So we.
Raman Randhawa: So we sort of have been sort of signaling that. I do know that when we put out our guidance, we put out a one number for the 12 months, but there is a sort of profile to the grade. And we also have communicated that our improvements incremental over the year will increase the throughput at Pinto Valley. So the combinations of those two will bring down the unit cost. And just on the net debt, like the biggest variance this quarter while it kind of went up was those one offs with Corus and Anami. So if you take those out, net debt comes flat, and then working capital is a function, you know, in quarter.
Speaker Change: We sort of have been sort of signaling that I do know that when we put out our guidance, we put out a one number for the 12 months, but there is a sort of a profile to the grade and we also have communicated.
Speaker Change: Communicated that our improvements are.
Incremental over the year will increase.
Speaker Change: Throughput at Pinto Valley, So the combinations of those two will bring down the unit costs.
Speaker Change: And just on the net debt.
Speaker Change: Like the biggest variance this quarter, while it kind of went up puzzles, one offs with Corus and an army.
Speaker Change: So if you take those out net debt post flat then working capital is a function.
Speaker Change: Quarter Mento Virtus sulfides.
Raman Randhawa: Mantelverde sulfides, obviously are new in terms of the sales for this year. And there's a couple of different customers they go to, and some of them have a call a longer sales like, but I think you'd see in this quarter us receiving obviously that build up of receivable. So you should see that kind of ebb and flow, but it should turn back to positive this quarter.
Speaker Change: New.
Speaker Change: In terms of the sales for this year and Theres a couple of different customers. They go to and some of them have it.
Speaker Change: Call it a longer sales like but I think you'd see in this quarter us receiving obviously of that buildup of receivables. So you should see that kind of ebb and flow, but it should turn back to positive this quarter.
Emerson Vera: Alright, thank you very much, guys.
Speaker Change: Alright, Thank you very much guys.
Dalton Baretto: Your next question comes from Dalton Baretto from Connaport, please go ahead. Yeah, thanks for taking my follow up. Just one quick one from me. We saw a Mitsubishi Materials sell back their stake in another mine up in BC to one of your peers. And I'm just wondering if there's an opportunity for you to buy back their stake in Etta Verde. Yeah, thanks, Dalton. Look, we do have a rather first offer to acquire the estate should they ever wish to sell it. I think Monteverde is an absolutely spectacularly good asset and so we'd obviously love to increase our shareholding units to sort of the maximum that we could.
Jonathan Miranda: Your next question comes from Jonathan Miranda from Canaccord. Please go ahead.
Jonathan Miranda: Yeah. Thanks for taking my follow up.
Jonathan Miranda: Just one quick one from me we saw.
Jonathan Miranda: Mitsubishi materials sell back their stake in another mine up in BC to one of your peers and I'm. Just wondering if there is an opportunity for you to buyback cop their stake in <unk>. Thank you.
Jonathan Miranda: Yeah. Thanks, Jonathan.
Jonathan Miranda: Look we do have a right of first offer two to acquire stakes should they ever wished to sell it.
Jonathan Miranda: Look I think much of it is an absolutely spectacularly good assets and so we would obviously like to increase our shareholding that she should have the maximum that we could.
John MacKenzie: On the other hand, I'd say MMC have been really fantastic partners and we can't really speak on their behalf in terms of, you know, if they would have any intention of, you know, exiting their stake. Certainly in my discussions with them, they state that this is their most core asset in their portfolio. They're super happy with it. So I think, you know, it's been a really great partnership and I suspect that's going to continue for a long time to come. Great, thanks. As a reminder, if you wish to ask a question, please press R1.
Speaker Change: And the other hand, I'd say MMC have been really fantastic partners.
Speaker Change: And we can't really speak on their behalf in terms of you know what I'd say, we'd have any intention is.
Exiting this stake Sydney.
Speaker Change: In my discussions with them. They they state that this is the most core assets in their portfolio. They are super happy with it.
Speaker Change: That's been a really great partnership and.
Speaker Change: I suspect that's going to continue for a long time to come.
Speaker Change: Great. Thanks Chuck.
Speaker Change: Okay.
Speaker Change: As a reminder, if you wish to ask a question. Please press star one.
Jonathan: There are no further questions at this time I will now turn the call over to Jonathan.
Operator: There are no further questions at this time.
John MacKenzie: I will now turn the call over to John MacKenzie. Thank you, operator. It's been an honor to serve as the Chief Executive Officer of Capstone Copper for the past three years. I look forward to continuing to serve the company and all stakeholders as chair of the Board of Directors following our AGM tomorrow. Cashel will become the new CEO of Capstone and I have every confidence that he has the experience and capabilities to lead our company to its next phase of transformational growth. We look forward to updating you in late July with our Q2 results. Until then, stay safe and feel free to reach out to Daniel, Michael or Claire if you have any further questions.
Speaker Change: Okay. Thank you.
Thank you operator.
Speaker Change: It's been an honor to serve as the Chief Executive Officer of Capstone cutback for the past three years.
Speaker Change: I look forward to continuing to serve the company and all stakeholders as chair of the board of directors following our AGM tomorrow.
Speaker Change: Castle will become the new CEO of Capstone and I have every confidence that he has the experience and capabilities to lead our company through its next phase of transformational growth.
Speaker Change: We look forward to updating you in late July with our Q2 results.
Speaker Change: Until then stay safe and feel free to reach out to Daniel Michael or Clay. If you have any further questions.
John MacKenzie: Thank you for your continued support and have a good day.
Speaker Change: Thank you for your continued support and have a good day.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Operator: Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may not.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yeah.