Q1 2025 Lundin Mining Corp Earnings Call
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Operator: Good day and thank you for standing by.
Speaker Change: Good day, and thank you for standing by and welcome to the Lundin mining first quarter 2025 financial results Conference call.
Operator: Welcome to the Lundin Mining First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 101 again.
Speaker Change: At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Speaker Change: To ask a question during the session you will need to press star one one on your telephone.
Speaker Change: Here, an automated message advising your hand is raised.
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Operator: Please be advised that today's conference is being recorded.
Speaker Change: Please be advised that today's conference is being recorded.
Jack Lundin: I would now like to hand the conference over to your first speaker today, Jack Lundin, President and CEO. Please go ahead.
Speaker Change: I would now like to hand, the conference over to your first speaker today, Czech lending President and CEO. Please go ahead.
Jack Lundin: Good morning, and thank you everyone for joining Lundin Mining's first quarter 2025 conference call. Yesterday we reported our operating and financial results for Q1. A copy of our press release containing the details of the quarter and a presentation are available on our website, where a replay will also be made available. All figures presented are in US dollars, unless otherwise noted. I would like to remind everyone that yesterday's results and certain comments on the call include forward looking information.
Speaker Change: Good morning, and thank you everyone for joining Lundin Mining's first quarter 2025 conference call yesterday, we reported our operating and financial results for Q1 copy of the press release containing the details of the quarter and the presentation are available on our website, where a replay will also be.
Speaker Change: Available.
Speaker Change: All figures presented are in U S dollars.
Speaker Change: Otherwise noted.
Speaker Change: I would like to remind everyone that yesterday's results and certain comments on the call include forward looking information I will draw your attention to the cautionary statements on this slide for reference and our latest relevant filings on SEDAR.
Jack Lundin: I will draw your attention to the cautionary statements on this slide for reference and our latest relevant filings on CDAR.
Jack Lundin: On the call with me today, I'm joined by my colleagues Teitur Poulsen, our Executive Vice President and Chief Financial Officer, and Juan Andres Morel, our Executive Vice President and Chief Operating Officer. We will be presenting our figures from continuing operations Candelaria, Casaronis, Chapada, and Eagle. Touching on the highlights from Q1, quarterly copper production for the company was 76,774 tons, while gold production was 31,849 ounces, which keeps us on track to meet our annual guidance of between 303 to 330,000 tons of copper and 135 to 150,000 ounces of gold. The operational performance supported by strong gold prices in the quarter translated into another quarter of almost $1 billion in revenue, $388 million in adjusted EBITDA, and $337 million in adjusted operating cash flow, which excludes the impact of a working capital build of $215 million.
Speaker Change: On the call with me today I'm joined by my colleagues tighter Paulson, our executive Vice President and Chief Financial Officer, and panel dries morale, our executive Vice President and Chief operating Officer.
Speaker Change: We will be presenting our figures from continuing operations candle area, Casoron us chill powder and Eagle.
Speaker Change: Touching on the highlights from Q1 quarterly copper production for the company with 76774 times, while gold production was 31849 ounces, which keeps us on track to meet our annual guidance of between 303 to 330000 tonnes of copper and one <unk>.
Speaker Change: 135 to 150000 ounces of gold.
Speaker Change: The operational performance supported by strong gold prices in the quarter translated into another quarter of almost $1 billion in revenue $388 million and adjusted EBITDA, and 337 million and adjusted operating cash flow, which excludes the impact of a working capital build of two <unk>.
Speaker Change: $15 million.
Jack Lundin: When we released our annual guidance in January, we introduced a consolidated cash cost range. For the quarter, we produced copper at $2.07 a pound, which is in the lower end of our cash cost guidance range for the year between $2.05 and $2.30 a pound. In addition to the operations performing as per plan, the company executed on a number of strategic initiatives that I will touch on in the next slide.
Speaker Change: When we released our annual guidance in January we introduced a consolidated cash cost range for the quarter, we produced copper at $2.07, a pound, which is in the lower end of our cash cost guidance range for the year between 205 and $2 30 a pound.
Speaker Change: In addition to the operations performing as per plan. The company executed on a number of strategic initiatives that I will touch on in the next slide.
Jack Lundin: On April 16th, outside the current earnings period, we successfully completed the sale of our European assets Nevis Corvo and Zink Rubin for cash proceeds of $1.4 billion US dollars. Following receipt of those proceeds, we paid off and cancelled our term loan of $1.15 billion and repaid a portion of the debt drawn on our revolving credit facility, all of which has significantly strengthened our balance sheet in support of our future growth opportunities.
Speaker Change: On April 16th outside the current earnings period, we successfully completed the sale of our European assets nervous Corvo zinc Ruben for cash proceeds.
Speaker Change: One 4 billion U S dollars.
Speaker Change: Following receipt of those proceeds we paid off and canceled our term loan of 1.15 billion and repaid a portion of the debt drawn on our revolver credit revolving credit facility all of which are significantly strengthened our balance sheet in support of our future growth opportunities.
Jack Lundin: In March, the company entered into an option agreement with Talon Metals to acquire a highly prospective exploration project called Boulder Dash, adjacent to the company's Eagle Mine. This transaction provides a low-risk, high-potential opportunity that could extend the mine life at Eagle if exploration continues to be successful, improving out an economic ore body.
Speaker Change: In March the company entered into an option agreement with talent metals to acquire a highly prospective exploration project called balderdash adjacent to the Companys Eagle mine.
Speaker Change: This transaction provides a low risk high potential opportunity that could extend the mine life at Eagle exploration continues to be successful improving out in economic ore body.
Jack Lundin: During the quarter, Lundin Mining also announced a new shareholder distribution policy that commits an annual return of approximately $220 million per year to shareholders. This is in line with previous annual distributions, but we have increased the level of share buybacks and adjusted the dividend to maintain the set amount. On an annualized basis, we are now paying a dividend yield, which is in line with our peers.
Speaker Change: During the quarter Lundin mining also announced a new shareholder distribution policy that commenced an annual return of approximately $220 million per year to shareholders.
Speaker Change: This is in line with previous annual distributions, but we have increased the level of share buybacks and adjusted the dividend to maintain the set amount on an annualized basis. We are now paying a dividend yield which is in line with our peers.
Jack Lundin: In February, we updated our mineral resource and mineral reserve statement for our operating assets, where we were able to successfully offset mine depletion and replace reserves associated with the sale of Nevis Corvo and Zinc Reuven.
Speaker Change: In February we updated our mineral resource and mineral reserve statement.
Speaker Change: For our operating assets, where we were able we were able to successfully offset mine depletion and replace reserves associated with the sale of beverage Corvo and the group.
Jack Lundin: This past Monday, we announced the impressive initial mineral resource estimate for the Vicuña project, outlining the world's largest advanced stage copper gold silver development project, of which Lundin Mining owns 50% alongside our partnership with BHP. On January 15th, we closed the transaction to jointly acquire Philocorp, and the mineral resource announcement is the first major milestone for the joint venture. It forms the basis for our upcoming integrated technical report that will continue to outline a multi-phase development plan for the district in the emerging Argentinian mining province of San Juan.
Speaker Change: This past Monday, we announced the impressive initial mineral resource estimate.
Speaker Change: The Virginia project outlining the world's largest at that stage copper gold silver development project of which lundin mining on 50% alongside our partnership with BHP.
Speaker Change: On January 15th we closed the transaction to jointly acquire Philo Court and the mineral resource announcement is the first major milestone for the joint venture.
Speaker Change: One is the basis for our upcoming integrated technical report that will continue to outline a multi phase development plan for the district and the emerging Argentinian mining province of San Juan.
Juan Andres Morel: I will now hand the call over to Juan Andres, our COO, to walk us through in more detail the company's production results. Thank you, Jack. And good morning, everyone. The company is tracking to production guidance on consolidated basis for all metals in 2025. As Jack mentioned, copper production for continuing operations for the company was 77,000 tons, and gold production was 32,000 ounces for the border. At Candelaria, production was 37,000 tons of copper and 21,000 ounces of gold. During the quarter, throughput was positively impacted by softer than anticipated ore from sections in the phase 11 in the open.
Speaker Change: I will now hand, the call over to Juan Andres, our CFO to walk us through in more detail the companys production results.
Juan Andres: Thank you Jack and good morning, everyone.
Juan Andres: The company is tracking to production guidance on consolidated basis for all metals in 2025.
Juan Andres: Jack mentioned copper production for continuing operations for the company was 77000 tonnes and gold production was 32000 ounces for the quarter.
Juan Andres: At <unk> production was 37000 tons of copper and 21000 ounces of gold.
Juan Andres: During the quarter throughput was positively impacted by softer than anticipated all from sectors in the face of 11 in the open pit. This is expected to continue into the first part of the second quarter.
Juan Andres Morel: This is expected to continue into the first part of the second part. Overall, production at Candelaria is striking to guidance. Cacerones has performed well this quarter, and throughput was positively impacted by improvements to operations from the full potential program underway. During the quarter, the mill processed 8.7 million tons, which is a quarterly record for Cacerones. In addition, cathode production was strong at 6,500 tons due to continued benefits from ore material being placed on the pads and higher aggregation rates on the dumbledge. Casadones is tracking to guidance for the full year. Production at Chapada will be modestly weighted to the second half of the year.
Juan Andres: Overall production Candelaria is striking to guidance.
Juan Andres: <unk> has performed well this quarter and throughput was positively impacted by improvements to operations from the full potential program underway.
Juan Andres: During the quarter the mill processed eight 7 million tons, which is a quarterly record forecasted on it.
Juan Andres: In addition, cathode production was strong at 6500 tonnes due to continued benefits from all material being placed on the pads and higher <unk> rates on the dump Leach <unk> is tracking to guidance for the full year.
Juan Andres: Production at <unk> will be modestly weighted to the second half of the year during the quarter, Japan produced 8900 tonnes of copper and 11000 ounces of gold.
Juan Andres Morel: During the quarter, Chapada produced 8,900 tons of copper and 11,000 ounces of gold. Results were driven by an increase in stockpiled material to the mill, which led to lower recoveries for the period. Grades on copper recoveries are expected to increase in the second half of the year due to higher contributions from fresh ore and less stockpile material process. Chepada is tracking to guidance for the year for both copper and gold. At EGLE, nickel production was 2,300 tons, and copper production was 2,100 tons for the quarter. Ramp rehabilitation at EGLE East has been completed after the fall of ground in Q2 2024.
Juan Andres: <unk> were driven by an increase in stockpile material to the mill, which led to lower recoveries for the period.
Juan Andres: Rates in copper recoveries are expected to increase in the second half of the year due to higher contributions from fresh ore unless stockpile material process.
Juan Andres: Japan is tracking to guidance for the year for both copper and gold.
Juan Andres: At Eagle Nickel production was 2300 tons and copper production was 2100 tons for the quarter.
Juan Andres: Ramped rehabilitation at Eagle East has been completed after the fall of ground in Q2 2020 for a normal production levels are expected for the remainder of 2025.
Juan Andres Morel: And normal production levels are expected for the remainder of 2025. Mine sequencing and grades are expected to normalize in Q2, which will support the annual guidance forecast for the year. In the first quarter, we experienced impacts from winter weather that affected ore haulage, which affected mining rates and mill throughput. Overall, we have had a good start of the year, and production is tracking to guidance for 2025.
Juan Andres: Mine sequencing and grades are expected to normalize in Q2, which will support the annual guidance forecast for the year in the first quarter, we experienced impacts from winter weather that affected the ore haulage, which affected mining rates and mill throughput.
Juan Andres: We have had a good start of the year and production is tracking to guidance for 2025.
Teitur Poulsen: I will now turn the call over to Teitur to provide the summary on our financial results.
Speaker Change: I will now turn the call over to tighter to provide a summary on our financial results.
Teitur Poulsen: OK, thank you, Hkan Gabrielsson, and good morning, everyone. So before going into the numbers, a reminder that for the first quarter 25, we continue to report our European assets as discontinued operations. and the balance sheet items from these subsidiaries will be reported as assets and liabilities held for sale. As previously mentioned, the transaction closed on 16th of April, and as such, our reporting for the second quarter will also include the contribution from our European assets for the first 15 days of the second quarter as discontinued operation.
Tighter: Okay. Thank you Pablo and good morning, everyone.
Tighter: So before going into the numbers I reminded us for the first quarter 'twenty five we continue to report our European assets.
Tighter: Continued operations.
Tighter: And the balance sheet items from these subsidiaries will be reported as assets and liabilities held for sale.
Tighter: As previously mentioned the transaction closed on 16th of April.
Tighter: And as such our reporting for the second quarter will also include the contribution from our European assets for the first 15 days after the second quarter as discontinued operations.
Teitur Poulsen: So the company generated $964 million in revenue from continuing operations. The quarter benefited from certain delayed shipments at Casa Rona, around 40,000 metric tons of concentrate, which slipped into January and contributed around 80 million to our revenue generation for the first quarter. With the sale of our European assets, our revenue mix is now even more geared towards copper, with copper generating 84% of the quarter's revenue, compared to last year when copper made up around 76%. Approximately 95% of our revenue now comes from our South American assets, with Candelaria and Caserola being the largest contributors.
Tighter: So the company generated 964 million in revenue from continuing operations.
Tighter: Quarter benefited from certain delayed shipments after casserole that around 40000 metric tonnes of concentrate.
Tighter: Which slipped into January and contributed around $80 million to our revenue generation for the first quarter.
Tighter: With the sale of our European assets, our revenue mix is now even more geared towards copper copper generating 84% of the quarter's revenue.
Tighter: Compared to last year, when copper made around 76%.
Tighter: Approximately 95% of our revenue now comes from our South American assets.
Tighter: Candelaria in Colorado being the largest contributors.
Teitur Poulsen: Turning to slide 13. As mentioned previously, with the delayed shipments from Casa Rona, this benefited the volume of copper sold during the quarter. On a consolidated basis, we did, in fact, sell around 5% more copper in the quarter than we produced. The total copper sold amounted to 81,000 tons during the quarter at a realized price of $4.63 per pound of copper and 30,000 ounces of gold at $3,350 per ounce.
Tighter: Turning to slide 13.
Tighter: As mentioned previously with the delayed shipments from customer on that this benefit.
Tighter: The volume of copper sold during the quarter on a consolidated basis, we did in fact sell around 5% more copper in the quarter than we produced.
Tighter: The public coffers sold amounted to 81000, Thomas during the quarter at a realized price of $4 63.
Tighter: Copper and 30000 ounces of gold at $3350 per ounce.
Teitur Poulsen: or the impact of streaming and including adjustments from prior period sales. This translated into, as I said, $964 million for the quarter in revenue, which also includes $45 million positive adjustments from prior period provisional pricing on copper and gold. And as you can see on the graph to the right, This quarter was the highest revenue generation from our continuous operations over the last five quarters. A portion of our revenue for the quarter is derived from volumes sold under provisional prices. The final prices for these volumes are subject to adjustments and will typically be determined in the following quarter.
Tighter: Before the impact of streaming and including adjustments from prior period sales.
Tighter: Yeah.
Tighter: This translated into as I said $964 million.
Tighter: Quarter in revenue, which also includes four to 5 million positive adjustments from prior periods provisional pricing on copper and gold.
Tighter: And as you can see on the graph to the right.
Tighter: Quarter was your highest revenue generation.
Tighter: Our continuum continuous operations over the last five quarters.
Tighter: <unk> of our revenue for the quarter is derived from volumes sold on their provisional pricing.
Tighter: The final prices for produce volumes are subject to adjustments and will typically be determined in the following quarter.
Teitur Poulsen: At the end of the first quarter, just over 80,000 tons of copper were provisionally priced at $4.43 per pound. with final pricing still pending.
Tighter: At the end of the first quarter just over 80000 tonnes of copper were provisionally priced at.
Tighter: $4 43 per pound.
Tighter: Final pricing is still pending.
Teitur Poulsen: Turning to slide 14. Production costs from continuing operations totaled 517 million for the quarter, which is slightly higher than the costs recorded for the previous couple of quarters. This quarter includes the costs associated with the change in inventory at Casaronis in relation to the previously mentioned delayed shipments of concentrate, in addition to recording higher production costs at EGLE.
Tighter: Turning to slide 14.
Tighter: Production costs from continuing operations totaled $517 million for the quarter, which is slightly higher than the costs recorded for the previous couple of quarters.
Tighter: This quarter includes the costs associated with the change in inventory at customer all of this in relation to the previously mentioned delayed shipments of concentrate.
Tighter: In addition to recording higher production costs at Eagle.
Teitur Poulsen: In the previous two quarters, a portion of the costs at EGLE were categorized as standby costs, so not reflected in production costs, while ramp rehabilitation work was carried out. But with EECL now having returned to full production, all costs incurred are now charged through the production cost line, and thus increasing our consolidated production costs for the quarter by around 15 to 20 million compared to the previous two quarters. The various total costs have come down from prior quarter due to lower sales volumes, while C1 costs for the quarter are slightly higher compared to previous two quarters as the mine went through higher grade ores during the second half of last year.
Tighter: In the previous two quarters, a portion of the cost at the equal were categorized as standby costs. So much reflected in production costs.
Tighter: Rehabilitation work was carried out.
Tighter: While the vehicle now having returned to full production all costs and cards are now charged to the production cost line and thus increasing our consolidated production costs for the quarter by our owned.
Tighter: $15 million to $20 million compared to the previous two quarters.
Tighter: But the various total costs will come down from prior quarter due to lower sales volumes, while <unk> costs for the quarter are slightly higher compared to previous two quarters as the mine went through higher grade ores during the second.
Tighter: Half of last year.
Teitur Poulsen: Costs at Casa Rona were driven by higher throughputs and an increase in sales volumes from the previously mentioned delayed shipments, while Casa Rona's C1 costs continue to remain fairly stable. At Chapata, our C1 costs for the quarter are somewhat higher than the previous two quarters due to lower salt volumes for copper and gold. Nevertheless, the C1 cost for the quarter remains significantly below guidance of $1.80 to $2 per pound copper for the full year, the continued favorable effects and also due to higher gold prices. On a consolidated basis, as previously mentioned, our receipt bond costs amounted to $2.07 per pound copper, which is towards the bottom end of our guidance of $2.05 per copper to $2.30 per copper.
Tighter: Cost per customer all never driven by higher throughput and an increase in sales volumes from the previously mentioned delayed shipments.
Tighter: The customer on the <unk> costs continue to remain fairly stable.
Tighter: At <unk>, our <unk> costs for the quarter are somewhat higher than the previous two quarters due to lower salt volumes for copper and gold.
Tighter: Nevertheless, this jan costs for the quarter remained significantly below guidance of $1 80 to $2 per pound copper for the full year.
Tighter: <unk> favorable FX and also due to higher gold prices.
Tighter: On a consolidated basis as previously mentioned, our Bom cost amounted to $2 seven per pound copper.
Tighter: Which is towards the bottom end of our guidance of $2 <unk> per copper to $2 target per copper.
Teitur Poulsen: Our costs continue to benefit from weaker local currencies, and our C1 unit costs also continue to benefit from higher gold prices compared to what's assumed in our guidance.
Tighter: Our cost continues to benefit from weaker local currencies and our <unk> unit costs also continued to benefit from higher gold prices compared to what is assumed in our guidance.
Teitur Poulsen: On to slide 15. The total capital expenditure for the quarter were below guidance, primarily due to the deferral of capital projects at Candelaria, including deferrals of the SAG power system upgrade and the deferral of relocating certain electrical lines. as well as lower volume moved at Casa Ronas TSM.
Tighter: On slide 15 to total capital expenditure for the quarter were below guidance, primarily due to the deferral of capital projects at Candelaria.
Tighter: Including deferrals of the stock power system upgrade and the deferral of relocating certain electrical lines.
Tighter: As well as lower volume at the customer wellness TSS.
Teitur Poulsen: These are all expenditure deferrals and are expected to be incurred later in the year. Almost 70% of the sustaining COPEX in the quarter was for stripping and tailing storage development. Lundin Mining's 50% share of capital expenditure related to Ricuña was 43 million, which is tracking slightly above the full year guidance. Higher expansionary capital costs during the quarter were also the result of an opportunistic mineral rights purchase at Candelaria during the quarter.
Tighter: These are all the expenditure deferrals and are expected to be incurred later in the year.
Tighter: Almost 70% after sustaining capex in the quarter for stripping and tailing storage development.
Tighter: We will be mining street, 2% share of capital expenditure related to the courtyard was 43 million, which is tracking slightly above our full year guidance.
Tighter: Yeah.
Tighter: Hi, Eric.
Tighter: Spansion iron copper cost during the quarter or are also the result of fund opportunistic mineral rights purchase at Camden area during the quarter.
Teitur Poulsen: We remain on track for full year guidance with sustaining and expansionary topics of 175 million for the quarter while the total guidance for the year is 735 million.
Tighter: We remain on track for our full year guidance, Mitch sustaining and expansionary capex.
Tighter: $175 million for the quarter, while the total guidance for the year is 700, and <unk> 5 million.
Teitur Poulsen: The first quarter key financial metrics are presented on slides 16 and 17. As mentioned, we generated adjusted EBITDA of $388 million and adjusted operating cash flow of $337 million, which excludes a billed working capital of $250 million during the first quarter. Cash taxes of $43 million also impacted the operating cash flow in the quarter, with a further cash tax installment of $108 million made in April to settle final taxes due in Chile and Brazil for 2024.
Tighter: The first quarter key financial metrics are presented on slides 16 and 17.
Tighter: As mentioned, we generated adjusted EBITDA of $388 million and adjusted operating cash flow of $337 million, which excludes a buildup of working capital was $260 million.
Tighter: During the first quarter.
Tighter: Cash taxes of 43 million also impacted operating cash flow in the quarter.
Tighter: Without further cash tax installment of 108 million made in April to central Tayo taxes due in Chile.
Tighter: So more attracted to Q4.
Teitur Poulsen: Pre-cash flow from operations was $22 million from continuing operations, which includes the working capital build of $215 million. Adjusted earnings were 94 million for the quarter. We finished the quarter in a moderate net debt position of roughly 1.44 billion excluding capital leases, which equates to a leverage ratio of one-time net debt to adjusted EBITDA for continuing operation. The company remains in good financial health with costs trending according to guidance.
Tighter: Okay.
Tighter: Free cash flow from operations was <unk> 2 million from continuing operations, which includes the working capital build of 215 million.
Tighter: Adjusted earnings were 94 million for the quarter.
Tighter: We finished the quarter and a modest net debt position of approximately $1 4 billion excluding capsule.
Tighter: Yes.
Tighter: Our leverage ratio of one times net debt to adjusted EBITDA for continuing operations.
Tighter: The company remains in good financial health with costs trending according to guidance.
Teitur Poulsen: with some potential upside on the cost structure due to the continued weaker local currencies as well as a stronger gold price.
Tighter: With some potential upside on the cost structure.
Tighter: Continued weaker local currencies as well as a stronger gold price.
Teitur Poulsen: Turning to slide 18, with the closing of the Wikunja transaction in January and the closing of the European asset sale in April, there have been a number of cash inflows and outflows impacting our cash flow statement and our net debt position. Reading this chart from left to right, we have already explained the quarterly adjusted operating cash flow, working capital build, and the expenditure on capital items. Closing of Vicuña resulted in a net cash inflow of $79 million with a cash payment to FILA shareholders of $611 million and receipt of cash from BHP for their 50% stake in Jos Maria of $690 million.
Tighter: Turning to slide 18, with the closing of <unk> transaction in January and the closing of the European asset sale in April.
Tighter: Been a number of cash inflows and outflows impacting our cash flow statement and our net debt positions.
Tighter: Breathing discharged from left to right. We have already explained the quarterly adjusted operating cash flow working capital build and the expenditure on capital items.
Tighter: At closing of the courtyard resulted in a net cash inflow of $709 million with a cash payment to feed the shareholders of $611 million and receipt of cash from BHP for therapeutic transit can I was wondering you of $690 million.
Teitur Poulsen: With our recently announced revised shareholder distribution policy, the company has pivoted to do more share buybacks, and the company bought 71 million worth of its own shares during the quarter. Accounting for cash interest and certain other items, the company ended the quarter with a net debt of $1.44 billion.
Tighter: Our recently announced revised shareholder distribution policy of the company has pivoted to do more share buybacks.
Tighter: The company booked $71 million worth of its own shares during the quarter.
Tighter: Accounting for cash interest and certain other items the company entered departure with a net debt of $1 44 visit.
Teitur Poulsen: After Q1, the company completed the sale of the European... assets and received 1.4 billion in proceeds and released to Boletin a cash accumulated cash in default subsidiaries amounting to $84 million. Along the closing of the European asset sale, the company paid off £1.15 billion in term loans as well as repaid £170 million of debt drawn under the Royal Wind Credit Facility. The company also paid out Q4 dividend of just over 50 million and continued to repurchase shares during April. As previously mentioned, we paid a cash tax installment of 108 million in April to settle final taxes due in Chile and Brazil for 2024.
Tighter: After Q1, the company completed the sale of the European.
Tighter: Assets and received $1 4 billion in proceeds and released to believe our cash.
Tighter: Emulated cash.
Tighter: And just hold subsidiaries amounting to $84 million.
Tighter: Along to closing up the European asset sale. The company paid off 1.15 billion in term loans as well as <unk> repaid $170 million of debt strong.
Tighter: Under the revolving credit facility.
Tighter: The company also paid out Q4 dividend of just over $50 million and continued to repurchase shares during April.
Tighter: As previously mentioned, we paid a cash tax installment of $108 million in April two central final tax issue in Chile and in Brazil for 2024.
Teitur Poulsen: giving the company and that position of $262 million as of May 2nd, 2025.
Tighter: Leaving the company.
Tighter: Our net debt position.
Tighter: $262 million as of May 2nd tranches $95.
Jack Lundin: So with that, I will now turn the call back to Jack. Thank you, Teitur.
Jack: So with that I will now turn the call back to Jack.
Jack: Thank you Tyler.
Jack Lundin: During the quarter, as I mentioned, we entered into an earning agreement with Talon Metals to acquire up to 70% ownership in the Boulder Dash property, which is adjacent to our Eagle Mine. Initial drilling at Boulder Dash intercepted 100 meters grading 0.41% nickel and 0.35% copper starting at a depth of approximately nine meters. More recently, drilling has intercepted grades of 2.33% nickel and 2.95% copper, which is in line with the current head grades at EGLE. Lundin Mining has agreed to fund an initial 30,000 meter drill campaign. Following the completion of the 30,000 meters of drilling, the company can decide to fund a feasibility study in exchange for a total ownership of 70%.
Jack: During the quarter as I mentioned, we entered into an agreement with Talon metals to acquire up to 70% ownership in the border Dash property, which is adjacent to our Eagle mine initial drilling at both Boulder Dash intercepted 100 meters grading.
Jack: Four 1% nickel and three 5% copper starting at a depth of approximately nine meters.
Jack: More recently drilling has intercepted grades of 233% nickel and 295% copper which is in line with the current head grades at Eagle.
Jack: Lundin mining has agreed to fund an initial 30000 meter drill campaign.
Jack: Following the completion of the 30000 meters of drilling the company can decide to fund a feasibility study in exchange for a total ownership of 70%.
Jack Lundin: This highly anticipated drilling program is set to start within the coming weeks.
Jack: This highly anticipated drilling program is set to start within the coming weeks.
Jack Lundin: On Monday's webinar, we were able to detail the announcement of the Impressive Vicuña Mineral Resource Estimate. A replay is available on our website, which I encourage the audience to visit. The initial mineral resource has highlighted the Vicuña project as one of the highest-grade, undeveloped, open-pittable copper projects. Its size and scale, not only in copper, validates Vicuña as one of the largest gold and silver resources globally as well. The total measured, indicated and inferred resource contains 38 million tons of copper, 81 million ounces of gold, and just under 1.5 billion ounces of silver.
Jack: On Mondays webinar, we were able to detail the announcement of the impressive <unk> mineral resource estimate a replay is available on our website, which I encourage the audience to visit.
Jack: The initial mineral resource has highlighted that between your project is one of the highest grade undeveloped open pit <unk> copper projects.
Jack: Its size and scale not only in copper validates vicuna as one of the largest gold and silver resources globally as well.
Jack: The total measured indicated and inferred resource contains 38 million tons of copper.
Jack: 1 million ounces of gold and just under one 5 billion ounces of silver.
Jack Lundin: Philo Del Sol and the Vicuña District are poised to develop into a world-class deposit that will support a globally ranked mining complex. Since the initial oxide discovery in 2000, phthalo del sol has emerged as a generational discovery, highlighted by the drilling of the high-grade aurora zone in 2021. Alongside Jose Maria discovered in 2004, it forms the Vicuña project, now representing the largest greenfield copper discovery in the last 30 years. The figure to the bottom of the screen shows resource data collected from SMP Global Platform. This figure shows the relative measured indicated inferred resource size of initial discoveries from 1990 until present day.
Jack: CLO del Sol and the Vicuna district are poised to develop into a world class deposit.
Jack: That will support it globally ranked mining complex.
Jack: Since the initial oxide discovery in 2000, Zillow del Sol has emerged as a generational discovery highlighted by the drilling of the high grade <unk> zone in 2021.
Jack: Alongside Jose Maria discovered in 2004, it forms the Vicuna project now representing the largest greenfield copper discovery in the last 30 years.
Jack: This figure to the bottom of the screen shows resorts data collected from S&P global platform.
Jack: The figure shows the relative measured indicated and inferred resource size of initial discoveries from 1990 until present day.
Jack Lundin: You can see Vicuña as stacking up next to the large world-class mining operations such as Coyoaci, Cerro Verde, and Escondida. The scale is impressive. However, not only the size and scale of Vicuña, but also the elevated grades that exist in the core of the deposits make it truly unique. At Filo del Sol, there is over 600 million tons at 1.14% copper equivalent in the measured and indicated category, containing 4.5 million tons of copper. At Jose Maria there's a near surface high grade core of 200 million tons at 0.73% copper equivalent, containing 1 million tons of copper, which would likely contribute to the initial years of mining.
Jack: You can see the continued stacking up next to the large world class mining operations, such as <unk>, Cerro Verde and Escondida.
Jack: The scale is impressive however, not only the size and scale of the <unk>, but also the elevated grades that exist in the core of the deposits make it truly unique at <unk>.
Jack: <unk>. So all there is over 600 million tonnes at 114% copper equivalent in the measured and indicated category containing $4 5 million tonnes of copper.
Jack: And Jose Maria Theres, a near surface high grade core of 200 million tons at 73% copper equivalent containing 1 million tonnes of copper, which would likely contribute to the initial years of mining.
Jack Lundin: The mineral resource estimate is a key milestone for the district and will form the basis for the integrated technical report that will outline a combined project that is scheduled for completion in the beginning of 2026.
Jack: The mineral resource estimate is a key milestone for the district and will form the basis for the integrated technical report that will outline that a combined project that is scheduled for completion in the beginning of 2026.
Jack Lundin: In summary, Lundin Mining has completed a significant transformation to start the year. Most importantly, our existing operations are performing well and are tracking to full year production guidance across all metals.
Speaker Change: In summary, Lundin mining has completed a significant transformation to start the year. Most importantly, our existing operations are performing well and are tracking to full full year production guidance across all metals.
Jack Lundin: To streamline our portfolio and position the organization with the ability to focus on the key value drivers for our business, we officially launched Vicuña Corp. in partnership with BHP in January. Since then, we have made solid progress in de-risking and confirming the significant growth potential of the Vicuña District, highlighted by the mineral resource estimate, which was released on May 4th. The accompanying technical report will follow within the coming weeks.
Speaker Change: To streamline our portfolio and positioning the organization with the ability to focus on the key value drivers for our business. We officially launched Vicuna Corp in partnership with BHP in January.
Speaker Change: Since then we have made solid progress in de risking and confirming the significant growth potential of the Vicuna district highlighted by the mineral resource estimate which was released on May four.
Speaker Change: The accompanying technical report will follow within the coming weeks.
Jack Lundin: Subsequent to the first quarter, we finalized the sale of our European assets, generating $1.4 billion in proceeds. This enabled us to repay and cancel our term loan and reduce our revolving credit facility, resulting in a strong balance sheet going forward.
Speaker Change: Subsequent to the first quarter, we finalized the sale of our European assets generating $1 4 billion in proceeds this enabled us to repay and cancel our term loan and reduced our revolving credit facility, resulting in a strong balance sheet going forward.
Jack Lundin: As we move into the next phase of growth centered on the high potential of the CUNYA district as well as near term growth opportunities that are existing operations, we do so with an enhanced financial flexibility and a clear focus on delivering long term shareholder value. The company is well positioned for the future with a strong commitment to achieving our operational targets, improving margins through discipline cost management, and maintaining the highest health and safety standards to protect our workforce.
Speaker Change: As we move into the next phase of growth centered on the high potential Vicuna district, as well as near term growth opportunities at our existing operations. We do so with an enhanced financial flexibility and a clear focus on delivering long term shareholder value.
Speaker Change: The company is well positioned for the future with a strong commitment to achieving our operational targets improving margins through disciplined cost management and maintaining the highest health and safety standards to protect our workforce.
Jack Lundin: Thank you to those on the call and I'll now open up for questions. Thank you.
Speaker Change: Okay.
Speaker Change: Thank you to those on the call and I'll now open up for questions.
Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Speaker Change: To withdraw your question. Please press star one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Lawson Winder: Our first question comes from Lawson Winder of B of A Securities. Your line is now open. Thank you very much, operator. And good morning, Jack and team. Thank you for the update.
Lawson Winder: Our first question comes from Lawson Winder Bofa Securities. Your line is now open.
Lawson Winder: Thank you very much operator and.
Lawson Winder: Good morning, Jack and team. Thank you for the update.
Jack Lundin: We spent a lot of time talking on Monday about Vicuña, so I think maybe I'd like to ask about some of the other operations this morning. and ask about Candelaria and the expansion. So at this point, what remains outstanding in terms of information that you need to gather in order to make. on the underground expansion. And then what is the current thinking on the timeline?
Aye.
Speaker Change: We spent a lot of time talking on Monday about.
Speaker Change: <unk>, So I think maybe I'd like to ask about some of the upper other operations. This morning.
Speaker Change: And ask you about candle area and the expansion so at this point.
Speaker Change: The outstanding in terms of information that you need to gather in order to make a decision on the underground expansion and then what is the current thinking on the timeline. Thank you.
Jack Lundin: Hi Lawson, it's Jack here. Thanks a lot for the for the question. And thanks a lot for the interest on the call on Monday as well. Yeah, for Candelaria, the underground, you know, we were looking historically at quite a large underground expansion that we were dubbing as the QJET project. And I think we've telegraphed in recent calls that we've since kind of modified the approach to the underground expansion and looked at kind of increasing the capacity from the underground in more of an incremental way. And through more traditional measures, rather than in implementing underground infrastructure, like crushing and conveying, we're looking at improving the productivity of our underground mining crews, and then potentially adding more mobile underground equipment to increase production from the underground incrementally.
Speaker Change: I lost time as Jackie and thanks, a lot for the question and thanks, a lot for the interest on the call on Monday as well.
Speaker Change: Yes for candle area of the underground.
Speaker Change: We were looking historically at <unk>.
Speaker Change: Quite a large underground expansion that we were dumping is a huge project.
Speaker Change: And I think we've telegraphed in recent calls that we have since kind of modified the approach to the underground expansion and looked at kind of increasing the capacity from the underground and more of an incremental way.
Speaker Change: More traditional measures rather than implementing underground infrastructure like crushing and conveying we're looking at improving the productivity of our underground mining crews and then potentially adding more mobile underground equipment two.
Speaker Change: To increase production from the underground incrementally so.
Jack Lundin: So, you know, QJET, the large QJET expansion project has been, you know, essentially put to the side. And at our Capital Markets Day in June, we'll be outlining kind of the next steps for how we're going to be incrementally growing production from the underground. But it's not going to be a heavy capex item. We're looking at a low capital intensity, you know, initiative to incrementally increase production.
Speaker Change: Q, Jeff the large Q, Jeff expansion project has been.
Speaker Change: Essentially put to the side and at our capital markets day in June we will be outlining kind of the next steps are how we're going to be incrementally growing production from the underground, but it's not going to be a heavy capex item, we're looking at a low capital intensity.
Speaker Change: Initiatives to incrementally increase production and we'll outline those details in June at our capital markets day.
Juan Andres Morel: And we'll outline those details in June at our Capital Markets Day. Yeah, that'll be very helpful. No, but what does that imply in terms of permitting? Does incremental mean a more streamlined permitting process? Or do you face the same constraints on that?
Speaker Change: Yes, that'll be very helpful, but what does that imply in terms of permitting.
Speaker Change: As to the incremental mean, a more streamlined permitting process or do you face the same constraints on that front.
Juan Andres Morel: Lawson, this is Juan Andres. In terms of permitting, the underground expansion was already permitted in the EIA 2040. But as Jack mentioned, since we're making some changes from underground material handling system to more mobile based expansion, we will have to amend some permits. And we're currently working on on doing that.
Juan Andres: Nelson This is Juan Andres.
Speaker Change: In terms of permitting.
Speaker Change: Underground expansion was already permitted in the EIA 2040.
Speaker Change: But as Jack mentioned since we are making some changes from underground materials handling system to more mobile based expansion, we will have to amend some permits.
Speaker Change: We're currently working on on doing that.
Juan Andres Morel: In any sense on timeline to having those amendments? Uh, not yet. Okay.
Speaker Change: Okay.
Speaker Change: And any sense on timeline to having those amendments.
Speaker Change: Not yet.
Juan Andres Morel: Something to follow up with on the Investor Day in June. That'll be very informative.
Speaker Change: Okay.
Speaker Change: Something to follow up with on the on the Investor Day in June that will be very very informative.
Lawson Winder: On Candelaria as well, I wanted to ask you about the stream. So the drop down in the percent payout to Franco-Nevada on both the gold and silver is approaching relatively quickly in my model. And at current gold and silver prices, we're getting something in the range of an annual boost to cash flow of about $100 million. Is that in line to your estimate at spot prices? And then what's your current estimate on the timing of that drop down?
Speaker Change: On candle area as well I wanted to ask you about the stream so.
Speaker Change: The dropdown and the percent payout to Franco Nevada on both the gold and silver is approaching relatively quickly in my model and at current gold and silver prices were getting something in the range of an annual boost the free cash flow of about $100 million is that in line to year estimate at spot prices and then what's your.
Speaker Change: Current estimate on the timing of that dropdown.
Teitur Poulsen: Morning, Lawson. It's Teitur here. Yeah, so we are currently forecasting that that step down from 68% of the gold down to 40% gold and silver should happen gone about it towards the end of 2026. And obviously, depending on spot prices at that point in time, I think your order of magnitude number is in the ballpark. Okay, great. That'll be nice to have.
Speaker Change: Yes, good morning loss on its tightened area yes.
Speaker Change: We are.
Speaker Change: Currently forecasting that that step down from 68% of the gold is down to 40% hold on silver should happen.
Speaker Change: Towards the end of 2026.
Speaker Change: And obviously, depending on spot prices at that point in time, Yes, I think your order of magnitude of numbers just in the ballpark.
Speaker Change: Okay, great that will be nice to have and then just finally on.
Lawson Winder: And then just finally on... When you're thinking about the capital to develop Jose Maria and FILO, which, I mean, I think you made very clear on the last call that it would be done so in an incremental fashion. Nevertheless, have you considered copper hedges as an option to protect downside risk and ensure funding for that process?
When youre thinking about the capital too to develop Jose Maria and Philo, which.
Speaker Change: I think you've made very clear on the last call that it would be done so in an incremental fashion.
Speaker Change: Nevertheless have you considered.
Speaker Change: Copper hedges.
Speaker Change: As an option too.
Speaker Change: We are protected.
Speaker Change: To protect downside risk and ensure funding for that process.
Jack Lundin: Short answer is no, we're not really contemplating copper hedges. I mean, as you've seen from our presentation today, our balance sheet is very, very strong. We are effectively at net debt zero. So we have all the flexibility in the world, really, in terms of how we go about funding this. I mean, we obviously will remain very disciplined on. on cost control and obviously trying to optimise the economics of Wikunye in terms of phasing of CAPEX. but hedging on commodities is not on the table at the moment.
Speaker Change: Well the short answer is no we're not really contemplating copper hedges. So I mean as you've seen from our presentation today, our balance sheet is in very very strong we are effectively net debt zero. So we have all the flexibility in the world really in terms of how we go about pulp.
Speaker Change: Ending this I mean, we obviously will remain very disciplined.
Speaker Change: On cost control and obviously trying to optimize the economics of clean your internal facing of Capex.
Speaker Change: But hedging on commodities just thoughts.
Speaker Change: The table at the moment.
Lawson Winder: Fantastic.
Operator: Thank you all very much.
Speaker Change: Fantastic. Thank you all very much.
Speaker Change: Okay.
Craig Hutchinson: Thank you Our next question comes from the line of Craig Hutchinson of TD Cowan. Your line is now open. Good morning, guys.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Craig Hutchison of TD.
Speaker Change: TV Cowen airline is now open.
Craig Hutchinson: I just want to follow up from Monday's call, the integrated technical report that's going to come out in Q1 of next year, is the intent that the phase one, Jose Maria, will be a feasibility level? And the oxides from FILA will be at a PEA level? Or do I have that right?
Craig Hutchison: Hey, good morning, guys.
Speaker Change: I just wanted to follow up from Monday's call. The integrated technical report is going to come out in Q1 of next year is the intent that the the phase one Jose Maria will be at feasibility level and the oxides from vivo will be at a peak level or.
Jack Lundin: And I guess I'm just going to ask you if the Jose Maria is the plan to whatever you put out in Q1, that's the project you're going to move forward with through the rigging Hey, Greg, thanks for the question. Yeah, that's right. So phase one, you know, what we're looking at right now, Jose Maria, we're getting the level definition of the study to a to a definitive feasibility study level. We've obviously been studying Jose Maria for a number of years and have much more detail on that project and have significantly de-risked it. We've been also looking, of course, at the phyllo oxides.
Speaker Change: Do I have that right and I guess I'm, just kind of asking if the Jose Maria is the plan.
Speaker Change: We put out in Q1, that's a project we're going to move forward with.
Speaker Change: Through the rig.
Craig Hutchison: Hey, Craig Thanks for the question, Yes, that's right so phase one.
Speaker Change: What we're looking at right now Jose Maria.
Speaker Change: Getting the level definition of this study two to a definitive feasibility study level. We've obviously been studying Jose Maria for a number of years and have much more detail on that project and have significantly derisked. It. We've been also looking of course at the CLO oxides Theres, a PFS that came out when CLO Corp.
Jack Lundin: There was a PFS that came out when phyllo corp was in control of the phyllo del sol deposit. And so we're advancing the and redoing kind of the PFS on the phyllo oxides and then for the phyllo sulfide. So, once we get into large scale, full kind of capacity production, that would be at a PEA level that we would be doing the study at. So, all of these three studies that are ran in parallel are at different definitions based on the amount of data we've accumulated and the amount of work we've done to date. Okay, great.
Speaker Change: And control of the CLO del Sol deposit and so we're advancing that and redoing kind of the PFS on the CLO oxides and then.
Speaker Change: For the CLO sulfide. So once we got into large scale full kind of capacity production that would be at a level that we would be doing the study. So all of these three studies that are out in parallel.
Speaker Change: Different definitions based on the amount of data we have accumulated in the amount of work we've done to date.
Jack Lundin: And do I understand it correctly?
Speaker Change: Okay, Great and do I understand it correctly. The idea is after you've kind of moved through the high grade zone and Jose Maria Youre look at the PAA will look at countries substituting that or with the high grade zone from a field of outcome.
Jack Lundin: The idea is after you've kind of moved through the high grade zone and Jose Maria, your look at the PA will look at potentially substituting that or the high grade zone from a field of self Yeah, that's exactly right. I mean, we're integrating the deposits together and looking at coming up with the most optimal mine plan based on kind of the mineral resource endowment that both of these deposits have. And so, you know, the plan is for us to, you know, as cost effectively as possible, get into production at scale, and then, you know, ensure that we have a robust mine plan so that we're mining for as long as possible the highest grade material from either ore body.
Speaker Change: Yes, that's exactly right I mean, we're integrating the deposits together and looking at coming up with the most optimal optimal mine plan based on kind of the mineral resource endowment that both of these deposits have and so the plan is for us to.
Speaker Change: As as cost effectively as possible get into production at scale.
Speaker Change: And then ensure that we have a robust mine plans. So that we're mining for as long as possible at the highest grade material from either ore body. So that's why I'm, putting these deposits together and building it out in sequence makes so much sense because as we've discussed there is a high grade core in both deposits and for us to kind of capital.
Jack Lundin: So, you know, that's why putting these deposits together and building it out in sequence makes so much sense because, as we've discussed, there's a high grade core in both deposits and for us to kind of capitalize on that through integrated mine planning, we'll be able to come up with the most, I think, economic and robust kind of scenario. Okay, great.
Speaker Change: <unk>.
Speaker Change: That through integrated mine planning, we will be able to come up with the most I think economic and robust kind of.
Speaker Change: Scenario.
Craig Hutchinson: And just one housekeeping item for me, just the negative $250 million in non-cash working capital in the quarter.
Speaker Change: Okay, Great and just maybe one housekeeping item for me just the negative.
Speaker Change: $250 million.
Speaker Change: Noncash working capital in the quarter.
Teitur Poulsen: Can you just give some context around that and do you expect some of that to unwind here in Q2 and Q3? Yeah, I mean, if you look at our Q4 numbers, we had the opposite effect. We had a big working capital cash inflow. And part of the reason was that we, these two Casarone shipments, which got delayed from December into January, we actually got Those prepaid so they were paid up front, which obviously impacted working capital positivity in Q4, but it's reversing in Q1. And then just generally, you know, with copper prices having increased, you know, when you when you have increasing copper prices, your receivables are increasing.
Speaker Change: Can you just give some context around that and do you expect some of that to unwind here in Q2 and Q3.
Speaker Change: Okay.
Yes, I mean, if you look at our Q4 numbers, we have the opposite effect, we had a big working capital cash inflow and part of the reason was that we these two.
Speaker Change: As Rodney shipments, which got delayed from December into January we actually got.
Speaker Change: Those prepaid so they were paid upfront.
Speaker Change: Which obviously impacted working capital positively in Q4 boats.
Speaker Change: <unk> and.
Speaker Change: Q1.
Speaker Change: And then just generally you know with copper prices have increased.
Speaker Change: You have increasing copper prices your receivables are increasing sort of optical is still being worked out.
Teitur Poulsen: So that's what was building working capital. So Those are the reasons.
Speaker Change: No.
Speaker Change: Those are the reasons.
Craig Hutchinson: All right. Great.
Craig Hutchinson: Thanks, guys.
Speaker Change: Alright, great. Thanks, guys.
Operator: Thank you.
Speaker Change: Thank you.
Connor Mackay: Our next question comes from Connor Mackay of Vintum Financial. Your line is now open. Hey, thanks, guys. Thanks for taking my question here.
Speaker Change: Our next question comes from Conor Mckay.
Speaker Change: Financial your line is now open.
Speaker Change: Hey, Thanks, guys. Thanks for taking my question here.
Connor Mackay: I just want to talk about the investment climate in Argentina that, you know, I imagine with the, I think we've spoken in the past that the integrated technical report coming early next year is going to form the basis of the REGIE application for the Vicuna project. Are you guys, have you seen, have you been seeing other projects kind of start to trickle into the REGIE process? Is there any color you can provide on sort of how those projects are advancing and if there's anything that you guys are watching out for in crafting your own application?
Speaker Change: I just wanted to talk about the investment climate in Argentina that I imagine with the.
Speaker Change: And I think we've spoken in the past that the.
Speaker Change: Integrated Technical report coming early next year is going to form the basis of the <unk> application for.
Speaker Change: For the Vicuna project.
Speaker Change: Are you guys.
Speaker Change: Have you seen have you been seeing other projects.
Speaker Change: Start to trickle into the <unk> process is there any color you can provide on sort of how those.
Speaker Change: How those projects are advancing and if theres anything that you guys are watching out for in crafting their own application.
Jack Lundin: Thanks for the question, Connor.
Jack Lundin: I think it's obviously super important to understand kind of the climate in Argentina, as we look to potentially make a large investment into into the country into San Juan province. And what we've been seeing is, you know, a lot of positive momentum building in Argentina. A lot of the management team will be heading down there at the end of this month. We'll be going to Buenos Aires. We'll be heading to San Juan and visiting the site. And, you know, all of this is an anticipation of us getting ready to submit a REGI application. And we're working now with the joint venture with our partners to kind of identify and align on when we think that application would be optimal to be sent into the government.
Speaker Change: Thanks for the question Carter I think it is obviously super important to understand kind of the climate in Argentina, as we look to potentially make a large investment into the country and the San Juan Province, and what we've been seeing is a lot of positive momentum building in Argentina.
Speaker Change: A lot of the management team will be heading down there at the end of this month, we'll be going to Buenos Aires will be heading to San Juan and visiting the site.
Speaker Change: And all of this is in anticipation of us getting ready to submit our <unk> application and we're working now with.
Speaker Change: The joint venture with our partners to kind of identify and align on when we think that application would be.
Speaker Change: Optimal to be sent in to the government.
Jack Lundin: But what we're seeing is, yeah, there are other projects coming in, not just in the mining sector, but, you know, any kind of industry that can be applicable for the REGI regime. There have been a number of applications, not many yet for mining. But, you know, we're we're trending towards being in a position to to apply. But overall, what we've been able to see and what Javier Millet, president of Argentina, has been able to do has been extremely positive for the investment climate for for projects like ours. So, you know, we continue to be encouraged with what we're seeing in Argentina.
Speaker Change: But what we're seeing is yes, there are other projects coming in not just in the mining sector.
Speaker Change: Any kind of an industry that can be applicable for the <unk> regime. There there have been a number of applications not many yet for mining but.
Speaker Change: We're trending towards being in a position to apply.
Speaker Change: But overall, what we've been able to see and what Javier <unk> President of Argentina has been able to do has been extremely positive for the investment climate for for projects like ourselves.
Speaker Change: We continue to be encouraged with what we're seeing in Argentina.
Speaker Change: That's good to hear.
Speaker Change: Then I just had a question on the on cash costs and particularly.
Speaker Change: Just wanted to get a reminder, what gold price did you guys assume in coming up with your cash cost guidance for the year.
Speaker Change: <unk>.
Speaker Change: If we if we do see these elevated gold prices continue throughout the remainder of the year is there potential for.
Speaker Change: Guidance to come down or are you seeing maybe cost inflation elsewhere offset some of those gains.
Teitur Poulsen: Yeah, so we will revisit all our guidance at the Capital Markets in mid-June, but what we so far have assumed is 2,500 ounces, $2,500 pounds in gold. And on FX, we assumed 900 trillion pesos, dollar and 550 Brazilian real. Perfect. Thanks for the detail there.
Speaker Change: Yes, so we will revisit all of our guidance at the capital markets day in mid June book to what we so far have assumed as 2500 <unk>.
Speaker Change: So thus far on $1 per ounce in gold.
Speaker Change: On FX, we issued 900 Chilean pesos.
Speaker Change: Solar and $5 50 in Brazilian real.
Connor Mackay: That's it for me. Thanks.
Speaker Change: Perfect. Thanks for the detail there.
Speaker Change: Thats It for me thanks.
Operator: Thank you.
Speaker Change: Thank you.
Operator: As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. One moment, please.
Speaker Change: As a reminder to ask a question you will need to press star one on your telephone and wait for him to be announced.
Speaker Change: One moment please.
Daniel Major: Our next question comes from the line of Daniel Major of EUBS. Your line is now open. Hi, guys, thanks for the details on Monday. And thanks for the questions. Yeah, just want to follow up a couple on Argentina. I mean, obviously, the integrated technical report is coming.
Speaker Change: Our next question comes from the line of Daniel <unk> of UBS. Your line is now open.
Speaker Change: Hi, guys. Thanks.
Speaker Change: Full details on Monday, and thanks for the question.
Speaker Change: I just wanted to follow up a couple on <unk>.
Speaker Change: Argentina.
Speaker Change: The.
Daniel Major: But in terms of thinking about the structure of that, we discussed a little bit on Monday, that it you would look to develop the phyllo oxides and Jose Maria sulfides in conjunction with each other in the first phase. If we're thinking about scaling the CAPEX for phase one is a reasonable starting point to assume the four billion plus guidance that you previously given for Jose Maria plus the kind of 1.8 I think it was phyllo guidance from 2023 technical report as a as a kind of starting point for for phase one. Thanks, thanks, Daniel, for the for the question.
Speaker Change: Integrated technical report is coming but in terms of thinking about the structure that we discussed a little bit on Monday.
Speaker Change: You would look to develop the CLO oxides.
Speaker Change: Jose Maria sulfides in conjunction with each other in the first phase if we're thinking about scaling that the capex for phase one is a reasonable starting point to assume does that $4 billion plus guidance stake.
Speaker Change: Our previously given full Jose Marina plus does that kind of one 8% I think it was.
Speaker Change: <unk> guidance from 2023 technical report.
Is it kind of starting point for full size one.
Speaker Change: Thanks, Thanks, Danielle for the question. So obviously as we go through the period that we're in right now to fully define and build those.
Jack Lundin: So, you know, obviously, as we go through the period that we're in right now to fully define and build those, you know, capital estimates for for all phases that, you know, as I as I discussed, kind of different level of definition, you know, we'll be in a position to kind of firmly announce what those numbers look like. But, you know, Jose Maria phase one, you know, looking to trend to probably a little bit higher than what you've said. And then the PFS level on the oxides is still early days for us to kind of dictate what that number is going to be.
Speaker Change: Capital estimates for for all phases.
Speaker Change: As I discussed kind of different level of definition.
Speaker Change: We will be in a position to kind of firmly announced what those numbers look like but Jose Maria phase one now looking to trend at probably a little bit higher than what you've said and then the PFS level on the oxides is still early days for us to kind of dictate what that number is going to be.
Jack Lundin: But, you know, we're, we're working hard to make sure that this is the most cost effective initial capital project on phase one.
Speaker Change: But we're working hard to make sure that this is the most cost effective initial capital project on phase one.
Daniel Major: And, you know, at this time, we're not really in a position to reveal more information than that. Okay, thanks.
Speaker Change: And at this time, we're not really in a position to reveal more information than that.
Jack Lundin: And then a follow up on the Rigi and how that fits in with your timeline of potential FID in 2026. If you submitted the Rigi by mid-year, so you know, the deadline for mid-year, I mean, would it be possible to FID or assume that you could FID the project? As you've submitted that application, or will it take a long time to to kind of process that and have visibility to, you know, to to FID the project? You know, is it going to be a long timeline for the ReGETB process?
Speaker Change: Okay. Thanks, and then.
Speaker Change: A follow up on the.
Speaker Change: Ricky.
Speaker Change: And how that.
Fits in with your top line of potential <unk>.
Speaker Change: 2026.
Speaker Change: If you submit the <unk>.
Speaker Change: By midyear.
Speaker Change: The deadline for <unk> would it be possible to EFI will assume that you could have on the project.
Speaker Change: As you've submitted that application or will it take a long time to kind of process that.
Speaker Change: Have visibility to.
Speaker Change: <unk> approach is it going to be a long timeline.
Speaker Change: <unk> processed.
Jack Lundin: Now, we don't believe that critical path item would be the REGI application. I think, you know, from what we're studying, and what we understand is, once we submit that application, it's quite a clear cut process of going through and getting the, you know, enabling us to adhere to that.
Speaker Change: No. We don't believe that critical path item would be the.
Speaker Change: Rigi application I think.
Speaker Change: From what we're studying and what we understand is once we submit that application, it's quite a clear cut process of going through and getting the <unk>.
Daniel Major: So REGI is definitely not the hang up. I mean, we're putting our efforts forward so that we can be in a position to really understand the magnitude of all phases of the project next year, understand, you know, the fiscal stability regime that, you know, once we sign up and adhere to REGI, so that next year, we'll have all of the information in front of us, and able to make a decision on sanction or, you know, going into construction or initiating phase one. Great. Thanks so much.
Speaker Change: Like us to adhere to that so.
Speaker Change: Rig is definitely not not to hang up I mean were putting our efforts forward. So that we can be in a position to really understand the magnitude of all phases of the project next year understand physical.
Speaker Change: Fiscal stability regime that once we sign up and adhere to review so that next year, we'll have all of the information.
Speaker Change: In front of us enable to make a decision on sanction or are going into construction are initiating phase one.
Speaker Change: Great.
Speaker Change: Thanks, so much.
Speaker Change: Thank you.
Ralph Profiti: Our next question comes from the line of Ralph Profiti of Stiefel. Your line is now open. Thanks, operator. And thanks, Jack and team for taking my questions. I wanted to delve into this.
Speaker Change: Our next question comes from the line of Ralph <unk> of Stifel. Your line is now open.
Speaker Change: Yeah.
Ralph: Thanks, operator, and thanks, Jack and team for taking my questions I wanted to.
Juan Andres Morel: Irrigation rate flow at Casa Ronis which was behind some of the outperformance on production and just wondering is that a design change in leach kinetics or is this Is it going to have a customs impact to higher irrigation rates across Canada?
Speaker Change: <unk> into this.
Speaker Change: Irrigation rate.
Speaker Change: Flow at Kaz erroneous, which was behind some of the outperformance on production and just wondering is that a is that a.
Speaker Change: Design change in Leach kinetics or is this.
Speaker Change: Or character, telling you something and and is there going to be a cost impact to some of these higher irrigation rates and it leads to my second question was how close should we be watching this in terms of similar oxide characteristics at <unk> soles oxide core and whether or not youre going to be learning lessons on how you take the approach.
Juan Andres Morel: My second question is how close should we be watching this in terms of similar oxide characteristics at Philo del Sol's oxide core and whether or not you're going to be learning lessons on how you take the approach from Kazaronis oxides to Philo oxides.
Speaker Change: 'cause it Rona sock sites to a FILO oxides. Thank you okay.
Juan Andres Morel: Morning, Ralph. Thanks for the question. So probably it's good to start by highlighting that Cassadonus is a dump leach. So the kinetic cycle is normally very long, especially with the secondary sulfides. So as we dump more secondary sulfides, of course, the extraction becomes a little slower. But in general, we are on track with the budget or internal plans on the placement of the leaching material. So we are taking advantage of irrigating some slopes in the dump leach. And that is why we're being able to produce more cathodes than expected. But we're basically on track with our internal plans.
Ralph: Good morning, Ralph Thanks for the question.
Ralph: So probably it's good to start by.
Ralph: Highlighting that cost it honest as a dump leach so.
Ralph: Cycle is normally.
Ralph: Very long, especially with the secondary sulfites.
Ralph: So as we do.
Ralph: Tom.
Ralph: More secondary sulfide of course.
Ralph: Extraction becomes a little slower but in general we're in tracks are on track with that.
Ralph: Two of our internal plans on the.
Ralph: B.
Ralph: About the placement will be leaching material. So we are.
Ralph: Taking advantage of irrigated some slopes in the dump leach and that is how why we're being able to produce a more cathodes that unexpected, but we're basically on track with our internal plans.
Operator: Gotcha. OK. Thanks very much. Thank you.
Ralph: Got you okay.
Ralph: Thanks very much.
Ralph: Thank you.
Operator: I am showing no further questions at this time. I'd like to thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thank you for watching!
Ralph: I am showing no further questions at this time.
Ralph: We'd like to thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Ralph: Okay.
Ralph: [music].
Ralph: Okay.
Ralph: Okay.
Ralph: [music].