Q2 2025 MAC Copper Ltd Earnings Call

Operator: Thank you for standing by and welcome to the MAC Copper Limited Q2 results call and webcast. All participants are in a listen only mode. There will be a presentation followed by a question and answer session.

Operator: If you wish to ask a question you will need to press the star key followed by the number one on your telephone keypad.

Michael McMullen: I would now like to hand the conference over to Mr. Mick McMullen, CEO. Please go ahead. Thank you very much and thank you everyone for joining us.

Thank you for standing by and welcome to the Mac copper limited Q2 results, call and webcast all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. McMullen CEO. Please go ahead.

Michael McMullen: I'm joined on the call by our CFO Morne Engelbrecht. I'll run through the slides and these will be released as well so that everyone can refer to them at your So this is our second quarter 2025 quarterly presentation. Obviously, there's the usual disclaimer at the front that people can read at their leisure. And if I go to slide four, you know, in summary, you know, look, MAC Copper at a glance, it's a well-capitalized, low-cost, high-grade copper mine in a tier one jurisdiction. And we're trending towards greater than 50,000 tons of copper by 2026. Obviously, during the quarter, we announced the transaction with Harmony to sell the company in the absence of a superior proposal at $12.25 US a share, all cash, and there's been various announcements made about that.

Uh, thank you very much and thank you everyone for joining us. Um, I'm joined on the call by our CFO Monet englebrecht. Uh, I'll run through the slides, uh, and these will be released as well, so that everyone can refer to the mature leisure.

So, this is our second quarter 2025, uh, quarterly presentation. Uh, obviously, this is the usual disclaimer at the front that people can read at their leisure,

Uh, and if I go to slide 4, you know, in summary, um, you know, look Matt Copper at a glance. It's a Well capitalized, low cost, a high-grade copper mine in a tier 1 jurisdiction. Uh, and we're trending towards greater than 50,000. Tons of copper by by 2026.

Michael McMullen: We are on our growth pathway. We have a very strong balance sheet. At the end of the 30th of June, we had about $196 million US of liquidity, and Morne will run through the components of that here shortly. We have been advancing our key growth projects, which are the ventilation project and the Merrin mine. We did the refinancing and said that we wanted to have less than 20% net gearing, which is where we are. Again, there were separate announcements about that, but that has reduced our interest costs by around about $14 million US per annum.

Michael McMullen: It's reduced our interest rate to a floating rate of just under 7% right now. We had $102 million US of actual cash on the balance sheet at the end of the second quarter. Overall, we ended Q2 in a really good position. Moving into the next slide, you know, that position is always underpinned by operations. We've got a slide on safety here, and very importantly, we've seen a significant improvement in our safety record. We produced just under 10,600 tonnes of copper, which was a 23% increase quarter on quarter. Like we've said before with CSA, we can produce anywhere from 2,000 tonnes of copper in a month to 5,500 and in the month of July, potentially 6,000 tonnes.

Uh, obviously, during the, uh, quarter, we we announced the transaction, uh, with Harmony to sell other company, uh, in the absence of a superior proposal at 1225 us, a share or cash. Uh, and there's been various announcements made about that. Uh, we are on our growth pathway. Uh, we have a very strong balance sheet, um, at the end of, uh, 30th of June, we had a about 196 million US dollars of liquidity and morayo will run through the components of that here shortly. Um, you know, we have been advancing our key growth projects which are the ventilation project and the Marin 9. Uh and we did the refinancing and and would have said that we wanted to have um less than 20%, net gearing, which is where we are, uh, and again there was separate announcements about that. But you know, that has reduced our interest costs by around about 14 million US dollars per atom. Um, it's reduced our interest rate to to floating rate, just under 7% right now.

Uh and you know we had 102 million US dollars of actual cash on the balance sheet at the end of the second quarter. Um so overall we ended Q2 in a in a really good position.

um,

Michael McMullen: It really comes down to where we are in the stope sequencing. And also, I think, in the full form quarterly, we've made some commentary in there about how disruptive it is when you have a transaction like we announced. And that was certainly the case here during the first quarter and April as well, which, you know, if you look at how much we produced in April versus June, there was a significant difference. Grade was great. 4.4% Copper grade. It was an 8% increase quarter on quarter. We hit a few records during the quarter. So under our ownership, the most Copper produced in a day was actually I think the 30th of June.

Moving into the next slide, you know that position is always underpinned by uh operations. We've got a slide on safety here and very importantly we've seen a, a significant improvement in our uh, uh safety record. Uh, we produced just under 10,000 600 tons of copper, um, which was a 23% increase quarter on quarter. Uh, and like we've said before, with CSA, you know, we can produce anywhere from 2,000, tons of copper in a month to 5 and a half. And in the month of July potentially 6,000 tons, uh, it really comes down to where we are in the scope sequencing. Uh, and also, I think, you know, uh, in the full form quarterly,

We've made some commentary in there, about you know, how disruptive it is when you have a transaction like we announced. Uh, and that was certainly the case here during the first quarter, uh, and April as well, which, you know, um, if you look at how much we produce in April versus June, there was there was a a significant difference there.

Michael McMullen: It was 385 tonnes. We had quite a few days around the 300 tonne mark. C1 for the quarter was a good $1.48 US a pound. Whenever we talk about numbers, it's always in US unless expressly stated otherwise and that's consistent with the goal of where we said we thought we could get the mine to. And really pleasingly, you can see in the month of June, we were at $0.94 a pound C1. Overall, good operating results, everyone sort of settled down at site after the transaction was announced and then really delivered for us. record quarterly operating free cash flow for us of about 42 million US dollars and we do note here that the first Glencore contingent payment conditions will likely be satisfied in August of this year and in the absence of the transaction that's proceeding right now that would that would then get paid in in June of next year.

Ride was great, you know, 4.4% copper grade was an 8% increased quarter on quarter. Uh, we, we hit a few records during the quarter, so, um, under our ownership, the, the most copper produced in a day, uh, was actually, I think the 30th of June was 385 tons. We had quite a few days around the 300 tonne, mark, uh, C1 for the quarter was, was a good dollar 48 us a pound. Uh, whenever we talk about numbers, it's always in US, unless especially started, otherwise

Uh and that's consistent with the goal of where we said, we thought we could get the mind to and and really pleasingly. You can see in the month of June, we were at 94 cents a pound C1. So um,

Overall, uh, you know, good operating results. Uh, everyone sort of uh, settled down at site after the transaction was announced, uh, and then really delivered um, for us.

Conditions will likely be satisfied in August of this year and in the absence of the transaction that's proceeding right now that would that would then get paid in in June of next year.

Michael McMullen: We've had really strong production the last few months. We're maintaining our guidance of 43,000 to 48,000 tonnes for the year. I would say we'll be in the sort of bottom half of that, maybe. Grade, again, keeping the same grade, notwithstanding the fact that we have been producing well above that grade. We do sort of see the stope sequencing towards just the middle to the back end of the current quarter. We'll start moving into a bit of that lower grade material and then, again, towards the back end of the year, we'll see a pretty strong run in terms of production and grade.

Michael McMullen: Growth CapEx and Sustaining CapEx, again maintaining those guidance ranges we're tracking for those. Again, the Harmony transaction, we have announced here in the last day or two that the restructuring agreements that were required with both ASISCO and Glencore for Harmony have been executed, got various CPs in them still to be satisfied, including... The Voucher. Curve and Saab. But that has allowed us to schedule a Jersey court hearing, the first court hearing for 30 July, which will then allow us to dispatch the circular on the 4th of August and targeting a vote date of 29 August at this stage.

Uh, you know, we've had really strong production, the last few months. Um, you know, we're maintaining our guidance of 43 to 48,000 tons for the year. I I would say will be in the sort of bottom bottom half of that. Maybe, um, grade, you know, again keeping the same grade, not notwithstanding the fact that we've we have been producing well above that grade. Uh, we do sort of see the the, um, Stoke sequencing towards the, I guess the middle to the back end of the current quarter, we'll start moving into a bit of that, lower grade material. And then again towards the back, end of the year, uh we'll see a pretty strong uh run in terms of production and and grade.

Growth capex and sustaining capex. Again, maintaining those um those guidance ranges we're we're tracking for those

Um again, you know, the harmony transaction. Um, you know, we uh have announced here in the last a day or 2 that the um, restructuring agreements that were required with both the Cisco and Glenn core for harmony have been executed. Um uh got got various CPS in them still to be satisfied, including um, you know, um, the votes and um, curve and sub. Uh, but that has allowed us to schedule a jersey court hearing the first court hearing for 30 July. Um, which

Then allow us to dispatch the circular on the 4th of August uh and targeting. A vote date of 29 August um at this stage

Michael McMullen: Exploration. I've got a little slide at the back. We don't really give a lot of information on exploration these days because quite frankly I don't think the shares trade on the back of the exploration results that we get, notwithstanding that they are world-class, but we've got some interesting stuff happening on exploration as well.

Uh, expiration. I got a little slide at the back. We don't really give a lot of information on expiration these days because quite frankly, I don't think the shares trade on the back of the expiration results that we get, not notwithstanding their, their, they are world class. Uh, but we've got some interesting stuff happening on expiration as well.

Michael McMullen: So look, our key goals for this year are really consistent, safe and low-cost high-grade production, which we are delivering on, progress the Harmony transaction to close in the absence of a superior proposal, advance our ventilation project through, get first ore out of the new Merrin mine in Q4 of this year, and maintain balance sheet strength. And I think, you know, based on Q2, we are absolutely delivering on all of those things. Safety and TSF, as I said, you know, safety had, our triffer had been a bit sticky for about the first year, but you can see a very sustained reduction there, which again, against the backdrop of all the sort of corporate goings-on with site visits and uncertainty around a transaction has been very pleasing.

Uh so look, our key goals for this year are are really consistent safe and low cost high grade production which we are delivering on uh progress. The harmony transaction to close in the absence of a superior proposal. Advance, our ventilation project through get first store out of the new Maran mine, um, in Q4 of this year and maintain balance sheet strength and I think, you know, based on Q2, we are absolutely delivering on all of those things.

Michael McMullen: The team have worked really diligently to drive that incident rate down. Again, no reportable incidents for last year and none for this year either. The Stage 10 TSF embankment works are progressing well, they're on track for completion in the fourth quarter of this year, which is one of our, I guess, our three main capital projects for the year. And pleasingly, we worked, or our team worked with the regulator to get a reduction of $4 billion Australian dollars in our environmental bond, the RCE, so that was good. We also donated $100,000 Australian dollars to the local Cobar Shire Council's museum effort, which is really important in terms of selling Cobar as a destination and why mining is so important out there.

Um, safety and tsf. As I said, you know, safety had um, our trip for had been a bit sticky for about the first year, but you can see a very sustained reduction there, uh, which again against the backdrop of all the sort of corporate going on with site visits, and, and uncertainty around a transaction has been very pleasing. Uh, the team have worked really diligently to to drive that incident rate down.

Michael McMullen: And as we've always said, we're quite happy to put money into the local community because that's basically where we operate. On the recommended transaction with Harmony, obviously a lot of work has gone into both getting to announcement but also then the restructuring agreements and both ASISCO and Glencore have worked with us and with Harmony to get those things papered up and again the timetable has been published there but you know we are working towards a vote date on the 29th of August. We will also hold our annual general meeting on the same day as well.

Uh again, uh no reportable incidents. Um, you know, for last year uh and none for this year, either the stage 10 uh, tsf embankment works are progressing. Well, they're on track for completion in the fourth quarter of this year which is 1 of our I guess, our 3 main capital projects for the year. Uh and and you know pleasingly we worked or our team worked with the regulator to get a reduction of 4 million Australian dollars in our environmental, Bond the rce. So that was good. We also donated 100,000 Australian dollars to the local Cobar show council's Museum effort, uh, which is really important in terms of selling Cobar as a destination and why mining is so important out there, uh, and as we've always said, we're quite happy to put money into the local community because, um, you know, that's basically where we operate, right.

um,

On the recommended transaction with Harmony. Obviously a lot of work has gone into both getting to announcement but also then the restructuring agreements um and both of Cisco and Glenn core have worked with us and with Harmony to to get those things papered up. Um and again the timetable has been published there but you know, we are we are working towards a vote date on the 29th of August, uh we will also hold our annual general meeting on the same day as well.

Michael McMullen: and The Circular, as I say. We'll have a pretty fulsome description of the transaction. We'll have a pretty fulsome background of the transaction and that is planned to be sent around on the 4th of August at this stage. Record date is the 29th of July, so you know, unlike in Australia, relatively long period between record date and vote date, but everyone has plenty of notice I think at this point. So production, as you can see, big jump on the previous quarter, which had been a bit of a slow start to the year. Really a lot of that came in from the back part of May.

Uh, and the circular, as I say, we we'll have a pretty wholesome, um, you know, um, description of the transaction. We'll have a pretty wholesome background of the transaction, uh, and that is planned to be sent around on the 4th of August at this stage.

Record date, uh, is the 29th of July. So, you know, unlike in Australia, relatively long period between record date and vote date. Uh, but you know, everyone has plenty of notice. I think at this point,

Michael McMullen: Certainly in June, you can see the impact of a 6% copper grade in the month of June. Lots of copper coming out, very low C1 obviously, and grade has been in excess of 8% for much of the last couple of weeks of June and extending into July. As of yesterday, we produced 4,500 tonnes of copper in July. We expect this month to be somewhere in the order of 5,900 to 6,200 tonnes of copper at an average grade of around about 7%. And you can see some of that super high-grade ore coming from the bottom of the mine.

You know, you can see the impact of a 6% copper grade in the month of June, you know, lots of copper coming out very low C1. Obviously uh and you know grade have been has been in excess of 8% for much of the, you know, the last couple of weeks of June uh and extending into July. Um,

Michael McMullen: That is CSA. We've spoken about this many times before publicly. We have a small number of very high-grade, reasonably bulk tonnage stopes that drive our annual production. And as we explained after Q1, we just didn't have those online. We had them in Q4 last year, didn't have them really in Q1 and then we got into them in Q2 and now that's extended into Q3. that is CSA for you. It isn't a porphyry where we've got the same grade plus or minus a couple of percent for all year. We have a small number of big high-grade stokes that drive our production and that's why we get a bit of volatility in our quarter-on-quarter.

As of yesterday, the, you know, we produced 4500 tons of copper in July. We expect this month to be somewhere in the order of 5,900, to 6,200 tons of copper at an average grade of of around about 7%. And you can see some of that super high grade or are coming from the bottom of the mine. You know, that that is CSA. We've we've spoken about this many times before publicly. Uh, you know, we have a small number of very high grade reasonably bulk tonny Stokes that drive our annual production. Uh, and as we explained after q1, you know, we just didn't have those online. We had them in Q4 last year. Didn't have them. Uh, really in q1. And then we got into the mq2 and now that's extended into Q3. So um, you know, I guess.

That is that is CSA for you, right? Like it isn't a poor free where we've got the same grade plus or minus a, a couple of percent for the for all year. It's it's we have a small number of big high-grade Stokes that drive our production, right? Um, and that's why we get a bit of volatility in our quarter on quarter production,

Michael McMullen: You can see there, we had a fair bit of concentrate laying around and that pile has only grown. Great results on costs, obviously all-in costs continuing to trend down, notwithstanding obviously just a small amount of general cost escalation. The plant, again, has continued to demonstrate it can produce far in excess of what we currently can mine. That's why we're developing some other ore sources and again, as I said, for the rest of the year. the back half of the Q3. We do expect grade to moderate a bit. We do have a planned change out of some of the concentrate filter plates in August.

um, you can see there, we had a fair bit of concentrate laying around um and and that is a that poll has only grown um,

Michael McMullen: But even so, we expect Q3 should be a reasonably strong quarter, particularly in this instance, we've actually started off with our best month. in the quarter with July as opposed to having to come home with a wet sale, which has been the case in a few of the other quarters. So in general, you know, we're pretty happy with the way sites settled down. They're operating really well. The team's all going well. We've made a few changes as well, just to sort of, you know, get people enthused and add some extra resources. We've been bringing in some extra equipment.

You know, great results on costs, or, you know, obviously, all in costs continuing to Trend down. Um, you know, notwithstanding obviously just small amount of general cost escalation. Uh, the plan again, has continued to demonstrate it. Can produce it, you know, far in excess of what what we currently can mine. Um, but you know that's why we're developing some other all sources. Uh, and again as I said you know, for the rest of the um, well the back half I suppose of the Q3 we do expect gray to moderate a bit reasonable bolts on each stapes, but gray to moderate a bit and we do have a plan um uh change out of of some of the um concentrate filter plates, um, in August. Uh, but but even so we expect, you know, Q. Q3 should be a reasonably strong um quarter particularly in this instance, we've actually started off with our best month in the uh in the quarter with July as opposed to um being being having to come home with a wet sale.

Which has been the case in a, in a few of the other quarters.

So in general, you know, we're pretty happy with the way site settle down. Uh, they're operating really well. Uh, the teams, all going well. Uh, We've made a few changes as well just to sort of uh, you know, get people. Um,

Michael McMullen: Now that we can probably utilize that, you know, we might as well put that extra equipment into the mine.

Morne Engelbrecht: With that, I might hand over to Morne, our CFO, he can talk to the next couple of slides in terms of the financial. Thank you, Mick. Good evening and morning, everybody.

Enthused and add some extra resources. We've been bringing in some extra equipment, um, now that we can probably utilize that, you know, we might as well put that equipment into the mine.

Speaker Change: Um, with that I might hand over to mourn our CFO, he can talk to the next couple of slides in terms of the financials.

Morne Engelbrecht: I'm going to slide 11 now. This is covering the overall capital expenditure and development meters where we had another record on the MAC ownership and development meters for the quarter. So overall capital expenditure, as you can see, they increased by around 85% quarter on quarter. So this is mostly driven by obviously the increased activity around the Vent Project and the Merrin Mine, which we'll go through next. With the development meters overall increasing to that record-breaking 1,196 meters for the quarter. That's obviously under MAC ownership. With the Merrin Mine development meters increasing by around 65% to 530 meters and the Vent Project increasing by 125% to 564 meters.

Thank you, Mick. Uh uh good evening and morning everybody. Um I'm going to slide 11 now

Mick: Uh, this is covering the overall capital expenditure and development meters, where we had another record on the Mac ownership and development meters for the quarter.

Mick: So overall capital expenditure, as you can see the increased by around 85% quarter on quarter. So this is

Mick: Uh mostly driven by obviously the increased activity around event project and the Marine mine uh which I think will go through next um you know with the development meters overall increasing to that record breaking thousand 196 meters for the quarter.

Morne Engelbrecht: So this translated into growth capital expenditure for the quarter, increasing by 139%. And this is mainly driven by those two key projects for us in terms of the Vent Project, which is around $7.3 million spent for the quarter, and the Merrin one, which is around $3.5 million US for the quarter.

Mick: Uh, that's obviously on the Mac ownership with the May in mind, development leaders, increasing by around 65% to 530 M and the vent project increasing by 125% to 564 M. So that's that's translated into growth. Capital expenditure for the quarter, uh, increasing by

Morne Engelbrecht: Obviously very pleasing to see those two key projects being executed really well by the team at SITE and obviously to plan with the Merrin one coming online in Q4. On the Sustaining CapEx side, that mainly consists of the Stage 10 TSF, which has stepped up again and progressing to plan, and that will be a mark for completion in Q4 of this year as well.

Mick: 139% and and this is mainly driven by those 2 uh key projects for us, in terms of the vent project uh which is around 7.3 million, spent for the quarter and the Marine, which was around 3 and a half million uh us for the quarter.

Um, obviously very pleasing to see uh those CQ key projects being executed really well. Uh by the team at sight and and and obviously to plan uh with the mayor in mind coming online in Q4 this year.

Morne Engelbrecht: Moving to slide 12 now on the all-important cash flow waterfall, where there's a number of key drivers to keep in mind that impacted the cash flow over the June quarter. Firstly, we had another record for the quarter on the MAC ownership, as Mick mentioned, relating to free cash flow from operations. And that's obviously after sustaining CapEx, which amounted to around US$42 million for the quarter. This was mainly driven by that 23% increase in production, the 8% increase in grade obviously made a big difference as well, and then there's a 3% increase in realised copper price over the quarter that added to that number.

Mick: Um, on the sustaining capex side, the uh, that mainly consists of the stage 10 tsf, uh, which is stepped up again and progressing to plan. Uh, and that sort of be a mark for completion and Q4 of this year as well.

Mick: Where there's a number of key drivers to to keep in mind that impacted the cash flow over the June quarter.

Mick: Uh, firstly, we had another record for the quarter on the Mac ownership as Mick, mentioned relating to free cash flow from operations, um, and that's obviously off the sustaining capex, which amounted to around 42 million us for the quarter.

Mick: Uh, this was mainly driven by that 23% increase in production. Uh, the 8% increase in grade obviously made a big difference as well. And then there's a 3% increase in realized copper price over the quarter uh that added to, to that number.

Morne Engelbrecht: Secondly, as you can see, our interest costs have significantly reduced over the quarter. That's after refinancing was completed in March, where we are starting to see the benefits of reducing that average weighted interest cost by more than 30% through that refinancing and we're definitely well on our way to realise that $14 million US of interest savings pattern. Then moving to Growth Capital, which incorporates the Vent Project and Merrimine, as I said before, and then Exploration as well. This ramped up for the quarter, a total cash spend of $13 million US, which was driven by that record development leaders done in the quarter as well.

Mick: Uh, secondly.

Mick: See, our interest.

Mick: Significantly reduced um, over the quarter.

Mick: And that's after the refinancing was completed and in the March, uh, where we are starting to see the benefits of reducing that average weighted interest cost are more than 30%, uh, through that refinancing. And, and we definitely, well, well on our way to realize that 14 million us uh, of Interest savings ban them.

Mick: Um then we went to growth Capital, which incorporates event project and Marine as I said before and then exploration as well.

Mick: Uh, this ramped up for the quarter, a total of cash, spend of 30 million us.

Morne Engelbrecht: Our senior facility still sits at $159 million US, and we maintained a drawdown on the revolving facility of $66 million US as well, with $102 million US in cash-to-bank at the end of June, which leaves us with that net debt figure of $123 million US. And as Micah said, that's way under 20%, so we're just over 17% at the moment in terms of that net gearing ratio. We also had a very healthy $196 million US in liquidity, that's almost $300 million Aussie available to us at the end of the quarter, and that consisted of that underwound revolving facility of $59 million US, outstanding QP receipts of $11 million, unsold concentrate at 30 June of $18.5 million, and then that investment in polymetals of around $5.5 million, still doing great for us.

Drive that development, uh, which was driven by that record development leaders done in the court as well.

Um our senior facilities still sits at uh at 159 million uh us and we maintained a draw down on the revolving facility of 66 million dollars us as well with 102 million us and Bank. Uh, cash at bank at the end of June which leaves us with that net debt, figure of 123 million us. Uh, and let's make this said, that's that's that's why under 20%. So we just over 17% at the moment in terms of that net gearing ratio.

Morne Engelbrecht: Finally, on the contingent copper payments to Glencore, we currently anticipate that based on the average daily LME closing price over the last 18-month period leading up to June, that the condition of the payment for the first contingent payment will be met around that August of this year, as Mick has previously mentioned. So, under the terms of the CSL agreement with Glencore and the Intercreditor Deeds, that obligation to make that payment is deferred until the earlier of the payment being permitted by the current debt arrangements and the three-year anniversary of when MAC actually acquired the CSA copper mine.

Mick: It's a very healthy uh, 196 million uh, Us in liquidity that's almost 300 million Aussie uh available to us at the end of the quarter and that consists of that unborn revolving facility of 59 million us. Um, our standing QP receipts of 11, un sold concentrate at 30, June of 18, and a half, and then that investment in poly Metals all around 5.5, that's still doing great for us. Um, finally on the contingent copper, uh, payments to Glen call. We currently anticipate that based on the average

Morne Engelbrecht: So, we therefore expect that the first contingent payment, as Mick has mentioned, will become payable on 17 June 2026. Given MAC's current liquidity position, the company expects to be able to fully cash settle this obligation when it becomes payable. So overall, a very strong and healthy balance sheet position at the end of the quarter with that circa $102 million of cash at bank and $196 million of liquidity available.

Mick: Daily alamy, uh, closing price, uh, over the last 18 month period leading up to June that the condition of the payment, uh, for the first continued payment, uh, will be met, uh, around that August, uh, uh, August of this year as as m is previously mentioned. So under the terms of the CSL agreement, um, with clinical and the integrated, the Deeds, uh, you know, that obligation to make that payment is is deferred until the earlier of uh, the payment being permitted by the current debt arrangements and the 3 anniversary of when Mac actually acquired the CSA copper mine. So, uh, we therefore expect that the first continued, payment does make us mentioned uh, will become payable on uh the 17th of June 2026.

Mick: Um given Max currently put it to the position uh the company uh expects to be able to fully cash settle this obligation when it becomes payable.

Michael McMullen: And with that, I'll hand back to Dick. Thanks, Morne. And yes, as I sort of showed on that photo, we had even more concentrate last week sitting at the mine. And so, you know, we have a significant amount of liquidity over and above what's actually about 196 as well. Um Again, we've shown this before. We're on track to moving towards that 50,000t mark or greater than. Those key projects, obviously the Capital Vent Project and the Merrin Mine, that's where our growth capital comes in. You can see clearly we're doing a lot more metres of development, we're buying more equipment for those projects and therefore that's why the capital spend is going up in those.

Speaker Change: So overall a very strong and healthy balance sheet uh position at the end of the quarter, uh with that 102 million dollars of cash, uh, a bank and uh 196 million of liquidity available to us. And with that, I will I'll hand back to me.

Thanks Mo. And yes, as I sort of showed on that photo, we had even more concentrate. Um, last week sitting at the mine. Uh, and so, you know, we we have a significant amount of liquidity over and above what, what's actually that 196 as well.

Um,

Michael McMullen: Again, that's consistent with what our guidance is. So we are delivering on those things. And then, you know, the Merrin mine, we are moving fairly quickly on development out there now. The exploration team have also continued to sort of close out the drilling out of QTS South Upper that we're about half way across or a bit more than half way across and they've drilled out Pink Panther which you know has got some other material that you know is potential to be mined as well. Lower grade than QTS South Upper but still but it's still there and you know this this area of the mine has independent firing so the development rates in this as you can see from the previous graphs are materially faster than what we get at the bottom of the mine just basically because it's so much easier and we can fire independently from the rest of the mine.

So, you know, again, we've shown this before really, there's, you know, we're sort of all on track to to moving towards that 50,000 ton, Mark or, or greater than those key projects, you know, obviously the capital vent project and the Marin 9, you know, that's where our, you know, um, growth Capital comes in, uh, and you can see clearly we're doing a lot more meters of development. We're buying more equipment for those those projects. Uh, and therefore, that's why the capital spend is going up in those. And, and again, that's consistent with what our guidance. Um, what? What our guidance is

Speaker Change: Uh, so we are delivering on those things. Um,

Across, uh, and they've drilled out Pink Panther. Which uh, you know, has got some other material that, you know, is potential to be mined as well, lower grade than Q to yourself upper, but still, but it's still there. Uh, and you know, this, um, this area of the mine has independent firing. So, uh, the development rates in this, as you can see, from the previous graphs, are are materially faster than what we get at the bottom of the mine. Just, um, basic as it's so much easier and it's, um, we we can fire independently from the rest of the mine.

Michael McMullen: So it's progressing quite rapidly there now, you can see that little schematic there where we are and you can see the ore body just on the very left of that thing there. So additional ventilation is going in, we are well on track for this. Again we said it's very slow to get started on it because you're interacting with the existing mine up until you get to independent firing and now that we've got that, now we can go much much faster, so that seems to be going pretty well up there. And, you know, not only do we have that sort of Q2 South Upper stuff that we're developing out to, but there's a series of zinc stoats that are being planned and some copper areas there that are not currently in resource.

Speaker Change: Uh, so it's it's progressing quite rapidly there. Now you can see that little little schematic there where we are, and you can see the sort of the all body just on the very left of that, uh, thing there. Uh, so, you know, additional ventilation is going in, um, you know, we, we are well on track for this. Uh, again we sort of said, you know, it's very slow to get started on it because you're interacting with the existing mine up until you get to Independent firing. And now that we've got that now, now we can go much, much faster. So, um, that seems to be going pretty well up there. Um,

Michael McMullen: And we're sort of in the process of drilling that stuff out and sort of getting a plan around going to mine that stuff. So during the quarter, you know, you'd have noticed Polymetals has announced they've recommissioned their processing route for the zinc ore. We still think it'll be towards the end of the year before we would be ready to send some material to them. But we are certainly making plans to do so. Ventilation project, again, you know, we are starting to spend a fair bit more money on this thing as part of your capital budget.

Speaker Change: and you know, not only do we have that sort of cue to South Upper stuff that we're developing out to, but there's there's a series of, um, zinc soaps, uh, that have been planned and some some some copper areas there that are not currently in resource, uh, and we're sort of, in the process of drilling that stuff out and sort of getting a plan around going to mine that stuff. So, uh, during the quarter, you know, you'd have known as poly Metals as announced.

Have very commissioned their concentrator, uh, during the month. So that sort of, you know, that is up and running to provide the processing route for the zinc or, uh, we still think it'll be towards the end of the year, before we would be ready to send, uh, some material to them. Uh, but we are certainly making, uh, making plans to do so.

Michael McMullen: You know, if you want to get your project done, you need to spend your money. And we're not that far away from starting the vertical raise boring works on that as well, which will be the next sort of key phase of that project.

Speaker Change: Ventilation project again. We, you know, we are starting to spend a fair bit more money on this thing of, of, part of your capital budget. Uh, you know, if you want to get your project done, you need to spend your money. Uh, and then, and we're not that far away from starting the vertical, um, raise boring works on that as well, um, which will be the next sort of key phase of that project.

Michael McMullen: Finally, exploration, you know, we don't really talk about exploration much anymore. No one sort of seems to give us much value for exploration. The exploration team are quite excited. They've sort of done an EM survey about 15 kilometers north of the mine. It has picked up a very strong anomaly that looks, you know, quite similar to what we have at the CSA mine. So we have very quickly moved to drill rigs onto that. And we are currently drilling that. And we shouldn't be far away from hitting the target zone on that. So we think that's quite an exciting area for us to go and try and explore.

Michael McMullen: If we can find a CSA style ore body, that could be pretty interesting. So we'll come back to the market if we find something material on it, certainly ahead of the vote date so that everybody has the full amount of information. So closing off, you know, just in terms of our goals for this year that we've sort of been pretty consistent about, you know, we are accelerating work on many of these projects. I think we've having near enough to 300 million Australian dollars of liquidity on the balance sheet for a company our size would definitely tick the box for a strong balance sheet.

Finally expiration, you know, we don't really talk about patient much anymore. No, 1 sort of seems to give us much value for expiration. Uh, the expiration team are quite excited. They've sort of done in the M survey about 15 kilometers north of the mine. Uh it has picked up a very strong um uh anomaly. Uh that looks you know, quite similar to what we have at the CSA mine. Uh so we have very quickly moved to drill rigs onto that. Uh, and we are currently drilling that and we shouldn't be far away from hitting the target Zone on that. Um so we think that's quite an exciting uh area for us to go and try and explore. Uh if we can find a CSA style or body, um, that that could be pretty interesting. Um, so we'll come back to the market if we find something material on it, um, certainly ahead of

Speaker Change: Of the vote date. Uh, so that everybody has the full amount of information.

Michael McMullen: I think the fact that we managed to, you know, get the C1 in the quarter down to $1.48 US a pound, but, you know, clearly June at 94 cents was pretty good. And if we produce more copper in July, well, I guess it's going to be even better. And then there's been a large amount of documentation required for this Harmony transaction. And so we've now managed to get that out of the way. And now we're moving forward through to getting organised for the vote.

Speaker Change: So, closing off, you know, just in terms of our goals for this year, that we've sort of been pretty consistent about. Um, you know, we are accelerating, uh, work on many of these projects. Uh, I think we've, you know, having near enough to 300 million Australian dollars of of liquidity on the balance sheet for company. Our size would definitely tick the box for a strong balance sheet. I think the fact that we managed to, you know, get the C1 in the quarter down to about 48 us a pound. But, you know, clearly, um, June at 94 cents was pretty good and if we produce more copper in July, well, I guess it's it's going to be even better.

Michael McMullen: So with that, that's really the summary of the second quarter. I think overall, it was a great result from a safety point of view, good result from a production and cost point of view. And as I say, July has been quite exceptional as well. And so we think given where we started the year at the end of Q1, you know, where obviously we were a bit behind where we needed to be, we've now caught up and gotten a bit ahead of where we need to be. And that's always a good spot to be in as you're coming into the end of the year.

Speaker Change: Um, and then there's been a large amount of documentation required for this harmony transaction and so we've now managed to get that out of the way, uh, and now we're moving forward through to um, to getting organized for the vote. Uh, so with that that's really the summary of the second quarter. I think overall it was, you know, great result from a safety point of view, good result from uh from a production and cost point of view. Uh and as I say July has has been

Operator: So with that, I'm going to open up the floor to questions if anyone's got some. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2 and if you're on a speakerphone, please pick up the handset to ask your question. We will pause momentarily for any questions to register. Once again, if you wish to ask a question, please press star 1. Thank you.

Speaker Change: Quite exceptional as well. Uh, and so we think given where we started the year at the end of q1, you know, we're obviously, we were, we're a bit behind, uh, where we needed to be. We've now caught up and gotten a bit ahead of where we need to be, uh, and that's always a good spot to, to be in as you're coming into the, um, to, to the end of the year. So with that, I'm going to open up the floor to questions if

Speaker Change: Someone's got some.

Speaker Change: Thank you. If you wish to ask a question, please press star 1 on your telephone, and wait for your name to be announced if you wish to cancel your request. Please press star 2. And if you're on a speakerphone, please, pick up the handset to ask your question, we'll post. We'll pause momentarily for any questions to register.

Speaker Change: Style 1.

Operator: There are no questions at this time.

Michael McMullen: I'll now hand back to Mr. McMullen for closing remarks. Okay, well look, I appreciate everyone taking the time to dial in. Thank you very much and we'll be back to you as we progress the transaction.

Speaker Change: Thank you. There are no questions at this time, I'll now hand back to Mr. McMullen for closing remarks.

Operator: Bye. And that does conclude our conference for today. Thank you for participating.

Mr. Mcmullen: Okay, we'll look, I appreciate everyone taking the time to dial in. Thank you very much and um we'll we'll be back to you as we progress the transaction. Bye.

Operator: You may now disconnect.

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