Q3 2025 First Quantum Minerals Ltd Earnings Call
Minerals third quarter 2025 results conference call all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If he would like to withdraw your question again press Star one.
I would now like to turn the conference over to Bo need It all director Investor Relations you may begin.
Thank you does ray and thank you everyone for joining us today to discuss our third quarter results.
Speaker #4: Ladies and gentlemen , thank you for standing by . My name is Desiree , and I will be your conference operator today . At this time , I would like to welcome everyone to the first quantum Minerals .
During the call, we will be making forward looking statements and as such I encourage you to read the cautionary notes that accompany this presentation.
Our MD&A and the related news release as a reminder, the presentation is available on our website and that all dollar references are in U S dollars unless otherwise noted.
Speaker #4: Third quarter 2020 results conference call . All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .
On today's call are trust and Pascal, our Chief Executive Officer, Ryan Mcwilliams, Our Chief Financial Officer, and really bad and horse, our Chief operating officer, and with that I will turn the call over to Tristan for opening remarks.
Thank you Vanessa and thank you to everybody for joining us today to discuss our third quarter results.
During the quarter, we made meaningful progress on our priorities for 2025, and I'm pleased to be able to provide an update on this.
Especially we continued to proactively strengthen our balance sheet and manage our liquidity.
In August we announced one of them given knowing that gold stream agreement with Royal Gold and undertook a series of bond transactions to extend debt maturities, which were covered.
Cover in more detail.
Well I believe.
Secondly, we remain focused on safe and Lady productive operational performance.
We were pleased.
And investors to a Saturday operations in September to sugar as cornerstone assets, and we continue to see quarter over quarter improvement in production.
We remain on track with our guidance for the year, which really will review.
Thirdly at the Constancia three expansion, we successfully reached substantial completion of most construction areas during the quarter and produce first concentrate in August which I will cover in more detail in my closing remarks.
On our fourth priority in Panama, there were several positive developments during the quarter and we continue to make progress on the preservation and safe management program that the government approved earlier this year.
During the quarter, we shipped the remaining concentrated thought along with subsequent shipments of supplies and equipment.
Took place safely at airport without incident.
With regards to the power plant with the commission, we commenced pre commissioning activities and mobilize specialists to solve it ahead of the restock, which remains on schedule with.
With the first 150 megawatt unit expected to be funded synchronized with the grid in November.
The power generated will support alongside preservation activities while.
While surplus energy will be made available for dispatch to support the national grid as record.
During the quarter the government of Panama threw me a moment I initiated the comprehensive order of Cobre, Panama and <unk>.
What are the contract as she is political and independent and internationally recognized order for.
SCS has commenced a six month process and is currently working with various industries.
The company has always sought to conduct its operations with transparency and in full compliance with international environmental standards, including achieving 100% compliance on our environmental commitments in the most recently so I ordered published early this year.
Yeah.
Our team at Cobre, Panama is ready to provide all the necessary information to support S juice and the government to complete the orders.
Today. The company has worked with the government has been centered around the preservation and safe management program for the mine with the priority focused on safety asset integrity and environmental stewardship.
However, we remain prepared for when the government is ready to discuss more broadly a resolution for the future of Cobre Panama.
Understandably any potential new agreement, we need to clarify that the mineral resources belong to the people of Panama City.
This is well understood by first quantum and hence a willingness to find a gerbil agreement for a fair physical structure that reflects this as well as the $10 billion investment that first quantum has made into the country.
I believe both sides will be motivated to reach a fair and equitable and mutually beneficial resolution.
Had cobra Panama remained in operation since 2023 contribution to the country of Panama could have reached $1 billion to the treasury and $2 billion you with the local Panamanian supplier companies.
It is important to first quantum that the contributions of the mines, such as employment and growth can deliver tangible benefits to the people of Panama.
At the same time, a fair and balanced agreement would position in Panama.
As a destination for foreign direct investments and a pivotal step in confirming the country's reputation as a stable and attractive environment for international capital.
Our focus remains on reaching a resolution for the mine that serves the best interests of our stakeholders the governments and the people of Panama.
Thank you and I will now pass the call over to Rudy for his operational review.
Thank you Jason.
We just need to import that operations continue to improve into the third quarter of this year and I'll provide an uninterrupted flow from on site.
Total copper production was 105000 tonnes of.
15, 15% increase over the second quarter, both St and consensual reported a higher production.
Copper sales volume struggled to under 19 thoughts.
During the quarter assisted noted we benefited from additional concentrate shipments at Cobre Panama.
However, satisfy instant Zambia beloved production.
Due to the replenishment of inventory following the smell.
Hum.
Brian will cover this in more detail in a short overview.
Year to date, we produced 295000 tons of copper.
All are on track to achieve our 2025 tightened the guidance range.
390 to 410000 tons.
At <unk> the operation there for 7000 tons of copper production in the third quarter.
An increase of nearly 7000 tons from the previous quarter.
The improvement was mainly driven by higher mill throughput with the commissioning of the S. Three expansion.
The ramp up of history that surpassed expectations, achieving first production in August and contributed approximately 6000 tons of copper production to the quarter.
Looking forward copper and gold production in the fourth quarter.
I expect it to exceed first quarter levels.
Stable performance is running ahead of schedule, leading to a better than anticipated that that is very concentrated.
Jason will cover in more detail in his closing remarks.
With respect to 2025 production guidance for Consensually, we have narrowed the copper production to a range of 175 to 185000 tons.
While the gold production guidance has increased.
<unk> hundred 10 215000 ounces.
I would say outside of the operations.
Sentinel reported copper production of 51000 tons in the third quarter, an improvement of 8000 tonnes from fortitude.
Most of them are based of the 5 million tons per month.
Representing a 14% increase from the second quarter tables.
I think from improved ore fragmentation improved reliability and performance of the primary crushers.
Excellent management of the Moorefield stockpile.
The relocation of input crushing too has been completed.
And will be commissioned in the fourth quarter.
The innovative low energy consumption on the available and conveyor, which was showcased on Zambia intuit for analysts investors and lenders in September.
Will it require some ways Vacation's performance testing continues towards final commissioning of the asset.
During the quarter. We also continued to advance the program to address the bolt fatigue issues.
Two.
Work is ongoing with the original equipment manufacturer and specialist engineering consultants to develop a long term corrective procedures to ensure sustainable performance.
An update will be provided once this is established.
Any remedial actions will be timed to the best availability with planned maintenance downtime in order to mitigate the impact on production.
Copper production in St to note is expected to continue to improve for the fourth quarter.
As higher grades will be accessed as mining progresses to the bottom of stage one but for some development ahead of this bid season.
Along with the transition to higher primary sulfide ore volumes supporting trumps phase III.
That being said due to the year to date production.
We have updated our copper production guidance for <unk> to a range of 90 to 200000 tons.
Enterprise It is pleasing to report a 44% quarter over quarter improvement the nickel production to nearly 6000 tonnes during the third quarter.
While nickel grades continued to be impacted by transitional ore from the size of the area three.
Throughput improved with increased nickel ore supply and plant performance.
Production guidance for the year has narrowed to between 23000 tons of contained nickel.
The continued focus on enterprise will be on maximizing ore supply improving communication efficiency.
Throughput is it wasn't ontic plant performance when processing complex Nikola types.
At Cobre, Panama, we continued our preservation safe management of work during the quarter, which included the refurbishment of subsystems in the flotation area ethical way above.
Inspections of the plant and stockpiled feeders are concluded that these is unsafe condition.
Additionally, detailed inspections with original equipment manufacturers specialist.
Are being conducted on the mobile fleet to ensure asset safety and integrity.
These inspections of the airports are expected to be concluded in the near future.
Reservation and safe management of costs during the third quarter averaged approximately $16 million per month.
Included services related to the copper concentrate shipments.
And commissioning activities for the restart of the pellet plant.
Thank you and with that I will hand, the call over to Ron for his financial review.
Thank you Rudy.
For the third quarter, we reported EBITDA of $435 million and an adjusted loss of two cents per share.
This financial performance positively benefited from the solid operational results, which Rudy just described.
Additionally, the copper price increased 2% from Q2 due to supply disruptions at simple much copper mines across the industry.
Financial results, however were negatively impacted by two key items.
Our revenue grew by 10% quarter over quarter benefiting from higher copper sales volumes and improved metal prices. This was mainly driven by the 24000 tonnes of concentrate shipped from Cobre Panama.
However, as Rudy noted sales volumes from cancer actually were negatively impacted by the replenishment of antibody inventories finally, the smelter shutdown.
This impacted EBITDA by $45 million and third quarter.
<unk> per share.
Additionally, <unk>.
Royalty costs with $25 million higher at Constancia this quarter due to the smelter shot which resulted in an increased proportion of local sales, which in turn resulted in annuity of crystallization of royalties.
With inventories not be replenished, we expect sales volumes and associated royalty cost to normalize project to normal timing lax.
Moving on to the rest of our financial results.
As I noted today and yet during the quarter, we shut the remaining concentrated cobre Panama.
<unk> contributed approximately 106 million to $160 million to third quarter EBITDA.
And does that mean operations, we had a nature of that.
During the quarter.
Revenue was booked in the quarter.
It also resulted in elevated receivables at the end of September which is expected to unwind in Q4.
During the quarter, we slightly avatar copper hedges, while maintaining all the hedge portfolio.
Were not currently adding additional hedges as our long term strategy remains to be on the east, thereby retaining full exposure to spot commodity prices.
We have engaged in selective hedging as a tool to support our financial resilience and safeguard the balance sheet on a S. III ramps up and as we work towards resolution and Panama.
[noise] competency one costs of $1.95 per pound improved by 3% from Q2.
Oh, my highest production and lower fuel costs.
Basically impacted by reduced gold byproduct credits and less capitalized costs.
Remaining input prices and Zambian power rates were stable during the quarter.
We are narrowing our full year cone cash cost guidance of $2 95 to $2.10 per pop.
Although prices have been strong.
Zambian kwacha and higher expected Zambia power costs in Q4 offset this benefit.
Our all in cost guidance has also been narrowed to $3.10 to $3.25 per pound.
Flexing, a lowered guidance in sustaining and capitalized stripping spend.
With lower 2025, Capex guidance by approximately $175 million to a range of 1.15 to $1 2 billion.
Got it.
This is due to lower capital spend year to date.
And the expectation Street project will come in under the $1 million to $5 million of budget.
However, the reduction of sustaining capital is expected to be carried forward to next year.
Such as some of our mobile fleet replacements, and my mom component change shops.
As trusted market during the quarter, we continued to take proactive steps to further strengthen our balance sheet by executing two milestone transactions.
First we completed a $1 billion on a gold stream with Royal gold, which provide long term unsecured non debt capital.
This transaction allows us to maintain exposure to copper production that Ken sachi, well, even most of our pulp production exposed to spot pricing over the long term.
Proceeds were largely deployed towards debt repayments net debt ending the quarter at $4 $8 billion.
Second we issued $1 billion in senior unsecured notes maturing in 2034.
The proceeds were used to retire the remaining 2027 notes and a portion of the highest coupon 2029 secured notes.
Following this refinancing our nearest bond maturity has now been extended to 2029.
These combined actions have improved our near term liquidity by approximately $1 $6 billion.
He was liquidity of $2 $3 billion at quarter end.
This comprised of $960 million in cash.
Plenty of Undrawn revolver of $1 $3 billion.
After thoroughly evaluating alternatives. The stream agreement was the best strategic and financial outcomes for first quantum.
As such no further financing or stake sale leaseback with Zambia at this time.
Thank you and I'll now hand, the call back to <unk> for his closing remarks.
Thank you Ron.
During the third quarter first quantum achieved two milestones that demonstrate our commitment to safety and sustainability in that broader business.
Ah trial in Turkey, our colleagues to leave it over three years without a lost time injury.
I congratulate them on these achievements are a testament to I think safety program, which drives engagement and a measurable reduction in incidence.
Also at Toyota Yesterday, we published an updated 43 101 technical report.
On the new southern ore body, including a loss of mine plan, which extends the mine lots of chair of Chile to 2036.
In Finland at a close to <unk> mine.
If they take megawatts sold sorry about volt, so I'm talking about tight generation project was commissioned on the filter tailings pond for the municipal or in development compete Kelly.
Connecting to the existing electrical infrastructure established by the mine.
As part of our commitment to responsible mine closure, we supporting the transition of legacy assets into renewable energy that benefits local communities.
Yeah.
And it's pleasing that I can conclude today's call by discussing the substantial completion of the company's latest brownfield expansion project.
During the quarter consensus U S expansion project was successfully completed and all but two circuits were handed over to operations in October.
The full copper circuit was brought online in stages with a focus on shooting the circuit and ramping up towards steady state of nameplate capacity at.
As Rudy noted to date the ramp up has exceeded expectations and the plant is now maintaining 24 hour operations with support from the commissioning team the advent of specialists.
I mean, the gravity gold circuits and some concentrate filter upgrades as three reminds me.
And handed over to operations.
In addition, the smelter expansion works are complete well S. Pumped five is currently in the hot commissioning stage.
Ongoing project capital works on pace to have two are expected to be completed in the second quarter of next year.
I would like to take this opportunity to congratulate inhouse first content teams responsible for the successful delivery of the Constancia sturdy expansion and on behalf of the board and the company I would like to extend my gratitude to all involved in building and making operational the project for the remarkable work.
These are the same in house teams that successfully built the Sentinel and Cobre Panama projects.
Having us to learn and improve and go into each of the 640 foot Sag mill processing trying to cross sell business.
The new processing plants are concerned she is onto trained 25 million tonnes of ore annually incorporates cutting edge technology and automation such as the integrated operations center that make the consensus is three expansion one of the most advanced copper projects in Africa.
At the peak of construction over two and a half thousand Zambians and 535 local Zambian companies worked on the project alongside our in house teams, gaining skills and capacity that will suit long after is <unk> complete.
We see the capital intensity for a couple of projects is a growing challenge, particularly as the mining industry prices relatively high cost of capital compared to other market sectors.
As a result of declining grades and an increasing infrastructure burden for new projects. The industry average capital intensity to build a project is moving steadily towards $30000 per ton of any lost production.
In contrast by building our own projects largely in house our experience at first quantum is that we are typically able to exert greater control on quality productivity and capital intensity.
This has allowed us to build a brownfield project at the consensus Street, Ken said, she is three expansion at $12000 per ton of annual copper production.
Our latest greenfield projects that Covid, Panama, including important power station was built at $18000 and Sentinel was built at $12000 per ton about in your last call. It production.
As we look forward to applying our experienced you should projects within our portfolio.
The most responsible and correct time for our balance sheet position.
We say on most likely need to have the project to be tech attack here in Argentina.
The midterm election results in Argentina over the weekend provided an endorsement by the electorate of economic reforms underway in the country and the administration's initiatives to attract greater foreign investment into the country.
We continue to work towards a <unk> application of attack attack are well ahead of the July 'twenty 'twenty six time top timeline.
Yeah.
In closing then the consensus U S. Three expansion is the lightest fab projects to deliver on schedule and under budget.
This is an important milestone for first quantum which will move consensually back to 200000 plus per annum copper producing mine extending its life beyond 2014, and returning the company back to a position of positive free cash flow generation.
With that operator, I'm happy to open the call to questions.
Thank you we will now begin the question and answer session. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
If you would like to withdraw your question simply press Star one again.
As you all called upon to ask a question or listening via speakers wanting advice. Please pickup your handset to ensure that your phone is not on mute and asking your question. You gave a question for todays session that you. Please limit to one question and one follow up question Amy. Thank you.
Yeah.
And our first question comes from the line of Ralph <unk> with Stifel. Your line is open.
Oh good morning, Thanks, operator interest in Ryan Congratulations on performance of budgeted capital targets at Constancia.
What's your outlook for copper recovery improvements.
And targets and that S. Three circuit over the coming months and quarters looking at that 74% in the context of the low grade stockpiles and as you optimize the circuits.
Hi, Ralph Thanks for that yes, very pleasing to see is performing better than our expectations. So far.
In my comments there are some areas that need to be finished the two circuits being the gravity gold and the filter upgrades.
So we will continue to remain conservative and stick with that guidance at this stage and we're going to provide guidance.
This year, we will re look at Collins next year in late January but again, the ramp up is going well, we continue to see to target a 90%.
Just on throughput by the end of the year.
More broadly as we look into next year, we will be commencing on stockpiles, which means the garage is lower and so that will have an impact on production.
And cost as well, but then as we get into 2027 and the outlook is we will get into much more prescribed which will increase production from the overall circuit.
With a corresponding impact much locked down costs as well.
Okay. Okay. Thanks, Tristan I appreciate that and as a follow up what are the.
Critical path items for consensus T. S F to completion by the second quarter of 26 is this just maintaining civil earthwork rights.
Yeah, not complicated Ralph we just putting in a large buttress there and going about the works we comfortable around deposition rates were comfortable around rights Ross, It's really just steady progress on on volumes.
Yeah.
As we get into the South East argument have much more competent rock available that gets easier and easier for us as well.
Our next question comes from the line of RSV called out with Scotiabank. Your line is open.
Hi, good morning.
Like to just say congratulations on the deleveraging efforts, both with the stream and the terming out the refinancing your debt that really eases the pressure in the next couple of years, but my question had to do with Cobra, Panama and I'm, just curious with the environmental audit now underway do we do you think that we have to wait.
So the conclusion of that audit before formal negotiations could begin with the government on on a potential new deal or could that began earlier and I'm just wondering what milestones we should be looking for here.
Thanks, Sarah and thank you for those comments yeah Panama.
Panama.
We recognize the concrete progress in the country and it has been.
Evidence in terms of that progress with the approval of preservation and site management plan. The export of the concentrates that would complete the journey.
Q3, we continued to see the power plants coming online and the permits are granted to get that restarted and we expect to start up in the first train in November and the environmental audits now underway.
Right.
It's good solid momentum in terms of future milestones, we're not really anchoring around those we remain disposed to the governments I believe we will see it will be the price.
Set out on that timetable and the pathway to those milestones and progress from outside.
Put aside the arbitration suspended arbitration and we are committed to a constructive process. We will work step by step with the government and again, we will follow the pricing guidance in that timetable and to work things for you.
All the time table for the audits.
And how that relates will take direction from government indication from government is four to six months timetable.
And how things go with or in sequence work parallel take guidance from the president and from the government of Panama.
Okay, and then just as a quick follow up is there any potential visibility on processing the existing ore stockpiles on site at Cobre, Panama under the the preservation plan in terms of turning at a mill.
Yes sure are things.
It hasn't been any discussions on that Tonight, and again, we wouldn't anchor things around future milestones, we want to be constructive and move.
Towards resolution that feels.
With the medicine Cobre, Panama in the best interest of all stakeholders, the government of Panama that people in Panama, but also shareholders.
Having said that the stockpiles, we do think there's some good rationale to move forward.
You're providing that feed to the cycling plants at the tailings dam would give an important source of material that we can use to cancer.
Cancer erosion from the high rainfall.
That is important work that the stockpiles would provide.
But we you know we don't have a dot on a critical path, we remain constructive towards a resolution and engaging with government in that regard.
Next question comes from the line of Marshalls Hobby with Goldman Sachs. Your line is open.
Yeah.
Hey, good morning, everyone and congrats on getting a three on time.
But yeah my.
My question is on maybe to radio.
The headroom is trying to do right and probably it made more sense could be more active on hedging.
The U W actions related to refinancing, but also the streaming deal as well just wondering how we should think about it going forward as well not the bullish that that's cleaner.
What was the sort of discounts are you going to be taking on the hedging program. Thank you.
Okay.
Thanks boss at Rowan.
Yeah, Hi, Masha, yeah, absolutely <unk> seen three big tailwind from the balance sheet as fast as stronger copper price. The second is the strong performance in history coming in on track at this stage under budget and then the third is the Royal Gold's treatment significantly adds to our liquidity and as a result of that that we haven't recently added.
<unk> hedges either on the comparable GUL side, and we'll continue to monitor that month to month those hedges roll off as we get into this first half next year.
But absolutely that.
Quality and strong balance sheet gives us more flexibility in terms of planning for future hatching 19, our overarching goal is to be unhedged overtime.
Great. Thank you that's helpful.
I'm trying to appropriately.
It was like some progress has been made their own niche with the bolt, albeit off of a true up but it sounds like you're still doing a lot of them for a long wait Dennis as well right. So just wondering what's the path for a final solution or I'll try them on the bulb newcomer to please thank you.
Thanks, Matthew Rudy will you take that one on the fatigue issue no problem, Hi, Masha and thankfully.
I assume it's not just the phone this.
The production results are sort of the steady increase in production from the second to third quarter was just as.
Indications.
How comfortable we are getting with the the maintenance strategy around the most.
Oh.
Ultimate fatigue on normal to.
It's really equates to something like 20 hours a month now.
We are quite comfortable with the Wyoming and again, we're working with the army and.
And try and get to a final fix we almost day and.
We are continuing into next year.
We're happy to continue with all kind of maintenance.
But we will come back.
To the market and gave us clear.
Fulsome update once we have finalized the final.
Our approach for this formal we sent them the.
Doug one do any intermediate in Asia, because we are quite comfortable with the current maintenance strategy.
And again, if you would like to ask a question Press Star then the number one on your telephone keypad.
Next question comes from the line of Myles Allsop UBS. Your line is open.
Yes.
Thank you maybe just.
On Panama.
Panama, and you're saying you're kind of working towards a fair outcome.
How should we think about that from a quantum perspective is that something.
Broadly aligned with the previous license agreement and do you think the government.
Yeah, similar kind of expect in terms of how valuation as we go into these things.
Yeah.
Hi, Marc Thank you Yeah look I think.
Too early to get into that.
We but I think you know.
First of all we understand for example, the recent comments in Panama the mineral resources, it's very clear ownership always belong to the people of Panama, and we absolutely willing to find a suitable arrangement that deals with each of the stakeholders.
The government and the people of Panama, and I need to see reasonable and tangible.
<unk> benefits coming from the mine.
But also that it deals with it.
The $10 billion investment at first quantum is made into the country and that's reasonable.
Recognition on that basis.
We will look at those as the main principles and deconstructive around any conversation that game the timetable from from that.
Type of direction from the President and the government of Panama.
As to when they are ready to commence.
Yeah.
Hum.
Hum.
Hum.
I.
I presume that the.
A big working capital build to get Adam I'll back up to.
Full operational level.
Okay. Thanks miles it broke up a little bit, but I'll take you asking what does the startup and capital and working capital looks like.
In the event that there is a positive outcome in resolution and.
Yeah.
As we go through the inspection process has been a lot of focus on that through the preservation and safe management plan now approved by the government and.
So dealing with corrosion.
Dealing with the situational and thought we would.
Pleased in that the resolution to those corrosion that's been fairly straightforward it's really around.
Now for welding for painting.
And to work our way through that I think music.
The team continues to do a good job of making sure that the mine has its own.
The mills are the rope shovels remain.
In good condition that suddenly we will need to repair some of those those minor items and that.
Comes online.
But what I'm, saying, Tom type of more because inspection means that we will be able to always put up let's see areas, but at this stage, we think that something like six to nine months as we work through those issues.
But again you know the timetable for that.
And you might say, we don't see major capital items in that regard and it will really be getting people back on so getting supply back on site.
That all of a sudden.
The key drivers of that.
That's largely around working capital to pay salaries.
And also to remove a lot of supply chains in order to get there.
I'm sure as we get closer to L. A re forecast at like January.
Provide a clearer picture of what we see there.
To be honest that progressing Panama around resolution of this matter.
Next question comes from the line of Lawson Winder with Bank of America. Your line is open.
Thank you operator, and Hello, Chris Iridium Ryan Thank you for today's update.
I just you know if I could ask about hi, Ali I mean, I don't think that was something that was on everybody's bingo card.
So first of all well done on the unexplained in the life of 26, and I think that's an extraordinary development well.
But also as you think about longer term growth and the benefits for our jurisdictional diversification how would you characterize in Turkey as a country in which to grow going forward. Both in terms of the regulatory environment and the geological Cross activity.
Well listen thanks for the question, Yeah look I think the team at <unk>.
<unk> done a remarkable job, but histories that.
You know certainly the mine.
We're looking at at the end of life and then you know a lot of work over the last decade on exploration and the discovery of the sell the full body, which is.
It's a very productive fourth it's improved ground conditions compared to the.
The existing ore body, we still have more work to finish off on the existing ore body and that gives us a very good transition period across to the new our new southern orebody and as we spelled out in the 43 101 C life out to 2036 I think beyond that.
That's been very well developed both by the local team of Charlie but also our exploration group working hand in hand, and we do see that Turkey has those opportunities for exploration I would just.
Primarily there's a little bit in that what we see is in this brief.
Animal grade, but it's really around scale that we say challenge, but permitting and.
Particularly in example of Chile with its an extremely good relationship with community and so on.
And in established operation that they had one of the leading training grounds.
For technical capacity in the country, having run for many decades it does fit up.
Good basis in the country.
But overall.
There is opportunity in Turkey, it's just around questions of scale is to.
Whether they really move the needle for a company like first concept.
Okay understood that's helpful perspective.
I could ask a follow up but I would.
Would love to ask about talking to talk about them.
Hmm.
Yes.
Last technical report that you guys studied sort of project with very low capital intensity.
I mean, clearly there has been capex inflation in the industry.
Hum.
Perhaps could.
Can you give us a sense of how we can think about that capex intensity per day would that be a protein global averages would it still be slightly below global averages and then.
When my first quantum thing to update our technical report.
Thanks Lawson, our we were working on that at the more minutes must be around the engineering studies, we would like to have a 40, a technical report a 43 101 at out at the end of this year early next year.
We don't think the I's and crossing T's on the engineering studies around that.
There's been a lot of the drilling and the resource definition is willing hands.
But also around in terms of environmental water permitting process around what the project looks like.
We'll define that that final picture.
We believe that those payments are in good order intake continued to move oil and solve the problems.
Look forward to receiving those in the near future.
In terms of capital intensity Tech attack will remain competitive.
No.
Once we have that final picture in the 43 101, we would release that and make it very clear that.
Capital picture, but I think we we don't even see it evolving to the $30000 per tonne annualized capital intensity.
We will remain at a reasonable picture, obviously, there's been some level of inflation.
But we think that the project remains well in hand.
Our next question comes from the line of that Sony with CIBC. Your line is open.
Hi, Good morning, Chris and Ryan and really.
Most of the questions have been asked and answered but I just have a couple of follow up. So could you just talk about inflationary pressures. If there are any in in Zambia that you're seeing and any offsets that you see them you know obviously such as the ramp up that S. Three but can you just give us a context of what we should be thinking about going into place. Many thanks.
Thanks, and then Ron could you take that question on inflation.
I need to what we've seen in Zambia in terms of pushing costs up has principally been two things slightly high employee and maintenance costs and then secondly, we started this year with the quite Chevron 28 to the dollar more recently because of the strong fiscal reforms. The countries may ask up closer to 20 questions to the dollar so that's pushed our costs up Congress.
The strong gold price stronghold.
Our production from Ken Sanchez pushed our costs down and the net net of those two has meant that we've not really changing cost guidance and we expect those similar dynamics to play out as we go through next year.
Three as we ramp it up the early phase of a three is has higher cost because of the processing stockpiles and it's interesting notices as you get into 2027, and we stopped putting southeast time all through it. That's when you really see the cost position improved and that's with a positive impact on our cost position as a company.
Okay. Thank you and then just on Cobre Panama.
In terms of the timeline. Thanks for all the color that you've provided and I think worst asked a little bit about the environmental audit and whether or not something negotiations can start is the timeline for a restart.
Once it's all pass through Congress still six to nine months or has that evolved at this stage.
Yeah.
And they said yeah I think look.
That's the best estimate that we have at this stage as we go through.
Inspection and they tell the understanding on the preservation of site management plan as we are.
Up areas at my adjusted that's the best estimate that we.
That's really to get the three trains operating is important to note that optimization would take long to get it 100 million tonnes is a very large three important a lot of work to get there. So we'd qualify that to say optimization to the hundreds of them.
The level of refinement.
A longer period.
But at this stage.
Yeah, the six to nine months.
It seems reasonable based on what we know today.
You know.
We need to go through the process with the government that's not a straight line, though there'll be some ups and downs, but we sit and constructive progress.
And all of the concrete milestones that are achieved this year, we need to keep working on public perception and so I think we'll follow the time cycle order book.
Governments on the overall process.
And our last question comes from the line of Dalton Barreto with Canaccord Genuity. Your line is open.
Great. Thanks, operator, good morning, Jason and team. Thank you for taking my question Christian I wanted to follow up on a comment you made in your prepared remarks, there around Panama, where I think you said.
On a longer period, but additionally, its six to nine months.
It seems reasonable based on what we know today.
That first quantum recognizes that the resources belong to the people of Panama, but that any agreement would need to recognize the $10 billion investment made and I'm. Just wondering it sounds like there are bringing marcos laid down a negotiating position ahead of the actual official discussion taking off.
Yeah.
No.
We need to go through the process with the government that's not a straight line there will be some ups and downs, but we say constructive progress.
And all of the country more sensitive to chase this year, we need to keep working on public perception and so I think we'll follow the time cycle.
Governments on the overall process.
Just wondering are there background discussions happening around the potential framework.
Defining what the non negotiable are ahead of actual official discussions with the president.
And our last question comes from the line of Dalton Barreto with Canaccord Genuity. Your line is open.
Yeah.
Yes, Thanks Dalton.
Great. Thanks, operator, good morning, Jason and team. Thank you for taking my question Tristan I wanted to follow up on a comment you made in your prepared remarks, there around Panama, where I think you said that first quantum recognizes that the resources belong to the people of Panama.
We were very.
It's been pleasing progress so far this year in terms of the concrete.
Milestones that have been achieved and the preservation SEC management plan and song and Sydney around.
There is a conversation with the government on preservation and safe management plan around bringing in feedstock for the power plant.
Without any agreement would need to recognize the $10 billion investment made and I'm. Just wondering it sounds like there are bringing markers laid down a negotiating positions ahead of the actual official discussion taking off and I'm. Just wondering are there background discussions happening around the potential framework.
Technical issues around these topics.
All discussions at that level, we welcome the.
The environmental audit now the comprehensive audit to be done by FCS and that's commencing now as we understand and certainly that will take a lot of work from our side, but we are ready to provide all the information and to comply with that audits Felipe and <unk>.
Defining what the non negotiable are ahead of actual official discussions with the president.
Yeah.
To go through that.
Yes, Thanks Dalton.
The environmental authorities with the selected.
We were very.
It's been pleasing progress so far this year in terms of the concrete.
Independent expert in S. Yes, all of those for a framework around.
Milestones that have been achieved on the preservation stack management plan.
Which conversations.
And Sidney around.
Feedback.
Easing process, but more broadly no reasonably full conversation are we waiting for that timetable to come from government wants.
There is a conversation with the government on the preservation and safe Master plan around bringing in feedstock for the power plants the technical issues around these topics.
There are discussions at that level, we welcome.
President and so on.
People will be.
They construct.
The environmental audit now the comprehensive audit to be dumped yf's, yes, and that's commencing now as we understand in Sydney.
In terms of those royalties.
Point out we understand that criteria, certainly because we wouldn't buy them royalties before this royalty payments do recognize that it is the people of Panama and the resources and we understand that that's important in terms of the profile of <unk>.
A lot of work from our side, but we are ready to provide all the information and to comply with that audits Felipe and to go through that.
Your mental authorities with the selected.
The mine in the protocol.
Okay independent expert in STS all of those for a framework around it.
Extraction in Panama.
Great. Thank you for that attrition and then just one follow up for me.
Which conversations.
And feedback.
If and let's say win Cobre, Panama is back up and running again and looking at what you're doing at <unk>.
Easing process, but more broadly no.
Reasonably full conversation, we're waiting for that timetable to come from government.
The rest of your portfolio in terms of partnering and Jb's and so on.
Once.
And so on.
Is it your intention to bring on another partner there in addition to Franco and the Koreans I mean, even getting the Koreans to re up their stake or are you happy with the way things are.
On table will be considered.
In terms of those royalties.
Point out we understand that criteria certainly because we were paying royalties before this royalty payments do recognize that it is the people of Panama.
Delta and I think it's.
Sources, and we understand that that's important to absorb the profile of <unk>.
And we need to go step by step with the government of Panama I think it's too early to get into that it's not something we're looking at at this time, we're just working our way through.
Both the mine and the profile.
Extraction in Panama.
Each step as they present their focus at the moment is the preservation and safe management plan, the restart of the power plants.
Great. Thank you for that attrition and then just one follow up for me.
If and let's say win Cobre, Panama is back up and running again and looking at what you're doing at the rest of your portfolio in terms of partnering in JV and so on.
<unk> ordered the throttle on US now and certainly we Whiting, we're ready for conversation to happen when.
If the timetable to be chosen by governments, it's too early to get into those.
Is it your intention to bring on another partner there in addition to Franco and the Koreans I mean, even getting the Koreans to re up their stake or are you happy with the way things are.
Those areas at this stage.
That concludes the question and answer session I would like to turn the call back over to our CEO Tristan Pascoe for closing remarks.
Delta and I think it's.
And we need to go step by step with the government of Panama I think it's too early to get into that it's not something we're looking at at this time, we're just working our way through.
Thanks, operator, and thank you everybody for joining the call.
Should you have any additional questions. Please don't hesitate to contact us. Thank you again, and I would like to wish everybody well for the remainder of the year. Thank you and goodbye.
Each step as I present, the focus at the moment is the preservation and safe management plan that reached out of the power plant.
Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect.
<unk> ordered the throttle on US now and certainly we Whiting, we're ready for conversations happened Wayne.
It's a timetable to be chosen by governments, it's too early to get into.
Those areas at this stage.
That concludes the question and answer session I would like to turn the call back over to our CEO Tristan Pascoe for closing remarks.
Thanks, operator, and thank you everybody for joining the call.
Should you have any additional questions. Please don't hesitate to contact us. Thank you again, and I would like to wish everybody well for the remainder of the year.
Thank you and goodbye.
Ladies and gentlemen that concludes today's call. Thank you all for joining and you may now disconnect.
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