Q2 2025 Amerigo Resources Ltd Earnings Call

July 31, 2025

Operator: This is the Q2 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the formal remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by the 2. Thank you. Mr. Graham Farrell of North Star Investor Relations, you may begin your conference.

Graham Farrell: Thank you, operator. Good afternoon and welcome, everyone, to AMERIGO's Quarterly Conference Call to discuss the company's financial results for Q2 2025. We appreciate you joining us today. This call will cover AMERIGO's financial and operating results for Q2 into 30 June 2025. Following our prepared remarks, we will open the conference call to a question-and-answer session. Our call today will be led by AMERIGO's President and Chief Executive Officer, Aurora Davidson, along with the company's Chief Financial Officer, Carmen Hernandez. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be forward-looking statements. Forward-looking statements may include but are not necessarily limited to financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties.

Graham Farrell: The company's actual results may differ significantly from those projected or suggested by any forward-looking statements due to a variety of factors which are discussed in detail in our SEDAR+ filings. I will now hand the call over to Aurora Davidson. Please go ahead, Aurora.

Aurora Davidson: Thank you, Graham. Welcome to AMERIGO's earnings call for Q2 2025. We are pleased to report positive operational and financial results. AMERIGO has again demonstrated its operational excellence and capital allocation agility. We achieved strong copper production, managed costs effectively, and reinforced our commitment to shareholder returns. Our Chilean operation, MVC, continued to operate consistently in Q2 with no lost-time accidents among our employees and no environmental incidents. In both of these operational performance categories, MVC continues to extend its multi-year company records. Copper production was 15.5 million lbs, and molybdenum production was also robust. Copper production in the first half of the year accounted for 46% of AMERIGO's annual guidance of 62.9 million lbs. Our yearly guidance takes into account our lower production in Q1, which was associated with the annual maintenance shutdown. Therefore, our production guidance remains in place.

Aurora Davidson: We also maintained strict cost controls and our cash cost per pound declined to $1.82 in Q2. Our annual cash cost guidance of $1.93 per pound is also expected to be met. This guided cash cost target excludes the impact of MVC's collective bargaining cost, which is scheduled for October of this year. Collective bargaining occurs separately every three years at MVC for our two collective agreements. AMERIGO's financial performance in Q2 included revenue of $50.9 million and an average MVC copper price of $4.42 per pound. This price excludes positive price-driven settlement adjustments of $700,000 on the Q1 sales. The quarter was $3.5 million, with earnings per share of $0.05 by the end of the year. In line with AMERIGO's capital return strategy, or CRS, a quarterly dividend of CAD 0.02 per share was paid, representing $3.5 million.

Aurora Davidson: Additionally, 3.1 million common shares were repurchased and canceled during the quarter at a weighted average price of $1.78 CAD per share, representing $4 million. Year-to-date, copper prices have been stronger than we budgeted, with MVC receiving a copper price of $4.42 per pound compared to our conservative estimate of $4.15 per pound for 2025. This is good news and will discuss copper prices further shortly. The molybdenum price year-to-date for us has been $20.3 per pound and is trending very close to our annual estimate of $21 per pound. The average exchange rate of the Chilean peso to the US dollar in the first half of the year was CLP 955, also very close to our estimate of CLP 940.

Aurora Davidson: Following the close of Q2, our operational results for July have been very positive. The total price has also remained strong in July at $4.04 per pound. If these conditions persist during August and September, we anticipate results in Q3. Moving on from the view of the copper landscape, I would like to provide a quick summary. The copper market is tight by nearly historic levels. Reviewing our standard checklists for copper unmet demand, here are a few essential points. Global mine copper production is now expected to grow by 6% this year. It's close to 60% lower than the 2025 forecast made in mid-2023. Factors such as mine age, increasing capital requirements, resource depletion, political uncertainty, and declining energy demand act as headwinds against the defined copper market. We continue to see over-the-counter low, spot treatment, and refinery charges, also known as TCRCs.

Aurora Davidson: This reflects the difficulties refiners face in securing copper from miners. To remain profitable, developers must operate with minimal interruption, the low TCRCs they now charge copper miners indicate the desperation to secure an adequate supply. Estimated that 70% of global smelter operations are currently unprofitable. This could lead to smelter shutdowns and cause a sharp decrease in the growth of refined copper output. In 2023, refined copper supply grew by 4.2%, is now estimated to grow by only 1.3% in 2025. Refined product inventories in Tianjin and Shanghai have also fallen sharply this year. Concurrent with this sobering supply scenario in the concentrate and refined copper markets, demand mechanics have been. This demand has been driven by electrification, the growth of AI data centers, grid modernization, and traditional demand. We have discussed the source of the copper.

Aurora Davidson: By putting together this supply and demand outlook, a market deficit is expected by year-end. The International Energy Agency projects a third strain market paired with resilient demand. This is bullish for copper prices at AMERIGO. In addition, tariff-induced market distortions are outlying or have amplified market tightness and have impacted short-term copper prices. During our last earnings call, I discussed the high arbitrage since this year between the copper prices at the LME market and at COMEX. This trend continued to reach historical highs a few weeks ago in the US tariff on copper. AMERIGO's exports copper. However, the higher COMEX prices had a positive impact on LME prices, which in turn had a positive effect on AMERIGO. As traders began pricing in the expected surge relative to LME prices, with the arbitrage reaching over $0.45 per pound.

Aurora Davidson: This price divergence led to a massive redirection of copper inventories from Europe and Asia to the US, driven both by speculation and structural factors. US buyers scrambled to secure physical copper before 3 August, the unwarranted structure of trading making it more expensive to store copper. Under this condition, LME market shifted from its usual contango with extreme backwardation. The futures market signals an extreme tightness. Days before the 3 August, officials said copper. Additional information was finally released by the US government, indicating the tariff would only apply to copper products such as wires. Wires are priced at $4.30 per pound. This is a trading adjustment and not a fixed one. Does the current rule pay for copper being capped? The key to these rules is to capture copper price spikes for a very short duration and convert them into tangible gains for a short time.

Aurora Davidson: This is our strategy that I will discuss next. AMERIGO continues to return capital to shareholders at a rapid pace. In the Q2 alone, AMERIGO.

Carmen Amezquita: Operator, it seems like Aurora's having connection issues.

Operator: Am I not being correctly heard?

Carmen Amezquita: Now we can hear you now, you've been cutting in and out, Aurora.

Operator: Oh, I'm sorry about that. Well, I'll continue. The script will be on the website, and we can go over any questions. Sorry about that.

Aurora Davidson: Oh, I'm sorry about that. Well, I'll continue. The script will be on the website, and we can go over any questions. Sorry about that.

Carmen Amezquita: Okay.

Operator: Cumulatively, the CRS has returned $92.2 million since its inception, with 66% of the amount returned via dividends and 34% through buybacks. In addition to these returns of capital, there is also the benefit of share price appreciation. During the Q2, AMERIGO's share price increased from $1.91 to CAD 2.12. To date, the share price is CAD 2.17, representing a 36% year-to-date increase. I am often asked about whether AMERIGO's board of directors prioritizes dividends over share buybacks. The answer is that the CRS is flexible and multifaceted. There is no absolute preference for one over the other. Instead, we use these tools strategically to maximize shareholder value under varying market conditions. The CRS provides us with the flexibility to adapt to the inherent volatility of the copper sector without being locked into a single method. The quarterly dividends are the foundation of the CRS.

Aurora Davidson: Cumulatively, the CRS has returned $92.2 million since its inception, with 66% of the amount returned via dividends and 34% through buybacks. In addition to these returns of capital, there is also the benefit of share price appreciation. During the Q2, AMERIGO's share price increased from $1.91 to CAD 2.12. To date, the share price is CAD 2.17, representing a 36% year-to-date increase. I am often asked about whether AMERIGO's board of directors prioritizes dividends over share buybacks. The answer is that the CRS is flexible and multifaceted. There is no absolute preference for one over the other. Instead, we use these tools strategically to maximize shareholder value under varying market conditions. The CRS provides us with the flexibility to adapt to the inherent volatility of the copper sector without being locked into a single method. The quarterly dividends are the foundation of the CRS.

Operator: They provide a stable and predictable return to shareholders. Performance dividends are a flexible tool. We use a dividend to distribute excess cash when copper prices are strong and the company's cash balance exceeds $25 million. Performance dividends enable us to quickly share the benefits of spikes in copper prices with shareholders. Share buybacks are used opportunistically to take advantage of periods of share price weakness and to reduce dilution. We have stated the board's intention to buy back enough shares to eliminate annual shareholder dilution at a minimum, but we have been doing more than that. To be clear, being active on share buybacks does not mean there will be no performance dividends. Both can occur under strong copper prices. Our preference is for a balanced and opportunistic approach to capital return.

Aurora Davidson: They provide a stable and predictable return to shareholders. Performance dividends are a flexible tool. We use a dividend to distribute excess cash when copper prices are strong and the company's cash balance exceeds $25 million. Performance dividends enable us to quickly share the benefits of spikes in copper prices with shareholders. Share buybacks are used opportunistically to take advantage of periods of share price weakness and to reduce dilution. We have stated the board's intention to buy back enough shares to eliminate annual shareholder dilution at a minimum, but we have been doing more than that. To be clear, being active on share buybacks does not mean there will be no performance dividends. Both can occur under strong copper prices. Our preference is for a balanced and opportunistic approach to capital return.

Operator: The consistent quarterly dividends provide stability, performance dividends capture upside, and share buybacks manage dilution and capitalize on undervaluation. Our ultimate goal is to generate maximum value for shareholders and to utilize all the tools of the CRS to achieve this. AMERIGO's CFO, Carmen Amezquita, will now discuss the company's financial results. Carmen, please go ahead.

Aurora Davidson: The consistent quarterly dividends provide stability, performance dividends capture upside, and share buybacks manage dilution and capitalize on undervaluation. Our ultimate goal is to generate maximum value for shareholders and to utilize all the tools of the CRS to achieve this. AMERIGO's CFO, Carmen Amezquita, will now discuss the company's financial results. Carmen, please go ahead.

[Analyst] (CIBC World Markets): Thanks, Aurora. I'm pleased to present the financial report for Q2 2025 from AMERIGO and its MVC operation in Chile. During the three months ended 30 June 2025, the company posted a net income of $7.5 million, earnings per share of $0.05 or $0.06 Canadian, and EBITDA of $17.8 million. Net income was $2.2 million lower than in Q2 2024, primarily because during Q2 2024, AMERIGO booked $6.9 million in positive fair value adjustments to copper revenue receivables, resulting from a sharp quarter-on-quarter increase in copper prices. For comparison, during Q2 2025, the total positive fair value adjustments amounted to $0.7 million. Revenue in Q2 2025 was $50.8 million compared to $51.6 million in Q2 2024. This included copper tolling revenue of $43.8 million and molybdenum revenue of $7 million.

Carmen Amezquita: Thanks, Aurora. I'm pleased to present the financial report for Q2 2025 from AMERIGO and its MVC operation in Chile. During the three months ended 30 June 2025, the company posted a net income of $7.5 million, earnings per share of $0.05 or $0.06 Canadian, and EBITDA of $17.8 million. Net income was $2.2 million lower than in Q2 2024, primarily because during Q2 2024, AMERIGO booked $6.9 million in positive fair value adjustments to copper revenue receivables, resulting from a sharp quarter-on-quarter increase in copper prices. For comparison, during Q2 2025, the total positive fair value adjustments amounted to $0.7 million. Revenue in Q2 2025 was $50.8 million compared to $51.6 million in Q2 2024. This included copper tolling revenue of $43.8 million and molybdenum revenue of $7 million.

[Analyst] (CIBC World Markets): In Q2 2025, the gross value of copper tolled on behalf of DET was $66.9 million. From this gross revenue, we deducted notional items, including DET royalties of $19.9 million, smelting and refining of $3.6 million, and transportation of $0.4 million, and then added positive fair value adjustments to settlement receivables of $0.7 million, which, as I mentioned, were significantly lower than the positive fair value adjustments in Q2 2024. Revenue also included molybdenum revenue of $7 million. We reported a provisional copper price of $4.42 per pound on our Q2 2025 sales, which coincidentally were the same provisional price we had for Q1 2025. The final settlement prices for April, May, and June 2025 sales will be based on the average London Metal Exchange prices for July, August, and September 2025, respectively.

Carmen Amezquita: In Q2 2025, the gross value of copper tolled on behalf of DET was $66.9 million. From this gross revenue, we deducted notional items, including DET royalties of $19.9 million, smelting and refining of $3.6 million, and transportation of $0.4 million, and then added positive fair value adjustments to settlement receivables of $0.7 million, which, as I mentioned, were significantly lower than the positive fair value adjustments in Q2 2024. Revenue also included molybdenum revenue of $7 million. We reported a provisional copper price of $4.42 per pound on our Q2 2025 sales, which coincidentally were the same provisional price we had for Q1 2025. The final settlement prices for April, May, and June 2025 sales will be based on the average London Metal Exchange prices for July, August, and September 2025, respectively.

[Analyst] (CIBC World Markets): We now know July's average provisional price or average price, which is $4.44. A 10% increase or decrease from the $4.42 per pound provisional price used on 30 June 2025 would result in a $6.9 million change in revenue in Q3 2025 regarding Q2 2025 production. Tolling and production costs increased 10% from $35.1 million in Q2 2024 to $38.7 million in Q2 2025, which can be mainly attributed to an 11% increase in production between both quarters due to the timing differences of MVC's annual maintenance shutdown, which in 2024 took place in Q2 but this year took place during Q1. The most significant cost variances between the two quarters were consumption-driven. They included higher power costs of $1.2 million, lime costs of $0.6 million, and other direct tolling costs such as copper reagents of $0.8 million.

Carmen Amezquita: We now know July's average provisional price or average price, which is $4.44. A 10% increase or decrease from the $4.42 per pound provisional price used on 30 June 2025 would result in a $6.9 million change in revenue in Q3 2025 regarding Q2 2025 production. Tolling and production costs increased 10% from $35.1 million in Q2 2024 to $38.7 million in Q2 2025, which can be mainly attributed to an 11% increase in production between both quarters due to the timing differences of MVC's annual maintenance shutdown, which in 2024 took place in Q2 but this year took place during Q1. The most significant cost variances between the two quarters were consumption-driven. They included higher power costs of $1.2 million, lime costs of $0.6 million, and other direct tolling costs such as copper reagents of $0.8 million.

[Analyst] (CIBC World Markets): Molybdenum production costs increased by $0.3 million due to higher production associated with more processing of historic tailings in Q2 2025. The gross profit after revenue and production costs was $12.1 million compared to $16.5 million in Q2 2024. General and administration expenses were $1 million compared to $1.1 million in Q2 2024. These expenses included salaries, management, and professional fees of $0.6 million, office and general expenses of $0.2 million, and share-based payments of $0.2 million. Other gains were $0.1 million compared to $0.6 million in Q2 2024, driven mainly by foreign exchange gains in both periods. Finance expense was $0.4 million consistent with Q2 2024, and consisted entirely of interest on loans and bank charges. Income tax expense was $2.6 million compared to $5.6 million in Q2 2024.

Carmen Amezquita: Molybdenum production costs increased by $0.3 million due to higher production associated with more processing of historic tailings in Q2 2025. The gross profit after revenue and production costs was $12.1 million compared to $16.5 million in Q2 2024. General and administration expenses were $1 million compared to $1.1 million in Q2 2024. These expenses included salaries, management, and professional fees of $0.6 million, office and general expenses of $0.2 million, and share-based payments of $0.2 million. Other gains were $0.1 million compared to $0.6 million in Q2 2024, driven mainly by foreign exchange gains in both periods. Finance expense was $0.4 million consistent with Q2 2024, and consisted entirely of interest on loans and bank charges. Income tax expense was $2.6 million compared to $5.6 million in Q2 2024.

[Analyst] (CIBC World Markets): Beginning this quarter, we've included a breakdown of the company's tax expense in the P&L, separating current taxes from deferred income taxes. The current tax represents both actual income tax for MVC and repatriation taxes to bring funds from Chile to Canada. Deferred income tax is an accounting figure used to reconcile timing differences, in AMERIGO's case, primarily arising from the differences in the timing of financial and tax depreciation. Current tax expense in Q2 2025 was $4.4 million compared to $6.3 million in Q2 2024. Before moving on to the statement of financial position, I will mention some non-IFRS measures used by the company: cash cost, total cost, and all-in sustaining cost. AMERIGO's cash cost in Q2 2025 was $1.82 per pound, decreasing from $1.96 per pound in Q2 2024.

Carmen Amezquita: Beginning this quarter, we've included a breakdown of the company's tax expense in the P&L, separating current taxes from deferred income taxes. The current tax represents both actual income tax for MVC and repatriation taxes to bring funds from Chile to Canada. Deferred income tax is an accounting figure used to reconcile timing differences, in AMERIGO's case, primarily arising from the differences in the timing of financial and tax depreciation. Current tax expense in Q2 2025 was $4.4 million compared to $6.3 million in Q2 2024. Before moving on to the statement of financial position, I will mention some non-IFRS measures used by the company: cash cost, total cost, and all-in sustaining cost. AMERIGO's cash cost in Q2 2025 was $1.82 per pound, decreasing from $1.96 per pound in Q2 2024.

[Analyst] (CIBC World Markets): The $0.14 per pound reduction in cash cost was primarily due to a $0.19 per pound decrease in smelting and refining charges in response to the current annual benchmark, offset by increases of $0.03 per pound in lime costs, and other direct costs. Total cost decreased to $3.55 per pound, a decrease of $0.23 per pound from Q2, 2024's $3.78 per pound. This was the result of a $0.14 reduction in cash cost, a $0.04 decrease in DET royalties, and a $0.05 decrease in depreciation. All-in sustaining costs, which include total cost, sustaining capex, and corporate G&A, were $3.69 per pound in Q2, 2025, compared to $4.20 in Q2, 2024. This is the result of per-pound decreases of $0.23 in total cost, $0.27 in sustaining capex, and $0.01 in corporate G&A expenses.

Carmen Amezquita: The $0.14 per pound reduction in cash cost was primarily due to a $0.19 per pound decrease in smelting and refining charges in response to the current annual benchmark, offset by increases of $0.03 per pound in lime costs, and other direct costs. Total cost decreased to $3.55 per pound, a decrease of $0.23 per pound from Q2, 2024's $3.78 per pound. This was the result of a $0.14 reduction in cash cost, a $0.04 decrease in DET royalties, and a $0.05 decrease in depreciation. All-in sustaining costs, which include total cost, sustaining capex, and corporate G&A, were $3.69 per pound in Q2, 2025, compared to $4.20 in Q2, 2024. This is the result of per-pound decreases of $0.23 in total cost, $0.27 in sustaining capex, and $0.01 in corporate G&A expenses.

[Analyst] (CIBC World Markets): Moving on to the statement of financial position, on 30 June 2025, the company had cash and cash equivalents of $23.3 million, restricted cash of $0.9 million, and had a working capital deficiency of $5.4 million, down from a working capital deficiency of $6.5 million on 31 December 2024. Trade and accounts payable decreased from $24.6 million as of 31 December 2024, to $19.7 million at the end of June 2025. Current income tax liabilities also decreased from $8.5 million on 31 December 2024, to $0.1 million. Most of the tax balance due at the end of 2024 related to income tax owing by MVC in respect of 2024 earnings, which exceeded the monthly tax installments made. This tax was paid in April 2025 when MVC's annual tax declaration was filed in Chile.

Carmen Amezquita: Moving on to the statement of financial position, on 30 June 2025, the company had cash and cash equivalents of $23.3 million, restricted cash of $0.9 million, and had a working capital deficiency of $5.4 million, down from a working capital deficiency of $6.5 million on 31 December 2024. Trade and accounts payable decreased from $24.6 million as of 31 December 2024, to $19.7 million at the end of June 2025. Current income tax liabilities also decreased from $8.5 million on 31 December 2024, to $0.1 million. Most of the tax balance due at the end of 2024 related to income tax owing by MVC in respect of 2024 earnings, which exceeded the monthly tax installments made. This tax was paid in April 2025 when MVC's annual tax declaration was filed in Chile.

[Analyst] (CIBC World Markets): Note that, in line with Chilean tax requirements, MVC plays monthly tax installments based on a percentage of revenue, which may or may not be close to the final corporate tax for a given year. In April of the following year, when the tax declaration is filed for the previous year, any difference in the amount owing exceeding the monthly tax installments is paid. You will notice that the company's debt, which is shown as $7 million net of transaction fees, is now shown fully as current debt. As guided to the market, we intend to make the remaining scheduled payment of $4 million in the second half of the year and prepay the remaining $3.5 million, which is formally due on 30 June 2026. In this way, AMERIGO will be in a zero debt position by the end of 2025.

Carmen Amezquita: Note that, in line with Chilean tax requirements, MVC plays monthly tax installments based on a percentage of revenue, which may or may not be close to the final corporate tax for a given year. In April of the following year, when the tax declaration is filed for the previous year, any difference in the amount owing exceeding the monthly tax installments is paid. You will notice that the company's debt, which is shown as $7 million net of transaction fees, is now shown fully as current debt. As guided to the market, we intend to make the remaining scheduled payment of $4 million in the second half of the year and prepay the remaining $3.5 million, which is formally due on 30 June 2026. In this way, AMERIGO will be in a zero debt position by the end of 2025.

[Analyst] (CIBC World Markets): Regarding cash flows during the quarter, AMERIGO generated $11.9 million in cash flow from operations. Net operating cash flow, which includes changes in non-cash working capital, was $6.3 million. Included in the changes in non-cash working capital are payments related to current income taxes, income tax liabilities, rather, of $9.5 million, which includes the 2024 income tax payment we previously discussed. These decreases in accounts payable and income tax result in an outlay of cash, thereby decreasing the cash flow from operations net of these non-cash working capital changes. In terms of uses of cash during the quarter, $1.4 million was used for investing activities, in other words, for capex payments, and $9.4 million was used in financing activities.

Carmen Amezquita: Regarding cash flows during the quarter, AMERIGO generated $11.9 million in cash flow from operations. Net operating cash flow, which includes changes in non-cash working capital, was $6.3 million. Included in the changes in non-cash working capital are payments related to current income taxes, income tax liabilities, rather, of $9.5 million, which includes the 2024 income tax payment we previously discussed. These decreases in accounts payable and income tax result in an outlay of cash, thereby decreasing the cash flow from operations net of these non-cash working capital changes. In terms of uses of cash during the quarter, $1.4 million was used for investing activities, in other words, for capex payments, and $9.4 million was used in financing activities.

[Analyst] (CIBC World Markets): These financing activities included AMERIGO returning $7.6 million to shareholders, $3.5 million through AMERIGO's regular quarterly dividend of CAD 0.03 per share, and $4 million from the purchase and cancellation of 3.1 million common shares through a normal course issuer bid. The company also paid $4 million on borrowings, including $2.3 million paid with restricted cash. Briefly touching on the results for the first half of the year compared to guidance, our cash cost for the 6 months ended 30 June 2025 was $2 per pound, and our forecast indicates that we are on track to meet the company's 2025 guidance of an annual normalized cash cost of $1.93 per pound. Our normalized cash cost guidance excludes any signing bonus associated with a 3-year collective labor agreement with MVC's operators' union that will occur later this year.

Carmen Amezquita: These financing activities included AMERIGO returning $7.6 million to shareholders, $3.5 million through AMERIGO's regular quarterly dividend of CAD 0.03 per share, and $4 million from the purchase and cancellation of 3.1 million common shares through a normal course issuer bid. The company also paid $4 million on borrowings, including $2.3 million paid with restricted cash. Briefly touching on the results for the first half of the year compared to guidance, our cash cost for the 6 months ended 30 June 2025 was $2 per pound, and our forecast indicates that we are on track to meet the company's 2025 guidance of an annual normalized cash cost of $1.93 per pound. Our normalized cash cost guidance excludes any signing bonus associated with a 3-year collective labor agreement with MVC's operators' union that will occur later this year.

[Analyst] (CIBC World Markets): In 2025, MVC is expected to incur CapEx of $13 million, of which $4.4 million is optimization CapEx, $4.4 million is sustaining CapEx, and $4.2 million is CapEx associated with the annual plant maintenance shutdown and strategic spares. Year-to-date 2025, CapEx additions were $6 million, and CapEx payments were $8.2 million. We remain on track with our annual CapEx guidance. We will report Amerigo's Q3 2025 financial results in October 2025 and want to thank you for your continued interest in the company. We will now take questions from call participants.

Carmen Amezquita: In 2025, MVC is expected to incur CapEx of $13 million, of which $4.4 million is optimization CapEx, $4.4 million is sustaining CapEx, and $4.2 million is CapEx associated with the annual plant maintenance shutdown and strategic spares. Year-to-date 2025, CapEx additions were $6 million, and CapEx payments were $8.2 million. We remain on track with our annual CapEx guidance. We will report Amerigo's Q3 2025 financial results in October 2025 and want to thank you for your continued interest in the company. We will now take questions from call participants.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the 1 on your touchstone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press the star followed by the 2. If you are using a speakerphone, please let the handset before pressing any keys. The first question comes from Terry Fisher at CIBC World Markets. Please go ahead.

Graham Farrell: Yes. Good afternoon, everybody. I believe it's already been flagged that there was really a lot of problems with the connection while Aurora was speaking, particularly about the outlook for copper and copper markets. I think you said that the text of the speech will be available on the website, so I don't expect you to repeat it here. I did want to ask, though, about the likelihood because I think you mentioned it, but I didn't get it because the phone broke up, of a positive fair value adjustment in Q3, given where copper prices are and have been. Is that a reasonable expectation?

Terry Fisher: Yes. Good afternoon, everybody. I believe it's already been flagged that there was really a lot of problems with the connection while Aurora was speaking, particularly about the outlook for copper and copper markets. I think you said that the text of the speech will be available on the website, so I don't expect you to repeat it here. I did want to ask, though, about the likelihood because I think you mentioned it, but I didn't get it because the phone broke up, of a positive fair value adjustment in Q3, given where copper prices are and have been. Is that a reasonable expectation?

Aurora Davidson: Terry, first of all, sorry about that. We did a sound check before we had the call. We didn't have any problems, so it's unfortunate that I didn't come through. Yes, the text of the earnings call will be available on the website as soon as we get it from the supplier. I did speak about the fact that July has been a good month, both in terms of production, and we also saw, because now we have the average prices for the month of July, $4.44 per pound. We mark-to-market on average at $4.42 at the end of 30 June, as Carmen was mentioning. Right now, as we speak, there is a small positive adjustment on a pricing basis for the first month that has settled, which is essentially we have settled now April at the July average prices.

Aurora Davidson: The outlook remains positive from our perspective. I did speak about, and hopefully that wasn't broken, about what happened yesterday with the clarification of what the US tariff is going to be looking like, essentially exempting copper concentrates and unrefined copper from the tariffs. That caused a sharp correction of that arbitrage that we had been seeing between COMEX and the LME market for most of the year. If you look at copper COMEX price today and the LME, there's a $0.03 difference, which is life is back to normal in terms of what you normally have in those markets. Does that answer your question?

Graham Farrell: Yes, that's fine. I'll read the text. My second question's sort of left field. I'm wondering if you've heard of a company called Still Bright.

Terry Fisher: Yes, that's fine. I'll read the text. My second question's sort of left field. I'm wondering if you've heard of a company called Still Bright.

Aurora Davidson: No, I haven't heard about them.

Graham Farrell: Okay. Well, I'll leave that with you to research. Still Bright, I just saw an interview today on television. I'd never heard of it before. It's a startup, kind of a technology company that has received some seed financing. What they have is a new process for essentially smelting copper, but it's through flotation cells, and they use vanadium as a catalyst, and they're able to recover the copper without producing the waste products that many smelters do of lead and arsenic. They can do it at a much lower cost and quicker startup to build these things. From what the person said, I think it's unlikely that it would be targeted towards processing tailings. I think it's more an alternative to shipping ore to China to be smelted and doing it domestically in the US and other countries. Anyway, worth researching. I'll leave that with you.

Graham Farrell: The only other question I had, actually, is for a Carmen question. It'd be exciting for Carmen. It's a two-part question. One is that with all the depreciation we're taking at over $22 million a year, which I know helps with cash conservation by deferring taxes because there's tax depreciation. I don't know what CCA is versus depreciation rates in Chile. In any event, it seems to me that the fixed assets now are being considerably undervalued in the balance sheet. Related to that balance sheet, we also have $24 million of other assets, and I forget what those are. The question is, are the assets undervalued in the balance sheet, and what are the $24 million of other assets?

Carmen Amezquita: I think you have to remember when you look at tax depreciation and accounting depreciation are different. What we're taking on the P&L, that's just our standard depreciation rate over the life of the asset, whereas the tax depreciation is completely different. It's not in a we don't do it in a way to save taxes on the accounting side.

Graham Farrell: Okay. Sorry. I phrased the question improperly. Forget about the tax depreciation. It just seems to me that even with the depreciation rates the company uses, relative to the age and the value of the assets, that the assets in the balance sheet are probably understated, which is a good thing for us. I guess it doesn't matter a lot given that there's no fixed debt on the balance sheet as well. There's no leverage to that. Still, book value matters to some people.

Carmen Amezquita: Yeah. I wouldn't say the assets are understated.

Graham Farrell: Okay. Can you answer the other question? What are the other assets, $24 million?

Terry Fisher: Okay. Can you answer the other question? What are the other assets, $24 million?

Carmen Amezquita: Sure. That relates to all of the plant and equipment that's on site. Mostly the plant.

Graham Farrell: Other assets are plant, not fixed assets.

Carmen Amezquita: Yeah. machinery and equipment would relate to all of the other assets that are not.

Graham Farrell: Oh, all right. Okay. That's part of the whole plant and equipment then. Okay. That's a good thing.

Carmen Amezquita: Exactly. Yeah. There's the plant that's the majority of what we have in fixed assets on the balance sheet, and then there's also the machinery and equipment that we use as well.

Graham Farrell: Okay. I have just one final question for Aurora. It seems to me that in the quarter we've had with, obviously, the US copper price up because of the Trump tariffs. That's now gone away. Still, I would have thought there would have been a greater arbitrage effect on the LME price than we actually saw. Can you explain why that didn't happen?

Terry Fisher: Okay. I have just one final question for Aurora. It seems to me that in the quarter we've had with, obviously, the US copper price up because of the Trump tariffs. That's now gone away. Still, I would have thought there would have been a greater arbitrage effect on the LME price than we actually saw. Can you explain why that didn't happen?

Aurora Davidson: Terry, what we basically do is we mark to market, as we always disclose, based on the progression of the copper prices at month-end, and then we settle those prices at the actual average price for the LME of the month in question. For example, when you're looking at the average prices that we had for Q2, I'll tell you what they were, although this is available online. The average LME copper price for April was $4.17. There was a significant decline from $4.42 to 4.17 in April. That was final price for January sales was the April LME price, $4.17. The final sellment price for the February sales, which was the May price, was $4.32, and the final sellment price for the March sales was the June average price of $4.46.

Aurora Davidson: If you're looking at what happened there that I didn't see that huge pickup, April was a defining moment or a defining month of negative adjustments from $4.42 to $4.17. May was also settled at a lower price of $4.32 compared to the $4.42 that we had mark-to-market. The only month in the Q2 where there were positive settlement adjustments compared to our mark-to-market at 31 March was the month of June 46th. I'm sorry if this all sounds so confusing. We try to simplify all of that information in the notes to our, actually, news release. All of that information is there, but there certainly was a negative final settlement when you looked at the April realized prices of $4.17.

Graham Farrell: Right. I get that. I actually do understand it because I've been following the company a long time. I didn't phrase the question very well, I guess. I was just thinking about the LME price versus the spot price and the US copper price and why there wasn't a greater pull on the LME price. Nothing to do with AMERIGO. Maybe that's a question that can't be answered, but it just surprised me that there wouldn't have been a greater effect on the LME.

Terry Fisher: Right. I get that. I actually do understand it because I've been following the company a long time. I didn't phrase the question very well, I guess. I was just thinking about the LME price versus the spot price and the US copper price and why there wasn't a greater pull on the LME price. Nothing to do with AMERIGO. Maybe that's a question that can't be answered, but it just surprised me that there wouldn't have been a greater effect on the LME.

Aurora Davidson: A greater positive or a greater negative effect?

Terry Fisher: A greater positive or a greater negative effect?

Graham Farrell: Well, if the price of copper is higher in the US because Americans are buying it to front-run the tariffs, you would expect that would increase demand for copper even globally, which would reflect on the LME settlement prices.

Aurora Davidson: I think it did. I mentioned that. Sorry. That was one of the things that I mentioned on the script. The run-up that we saw on COMEX prices during the quarter and basically during the first semester of the year had a positive effect on the LME. I think it did pull it up. Now if you look at the prices today, $4.39 COMEX, LME spot price, $4.36, we're back to normal. I think that trading run opened up a lot of eyes into what's going on with the copper fundamental structure, not just a trading story, which is a benefit for the industry in general, for all of us, for sure.

Carmen Amezquita: I think it did. I mentioned that. Sorry. That was one of the things that I mentioned on the script. The run-up that we saw on COMEX prices during the quarter and basically during the first semester of the year had a positive effect on the LME. I think it did pull it up. Now if you look at the prices today, $4.39 COMEX, LME spot price, $4.36, we're back to normal. I think that trading run opened up a lot of eyes into what's going on with the copper fundamental structure, not just a trading story, which is a benefit for the industry in general, for all of us, for sure.

Graham Farrell: Right. Okay. That's great. I'll read it, Carmen. I don't want to take up more time now, but thanks for everything. That's great.

Terry Fisher: Right. Okay. That's great. I'll read it, Carmen. I don't want to take up more time now, but thanks for everything. That's great.

Carmen Amezquita: Thank you. The next question comes from Ben Pirie at Atrium Research. Please go ahead.

Operator: Thank you. The next question comes from Ben Pirie at Atrium Research. Please go ahead.

[Analyst] (CIBC World Markets): Hi, Aurora Davidson, Graham Farrell, and Carmen Amezquita. It's Ben Pirie from Atrium again. Firstly, congrats on a strong quarter, and it's good to see that shareholders are rewarding you guys for all the hard work. Just a couple of questions here, and I think Terry Fisher covered a couple of them around the LME prices there. In terms of CapEx, obviously, the main end shut down in Q1, so it was elevated. Q2, it was quite low. What can we expect in Q3 and Q4 from a CapEx perspective?

Ben Pirie: Hi, Aurora Davidson, Graham Farrell, and Carmen Amezquita. It's Ben Pirie from Atrium again. Firstly, congrats on a strong quarter, and it's good to see that shareholders are rewarding you guys for all the hard work. Just a couple of questions here, and I think Terry Fisher covered a couple of them around the LME prices there. In terms of CapEx, obviously, the main end shut down in Q1, so it was elevated. Q2, it was quite low. What can we expect in Q3 and Q4 from a CapEx perspective?

Aurora Davidson: You shouldn't expect any changes from the original guidance, which was $13 million. I think Carmen spoke about that. What is in those $13 million? We have essentially 5 process optimization projects, which have a price tag of $4.4 million. This includes finalizing some projects that we initiated in 2024, basically to expand and optimize the control of flotation cells and improve water evacuation in Cauquenes. We also have a project to optimize flotation in the Cascades, and we have the addition of a second thickener for the mixed concentrate. What has transpired in terms of Q1, Q2? We had a front-loading of a lot of the CapEx associated with 2 things: the timing of the plant maintenance shutdown and the workload of those optimization projects. We're on track to not have more than that $13 million of total CapEx for the year.

Aurora Davidson: I did mention $4.4 million for optimization. The other categories are $4.2 million for plant shutdown and $4 million just for sustaining CapEx, boring sustaining CapEx.

[Analyst] (CIBC World Markets): Okay. Understood. Thank you. Yeah, in terms of share buybacks, we did hear you were cutting in and out a little bit, but on the buybacks in particular in Q2, there was obviously quite a jump from Q1. I think it was a 4 or 5x in terms of shares bought back. Why such a big change? In terms of consistency going into Q3 and Q4, I know you mentioned you're sort of going to be opportunistic with the buybacks, but can you just touch on this jump from Q1 to Q2?

Ben Pirie: Okay. Understood. Thank you. Yeah, in terms of share buybacks, we did hear you were cutting in and out a little bit, but on the buybacks in particular in Q2, there was obviously quite a jump from Q1. I think it was a 4 or 5x in terms of shares bought back. Why such a big change? In terms of consistency going into Q3 and Q4, I know you mentioned you're sort of going to be opportunistic with the buybacks, but can you just touch on this jump from Q1 to Q2?

Aurora Davidson: Yes. I think what was happening was basically a strong cash iteration and the recognition that there was, especially in the Q2, an opportunity of buying back those shares at a really good price. I did mention that our average buyback price in the quarter was $1.78. I think that was for the first semester. I think that we were just watching how much cash is coming in as free cash flow and what is the best way of allocating that cash to ensure that we kept up with, essentially, that distribution commitment and share buybacks was an obvious opportunity for us in the Q2.

[Analyst] (CIBC World Markets): Right. Okay. Maybe you can touch on that sort of strategy in terms of how you're prioritizing shareholder returns because it did cut out a little bit, but it sounds like when the share price is higher, you'll probably scale back the buybacks, but if copper is high, performance dividends.

Ben Pirie: Right. Okay. Maybe you can touch on that sort of strategy in terms of how you're prioritizing shareholder returns because it did cut out a little bit, but it sounds like when the share price is higher, you'll probably scale back the buybacks, but if copper is high, performance dividends.

Aurora Davidson: It's basically a more holistic answer. I wouldn't like to just provide a very linear response saying, "If copper price is here, we do this or we do that, or if the share price is here, we take this route." I think that the answer is that our CRS has to be flexible. We have no absolute preference other than ensuring that we live up to our word of returning that cash to shareholders, and we use the tools strategically. You know quite well that for us, the foundation of the CRS is the quarterly dividend. We want to provide that very stable, very predictable return to shareholders under these copper price conditions where that $0.03 Canadian dividend is absolutely safe. The question becomes, "What do we do next, performance dividends or the share buybacks?" The performance dividends are a great tool.

Aurora Davidson: For example, when we have a spike in copper prices, we saw that happening in Q2 2024, the obvious answer was we've realized the benefits of this strong settlement in the quarter for our prior quarter sales, and we have to return this. The best way of doing it quickly is through the performance dividend. Share buybacks, if we see a period of share price weakness, we act on that. If we want to reduce dilution, we act on that. We have stated, at the very minimum, we want to end each year with no dilution. We've done more than that this year. Certainly, you saw the activity that we had in Q2. Literally, what was happening is we had the free cash flow.

Aurora Davidson: We were looking at our share price movement, and we thought, This is a great opportunity to go out in the market and buy back those shares at a bargain price. We did that.

[Analyst] (CIBC World Markets): Understood. Yep. No, that makes sense. I guess just the last question would be, obviously, you've been paying down the debt quite aggressively over the last year and a half. What are the plans to do with the excess cash flow once this debt is paid off at the end of the year? Is there a chance that the fixed dividend portion could increase?

Ben Pirie: Understood. Yep. No, that makes sense. I guess just the last question would be, obviously, you've been paying down the debt quite aggressively over the last year and a half. What are the plans to do with the excess cash flow once this debt is paid off at the end of the year? Is there a chance that the fixed dividend portion could increase?

Aurora Davidson: That is certainly a possibility. Depending on where share price performance is, additional activity on the buyback is also a possibility or a heftier or more frequent performance dividend. It's A, B, or C. That's the easy answer because basically, there's going to be a substantial catalyst in terms of additional free cash flow to equity. I think Carmen mentioned that. On average, if you look at our scheduled debt repayments for the debt worth $7 million, add to that $2 million finance costs. That's $9 million that are becoming available as of 2026.

[Analyst] (CIBC World Markets): Yep. Understood. I guess it's good to keep that flexibility and see how things go. Okay. Well, that's all I had for today. Again, congrats and thanks.

Ben Pirie: Yep. Understood. I guess it's good to keep that flexibility and see how things go. Okay. Well, that's all I had for today. Again, congrats and thanks.

Aurora Davidson: Thanks, Ben.

Carmen Amezquita: Thank you. The next question comes from John Polcari at Mutual of America. Please go ahead.

Operator: Thank you. The next question comes from John Polcari at Mutual of America. Please go ahead.

Graham Farrell: Thank you. Another well-managed quarter. Thank you. Two questions. I will not repeat or bother you with the question regarding dividends or increases. In addition to eliminating dilution, is there a minimum number of shares that you think might be retained as far as reducing the flow to was an aggressive repurchase of shares in Q2? That obviously will vary from quarter to quarter. Again, is there a minimum amount in order to maintain liquidity that you think would be appropriate, that you would not want to drop below in terms of number of shares outstanding, or?

John Polcari: Thank you. Another well-managed quarter. Thank you. Two questions. I will not repeat or bother you with the question regarding dividends or increases. In addition to eliminating dilution, is there a minimum number of shares that you think might be retained as far as reducing the flow to was an aggressive repurchase of shares in Q2? That obviously will vary from quarter to quarter. Again, is there a minimum amount in order to maintain liquidity that you think would be appropriate, that you would not want to drop below in terms of number of shares outstanding, or?

Aurora Davidson: No. The commitment is basically don't avoid dilution, and I don't think that we have reached a situation where we think that buying back any more shares or buying back a big block of shares would represent a detrimental decision for the company to take on.

Graham Farrell: Okay. As we speak, if there was an appropriate decision and there was adequate cash?

John Polcari: Okay. As we speak, if there was an appropriate decision and there was adequate cash?

Aurora Davidson: As we speak, share buybacks are absolutely on the table as are performance dividends and possibly in 2026 an increase to the quarterly dividend. The three tools remain fully valid and executable on depending on circumstances.

Graham Farrell: Thank you. The other question I had was just if you could take just a moment out to refresh me on, if you will, the chain of custody for copper delivery. After you've extracted the copper from the tailings, I assume it goes to port. At what point do you turnover, say, title to the copper? At what point do you receive payment?

John Polcari: Thank you. The other question I had was just if you could take just a moment out to refresh me on, if you will, the chain of custody for copper delivery. After you've extracted the copper from the tailings, I assume it goes to port. At what point do you turnover, say, title to the copper? At what point do you receive payment?

Aurora Davidson: It is easier than that in terms of when is title transferred. Our copper concentrate, it's a copper concentrate. It's not, obviously, a cathode. It's not a finished product. It's a dark powder called copper concentrate. It is shipped out on a daily basis. As soon as it's put on the LTNE into trucks, it passes title. We bill for those deliveries on a weekly basis. We get a provisional price on a weekly basis, and we settle that final provisional price three months later when the known price average price of the third month following delivery takes place.

Graham Farrell: Understand. That provisional price.

John Polcari: Understand. That provisional price.

Aurora Davidson: It's a continuous yeah. That provisional price is always yeah, go ahead.

Graham Farrell: Always based on the LME?

John Polcari: Always based on the LME?

Aurora Davidson: It's always LME. It's always LME. The provisional weekly price is based on the provisional price that is used until things are settled three months later. Always LME.

Graham Farrell: Great. All right. That's all I had, and thank you again for managing us through another volatile quarter.

John Polcari: Great. All right. That's all I had, and thank you again for managing us through another volatile quarter.

Aurora Davidson: Thank you.

Carmen Amezquita: Thank you. The next question comes from William Dower, an investor. Please go ahead.

[Analyst] (CIBC World Markets): All right. I just want to echo the congratulations to everybody on the call, but also to the teams in Chile doing the work. This is incredible operational performance, managerial performance. Just quick follow-up on the settlement. It sounds like the fair value adjustment is made 3 months later. That, I mean, we're marking the market, but when is the cash actually hitting our account? Kind of along the same lines, are we waiting to make decisions on cash flow such as buybacks or dividends until we know what the provisional adjustment is? That way, essentially, there's going to be a quarterly delay in the effect of the cash flows and then the decisions we make based on the cash flows?

[Shareholder]: All right. I just want to echo the congratulations to everybody on the call, but also to the teams in Chile doing the work. This is incredible operational performance, managerial performance. Just quick follow-up on the settlement. It sounds like the fair value adjustment is made 3 months later. That, I mean, we're marking the market, but when is the cash actually hitting our account? Kind of along the same lines, are we waiting to make decisions on cash flow such as buybacks or dividends until we know what the provisional adjustment is? That way, essentially, there's going to be a quarterly delay in the effect of the cash flows and then the decisions we make based on the cash flows?

Aurora Davidson: William, thank you for recognizing the team in Chile. They are the real people that make all of this happen. We just coordinate them. There are two parts to your question regarding the mark-to-market. I think that we mark-to-market every month. Carmen prepares consolidated financial statements on a monthly basis, not on a quarterly basis. We take the LME spot price and the LME M+3 price. We create a progression for the M+1, M+2 based on those two data points. We do the mark-to-market on a monthly basis. I think most important or the most important part of your question is what happens with the cash and what happens with the decision-making around that cash. The payment terms from Codelco to MVC can be summarized in three steps.

Aurora Davidson: We issue weekly invoices each Monday for 75% of the prior week's copper production, which is provisionally priced, as I was speaking in my prior question, at the week's average LME price. Once the month is completed, we issue one monthly invoice to true the amount up to set 90% of the month's production, which is provisionally priced at the monthly average price less the weekly interim payments. Basically, at each month's end, we are caught up with 90% of the deliveries that were done during the prior month priced at the most recent LME price for 90% of those deliveries. The final terms, when the final terms are known 3 months later, we issue one final either credit note or debit note at the final price, which is the M+3 price.

Aurora Davidson: Cash flow is coming in on a weekly basis at 75% of our production rate. It is trued up to 90% of our production rate a week after the end of the month, and the final settlement, positive or negative, takes place 3 weeks before. There's always a continuum of cash flow coming in on a weekly basis. We update all of this information in our model. We basically are working with real-time data that allows us to know how much, for example, can be allocated to share buybacks on a weekly basis when we're active on the buyback program or when copper prices are closer to lower prices, how safe is our CapEx payment or debt repayment, our quarterly dividend. We're monitoring all of that information, essentially, I would say, daily.

Aurora Davidson: We just plug in the copper price that we think is going to apply for each week, and we have all the data ready in front of us.

[Analyst] (CIBC World Markets): Perfect. Thank you so much. I have two follow-ups, not to that specific area, but with regards to cost guidance, it's around $2 per pound. Obviously, it's been beaten in Q1 and Q2 and really increasing.

[Shareholder]: Perfect. Thank you so much. I have two follow-ups, not to that specific area, but with regards to cost guidance, it's around $2 per pound. Obviously, it's been beaten in Q1 and Q2 and really increasing.

Aurora Davidson: In Q2.

[Analyst] (CIBC World Markets): In Q2. Okay. Largely because of smelting refining charges being lower, is that something, and I know you've maintained the cost? Go ahead.

[Shareholder]: In Q2. Okay. Largely because of smelting refining charges being lower, is that something, and I know you've maintained the cost? Go ahead.

Aurora Davidson: No. We guide it. If you're interested in the guidance, I would say the best source of information and probably the news release you should keep close to you year-round is our guidance news release, which is usually our first news release of the year. We provide there not only what the cash cost guidance is going to be, but also forbearance in terms of what happens with copper prices moving up or down, molly prices moving up or down, and even foreign exchange. When we provided our guidance for the year in terms of cash cost, we knew already what the spot prices sorry, what the TCRCs, treatment and refining charges were going to be for the year. Any variations that you've seen from guidance to actual are not driven by lower smelter and refining charges.

[Analyst] (CIBC World Markets): I guess, and I'm probably just ignorant and don't understand it, and maybe you can better explain it, but so are these decreases that at least the lower numbers than the cash cost guidance expected from smelting and refining? I guess what I'm getting at is this something that's going to be long-term, or is this kind of one-off?

Terry Fisher: I guess, and I'm probably just ignorant and don't understand it, and maybe you can better explain it, but so are these decreases that at least the lower numbers than the cash cost guidance expected from smelting and refining? I guess what I'm getting at is this something that's going to be long-term, or is this kind of one-off?

Aurora Davidson: No. The variances that we're seeing right now are coming in from higher molly production. They're coming in from a better or from a lower from a least strong Chilean peso compared to the US dollar. Those are the significant variances are coming from. They're not coming by lower smelter and refinery charges. In our case, as is also the case for most copper concentrate producers, we work not on the basis of spot treatment and refinery charges, but on what's called an annual benchmark treatment and refining charge that is known at the end of the prior year. You work with those figures, with those charges for the rest of the year, irrespective of what happens with the spot TCRCs. There are long-term or annually set rates that doesn't change through the year.

[Analyst] (CIBC World Markets): Okay. Thank you. The last subject, I'll preempt this question by thanking you for doing the interviews that you do, the kind of long-form, hour-and-a-half-long videos. Those are incredibly helpful and answer a lot of my questions. Part of that, when you're questioned about the overall DET contracts, both for historic and fresh tailings, obviously, you provide guidance in the management discussion analysis saying, basically, there's very little chance of DET canceling our contract in the short term. With regards to the current extension contract deadlines, obviously, it's been renewed and renewed. Can you provide us any guidance on when we might hear about talks of an additional extension or just kind of when we should start thinking about hearing that or, I don't know, some sort of guidance on that?

[Shareholder]: Okay. Thank you. The last subject, I'll preempt this question by thanking you for doing the interviews that you do, the kind of long-form, hour-and-a-half-long videos. Those are incredibly helpful and answer a lot of my questions. Part of that, when you're questioned about the overall DET contracts, both for historic and fresh tailings, obviously, you provide guidance in the management discussion analysis saying, basically, there's very little chance of DET canceling our contract in the short term. With regards to the current extension contract deadlines, obviously, it's been renewed and renewed. Can you provide us any guidance on when we might hear about talks of an additional extension or just kind of when we should start thinking about hearing that or, I don't know, some sort of guidance on that?

Aurora Davidson: We are 12 years away from the contract expiring. I can assure you one thing. If I'm still CEO in 12 years, you will not hear from it on year 11. You probably will hear from it around year six years before. This is critical to us. It is the genesis of what the company is. This is not a discussion or a negotiation that we're going to leave to the end of or closer to 2037. We're still 12 years away from that.

[Analyst] (CIBC World Markets): All right. I know. Obviously, it's very important. I think it's very important. That's why I figured I'd ask. I appreciate it. Your confidence is one of the main reasons I'm an investor. You are one of the main reasons I'm an investor in Amerigo. I appreciate you and the entire team there. Thank you for all the work that you do.

[Shareholder]: All right. I know. Obviously, it's very important. I think it's very important. That's why I figured I'd ask. I appreciate it. Your confidence is one of the main reasons I'm an investor. You are one of the main reasons I'm an investor in Amerigo. I appreciate you and the entire team there. Thank you for all the work that you do.

Aurora Davidson: You're very kind.

Carmen Amezquita: Thank you. We have no further questions. I will turn the call back over to Aurora Davidson for closing comments.

Operator: Thank you. We have no further questions. I will turn the call back over to Aurora Davidson for closing comments.

Aurora Davidson: Thank you very much. Again, my apologies for any communication disruptions through the call. We try to avoid them as much as we can. Thank you for attending today's call, and thank you to Carmen and Graham for being on the call as well. The recording and the script will be available on Amerigo's website in the next few days. We will hold our next earnings call on Thursday, 30 October, to report our Q3 results. Please visit our website regularly for updates, and feel free to contact us with any questions at your convenience. Thank you for your continued interest in Amerigo.

Carmen Amezquita: Ladies and gentlemen, this concludes our conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

Operator: Ladies and gentlemen, this concludes our conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

The second quarter 2025 earnings conference. Call Alliance have been placed on mute to prevent any background noise.

After the formal remarks, there will be a question and answer session. If you'd like to ask a question during this time simply Press Start, then the number 1 on your telephone keypad,

If you would like to withdraw your question, please press star followed by the 2.

Thank you, Mr. Grand, Farrell of Northstar investor relations, you may begin your conference.

Thank you, operator.

Good afternoon and welcome everyone. To America's quarterly conference call to discuss the company's Financial results for the second quarter of 2025. We appreciate you joining us today.

This call will cover America's Financial and operating results for the second quarter and to June 30th 2025.

Following our prepared remarks, we will open the conference call to a question and answer session.

Our call today will be led by America's president and chief executive officer Aurora Davidson along with the company's Chief Financial Officer Carmen azita

Before we begin our formal remarks, I would like to remind everyone. That some of the statements on this conference call may be forward-looking statements.

Or looking statements may include but are not necessarily limited to financial projections or other statements of the company's plans objectives expectations or intentions.

These matters involve certain risks and uncertainties.

Companies actual results May differ significantly from those projected or suggested by any 4 lucky statements, due to a variety of factors which are discussed in detail in our seeder plus filings.

I'll now hand the call over to Aurora Davidson.

Please go ahead. Aurora

Thank you, Graham.

We are pleased to report positive operational and financial results and Margot has again. Demonstrated its operational excellence and capital, allocation agility. We achieved strong copper production manage cost, effectively, and reinforce our commitment to shareholder returns.

Our Chilean operation, NBC continued to operate consistently in the second quarter with no lost, time accidents, among our employees and no environmental incidents.

In both of these operational performance categories. And we see continues to extend its multi-year company records.

Copper production was 15.5 million pounds and we lived in on production with also robust copper production. In the first half of the year started for 46% of America's annual guidance.

Of 62.9 million pounds, our yearly guidance takes into account, our lower production in q1, which was associated with the annual maintenance shutdown. Therefore, our production guidance remains in place

We also maintain strict cost controls and our cash cost per pound declined to a dollar 82 cents in the second quarter.

Our annual cash cost, guidance of a dollar and 93 cents per pound is sold to expected to be met.

This guided cash code, Target excludes the impact of NBC's collected bargaining cost, which is scheduled for a cover of this year. Collective bargaining. First separately, every 3 years at NBC for our 2 Collective agreements.

America financial performance in the second quarter included, revenue of 50.9 million and an average NBC copper price of $4.44. Now this price excludes positive price driven settlements, that means of 700,000 dollars on the first quarter sales.

The quarter was 3.5 million with earnings per year of 5 cents.

At the end of the year.

In line with America's capital return strategy or CRS a quarter of dividend of Canadian per share with speed representing 3.5 million. Additionally, 3.1 million, common shares, were repurchased and canceled during the quarter at a weighted average, price of a dollar 78 cents Canadian per share, representing 4 million.

Year to date copper prices have been stronger than we budgeted with NBC receiving a copper price of $4.42 per pound compared to our conservative estimate of $4.15 per pound in 2024 2025. This, this could be several, it has copper prices further shortly.

The price.

Effort with the US dollar in the first half of the year was 955 pesos.

Also, very close to our asset of 940 pesos.

Following the close of the second quarter, our professional results, for July have been very positive with disruption to 20.

The price has also remained strong in July.

At 4 dollars and 40 4 cents per pound. If this conditions persist during August and September,

8, third quarter.

If you have the copper landscape, I would like to provide a quick summary.

The copper Market is tight by.

Levels.

Standard checklist for cost here are a few special points.

Google, my copper production is now expected to grow, but this year,

60%, lower than the 20125 has made in the 2023.

Chapter such as my age, increasing Capital requirements resource equation, political uncertainty and decline.

As headwinds against.

Find Copper Market. We continue to see Market low spot treatment and refinary charges also, known as tcrc

This reflects a difficulty, finders face during power.

Interruption and low tcrc they now charge copper miners, indicate the desperation to secure and adequate Supply.

That 70%, Global, smelters operations are currently unprofitable. This could lead to smaller shutdowns and cause a sharp decrease in the growth of refined copper output.

In 2023, refined copper Supply, grew by 4.2%, and is now estimated to grow, by only 1.3% in 2025, refined product inventories. In Shanghai have also fallen short of this year,

Concurrent with this sobering Supply scenario in the country of the markets.

This demand has been electrification. The growth of AI data centers group modernization and traditional demand we have discussed before.

By putting together this supply and demand Outlook, a market deficit is expected by your end and the International Energy agency projects.

Strain Market Per would resilient man this is bullish for copper prices in America, in addition tariff. Induced Market distortions are as defined or have Amplified Market tightness and have impacted short-term copper prices.

During our last earnings call, I discussed the high arbitration since this year, be the proper places at the yellow Market at the comics.

This trend continued High a few weeks ago, you started from copper.

For its cover. However, the higher Comics prices had a positive impact on lme prices at which in turn had a positive effect on America.

To speak the pricing and the expected.

Relative to lme prices with the average, reaching over 45 cents per pound.

This price Divergence led to a massive redirection of copper inventories from Europe and Asia to the US driven post by speculation and structural factors us buyers scrambled to secure fiscal copper before office.

On warrants making it more.

Position, from its usual contango.

Markets signals and extreme tightness.

Today's, before the August, the first official.

To 4.3.

It's a trading.

Not.

To capture copper price facts, a very short duration and convert them into 10 things for sure.

This works, okay? I will discuss next.

To return Capital holders at rapid Pace in the second quarter.

Operator. It seems like a horse.

Production issues.

Might not be correctly. Heard now, we can hear you now, but you can cutting in and out Aurora.

Oh I'm sorry about that. Uh well I'll I'll continue um the script will be on the website and uh we can we can go over any questions. Sorry about that. Okay uh cumulatively the CRS has returned 902.2 million uh since its Inception with 66% of the amount returned via dividends and 34% through Buybacks, in addition to these returns of capital. There is also the benefit of share price.

Appreciation. During the second quarter, America, share price increase from 191 cents to Canadian 2.12 and today that share price is Canadian. $2.17 representing a 36% year-to-date increase.

I am often asked about uh whether America's board of directors prioritizes dividends overshare BuyBacks. The answer is that the CRS is flexible and multifaceted. There is no absolute preference for 1 over the other. Instead, we use this tools strategically to maximize shareholder value and their varying market conditions.

The CRS provides us with the flexibility to adapt to the hering volatility of the corporate sector without being locked into a single method, the quarterly dividends and the funds they are the foundation of the CRS.

They provide a stable and predictable return to shareholders.

Performance, Dividends are a flexible tool. We use a dividends to distribute excess cash when copper prices are strong.

And the company's cash. Balance exceeds 25 million performance dividends enable us to quickly share the benefits of spikes in copper prices which are holders.

I'm sure BuyBacks are used opportunistically to take advantage of periods of share price weakness and to reduce dilution we have stated the board's intention to buy back in users, to eliminate annual shareholder dilution at a minimum, but we have been doing more than that.

And to be clear of being active on share, BuyBacks does not mean, there will be no performance. Dividends both can occur under strong copper prices

So our preference is for a balance and opportunistic approach to Capital return. The consistent quarterly dividends provides stability performance dividends capture upside and share BuyBacks manage the illusion and capitalize on undervaluation.

Our ultimate goal is to generate maximum value for shareholders and to utilize all the tools of the CRS to achieve this.

I'm Margo CFO Carmen amesquita will now discuss the company's Financial results. Karma please go ahead.

Thanks Aurora. I'm pleased to present the financial report for the second quarter of 2025 from America go and its MVC operation in Chile.

During the 3 months end of June 30th, 2025 the company posted a net income of 7.5 million.

Earnings per share of 5 cents or 6, cents Canadian.

And ebita of 17.8 million.

Net income was 2.2 million lower than in Q2 2024 primarily. Because during the second quarter of 2024, Amigo booked 6.9 million in positive fair value, adjustments, to Copper Revenue receivables. Resulting from a sharp quarter-on-quarter increase in copper prices.

for comparison during Q2 2025, the total positive fair value, adjustments amounted to 0.7 million

Revenue in Q2, 2025 was 50.8 Million compared to 5 1. 6, 2 4.

This included, copper tolling revenue of 43.8 million and maliban revenue of 7 million.

In Q2 2025, the gross value of copper, told on behalf of debt was 66.9 Million.

Melting and refining of 3.6 million and transportation of 0.4 million. And then added positive, fair value, adjustments to settlement receivables of 0.7 million which as I mentioned, were significantly lower than the positive fair value adjustments. In the second quarter of 2024

Revenue also included, maliban revenue of 7 million.

We reported a provisional copper price of $4.42 per pound on our Q2 2025 sales, which coincidentally, were the same provisional price. We had for the first quarter of 2025.

The final settlement prices for April, May and June, 2025 sales will be based on the average London metal exchange prices for July August, and September 2025 respectively.

we now know, July is August provisional price for average price, which is $4.44,

A 10% increase or decrease from the $4.42 pat per pound. Provisional price used on June 30th, 2025 would result in a 6.9 million change in Revenue in Q3 2025 regarding Q2 2025 production.

Tolling in production costs. Increased 10% from 35.1 million in Q2 2024 to 38.7 million and Q2 2025 which can be mainly attributed to an 11% increase in production, between both quarters due to the timing differences of mvc's annual maintenance shutdown.

Which in 2024 took place in the second quarter, but this year took place during the first quarter.

The most significant cost variances between the 2 quarters were consumption driven.

They included higher copper higher power costs of 1.2 million lime costs of 0.6 million and other direct tolling costs such as copper reagents of 0.8 million.

Molly production costs increased by 0.3 million due to higher production, associated with more processing of historic tailings in 2020 to Q2 2025.

The growth profit after revenue and production costs was 12.1 million compared to 16.5 million in Q2 2024.

General and administration expenses were, 1 million compared to 1.1 million in Q2 2024.

These expenses included salaries management and professional fees of 0.6 million.

Office and general expenses of 0.2 million and share based payments of 0.2 million.

Other gains were 0.1 million compared to 0.6 million in the second quarter of 2024.

Driven, mainly by Foreign Exchange gains in both periods.

Finance expense was 0.4 million consistent with Q2 2024 and consisted entirely of interest on loans and Bank charges.

Income tax expense was 2.6 million compared to 5.6 million in Q2 20224.

Beginning this quarter, we've included a breakdown of the company's tax expense in the p&l. Separating current taxes from deferred income taxes,

the current tax represents, both actual income tax for MVC, and repatriation taxes to bring funds from Chile to Canada.

Deferred income tax is an accounting figure used to reconcile timing differences. In America's case, primarily arising from the differences in the timing of Financial and tax depreciation.

Current tax expense in Q2, 2025 with 4.4 million compared to 6.3 million in Q2 2024.

Before moving on, to the statement of financial position, I will mention some non-ifrs, measures used by the company. Cash cost total cost and all-in sustaining cost.

A Margo's cash cost in Q2, 2025 was $1.82 per pound. Decreasing from 1.96 cents per pound in Q2 2024.

The 14 cents per pound reduction in cash cost was primarily due to a 19 Cent per pound, decrease in smelting and refining charges.

in response to the current annual Benchmark offset by increases of 3 cents per pound in Lime costs and other direct costs,

Total costs decreased to $3.55 per pound, a decrease of 23 cents per pound from Q2 2024 $3.78 per pound.

This was the result of a 14, Cent reduction in cash cost, a 4 Cent decrease in debt royalties and a 5-cent decrease in depreciation.

2 2025 compared to 4202.

This is the result of per pound, decreases of 23 cents in total cost, 27 cents in sustaining capex and 1 cent in corporate G&A expenses.

moving on to the statement of financial position on June 30th 2025, the company had cash and cash equivalents of 23.3 million restricted cash of 0.9 million

And had to work in capital deficiency of 5.4 million down from a working capital deficiency of 6.5 million on December 31st 2024.

Trade in accounts, payable decreased from 24.6 million as of December. 31st 2024 to 19.7 million at the end of June 2025.

Current income tax liabilities, also decrease from 8.5 million on December. 31st 2024,

To 0.1 million.

Most of the tax balance due at the end of 2024 related to income tax, owing by MVC and respective 2024 earnings which exceeded the monthly tax installments made.

This tax was paid in April 2025, when mvc's annual tax Declaration was filed in Chile.

Note that in line with Chilean tax requirements MVC plays monthly tax installments based on a percentage of Revenue which may or may not be close to the final corporate tax for a given year.

Then in April of the following year when the tax declaration is filed for the previous year, any difference in the amount owing exceeding, the monthly tax installments is paid.

You will notice that the company's debt, which is shown as 7 million, net of transaction fees is now shown fully as current debt.

As guided to the market, we intend to make the remaining scheduled payment of 4 million in the second half of the year and prepay the remaining 3.5 million, which is formerly due on June 30th 2026.

In this way, America will be in a zero debt position by the end of 2025.

Regarding cash flows during the quarter, a Margo, generated 11.9 million in cash flow from operations.

Net operating cash flow which includes changes in non-cash. Working capital was 6.3 million.

Included in the changes in non-cash working capital. Our payments related to current income taxes, income tax liabilities.

Of 9.5 million which includes the 2024 income tax payment. We previously discussed.

These decreases in accounts payable and income tax results. In an outlay of cash, thereby decreasing. The cash flow from operations, net of these non-cash, working capital changes.

in terms of uses of cash, during the quarter, 1.4 million was used for investing activities, in other words for capex payments,

And 9.4 million was used in financing activities.

These financing activities included, a Margo returning 7.6 million to shareholders.

3.5 million through America's regular quarterly dividend of 3 cents Canadian per share and 4 million from the purchase and cancellation of 3.1 million common shares through a normal course, issuer bid,

The company also paid 4 million on borrowing, including 2.3 million paid with restricted cash.

Briefly touching on the results for the first half of the year compared to guidance our cash cost. For the 6 months, ended June 30th 2025 was $2 per pound and our forecast indicates that we are on track to meet the company's 2025 guidance of an annual normalized cash cost of 1.93 cents per pound.

Our normalized cash cost. Guidance excludes any signing bonus associated with a 3-year Collective, Labour agreement with NBC's operators. Union that will occur later this year.

In 2025 NBC, is expected to incur capex of 13. Million of which 4.4 million is optimization capex. 4.4 million is sustaining capex and 4.2 million is capex associated with the annual plant maintenance shutdown, and strategic strategic fairs.

Year to date. 2025 capex. Editions were 6 million and capex payments were 8.2 million. We remain on track with our annual capex guidance.

We will report a Margo's Q3 2025 Financial results in October 2025 and want to. Thank you for your continued interest in the company. We will now take questions from call participants.

You will hear a prompt that your head has been raised. If you wish to decline from the polling process, please press the star followed by the 2. And if you are using a speaker-phone, please lift the handset, before pressing any keys.

The first question comes from Thierry Fischer at CIBC World Markets. Please go ahead.

Uh, yes. Uh, good afternoon everybody. I I I I I believe it's already been flagged that there was a really, a lot of problems with the connection. Uh, well Aurora was speaking, particularly about the outlook for copper and copper markets, but I think you said that the the text of the speech will be available on the website so I don't expect you to repeat it here. Um, I did want to ask though uh about the um likelihood because I think you mentioned it but I didn't get it because the phone broke up of of a positive, uh a fair value adjustment in the third quarter uh, given where copper prices are and have been, is that a reasonable expectation.

Cherry first of all sorry about that. We did a sound check uh, before we had the call and we didn't have any problems. So it's unfortunate that I didn't come through but um, yes, the text of a of the earnings call will be available on the website as soon as we get it from the supplier. Uh,

I did speak about the fact that um, July has been a good month, both in terms of production and we also saw uh, because now we have the, the average prices uh, for the, for the month of of July $4.44 per pound. Uh, we marked to Market on average at 442, at the end of June 30th is coming was mentioning. So right now as we speak, there is a positive, small positive adjustment, uh,

On a price in basis, uh, during uh, for, for the first month that has settled, which is, uh, essentially, uh, we have settled now, April at the July, average, prices, um, the Outlook remains positive, uh, from our perspective, I did speak about and hopefully that wasn't broken, uh, about what happened yesterday with the clarification of what the US Drive. Uh, is going to be looking like essentially exempting copper concentrates and copper, uh, and refined Copper from the tariffs. And that causes a sharp, correction of that Arbitrage, that we had been seeing between comics and the lme markets, uh, for most of the year. So if you look at Copper Cox uh, price day and the lme, there's a 3 Cent difference which is uh, life is back to normal in terms of um what what you what you normally have in those markets. Uh does that answer your question? Yes, that's fine. And I'll read the text. Um, my second question.

Question sort of out in left field, but I'm wondering if you've heard of a, a company called still bright.

No, I haven't heard about them. Okay, well I'll leave that with you to research still bright. I just saw an interview today on television. I had never heard of it before. Um, it's um, a startup uh kind of a technology company that uh, has received some seed financing but what they have is a new process for essentially, smelting copper. Uh, but it's through flotation cells and they use the nadiem as a, a catalyst and they're able to recover, uh, the copper without producing the waste products that many smelters do have lead and Arsenic and they can do what, uh, a lot much lower cost and quicker startup to build these things. But I from what the person said, I think it's unlikely that it would be targeted towards processing tailings.

I think it's more an an alternative to shipping or to China to be smelted and doing it domestically in the US and other countries. Uh but anyway, worth researching. So I'll leave that with you. The only other question I had actually is for a kermen question. That'd be exciting for kermen. Uh, it's a 2-part question 1 is that with all the depreciation we're taking at over 22 million a year,

Which I know helps with, you know, cash, uh, conservation by deferring taxes. Um, you know, because there's tax depreciation, I don't know what CCA is versus depreciation rates in, in Chile. But in any event, it, it seems to me that the fixed Assets. Now are being considerably, undervalued in the balance sheet.

And of other assets and I forget what those are.

So that the question is,

are the Assets undervalued in the balance sheet and what are the the 24 million of other assets?

all right, so I think you have to remember when you look at depreciation tax depreciation, and

Accounting depreciation are different. So what we're taking on the

On the p&l. That's

You know, that's just our standard depreciation rate over the the life of the the asset whereas the tax depreciation is completely different so it's not.

You know, not in a, we don't do it in a way to to save taxes on the accounting side.

Okay, I'm sorry. I phrased the question properly. Forget about the tax depreciation, just seems to me that even with the depreciation rate, depreciation rates coming, it uses a relative to the the age and the value of the assets. That the Assets in the balance sheet are probably understated, which is a good thing for us. But I guess it doesn't matter a lot given that there's no fixed, you know, debt uh, on the balance sheet as well. So there's no leverage to that but still Book, value matters to some people.

Yeah, I wouldn't say the the assets are understated.

Okay, can you answer the other question? What are the other assets 24 million?

Sure. So that relates to all of the plant plant and Equipment that's that's on site.

So mostly the plant.

Other assets are plant, not, not fixed assets.

Yeah. So

Machinery. Machinery and equipment would would relate to all of the other assets that are not. Oh, all right, okay? So that's part of the whole plan equipment then. Okay. That's a good thing exactly.

Yeah. All right. That's the major.

Fixed assets on the balance sheet. And then there's also the machinery and equipment that we use as well.

Okay, if I have just 1 final question for Aurora. It seems to me that that in the quarter we've had with the, obviously, the US copper price up because of the Trump tariffs and that's now gone away still. I would have thought it would have been a greater Arbitrage effect on on the lme price than we actually saw. Uh, can, can you explain why that didn't happen?

Terry, while we basically do it, we Mark to Market uh as as as we always disclose based on the progression of the copper prices at month end. And then we settle those prices at the actual average price uh for the lme of of, of the month in question.

So, for example, when you're looking at, um, uh, the average prices that we had in 2010 and in, in for the second quarter, uh, I'll tell you what they were. And although this is available online, the average Len copper price for April was 417. That was a significant decline from 442 to 417 in April. So that was Final price. For January sales was the April, LM price 417 uh the final uh uh sale price. For the February sales, which was the May price was 432 and the final uh settlement price. For the March sales was June average, price of 446. So if if if if you're looking at what happened there, that I didn't see that huge pickup April, was it a defining moment, uh, or a defining month of of negative adjustments from 4:44 to 4:17? And then, uh, for, uh, May was also settled at a lower, uh,

Uh, price of 44 uh 32 compared to the 442 that we have marked to Market. So the only month, uh, in the second quarter, where there were positive sale settlement adjustments compared to our Mark to Market at March, 31st was the month of June at 4:36. I'm sorry. This all sounds so confusing. Uh, we try to simplify all of that information in the notes to our uh, actually news release. Uh, so all of that information is there. But there, there are certainly was

Um, a negative uh, final settlement. When you looked at uh, the the April realized prices of 417

Right? I, I get that and I actually do understand it because I've been following the company a long time. I I didn't phrase a question very well. I guess I was just thinking about the lme price versus the stock price and, and the US copper price and why there wasn't a greater pull on the lme price, nothing to do with the Margo just just

I maybe that's a question, can't be answered, but it just surprised me that uh there wouldn't have been a greater effect on the lme.

A greater negative effect. Well, if the us if the price of copper is higher in the US because Americans are buying at the front run the terrorists.

you would expect that would increase demand for copper even globally, which would reflect on the lme settlement prices and I think it did, and I mentioned that,

During the quarter and basically, during the first semester of the year had a positive effect on the lme, I think it did, pull it up. Uh, and now if you if you look at the prices today, 439 Comics, uh, LM spot price 436, we're back to normal. But I think that, uh, that that trading run, uh, opened up, uh, a lot of eyes into what's going on with the copper fundamental structure, not just the trading story, which is the a benefit for, uh, for the industry in general for, for all of us for sure. Alright, okay, that that's great. I'll read, I'll read your account. I don't want to take up more time now, but thanks for everything that's great.

Thank you.

At hmm research. Please go ahead.

Uh, hi Graham and Carmen. Um, it's been from Atrium again. Firstly, congrats on a strong quarter, and it's good to see, uh, that shareholders are rewarding. You guys for all the hard work, um, just a couple questions here and I think Terry was covered a couple of them around the lme prices there, but in terms of capex, obviously, um, you know, the main in shutdown in q1 so it was elevated Q2 is quite low. What can we expect in Q3 and Q4 from a from a capex perspective.

So, which was 13 million dollars? Uh, I, I think our spoke about that. What is in those 13 million dollars. We have essentially 5 process optimization projects, which have a a price tag of 4.4 million.

And this includes finalizing some projects that we initiated in 2024 uh, basically to expand and optimize the control of full patient sales and improve water, evacuation and calculus. Uh, we also have a project to optimize flotation in the Cascades and, uh, we have the addition of a second sickener, uh, for the Mixed concentrate. Um, so what has, uh, transpired in terms of q1 Q2, we had a front loading of a lot of the capex as associated with 2 things, the timing of the plant maintenance shutdown and the, um,

Uh, the workload uh, of of those optimization projects. Uh, but we're, we're on track to not have uh, more than that 13 million of uh of total capex. For the year. I did mention 4 uh, 4 for optimization. The other uh, categories are 4.7 million. Um uh um

Sorry 4 4.2 million dollars for a plant shutdown and uh 4 million dollars just for sustaining sustaining cap. Exploring sustaining capex.

Okay. Understood, thank you. Um, and then, yeah, in terms of share BuyBacks and we did hear your cutting in a little bit cutting in and out a little bit. But um, on the Buybacks in particular in Q2, there was obviously quite a jump. Um, from q1, I think it was a 4 or 5x in terms of shares bought back. Um, why such a big change and then in terms of consistency going into the Q3 and Q4, I know you mentioned, you're sort of going to be opportunistic with the BuyBacks, but um, can you just touch on this jump from q1 to Q2?

Yes. Uh I I think what was happening. Was basically a strong uh, cash generation and the uh the recognition that there is a there was especially in the second quarter uh uh an opportunity of buying back those shares at a really good price. I I did mention that our our

Average, uh, buyback a price in the quarter was uh a178. So I think that was for, for the first message. So I think that we were just watching. Uh, how much cash uh is coming in as free cash flow and what is the best way of allocating that cash, uh, to ensure that we kept up with the, uh, with with essentially that distribution commitment. And sure buyback was a, um, uh, uh, an obvious, uh, opportunity for us in the second quarter.

sounds like when the share price is higher, you'll probably scale back the buyback, but if copper is high performance, dividends

It. It's it's, it's

A holistic answer, I wouldn't like, I I wouldn't like, uh, to just provide a very linear, uh, response thing. If, if copper prices here, we do this, or we do that, or if the share price is here. We we, we, we, we take this route. Uh, I think that

Um, the answer is that our CRS has to be flexible. Uh, we have no absolute preference. Other than ensuring that we, uh, live up to our word of return in that cash to shareholders. And we use the tools strategically, uh, you know, uh, quite well that for us, the foundation of the CRS is the quarterly dividend. We want to provide that very stable, very predictable return to shareholders under this copper price conditions where that, uh, 3 Cent Canadian, uh, dividend is absolutely safe. Then, uh, the question becomes, what do we do next performance dividends or the share BuyBacks? Uh, the performance events are a great Tool. Uh, for example, when we have a spike in copper prices, we saw, uh, that happening in the second quarter of 2024. And the obvious answer was, uh, we we we've, uh, realized the benefits of this, uh, strong. Uh, uh, uh,

Settlement in the quarter, uh, for a prior quarter sales and we have to return this. The best way of doing it quickly is, uh, through, um, um, through the performance dividend, but sure BuyBacks. Uh, you know, uh, if we see a period of sh of share price weakness, uh, we act on that if we want to reduce dilution, we act on that we, we have stated at the very minimum we want to end each year with no dilution and but we've done more than that this year, uh, certainly, uh, you saw the activity that we had in the second quarter and literally, what was happening is we had the free cash flow. We were looking at our share price movement and we thought this is a great opportunity to go out in the market and buy back. Those shares at a at a bargain price and we did that.

Understood. Yep. No, that makes sense. And then I guess just the last question would be obviously, you've been paying down the debt, quite aggressively over the last year and a half. Um, what are the plans to do with the excess, uh, cash flow? Once this debt is paid off at the end of the year, is there a chance that, um, the fixed dividend portion um, could increase?

That is an, that, that is certainly a possibility. Um, uh, uh, uh, depending on where share price performance is, uh, additional activity on. The buyback is also, uh, a possibility or, um, a heftier or more, uh, frequent performance dividend. So, it's a b or c.

That's that's uh, that's the easy answer, uh, because that's basically there's going to be a substantial Catalyst in terms of additional free cash flow to equity. I think Carmen mentioned that um,

On average, if you look at our scheduled debt repayments for uh for the debt or 7 million, add to that 2 million uh Finance call. So that's 9 million dollars that are um uh becoming available as of 2026.

Yep. Understood and I guess it's good to keep that flexibility and and see how things go. Okay, well, that's all I had for today again, congrats and, and thanks.

Thanks Ben.

Thank you. The next question comes from John Paul Paris at Mutual of America, please go ahead.

Thank you. Uh, another well-managed quarter. Thank you. 2 questions.

And I will not.

Repeat a bother you with.

A question regarding dividends or increases.

but in addition, to eliminating dilution,

Is there a minimum?

number of shares that

You think might be?

Retained as far as.

Reducing the Florida.

It was an aggressive repurchase of shares of the second quarter that obviously will vary from quarter to quarter but

Again, is there a minimum amount to in order to maintain liquidity that you think would be?

appropriate that you would not want to drop below in terms of

number of shares outstanding, or

uh,

No. The the commitment is basically.

okay, so as we speak,

if there was an appropriate,

Decision.

And there was adequate cash.

As as we speak here, BuyBacks are absolutely on the table as our, uh, performance dividends and, uh, possibly in 2026 and increase to the, to the quarterly dividend. So, the 3 tools, uh, remain fully valid and executable on, depending on circumstances,

thank you. And the other question I had was just

Um, if you could take just a moment how to refresh me on.

If you will the chain of custody for copper delivery, after you've extracted, the Copper from the tailings, they assume it goes to port. And

At what point do you?

Turn over say title to the, to the Copper at. What point do you receive it? It says here. That it it it, it is easier than that. In terms of when is is title transferred, uh, our copper concentrate. It's a copper concentrate. So it's not a, it's not a, a obviously, a cathode. It's not a finished product. It's it's a, a dark, uh, powder, cold copper concentrate. It is shipped out on a daily basis. As soon as it's put on the altonian to trucks uh it passes title. Uh we bill for those uh deliveries on a weekly basis. We get a provision.

Basis, uh and we said all that final provisional price 3 months later when the known price.

Third month. Following delivery takes place.

Understand and that provisional price? Yeah.

That provisional price is is always. Yeah, go ahead.

Always based on the lime.

It's always lime, it's always lime. We actually look the the provisional weekly price is based on.

uh,

The provisional price that is used until things have settled, 3 months later, always telling me.

Great. All right.

That's all I had. And thank you again for

Managing us to another, uh, Hotel quarter.

Thank you.

Thank you. The next question comes from William dower and investor. Please go ahead.

All right, and and I just want to Echo the congratulations to everybody on the call but also, you know, to the teams in Chile doing the work, this is um, incredible operational performance and managerial performance and I just quick follow up um on the settlement so it it sounds like the fair value adjustment is made um 3 months later um and that I mean we're marking the market but when is the cache actually hitting our account and then kind of along the same lines?

Are we waiting to make decisions on cash flows such as BuyBacks or dividends until we know what the provisional adjustment is? So that way you know essentially there's going to be a quarterly delay in the effect of um

the the cash flows and then the decisions we make based on the cash flows.

Uh, William, thank you for recognizing the team in Chile. They are, they are the real, uh, the real people that make all of this happen. We we just coordinate them. Um, uh,

There, there are 2 parts to your question regarding the, the mark to Market. But I think that, you know, we Mark to Market every every, every, every month, uh, Carmen prepares Consolidated financial statements on a, on a monthly basis, not on a quarterly basis. Uh, we take the um, the lme and the lme. Sorry, the LM spot price and the lme, uh, M plus 3 price and we create a progression. Uh, for the M plus 1 M, plus 2 based on those 2 data points and we we do the mark to Market on, on a, on a, on a monthly basis. But I think most important, um, or the most important part of your question is, what happens with the cash, uh, and what happens with the decision making around that cash. So, uh, the payment terms, uh, from codelco, uh, to NVC can be summarized in 3, uh, 3 steps, we issue, uh, weekly invoices,

So basically, at each month end, uh, we are caught up with, uh, 90% of the deliveries that were done during the during the prior, uh, months, uh, priced at, uh, the, the, the most recent lme price, for 90 of those deliveries. And then the final terms, when the final terms are known, 3 months later, we issue 1 final either credit, note, or debit note, uh, at the final price which is the M, plus 3 price. So cash flow is uh coming in on a weekly basis.

At 75% of our production rate, it is screwed up to 90% of our production rate. Uh, but a week after the end of the month and the final, the final, uh, settlement positive or negative takes place 3 weeks before. So, there's always, uh, um, uh, there's a Continuum of of cash flow coming in, on a weekly basis. Uh, we update all of this information in our model, so, uh, we basically are working with real time data that allows us to, to know, uh, how much, uh, for example can be allocated to survive backs, uh, on a weekly basis when we're active on the buyback program or, um, um, you know, when copper prices are closer, uh, uh, uh, to down uh, to lower prices. Uh, how safe is our our uh, capex payment or get repayment, our quarterly dividends. So we're monitoring all

All of that information essentially. Um, I would say daily we have that we just plug in the copper price um that that that that we think is going to apply for each week. And and we have all the data right in front of us.

Perfect. Thank you so much. Um to I have another 2 follow ups um not to that specific area but with regards to cost guidance um

It's, you know, is around 2 dollars per pound and obviously it's been beaten and q1 and Q2 and and really in Q2 in Q2 in Q2, okay? And largely because of smelting refining charges being lower? Is that something? And I know you've maintained the the cost go ahead.

No, we we guided, uh, uh, if you're interested in the guidance, I would say the best source of information and probably the, the news release. You should keep, uh, close close to you. Uh, year round is our guidance new treaties, which is usually our first news release of the year. We provide their uh, um, not only what the Pascal's guidance is going to be but also

His, uh, for for experiences, in terms of what happens with copper prices moving up or down, Molly, price is moving up or down. And even before we exchanged, when we provided our guidance, for, for the year, in terms of cash costs, we knew already, what the spot prices. Uh sorry, what the PCR sees, the reason and Refinery charges. We're going to be for the year, so any

Variations that you've seen uh from guidance to actual are not driven by uh a lowest male to and refinary charges.

And and I guess and and I'm probably just ignorant, don't understand it and maybe you can better explain it. But so are these decreases that at least the lower numbers than the cash cost guidance? Um, expected from smelting and refining and I guess what I'm getting at is, is this something that's going to be long term? Or is this, uh, is this kind of 1 off?

No, the variances that we're seeing right now are coming in from higher Molly production, they're coming in from a better, uh, or from a lower, uh, from from at least a strong Chilean peso compared to the US dollar. Those are the significant variances are coming from. They're not coming by lower, uh uh, smelter and Refinery charges in our case as it's also. The case for most uh copper concentrate producers, we work not on the basis of spot treatment and Refinery charges, but on what's called an annual Benchmark, um um, treatment on Refinery charge, that is known um, at the end of the prior year and then you work with those figures with those charges for the rest of the year, irrespective of what happens with the spot tcrc. So there are long-term or annually set um uh rate that doesn't change through the year.

Is saying, you know?

Basically, there's very little, you know, chance of DEET canceling, our contract in the short term, but with regards to the current extension contract deadlines obviously has been renewed and renewed. When can you provide us? Any guidance on? When we might hear about talks of an additional extension, or just kind of, you know, when we should start thinking about hearing that or or, I don't know, some some sort of guidance on that.

We, we are 12 years away from the contract expiring, I can assure you 1 thing. If if I'm still CEO in in in, in 12 years, you will not hear from it. On the year 11, you probably will hear from it around year 6. Before we we 6 years before. Uh, this is critical to us. It is, it is a Genesis of what the company is. So this is not a discussion or a negotiation that we're going to leave to the end of uh or or closer to 2037.

But we're still 12 years away from that. Okay, yeah I I know and and I I obviously it's very important. I I think it's very important. That's why I figured I'd ask. So I I appreciate it. And your confidence, uh, is 1 of the main reasons. I'm, I'm an investor. Uh, you are 1 of the main reasons I'm an investor in America. So I appreciate you and all and the entire team there. Um, so thank you for all the work that you do.

You're very kind.

Thank you, we have no further questions. I will turn the call back over to our Davidson for closing comments.

Thank you very much again. Uh, my apologies for, uh, any, uh, communication disruptions to the, the call. We, we try to avoid them as as much as we can. Uh, thank you for attending today's call, and thank you to Carmen and Graham for being on the call, uh, as well. The recording and the script will be available on Margo's website in the next few days, we will hold our next earnings call on Thursday, October the 30th to report, our third quarter results. Uh, please visit our website regularly for updates and feel free to contact us with any questions at your convenience. Thank you for your continued interest in America.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines

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