Half Year 2026 Capital Ltd Earnings Call

August 20, 2026

Speaker #1: Good day, ladies and gentlemen, and welcome to Capital Limited's H1 2026 results. Later, we will conduct a question-and-answer session. If you wish to ask a question, we ask that you please do this via the webcast page using the 'Ask a Question' button.

Operator: Good day, ladies and gentlemen, and welcome to Capital Limited H1 2026 results. Later, we will conduct a question and answer session. If you wish to ask a question, we ask that you please do this via the webcast page using the Ask a Question button. Questions will follow after the presentation. I will now hand over to Jamie Boyton, Executive Chair, and Rick Robson, CFO, to start their presentation. Please go ahead.

Operator: Good day, ladies and gentlemen, and welcome to Capital Limited H1 2026 Results. Later, we will conduct a question and answer session. If you wish to ask a question, we ask that you please do this via the webcast page using the Ask a Question button. Questions will follow after the presentation. I will now hand over to Jamie Boyton, Executive Chair, and Rick Robson, Chief Financial Officer, to start their presentation. Please go ahead.

Speaker #1: Questions will follow after the presentation. I will now hand over to Jamie Boynton, Executive Chair, and Rick Robson, CFO, to start their presentation. Please go ahead.

Speaker #2: Thank you very much, and welcome everyone to Capital Limited's first half 2026 results presentation. As the moderator said, I'm Jamie Boynton, the Executive Chairman of Capital, and I've got with me today...

Jamie Boyton: Thank you very much, and welcome everyone to Capital Limited's H1 2026 results presentation. As the moderator said, I have got with me today. Well, I am Jamie Boyton, the Executive Chairman of Capital. I have got Rick Robson, our Group CFO with me from London, and also Ryan Tennis, who heads up our IR and Corp Dev function, also based in London. I will follow the usual format. We will go through our presentation deck for 15 minutes or so, and then open it to the floor for questions and answers. By way of introduction, again, for those that are new to Capital, a brief introduction to the company. We are an integrated service provider to exploration and mining companies. We operate across Africa, Middle East, and North America. We have three operating businesses, specifically Capital Drilling, Capital Mining, and MSA Labs.

Jamie Boyton: Thank you very much, and welcome everyone to Capital Limited's H1 2026 results presentation. As the moderator said, I have got with me today. Well, I am Jamie Boyton, the Executive Chairman of Capital. I have got Rick Robson, our Group Chief Financial Officer with me from London, and also Ryan Tennis, who heads up our investor relation and Corp Dev function, also based in London. I will follow the usual format. We will go through our presentation deck for 15 minutes or so, and then open it to the floor for questions and answers. By way of introduction, again, for those that are new to Capital, a brief introduction to the company. We are an integrated service provider to exploration and mining companies. We operate across Africa, Middle East, and North America. We have three operating businesses, specifically Capital Drilling, Capital Mining, and MSA Labs.

Speaker #2: I've got Rick Robson, our Group CFO, with me from London, and also Ryan Tennis, who heads up our IR and corporate development function, also based in London.

Speaker #2: I'll follow the usual format: we'll go through our presentation deck for 15 minutes or so, and then open the floor for questions and answers.

Speaker #2: And by way of introduction again, for those that are new to Capital, a brief introduction to the company: we're an integrated service provider to exploration and mining companies.

Speaker #2: We operate across Africa, the Middle East, and North America. We have three operating businesses: specifically, CAPITAL Drilling, CAPITAL Mining, and MSA Labs. In terms of our revenue splits, very broadly, 60% of the business is CAPITAL Drilling, 20% is CAPITAL Mining, and 20% is MSA Labs.

Jamie Boyton: In terms of our revenue splits, very broadly, about 60% of the business is Capital Drilling, 20% is Capital Mining, and 20% is MSA Labs. The drilling business is an end-to-end drilling service provider from air core drilling through to mine site, blast hole, grade control, and underground drilling. We operate a fleet of a little over 130 rigs. With the recent changes to our portfolio, it is exclusively across Africa and the Middle East. We are, by recount, the number 5 drilling company globally. Capital Mining is a niche provider of earth-moving services. We are currently operating two contracts, one at the Sukari Gold Mine in Egypt and the other at the Reko Diq Development Project in Pakistan. We have a fleet of over 60 pieces of yellow equipment, and we roll out that service generally concurrent with our existing drilling operations.

Speaker #2: The drilling business is an end-to-end drilling service provider, from air-core drilling through to mine site blast hole, grade control, and underground drilling. We operate a fleet of a little over 130 rigs.

Speaker #2: With the recent changes to our portfolio, it is exclusively across Africa and the Middle East, and we are, by rig count, the number five drilling company globally.

Speaker #2: CAPITAL Mining is a niche provider of earth-moving services. We currently operate in two contracts: one at the Sakari Gold Mine in Egypt, and the other at the Rica Dick Development Project in Pakistan.

Speaker #2: We have a fleet of over 60 pieces of yellow equipment, and we roll out that service generally concurrent with our existing drilling operations. Our laboratory platform is a very fast-growth business.

Jamie Boyton: Our laboratory platform is a very fast growth business. We have been involved in the labs business for about six years now. We have 33 laboratories across Africa, the Middle East, and North America. In fact, the revenue for the lab business, the larger proportion is North American. Comprehensive geochemical analysis and is a very complementary offering to our drilling business in particular. So they are the operating businesses. Then we have a fourth vertical within our platform, and that is our investment arm. We will go into a slide on that specifically, but we use our network across Africa, the Middle East, and North America to identify what we think are interesting opportunities, typically very early-stage development projects. We have had an outstanding track record, and we will get into that detail a little later. If we can move to the next slide, please. Some highlights from the results.

Speaker #2: We've been involved in the labs business for about six years now. We have 33 laboratories across Africa, the Middle East, and North America, and in fact, the revenue for the lab business—the largest proportion—is from North America.

Speaker #2: Comprehensive geochemical analysis is a very complementary offering to our drilling business in particular. So, they're the operating businesses, and then we have a fourth vertical within our platform, and that is our investment arm.

Speaker #2: We'll go into a slide on that specifically, but we use our network across Africa, the Middle East, and North America to identify what we think are interesting opportunities.

Speaker #2: Typically, very early-stage development projects. We've had an outstanding track record, and we'll get into that detail a little later. If we can move to the next slide, please.

Speaker #2: Some highlights from the results: I'll try not to use the word "record" too often, but we have had a very strong performance in the first half.

Jamie Boyton: I'll try not to use the word record too often, but we have had a very strong performance in the H1. Our revenues increased just a little under 38%, and we achieved adjusted EBITDA margins of 25%. Both of those are records for the group. Balance sheet in a very strong position at net debt to adjusted EBITDA 0.4 times, and group price to book, 0.8 times. In today's presentation, I will talk a little more to valuation than I typically do. We've obviously had a fairly rocky six months of the year with respect to our share price. I think today's reaction is rather calming that we think there's a lot of inherent value in the company that is not being recognized in the market at the moment. A record for MSA Labs.

Speaker #2: Our revenues increased just a little under 38%, and we achieved adjusted EBITDA margins of 25%, so both of those are records for the group.

Speaker #2: The balance sheet is in a very strong position, with net debt to adjusted EBITDA at 0.4 times and our group price-to-book at 0.8 times. Now, in today's presentation, I will talk a little more about valuation than I typically do.

Speaker #2: We've obviously had a fairly rocky six months of the year with respect to our share price. I think today's reaction is rather calming, and we think there's a lot of inherent value in the company that has not been recognized in the market at the moment.

Speaker #2: Our record for MSA Labs' first-half revenue grew significantly to $44.7 million, and adjusted EBITDA margins are 16.6%. A number of significant contract wins were announced in the first half, and today we are announcing a new one as well, which is with Tungsten West—a five-year contract with their project in the United Kingdom.

Jamie Boyton: H1 revenue grew significantly to $44.7 million, and adjusted EBITDA margins of 16.6%, and a number of significant contract wins announced in the H1. Today, we're announcing a new one as well, which is with Tungsten West, which is a five-year contract with their project in the United Kingdom. We have four laboratories that are due for commissioning imminently, will start contributing to our earnings in the Q4 of this year. The drilling and mining business is performing well. We have announced over the H1 of this year, again, some long-term drilling contracts with Montage Gold and PDI Gold. Today's new announcement is that we've secured a multi-rig exploration contract with Ma'aden. We have actually worked with Ma'aden in Saudi Arabia for many years now, since 2019, but we've done it through the Barrick joint venture at Jabal Sayid.

Speaker #2: And we have four laboratories that are due for commissioning imminently. They’ll start contributing to our earnings in the fourth quarter of this year. The drilling and mining business is performing well.

Speaker #2: We have announced, over the first half of this year, some long-term drilling contracts with Montage Gold and PDI Gold. Today's new announcement is that we've secured a multi-rig exploration contract with Marden.

Speaker #2: We have actually worked with Marden in Saudi Arabia for many years now, since 2019, but we've done it through the Barrick joint venture at Jebel Sayed.

Speaker #2: This is our first win with Marden directly. And with Saudi Arabia, a market that is seeing a lot of activity, we're very pleased to have secured this contract and announced this contract today.

Jamie Boyton: This is our first win with Ma'aden directly. With Saudi Arabia, a market that is seeing a lot of activity, we're very pleased to have secured this contract and announce this contract today. Investment portfolio, I'll come to later in the presentation, but we had a very good H1 performance. A gain of $7 million. The index we choose to reference was down 14% over the same period, so a very strong performance yet again from our investment portfolio, which as you can see, is valued at $116 million at 30 June. If we could move to the next slide, please. I won't spend too much time in here because I'm going to hand over to Rick Robson. Just a few points that I will make, however, is our adjusted EBITDA margin, which was 25%.

Speaker #2: I'll come to the investment portfolio later in the presentation, but we had a very good first-half performance. Again, at $7 million, the index we chose to reference was down 14% over the same period, so a very strong performance yet again from our investment portfolio.

Speaker #2: Which, as you can see, is valued at $116 million as of June 30th. If we could move to the next slide, please. I won't spend too much time here because I'm going to hand over to Rick Robson.

Speaker #2: So just a few points that I will make; however, our adjusted EBITDA margin was 25%. We had previously guided on many opportunities to the capital markets that the margin we're looking for—our sweet spot—is between 25% and 30%.

Jamie Boyton: We have previously guided on many opportunities to the capital markets, but the margin we're looking for, our sweet spot, is between 25% and 30%. So pleasing to see it, albeit at the bottom, in that range. I should point out that is after we've incurred impairments and exit costs associated with the conclusion of contracts in both Mali and the USA. The underlying operating business doing very well. Our EBIT margin 14.5%. I think the other thing I probably would like to draw your attention to, back in the context of where we were talking about price to book on the previous slide, is our adjusted return on capital has climbed back up to almost 19%.

Speaker #2: So, pleasing to see it—albeit at the bottom of that range. But I should point out that this is after we've incurred impairments and exit costs associated with the conclusion of contracts in both Mali and the USA.

Speaker #2: So the underlying operating business is doing very well. Our EBIT margin is 14.5%, and I think the other thing I would probably like to draw your attention to.

Speaker #2: Back in the context of where we were talking about price-to-book on the previous slide, adjusted return on capital has climbed back up to almost 19%.

Speaker #2: Now, again, our threshold or our goal for our return on capital for the operating business is about 20%. So it's very pleasing to see it pick up significantly as the business has started to improve in the second half of last year and the first half of this year.

Jamie Boyton: Now, again, our threshold or our goal for our return on capital for the operating business is about 20%, so it is very pleasing to see it pick up significantly as the business has started to improve in H2 of last year and H1 of this year. I go back to that reference about our price to book ratio, where we are trading at 0.8 times price to book. About a third of our market cap is our investment portfolio. The investment portfolio itself has generated a 60% return over the last 7 and a half years. If you back that investment portfolio out of our market cap and do a price to book exercise, we trade at about 0.7 times price to book on an operating basis, and our operating business generates a 19% return on capital.

Speaker #2: So I go back to that reference about our price-to-book ratio, where we're trading at 0.8 times price-to-book. Now, about a third of our market cap is our investment portfolio.

Speaker #2: The investment portfolio itself has generated a 60% return over the last 7.5 years. If you back that investment portfolio out of our market cap and do a price-to-book exercise, we trade at about 0.7 times price-to-book on an operating basis, and our operating business generates a 19% return on capital.

Speaker #2: As I said, in the valuation than I typically would do. However, a 19% return on a price-to-book of 0.7, an investment portfolio generating a 60% return, we're rather perplexed and, again, pleased to see a pickup in our share price at the back of the results today.

Jamie Boyton: As I said in the introduction, I will be focusing a little more on the valuation than I typically would do. However, a 19% return on a price to book of 0.7, an investment portfolio generating a 60% return, we are rather perplexed and again, pleased to see a pick up in our share price on the back of the results today. I will now hand over to Rick for the financials, please.

Speaker #2: I'll now hand over to Rick for the financials, please.

Speaker #1: Thanks, Jamie. Next slide, please. And again. So, good morning everybody, and welcome again. As Jamie said, a very pleasing revenue performance of nearly 38% half-on-half.

Rick Robson: Thanks, Jamie. Next slide, please. So good morning, everybody. Welcome again. As Jamie said, a very pleasing revenue performance of nearly 38% half on half, with a strong contribution from MSA, a record contribution from MSA at $45 million for the half. Adjusted EBITDA margin, again, as Jamie mentioned, sitting at the 25% level, which again, is a pleasing result for us despite the wind down costs that we saw in the US and Mali. I think the other thing to redraw people's attention to is at the operational NPAT level. The result there was impacted by higher tax. So our effective tax rate has remained high at a circa 45% for the half. I think it was previously raised at the 2025 results call that tax rates elevated due to higher withholding tax rates in Tanzania.

Speaker #1: With a strong contribution from MSA, record contribution from MSA at $45 million for the half. Adjusted EBITDA margin, again, as Jamie mentioned, sitting at a 25% level, which is a pleasing result for us.

Speaker #1: Despite the wind-down costs that we saw in the US and Mali, I think the other thing to draw people's attention to is that, at the operational impact level, the result there was impacted by higher tax.

Speaker #1: So, our effective tax rate has remained high at around 45% for the half. I think, as previously raised at the 2025 results call, that tax rate is elevated due to higher withholding tax rates in Tanzania.

Speaker #1: But in half one, 2026, we also had the impact of those US and Mali wind-down costs, which slightly elevated that tax rate.

Rick Robson: But in H1 2026, we also had the impact of those US and Mali wind down costs which slightly elevated that tax rate. We expect that tax rate in H2 to stay elevated at probably the high 30s but possibly starting with a 4. Overall, though, a strong operating performance from the business. Next slide, please. So looking at the cash flows, you can see a much stronger and pleasing operating performance has pulled through to that operating cash flow. So nearly 70% up half on half. But what is notable is a big swing in the working capital, as we referred to.

Speaker #1: We expect the tax rate in H2 to stay elevated, probably in the high 30s but possibly starting with a 4. Overall, though, a strong operating performance from the business.

Speaker #1: Next slide, please. So, looking at the cash flows, you can see pleasing operating performance has pulled through to that operating cash flow. So, nearly 70% up half on half.

Speaker #1: But what is notable is a big swing in the working capital, as we referred to. So, just for context, H1 2025's working capital positive movement was driven heavily by mobilization and establishment payments that we received.

Rick Robson: Just for context, H1 2025's working capital positive movement was driven heavily by mobilization and establishment payments that we received, which as you move to H1 2026, that position is unwinding during the course of has unwound during the course of H1 2026 and will continue to unwind in H2. We are also seeing the impact of just more activity. Increased operations in the business, just having a working cap draw in that first half as well. Investing cash outflows 70% up half on half, obviously driven by our participation in the Ngwenya and Isara equity raises during the half, offset marginally by about $2.7 million of disposal proceeds, again, majority tied to the US wind down. Next slide, please. Just looking at our financial position. Quick update on the debt facilities.

Speaker #1: Which, as you move to H1, 2026, that position is unwinding during the course of has unwind during the course of 2020 H1, 2026, and will continue to unwind in H2.

Speaker #1: But we're also seeing the impact of just more activities, so increased operations in the business—just having a working cap draw in that first half as well.

Speaker #1: Investing cash outflows were up 70% half-on-half, obviously driven by our participation in the WIA and ASARA equity raises during the half, offset marginally by about $2.7 million in disposal proceeds.

Speaker #1: Again, the majority is tied to the US wind-down. Next slide, please. Just looking at our financial position—a quick update on the debt facilities in March.

Rick Robson: In March, we refinanced what was our $75 million RCF into an RCF and term loan structure split 50/50 on that $75 million total. Term loan is fully drawn at the point of the refinance, and is a four-year amortizing facility. The RCF, as we move through to 30 June, has been drawn to $25 million. That is a renewed RCF on a three-year period. Net debt has increased on December. In December, we were $31.8 million net debt up to $43.3 million, driven by the working capital movement that I have outlined already. The participation in the raises, and obviously offset by our improved operating performance. Leverage wise, as Jamie pointed out, that net debt to adjusted EBITDA sitting at 0.4 times, a consistent level with the 31 December point as well.

Speaker #1: We refinanced our or what was our 75 million dollar RCF into an RCF and term loan structure split 50/50 on that 75 million dollar total.

Speaker #1: The term loan is fully drawn at the point of the refinance and is a four-year amortizing facility. The RCF has been moved through to 30 June.

Speaker #1: It's been drawn to $25 million, and that's a renewed RCF on a three-year period. So net debt has increased since December. In December, we were at $31.8 million net debt—now up to $43.3 million—driven by the working capital movement that I've outlined already.

Speaker #1: The participation in the raises is obviously offset by our improved operating performance. Leverage-wise, as Jamie pointed out, net debt to adjusted EBITDA is sitting at 0.4 times, a consistent level with the 31 December point as well.

Speaker #1: CAPEX—so, just as a reminder, the way we talk to CAPEX in this forum is cash CAPEX, prepayments, plus the OEM-financed assets as well.

Rick Robson: CAPEX, just as a reminder, the way we talk to CAPEX in this forum is cash CAPEX, prepayments, plus the OEM financed assets as well. We aggregate those three concepts. In the half, we had $24.1 million spend against our guidance for the year, which we are reiterating today at that $55 million to $65 million level. There will be an H2 weighting to that. Next slide, please. Sorry, next slide. Thank you. Just to finish off, we have maintained our interim dividend at 1.3 cents per share, a consistent level with the last four to five years. Again, just to reiterate that we remain committed to returning value to shareholders whilst maintaining a strong balance sheet. With that, I will hand back over to Jamie to cover off the growth and moving forwards.

Speaker #1: So, we aggregate those three concepts. So, in the half, we had $24.1 million spend against our guidance for the year, which we're reiterating today at that $55 to $65 million level.

Speaker #1: So we'll be in H2, waiting for that. Next slide, please. Sorry, next slide. Thank you. So, just to finish off, we've maintained our interim dividend of 1.3 cents per share.

Speaker #1: A consistent level with the last four to five years. And again, just to reiterate that we remain committed to returning value to shareholders whilst maintaining a strong balance sheet.

Speaker #1: And with that, I'll hand back over to Jamie to cover off the growth and moving forward.

Speaker #2: Thank you. If we can move forward—thank you. We'll start with talking through the group revenues. Obviously, one of the highlights of today's results is that we have increased our revenue guidance, which was previously $410 million to $440 million.

Jamie Boyton: Thank you. If we can move forward. Thank you. We will start with a on the, yep, talking through the group revenues. Obviously, one of the highlights of today's results is that we have increased our revenue guidance, which was previously $410 million to $440 million. We have increased it today to $430 million to $450 million. A few bullet points that we have provided there is the growth of our non-drilling revenue, which is now contributing to 40% of the group revenue. I think the growth rate, another factor playing into our perplexed nature with our valuation is just having a look at our revenue growth. We have obviously charted the seven-year cumulative revenue growth, and we are growing the top line at 22%. This year obviously a very strong year of revenue growth. Moving through some of the other statistics. Obviously, the healthy levels of utilization across our drilling fleet at 71%.

Speaker #2: We have increased it today to $430 million to $450 million. A few bullet points that we've highlighted there are the growth of our non-drilling revenue, which is now contributing to 40% of the group revenue.

Speaker #2: I think the growth rate, another factor playing into our perplexed nature with evaluation, is just having a look at our revenue growth. So we've obviously charted the seven-year cumulative revenue growth, and we're growing the top line at 22%.

Speaker #2: This year, obviously, was a very strong year of revenue growth. Moving through some of the other statistics, there were healthy levels of utilization across our drilling fleet at 71%.

Speaker #2: Our laboratories are running in the mid-50s. I'll defer to MSA Labs when we move on to that. And then, I note the comment about the mining side.

Jamie Boyton: Our laboratories are running in the mid-50s. I will defer to MSA Labs when we move on to that. I note the comment on the mining side. Let me just address that, because over the course of H1 of this year, we have been rather sensitive to announcements made in the public domain with respect to Barrick and Reko Diq. We are reiterating, as we have done with our quarterly revenue updates, that the Reko Diq mining contract continues to operate as contracted. Mining activity at Sukari Gold Mine, which is the new, well, our second iteration of the waste stripping contract, has started ahead of schedule with further equipment to arrive in Q4. I will go into a little bit more about Reko as we go through the slides. If we can move to the next slide, please.

Speaker #2: So let me just address that, because over the course of the first half of this year, we've been rather sensitive to announcements made in the public domain with respect to Barrick and Reykjavík.

Speaker #2: We are reiterating, as we have done with our quarterly revenue updates, that the Reykjavík mining contract continues to operate as contracted. Mining activity at Sakari Gold Mine, which is new with our second iteration of the waste stripping contract, has started ahead of schedule, with further equipment expected to arrive in the fourth quarter.

Speaker #2: And I'll go into a little bit more about RICO as we go through the slides. If we can move to the next slide, please.

Speaker #2: Just consistent with the improving revenue profile and the improving profitability of the business, we're obviously—as I alluded to earlier—we've seen quite an inflection in our return on capital, which is the light blue line on the graph.

Jamie Boyton: Just consistent with the improving revenue profile and the improving profitability of the business, obviously, as I alluded to earlier, we have seen quite an inflection in our return on capital, which is the light blue line on the graph. As I said, we are looking for a threshold of 20%, so we are certainly heading back in the right direction, and we have extremely supportive market conditions for what I think is quite a few years ahead of us, so expecting to see those returns to continue to improve. Moving on to the next slide, please. Just reiterating, I think it is important to point out, and I am going to say this in the context again of the market speculating on Reko specifically. We are the preferred partner in the jurisdictions in which we operate on the absolute tier 1 assets.

Speaker #2: As I said, we're looking for a threshold of 20%. So we're certainly heading back in the right direction, and we have extremely supportive market conditions for what I think is quite a few years ahead of us.

Speaker #2: So, expecting to see those returns continue to improve. Moving on to the next slide, please. Just reiterating, I think it's important to point out—and I'm going to say this in the context, again, of the market speculating on RICO specifically.

Speaker #2: We are the preferred partner in the jurisdictions in which we operate on the absolute Tier 1 assets. We're active service providers at the largest of the African gold mines.

Jamie Boyton: We are active service providers at the largest of the African gold mines, places like Sukari in Egypt, Geita in Tanzania, Kibali in the DRC, Tasiast in Mauritania. These are 0.5 million ounce per annum, long life, low-cost mines owned by the majors, and we are the trusted partner to execute on these assets. In terms of contract wins that we announced in H1, it is a similar thematic. We announced a five-year laboratory contract in Grand Falls in Newfoundland with Equinox Gold. It is a $20 billion company. Today, we have announced the exploration contract, multi-rig, multi-year contract with Ma'aden, which is obviously in the tens of billions in terms of market capitalization. Montage, we have announced contracts for both our laboratory business and our drilling business, both long-term contracts. This is one of the largest deposits and mines to come on stream in West Africa in the last decade.

Speaker #2: Places like Sakari in Egypt, Gaita, in Tanzania, Kibali in the DRC, Taziat in Mauritania, these are half a million ounce per annum long life low cost mines owned by the majors and we are the trusted partner to execute on these assets.

Speaker #2: In terms of contract wins that we announced in the first half, it's a similar theme. We announced a five-year laboratory contract in Grand Falls, Newfoundland, with Equinox Gold.

Speaker #2: It's a $20 billion company. Today, we've announced the expiration contract—multi-rig, multi-year contract—with Marden, which is obviously in the tens of billions in terms of market capitalization.

Speaker #2: Montage, we've announced contracts for both our laboratory business and our drilling business—both long-term contracts. This is one of the largest deposits and mines to come on stream in West Africa in the last decade.

Speaker #2: PDI Gold—we've recently started drilling there. They are the owner of the Bankan deposit, which is the largest mine coming on stream in Guinea.

Jamie Boyton: PDI Gold, we have recently started drilling there. They are the owner of the Bankan deposit, which is the largest mine coming on stream in Guinea. So consistent thematic that we are winning work on long-term, low-cost, large-scale mines, which is a testament to the service offering of the company. Back on the focus of the capital markets on Reko Diq specifically, we make the point today that we operate across 17 countries. We have 19 different customers across our drilling and mining business. We operate across 25 different sites, and we have over 30 separate contracts. When you go into MSA, the story gets even broader. Over 400 customers for our laboratory business across 33 laboratories.

Speaker #2: So, consistent thematically, we are winning work on long-term, low-cost, large-scale mines, which is a testament to the service offering of the company.

Speaker #2: Now, back to the focus of the capital markets on Reykjavík specifically. We made the point today that we operate across 17 countries, and we have 19 different customers across our drilling and mining business.

Speaker #2: We operate across 25 different sites, and we have over 30 separate contracts. When you go into MSA, the story gets even broader. We have over 400 customers for our laboratory business, across 33 laboratories.

Speaker #2: So, there is diversification across our client base. And again, perhaps we're too focused on the valuation, but we've seen a lot of reaction in the market, a lot of focus on the Reykjavík contract.

Jamie Boyton: There is diversification across our client base. Again, perhaps too focused on the valuation, but we've seen a lot of reaction in the market and a lot of focus on the Reko Diq contract. In fact, if I could reference some feedback I was given on one of the retail channels about if the company had materially bad news to impart, then it shouldn't hang around for the results to let us know. We are acutely aware of our disclosure obligations, and if we had bad news to communicate with respect to material contracts, we would do so. We obviously release our results in our quarterlies. We release contract wins, I should say, every quarter. We bespoke release contract wins for material contracts.

Speaker #2: So again, in fact, if I could reference some feedback I was given on one of the retail channels about if the company had materially bad news to impart, then it shouldn't hang around for the results to let us know.

Speaker #2: We are acutely aware of our disclosure obligations, and if we had bad news to communicate with respect to material contracts, we would do so.

Speaker #2: We obviously release our results for our court in our quarterlies. We release contract wins, I should say, every quarter. We bespoke-release contract wins for material contracts.

Speaker #2: But within our portfolio, at any point in time, there will be scope changes across the 25 different sites at which we are working. The balance of those scope changes is in a positive direction, consistent with the demand environment in which we're operating.

Jamie Boyton: Within our portfolio, at any point in time, there will be scope changes across the 25 different sites at which we are working, and the balance of those scope changes are in a positive direction consistent with the demand environment in which we're operating. I hope to some extent we've quelled what has seemed to be quite focused speculation about the company with our revenue upgrade and with the diversity of our client base. If we can move on to the next slide, please. MSA Labs is having a fantastic growth period. You can see the revenue growth of 50% cumulative over the last seven years. The momentum's continuing. The H1 revenue growth of 45%. What was particularly pleasing is we achieved adjusted EBITDA margins of 16.6%.

Speaker #2: So I hope, to some extent, we've quelled what seems to be quite focused speculation about the company with our revenue upgrade and with the diversity of our client base.

Speaker #2: If we can move on to the next slide, please. MSA Labs is experiencing a fantastic growth period. You can see that revenue has grown 50% cumulatively over the last seven years.

Speaker #2: And the momentum's continuing. The first half revenue growth of 45%. What was particularly pleasing is we achieved adjusted EBITDA margins of 16.6%. When we were going through the company's investment phase, rolling out our laboratory platform, which we have now seen the benefits of that rollout through added with our increased BD capabilities to see increased utilization, we're already operating within the target margins that we set, which were 15 to 20%.

Jamie Boyton: When we were going through the company's investment phase, rolling out our laboratory platform, which we have now seen the benefits of that rollout through, added with our increased BD capabilities to see increased utilization. We're already operating within the target margins that we set, which were 15% to 20%. Typically, seasonality-wise, the H2 is stronger than the H1. We commissioned the Grand Falls laboratory in the H1. We've got labs being commissioned in Armenia, two labs in Ivory Coast, and then Tungsten West as we announced today, and a joint venture that we formed with Mari Minerals in Pakistan. We continue to grow that platform at pace, and we're extremely pleased with the performance of that business. It's really gathered momentum over the last 24 months. If we can move on to the next slide, please.

Speaker #2: And typically, seasonality-wise, the second half is stronger than the first. We commissioned the Grand Falls laboratory in the first half. We've got labs being commissioned in Armenia, two labs in Ivory Coast, and then Tungsten West, as we announced today, and a joint venture that we formed with Mari Minerals in Pakistan.

Speaker #2: So, we continue to grow that platform at pace, and we're extremely pleased with the performance of that business. It's really gathered momentum over the last 24 months.

Speaker #2: If we can move on to the next slide, please. Our investment arm spoke to it a little bit earlier. Cumulative return over seven and a half years is 60%.

Jamie Boyton: Our investment arm, we spoke to it a little bit earlier. Cumulative return over seven and a half years is 60%. We have been extremely successful in identifying early-stage investment opportunities, partnering with the management teams, bringing our network to assist them in terms of technical expertise, corporate expertise, capital raising capabilities, service provision. Between the companies that we've been involved with, there's been over 10 million, 10 million ounces, pardon me, of grassroots discoveries over the last six years. I saw one of our clients referencing their target for the next five years, and they had a 6 million ounce greenfield target. This is one of the majors. Through our efforts, we've discovered over 10 million. The portfolio continues to do particularly well. It's concentrated on WIA Gold and Isara, both of which had capital raisings in the H1 of the year.

Speaker #2: We have been extremely successful in identifying early-stage investment opportunities. We partner with management teams, bringing our network to assist them in terms of technical expertise, corporate expertise, capital-raising capabilities, and service provision.

Speaker #2: Between the companies that we've been involved with, there's been over 10 million dollars, 10 million ounces - pardon me - of grassroots discoveries over the last 6 years.

Speaker #2: I saw one of our clients referencing their target for the next five years, and they had a 6-million-ounce greenfield target. This is one of the majors.

Speaker #2: Through our efforts, we've discovered over 10 million. So the portfolio continues to perform particularly well. It's concentrated on Weir Gold and Asara, both of which had capital raisings in the first half of the year.

Speaker #2: And we more recently announced, only a week ago, a subsequent capital raising and debt financing, as well as an increase in their resource to 3.78 million ounces with their DFS.

Jamie Boyton: WIA Gold more recently announced only a week ago, a subsequent capital raising, a debt financing, an increase in their resource to 3.78 million ounces with their DFS. That project is now funded into production with the subject to mine permitting, which they are anticipating the H2 of this year. So continue to look for opportunities and has been a fantastic performer for the group. Next slide, please. Demand. I do not need to talk to the gold price. I do think it is probably just worth mentioning, though, that there has been two things, I think that have had an impact on Capital's share price in the H1, and one has been the speculation around Reko Diq, and the second one has been the correlation with the gold price.

Speaker #2: So that project is now funded into production, subject to mine permitting, which they're anticipating in the second half of this year. So, we continue to look for opportunities, and it has been a fantastic performer for the group.

Speaker #2: Next slide, please. Demand. I don't need to talk to the gold price. I do think it's probably just worth mentioning, though, that there have been two things, I think, that have had an impact on Capital's share price in the first half. One has been the speculation around Reykjavík, and the second one has been the correlation with the gold price.

Speaker #2: I think it's important to point out that the assets on which we work and the demand environment in which we are working—gold price at $4,000, gold price at $5,000—it doesn't have a significant impact on demand.

Jamie Boyton: I think it is important to point out that the assets on which we work and the demand environment in which we are working, gold price at USD 4,000, gold price at USD 5,000, it does not have a significant impact on demand. In January of 2025, the gold price was USD 2,600. So this is a sector that is awash with cash at the moment. Record operating margins. If you look to the bottom left, there is the capital markets activity, and you can see that particularly on the ASX, record levels of capital markets activity, record operating margins. When you look at the top right, this is a slide that we were, a graph that we had talked to many times before. We use the term disconnect.

Speaker #2: In general, as of 2025, the gold price was $2,600. So, this is a sector that is awash with cash at the moment and has record operating margins.

Speaker #2: If you look to the bottom left, there’s the capital markets activity, and you can see that, particularly on the ASX, there are record levels of capital markets activity, and record operating margins.

Speaker #2: And when you look at the top right—and this is a slide, or a graph, that we have talked about many times before.

Speaker #2: And we used the term 'disconnect.' And the disconnect between the previous cycle peak, which was about 15 years ago, is that we still have exploration spend and capital spending at 50-odd percent lower than where it was 15 years ago, despite record gold prices, record operating margins, and the most robust balance sheets in the sector.

Jamie Boyton: The disconnect between the previous cycle peak, which is about 15 years ago, where we still have exploration spend and capital spending 50 odd percent lower than where it was 15 years ago, despite record gold prices, record operating margins, the most robust balance sheets in the sector. In October last year, we made the statement that we thought we were at the front end of a demand cycle for service providers. In late November last year, we raised money to enable us to secure capital equipment for what we thought was a growth phase that was coming. Today, we have reported extremely strong revenue growth. I would go so far as to say it is unprecedented demand that we are seeing across our platform as a result of the macro conditions supporting our client base, and we are very encouraged by the outlook for the next number of years.

Speaker #2: In October last year, we made the statement that we thought we were at the front end of the demand cycle for service providers. In late November last year, we raised money to enable us to secure capital equipment for what we thought was a growth phase that was coming.

Speaker #2: Today, we have reported extremely strong revenue growth. I'd go so far as to say it's unprecedented demand that we are seeing across our platform as a result of the macro conditions supporting our client base.

Speaker #2: And we're very encouraged by the outlook for the next number of years. If we can go to the next slide, please. To this thematic a little further, the last bull cycle—looking at the top left graph—you can see, despite the very strong market, the sector, the clients that we faced operated with negative cash flows.

Jamie Boyton: We can go to the next slide, please. To this thematic a little further. The last bull cycle, looking at the top left graph, you can see despite the very strong market, the sector, the clients that we faced, operated with negative cash flows. When you move across to the right and you see where the sector has started to pick up, you can see that the operating cash flow and free cash flow is at levels we have never seen before. So we continue to be extremely encouraged, and we are seeing it in terms of our demand pipeline. Again, just to reiterate, today, we have upgraded our group revenue guidance to USD 430 to 450 million. At this stage, maintaining MSA at the USD 85 to 95 million range and group CAPEX at USD 55 to 65 million. On that, I will hand over for Q&A, please.

Speaker #2: When you move across to the right and you see where the sector has started to pick up, you can see that the operating cash flow and free cash flow are at levels we've never seen before.

Speaker #2: So we continue to be extremely encouraged, and we're seeing it in terms of our demand pipeline. So, again, just to reiterate, today we've upgraded our group revenue guidance to $430 to $450 million.

Speaker #2: At this stage, maintaining MSA at the $85 to $95 million range, and group capex at $55 to $65 million. And on that, I'll hand over for Q&A, please.

Speaker #1: We will now start the Q&A session. If you wish to ask a question, please submit these through the webcast page using the 'Ask a Question' button.

Operator: We will now start the Q&A session. If you wish to ask a question, please submit these through the webcast page using the Ask a Question button. I will now hand over to Ryan Tennis, Corporate Development and Investor Relations to address the written questions. Please go ahead.

Speaker #1: I'll now hand over to Ryan Tennis, Corporate Development and Investor Relations, to address the written questions. Please go ahead.

Speaker #3: Hi, everyone. We've had quite a few questions today, so I'll just work through them systematically. We can start with the drilling business.

Jamie Boyton: Hi, everyone. We have had quite a few questions today, so I will just work through them systematically. We can just start with the drilling business. For Jamie, could you give an explanation of the optimum utilization rate for our drilling fleet, specifically for exploration rigs, and where do you see it moving from the current levels of 71%? Upheaval as a public company has been 83%. The answer to that question is 75%. You will never have a perfect scenario where you have exactly the fleet configuration for the contracts on tender. Having some capacity within your fleet and allowing movements of assets, refurbishment of assets, routine maintenance, et cetera, the answer is 75%. I do not know that we necessarily differentiate with that target utilization across the different types of assets.

Ryan Tennis: Hi, everyone. We have had quite a few questions today, so I will just work through them systematically. We can just start with the drilling business. For Jamie, could you give an explanation of the optimum utilization rate for our drilling fleet, specifically for exploration rigs, and where do you see it moving from the current levels of 71%?

Speaker #3: So, for Jamie, could you give an explanation of the optimum utilization rate for our drilling fleet, specifically for exploration rigs, and where do you see it moving from the current levels of 71%?

Speaker #2: I'll take, as a public company, it's been 83%. The answer to that question is 75%. You'll never have a perfect scenario where you have exactly the fleet configuration for the contracts on tender.

Jamie Boyton: Upheaval as a public company has been 83%. The answer to that question is 75%. You will never have a perfect scenario where you have exactly the fleet configuration for the contracts on tender. Having some capacity within your fleet and allowing movements of assets, refurbishment of assets, routine maintenance, et cetera, the answer is 75%. I do not know that we necessarily differentiate with that target utilization across the different types of assets.

Speaker #2: So, having some capacity within your fleet and allowing, obviously, movements of assets, refurbishment of assets, routine maintenance, etc., the answer is 75%. I don't know that we necessarily differentiate with that target utilization across the different types of assets.

Speaker #2: Most of our exploration rigs—which is only a small part of our business, about 10 percent or so of our business—they can be used on mine sites, development assets, which is where they tend to be.

Jamie Boyton: Most of our exploration rigs, which is only a small part of our business, 10 odd percent of our business, they can be used on mine sites, development assets, which is where they tend to be. When you do get into the blast hole contracts, the underground contracts, you do tend to see utilization across the fleet sitting at 90 odd percent. Predominantly because you get two, three, four-year mine plans ahead of you, therefore, better visibility on exactly what the profile is going to look like going forward. Thanks.

Speaker #2: But when you do get into the blast hole contracts, the underground contracts, you do tend to see utilization across the fleet sitting at 90-odd percent.

Speaker #2: Predominantly because you get two-, three-, four-year mine plans ahead of you, so therefore better visibility on exactly what the profile is going to look like going forward.

Speaker #3: Thanks. And then a question on why did we exit Marley in the US? And can you give an indication of the losses that we booked?

Ryan Tennis: Thanks. A question on, why did we exit Mali and the US? Can you give an indication of the losses that we booked?

Speaker #2: Well, let Rick talk to the losses. I mean, look, for us, we are in, I'll use the word again. I mean, I've been with Capital for 20 years now, and the last time I saw demand, extremely strong demand, was 2011.

Jamie Boyton: I'll let Rick talk to the losses. Look, for us, we are in, I'll use the word again. I've been with Capital for 20 years now, and when the last time I saw demand, extremely strong demand, was 2011. This is as strong a demand as we've seen. We just made the decision that we needed to optimize the portfolio. The operating conditions in Mali were not particularly favorable for international contractors, and we had a lot of opportunity on our platform in Guinea and Ivory Coast. In the US, look, we went there under previous management. The contract did not meet our return hurdles, and as such, assets are being redeployed. This is all about portfolio optimization, which I expect, and you're already seeing it.

Speaker #2: This is as strong a demand as we've seen. We just made the decision that we needed to optimize the portfolio. The operating conditions in Mali were not particularly favorable for international contractors, and we had a lot of opportunity on our platform in Guinea and Ivory Coast.

Speaker #2: And in the US, look, we went there under previous management. The contract had not met our return hurdles, and as such, assets have been redeployed.

Speaker #2: So this is all about portfolio optimization, which I expect—and you're already seeing it—it's feeding through to our margins and our returns. I think there's more to come in terms of how we can improve this business as we optimize it further.

Jamie Boyton: It's feeding through to our margins and our returns, and I think there's more to come in terms of how we can improve this business as we optimize it further.

Speaker #3: Yeah, I think on the wind-down costs, Ryan, I think, look, we've got the U.S., had an asset base, some of which was configured specifically for the U.S. requirements in that market.

Ryan Tennis: Thanks.

Rick Robson: On the wind down costs, Ryan, I think, look, the US had an asset base, some of which was configured specifically for the US requirements in that market. So unsurprisingly, those assets were put up for sale. We have taken a bit of a loss on disposal there, so I think it was about $1.1 million loss on disposal predominantly tied to that concept, with another further $1 million impairment against their sort of future disposals to be made. Overall, it probably a sort of mid-single-digit cost for exiting the US business.

Speaker #3: So, unsurprisingly, those assets were put up for sale. We have taken a bit of a loss on disposal there. So I think there's about a $1.1 million loss on disposal, predominantly tied to that concept.

Speaker #3: With a further $1 million impairment against future disposals to be made. Overall, it's probably a sort of mid-single-digit cost for exiting the US business.

Speaker #3: Thanks, both. On to the mining division: how much capacity is there, or flexibility to add additional mining service contracts?

Ryan Tennis: Thanks, both. Onto the mining division. How much capacity is there or flexibility to add additional mining service contracts?

Speaker #2: Personnel-wise, there's capacity. Technical personnel-wise, equipment-wise, we're pretty fully utilized. Part of the reason that we raised money in late last year is we were pretty confident on some opportunities.

Jamie Boyton: Personnel-wise, there is capacity, technical personnel-wise. Equipment-wise, we are pretty fully utilized. Part of the reason that we raised money late last year is we were pretty confident on some opportunities, and we announced in H1 the Sukari waste stripping contract. That has utilized all of our idle equipment that was remaining after we sent a lot of the fleet to Reko Diq in Pakistan. We did purchase further equipment, part of the proceeds from the raising, which is arriving in H2 this year. From a fleet perspective, we are pretty, well we are fully utilized. I am going to reiterate the fact that we are not actively participating in the open tender market for mining opportunities. We are very selective about what we look at, and mining opportunities have long lead times.

Speaker #2: And we announced in the first half of the year that the Sukari waste stripping contract has utilized all of our idle equipment that was remaining after we sent a lot of the fleet to Reko Diq in Pakistan.

Speaker #2: We did purchase further equipment, part of the proceeds from the raising, which is arriving in the second half of this year. So from a fleet perspective, we're pretty well— we are fully utilized.

Speaker #2: But I'm going to reiterate the fact that we're not actively participating in the open tender market for mining opportunities. We're very selective about what we look at.

Speaker #2: And mining opportunities have long lead times, so being able to secure equipment is an integral part before you submit the tender—having a line of sight on being able to secure equipment, which we can do.

Jamie Boyton: Being able to secure equipment is an integral part before you submit the tender of having a line of sight on being able to secure equipment, which we can do.

Speaker #3: Thanks. And then, could you give some more details on the likely outlook for record deck?

Ryan Tennis: Thanks. Could you give some more details on the likely outlook for Reko Diq?

Jamie Boyton: Well, Barrick have made a lot of announcements, and a lot of our shareholders have picked up on those announcements. There has been a slowdown in activity. It has been well flagged by Barrick. However, they do continue to run the asset. They are talking about the development timetable being pushed out. Barrick are over USD 1 billion deep into this asset. It is an absolutely world-class asset. They need to continue to invest in the asset, albeit at a reduced pace. We are a key contractor at the site, in fact, the largest contractor at the site, where the work that we are doing at site is critical path items to continue to move the project forward. I will not begin to speculate what will happen with the asset in terms of ownership.

Speaker #2: Well, I reckon we've made a lot of announcements, and a lot of our shareholders have picked up on those announcements. There has been a slowdown in activity.

Speaker #2: It's been well flagged by Barminco. However, they do continue to run the asset. They're talking about the development timetable being pushed out. But Barminco are over a billion dollars deep into this asset—it's an absolutely world-class asset.

Speaker #2: They continue to invest in the asset, albeit at a reduced pace. We are a key contractor at the site—in fact, the largest contractor at the site.

Speaker #2: The work that we are doing at site is critical path items to continue to move the project forward. I won't begin to speculate what will happen with the asset in terms of ownership.

Speaker #2: However, I'll reiterate the fact that when you're more than a billion dollars deep on one of the world's premier copper assets, I do not—I can only see this continuing to be developed.

Jamie Boyton: However, I will reiterate the fact that when you are more than USD 1 billion deep on one of the world's premier copper assets, I can only see this continuing to be developed.

Speaker #3: Thanks. So, onto labs. Our overall lab utilization is 54%. How are the mature or established labs performing, and what would be the ideal long-term rate for an established site?

Ryan Tennis: Thanks. On to labs. Our overall labs utilization is 54%. How are the mature, established labs performing, and what would be the ideal long-term rate for an established site? In addition to that, does onsite labs restrict ability to have more than one customer? How does that impact pricing?

Speaker #3: And in addition to that, do on-site labs restrict the ability to have more than one customer? How does that impact pricing?

Speaker #2: Okay, a bit to unpick there. On-site labs, typically, yes, they're just one customer. Then we talk about a margin range for the labs. How it affects pricing—it tends to be slightly lower margin.

Jamie Boyton: Okay. Big time peak there. Onsite labs, typically, yes, they are just one customer. We talk about a margin range for the labs, how it affects pricing. It tends to be slightly lower margin. But in saying that, onsite labs are typically client CAPEX, not to our account, to the client's account, so the returns are obviously commensurately compensate. In terms of more mature labs, yes, as they are better established. Remember, MSA itself is only about seven years old. In seven years, it has gone from a standing start to being the fifth largest geochemistry lab in the world. The brand is building. So those labs that have had a longer lead time are running at higher utilization. Labs that we are recently commissioning, lower. However, in the case of Grand Falls, for example, that was a, what we call a hybrid lab.

Speaker #2: But in saying that, on-site labs are typically client CAPEX, not to our account—it's to the client's account. So the returns are obviously conventionally compensated.

Speaker #2: In terms of more mature labs, yes, as they're better established. Remember, MSA itself is only about seven years old. In seven years, it's gone from a standing start to being the fifth-largest geochemistry lab in the world.

Speaker #2: And the brand is building. So those labs that have had a longer lead time are running at higher utilization. Labs that we are recently commissioning are lower.

Speaker #2: However, in the case of Grand Falls, for example, that was what we call a hybrid lab. So it has an anchor mine site customer, specifically at Equinox Valentine Mine.

Jamie Boyton: It has an anchor mine site customer, specifically Equinox Valentine mine, underpinning the volumes. New commercial labs, and we established quite a few in Canada quite a few years ago, they take longer to penetrate the market. But across the portfolio, certainly heading in the right direction. If you talk to any of the lab companies at the moment, or the clients, I should say, probably more so, turnaround time in the industry is the critical factor at the moment, getting your data back quickly. Turnaround times at a lot of our competitors who had not been investing in capacity have slowed down. This is where we are also seeing a benefit. Having some spare capacity as a result of our infrastructure build over the last couple of years is benefiting us in this market.

Speaker #2: Underpinning the volumes, new commercial labs—and we established quite a few in Canada quite a few years ago—take longer to penetrate the market.

Speaker #2: But across the portfolio, certainly heading in the right direction. And if you talk to any of the lab companies at the moment—or the clients, I should say—and probably more so, turnaround time in the industry is the critical factor at the moment: getting your data back quickly.

Speaker #2: Turnaround times, and a lot of our competitors who hadn't been investing in capacity, have slowed down. This is where we're also seeing a benefit.

Speaker #2: Having some spare capacity as a result of our infrastructure build over the last couple of years is benefiting us in this market.

Speaker #3: Thanks. And one for Rick. Someone has asked about our adjusted EBIT target for MSA Labs, which is something we don't report, but maybe you just want to give an explanation of what adjusted EBITDA is.

Ryan Tennis: Thanks. One for Rick. Someone has asked about our adjusted EBIT target for MSA Labs, which is something we don't report. Maybe you just want to give an explanation of what adjusted EBITDA is just to bridge that.

Speaker #3: Just to bridge that.

Speaker #1: Yeah, 100% sure. The question is, so adjusted EBITDA is obviously our EBITDA, as you would know, but it's been adjusted for the cash cost of the leases.

Rick Robson: Yeah, 100% sure what the question is. Adjusted EBITDA is obviously the EBITDA as you would know, but it's been adjusted for the cash cost of the leases, as if they were traditional operating leases as opposed to IFRS 16 capitalized leases. We use that adjusted EBITDA metric to show a much more truer picture of the underlying operations. For the labs business, the target there is between 15% and 20%. We're well within our target range, and we see that hopefully continue to increase as we develop the portfolio further.

Speaker #1: As if there were traditional operating leases as opposed to IFRS 16 capitalized leases. So we've used that adjusted EBITDA metric to show a much more true picture of the underlying operations.

Speaker #1: For the labs business, the target there is between 15% and 20%. So we're well within our target range, and we see that hopefully continue to increase as we develop the portfolio further.

Speaker #3: Thanks.

Ryan Tennis: Thanks.

Speaker #2: But broadly speaking, Rick, the delta between your adjusted EBITDA and your EBIT is probably a couple of hundred basis points, right? From an accounting perspective.

Jamie Boyton: Brian, broadly speaking, Rick, the delta between your adjusted EBITDA and your EBIT is probably a couple of hundred basis points, right? From an accounting perspective.

Speaker #1: Yeah, yes. I guess with the labs business being relatively capitalized, the true depreciation is relatively low.

Rick Robson: Yes. I guess with the labs business being relatively capital light, the true depreciation is relatively low.

Speaker #2: Yeah.

Jamie Boyton: Yeah.

Speaker #1: So yes, you're correct, Jamie. The adjusted EBITDA and the EBIT are not a million miles apart in that context.

Rick Robson: Yes, you are correct, Jamie. The adjusted EBITDA and the EBIT are not a million miles apart in that context.

Speaker #3: Thanks. There's a comment on the segment profit in the non-African business. It was 23%, and Africa was 29%. Do you see the non-African business segment profit increasing towards the 29% of Africa?

Ryan Tennis: Thanks. There is a comment on the segment profit in the non-African business. It was 23%, and Africa was 29%. Do you see the non-African business segment profit increasing towards the 29% of Africa?

Speaker #1: Sorry, Ryan's up for me.

Rick Robson: Sorry, Ryan, is that for me?

Speaker #2: Yes.

Speaker #3: Yeah.

Jamie Boyton: Yes.

Ryan Tennis: Yeah.

Rick Robson: Yeah. Well, it is all driven heavily by business mix. I think the short answer is yes. But obviously the specifics of it will be driven by the business mix as we move forward. Obviously the labs business is doing well in North America, so the non-African segment is performing pretty well. As that grows, then yes, that trend towards that margin should come through a little bit.

Speaker #1: Yeah, okay. Well, look, it's all driven heavily by business mix. And I think the short answer is yes, but obviously, the specifics of it will be driven by the business mix as we move forward.

Speaker #1: So, obviously, the Labs business is doing well in North America. So the non-African segment is performing pretty well. As that grows, then yes, that trend towards that margin should come through a little bit.

Speaker #3: Okay, thanks. For Jamie, did Capital participate in the recent Weir Gold fundraise?

Ryan Tennis: Okay, thanks. For Jamie, did Capital participate in the recent WIA Gold fundraise?

Speaker #2: I'm going to make the assumption—the reason being, one week ago—and the answer to that question is yes. It still needs to go to a shareholder vote.

Jamie Boyton: I am going to make the assumption the recent one being a week ago, and the answer to that question is yes. It still needs to go to a shareholder vote, which I believe is scheduled for late September. But the answer to the question is yes, we have maintained broadly similar sort of position as we had pre-raise.

Speaker #2: Which I believe is scheduled for late September. But the answer to the question is yes, we've maintained broadly the same sort of position as we had pre-raise.

Speaker #3: Thanks. And then, just following on—this is quite a chunky question—from Philip at Medium Invest: When do you plan to monetize the investment portfolio?

Ryan Tennis: Thanks. Then just following on, there is quite a chunky question from Philip at Mediolanum Invest. But when do you plan to monetize the investment portfolio? How will you use those proceeds? Following on from that, we did do a raise in November of last year. Was there consideration around using the liquid portfolio instead of raising money on the stock market?

Speaker #3: And how will you use those proceeds? And, following on from that, we did do a raise in November of last year. Was there consideration around using the liquid portfolio instead of raising money on the stock market?

Speaker #2: I'll answer the latter first. The answer was no. I think, as capital DI has matured and has proven itself consistently over seven and a half years, we don't look at it as a funding source.

Jamie Boyton: I will answer the latter first, and the answer is no. I think we have had a, as Capital Limited has matured and has proven itself consistently over seven and a half years. We do not look at it as a funding source for the business. We look at it as a very discreet, successful strategy. So it was not considered as a source of capital for the operating business. When you look at the return profile, I think pragmatically, you can understand why. In terms of monetizing the investments, I think that is a difficult question to answer. Specifically, when we think they hit fair value. But each investment has its own fair value point relative to where it is in its development cycle, where we think the upside is.

Speaker #2: For the business, we look at it as a very discrete, successful strategy. So it wasn't considered as a source of capital for the operating business.

Speaker #2: And when you look at the return profile, I think, pragmatically, you can understand why. And in terms of monetizing the investments, I think that's a difficult question to answer.

Speaker #2: Specifically, we consider when we think they reach fair value. But each investment has its own fair value point relative to where it is in its development cycle and where we think the upside is.

Speaker #2: We have been—we've seen this thing through from inception, and we were actually critical in forming the company, securing the licenses, and assisting with recruiting the management team.

Jamie Boyton: We've seen this thing through from inception, and we were actually critical in forming the company, securing the licenses, and assisting with recruiting the management team. We think there's a huge amount of inherent value in a 3.8 million ounce deposit with an NPV that's trading about 0.35 times price to NPV. I wouldn't encourage investors to expect to see large liquidation events from the portfolio in the near term.

Speaker #2: We think there's a huge amount of inherent value in a 3.8-million-ounce deposit with an NPV that's trading at about 0.35 times price to NPV.

Speaker #2: So, I wouldn't expect to—I wouldn't encourage investors who expect to see large liquidation events from the portfolio in the near term.

Speaker #3: Thanks. And a final question: Do you agree that the market applies our holding company discount to capital? And how does that translate into remaining listed?

Ryan Tennis: Thanks. Final question is, do you agree that the market applies a holding company discount to Capital? How does that translate into remaining listed?

Speaker #2: Probably a good opportunity to go to slide 24, if we could. Moderator, thanks. Does the market apply a holding company discount? I mean, I'll go right down to the bottom line and look at capital, isolating out our investments.

Jamie Boyton: Probably a good opportunity to go to slide 24, if we could. Moderator. Thanks. Does the market apply a holding company discount? I mean, we'll go right down to the bottom line and look at Capital, isolating out our investments. Let's look at the operating business as our Capital trades at 3.5 times 2027 EBIT, if we should use that measure. Our drilling peers trade at 7. Our mining contractors peers trade at 10, and our laboratory peers trade at 15. So I'll let others determine, is there a holding company discount? We've had all sorts of rationale given to us for the deep discount. Geographical exposure, geographical concentration, client concentration, lack of peers on the LSE. As I alluded to or pretty clearly communicated over the first half hour, correlation to the gold price with the news.

Speaker #2: So let's look at the operating business as our capital trades at three and a half times 27 EBIT, if we should use that measure.

Speaker #2: Our drilling PS trades at 7. Our mining contract is PS trades at 10, and our laboratory PS trades at 15. So, I'll let others determine if there is a holding company discount.

Speaker #2: We've had all sorts of rationale given to us for the deep discount: geographical exposure, geographical concentration, client concentration, lack of peers on the LSE, as I alluded to, are pretty clearly communicated over the first half hour.

Speaker #2: Correlation to the gold price. Rick, I think news—it will all matter, a lot of things—but I can't... well, I'll just simply come back.

Jamie Boyton: All manner of things, but I can't. Well, what I'll just simply come back. Revenue growth, 20, 22 odd percent. Has industry-leading margins at 25%, has industry-leading return on capital at 19%. It does not deserve the types of discounts against our peers. That's all I'd say to that.

Speaker #2: Revenue growth in 2022 was strong. We have industry-leading margins at 25% and industry-leading return on capital at 19%. It does not deserve the types of discounts against our peers.

Speaker #2: That's what I'd say to that.

Speaker #3: Okay, great. Thanks, Jamie and Rick. That's all the questions we have today.

Ryan Tennis: Okay, great. Thanks, Jamie and Rick. That is all the questions we have today.

Speaker #2: Great. Well, thank you to everyone who has dialed in, and particularly thank you for the questions. We look forward to keeping the market updated, and we expect to share further positive news as we continue to grow capital.

Jamie Boyton: Well, thank you for everyone that has dialed in. Particularly thank you for the questions. We look forward to keeping the market updated and expect to see some further positive news, as we continue to grow Capital. Thank you very much.

Speaker #2: Thank you very much.

Ryan Tennis: Thank you all.

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Half Year 2026 Capital Ltd Earnings Call

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