Jane Brunton: Good morning, all. This is Jane Brunton, Head of Investor Relations and Growth at Kantra Copper. Welcome, and thank you for joining the Kantra September 2026 quarterly update. With me today are our CEO and MD, Bob Fulker, and our CFO, Luke Anderson. Today's session is audio only. Bob and Luke will run through our quarterly update before we move into a Q&A session for analysts covering Kantra. I will now hand over to Bob.
Bob Fulker: Thank you, Jane, and good morning, everyone. Thanks for joining the Kantra 2026 September quarter results webinar. The September quarter saw continued strength in the copper market, supported by growing investor recognition of the structural supply challenges facing the industry. A significant feature of the quarter was the continued buildup of copper inventories in the United States, with COMEX stocks reaching approximately 770,000 tons, representing almost 70% of the global exchange inventories. While this reflects a regional imbalance rather than a global shortage, it has reinforced broader concerns around copper supply security. At the same time, declining mine grades, a limited pipeline of new copper projects, and continued tightness in concentrate markets remained the themes. Together, these factors continue to support a constructive midterm outlook for copper prices.
Bob Fulker: Moving on to Kantra, this is the first quarterly report we deliver under our new name following the completion of the share consolidation. It has been another strong quarter for the business, and today we will take you through the operational and financial performance, as well as progress across our growth projects and broader development pipelines. These results reflect the continued momentum across the operation, disciplined cost management, and the advancement of key strategic initiatives that position the company for sustained growth. I will begin with the operational highlights for the quarter. We produced 3,419 tonnes of copper, marking our fifth consecutive quarter of production growth. The mine generated an operating mine cash flow of AUD 32.1 million, resulting in an operating mine cash flow margin of 44%, and a net mine cash flow of AUD 18.7 million after capital and rehabilitation expenditures.
Bob Fulker: This contributed to an increase in the cash generated during the quarter of AUD 11.9 million, increasing the group cash balance by 37% to AUD 44.1 million, and an all-in sustaining cost of $5.44 per pound of payable copper sold, bringing the year-to-date all-in sustaining cost to $5.78 per pound of payable copper sold, which is at the lower end of our 2026 cost guidance range. Overall, we are on track to deliver the 2026 production guidance, and we expect the full year AISC to be at the lower end of our cost guidance range. During the September quarter, we also produced 1,852 ounces of gold and over 26,000 ounces of silver, bringing copper equivalent production to 4,154 tonnes. The increased gold production reflects the ore output from Nugent, which has a higher global gold grade compared to Kavanagh.
Bob Fulker: Year to date, we have produced 9,709 tonnes of copper and a copper equivalent of 11,828 tonnes. Moving on to the Kanmantoo growth projects. The board approved the development of Emily Star as a third underground mining front for Kanmantoo. Surface portal construction commenced and post-quarter end, first portal firings have commenced. The development of Emily Star will be fully funded from the company's existing operating cash flow. Stoping at Emily Star is planned to commence in H2 2027. When online, Emily Star is anticipated to displace a portion of the lower Kavanagh production, whilst the Kanmantoo operation will increase to greater than 2 million tonnes per annum. As the processing plant throughput increases, the fixed costs will be absorbed over a larger production base, resulting in further reduction in the unit all-in sustaining cost.
Bob Fulker: Development of the Kavanagh North exploration drive advanced 118 meters in the quarter. This development has established a drill platform to target the Kavanagh North, Matthews, and Coopers deposits, with diamond drilling planned to commence in the coming months. Underground diamond drilling continued to progress to plan, with over 14,000 meters completed by quarter end. Underground diamond drilling of the Spitfire lode, which is positioned to the south of the main Kavanagh lodes, returned strong results. Call-out intersects included 30 meters at 1.32% copper and 22 meters at 1.02% copper. We have also released results from the latest underground drilling at Nugent post-quarter end. These results confirm the continuation of mineralization more than 300 meters below the current mining horizon. A key intersect included 70 meters at 1.18% copper and 0.24 grams per tonne of gold, highlighting the prospectivity of this system at depth.
Bob Fulker: The 2026 surface drilling program, targeting the depth extension of the Kavanagh lode system, was completed. The program identified the deepest significant mineralization intersect recorded at Kanmantoo site to date, sitting more than 250 meters below the current decline level. The annual Mineral Resources and Ore Reserves update commenced during the quarter. Ore drilling results received by 3 August 2026 will be included. The update includes more than 82,000 meters of drilling across the 2025 and 2026 drilling campaigns. The Mineral Resources and Ore Reserves update is on track for the completion and release by the end of October. Looking at our development pipeline, following consultation with local communities, land holders, and our partners at Havilah Resources, we have renamed the Mutooroo Copper Project, the Coburn Copper Project.
Bob Fulker: The name draws inspiration from the nearby township of Cockburn, with a phonetic spelling adopted to create a distinctive and recognizable project identity. This name brings a lot of South Australian history with it. The township of Cockburn was established in 1886 and named after Sir John Cockburn, who later became the 18th Premier of South Australia. The phase I of the pre-feasibility study continued to progress. Metallurgical tests confirm that the Coburn mineralization is amenable to the Kanmantoo flow sheet and reagent suite. The copper recoveries exceeded 90% and the gold recoveries exceeded 50%. These results substantially reduce the metallurgical risk. The team also progressed work on the rail logistics aimed at assessing transportation requirements and refining the operating cost assumptions. This will be the last piece of the phase I de-risking stage, and we are on track to complete this pre-Christmas this year.
Bob Fulker: Due to some required seasonal studies, we have commenced early on-ground works. Additionally, we have also commenced an early drilling program to allow further metallurgical test work to commence in the new year. This 1,000-meter drilling program is planned to commence in October. On regional exploration, drilling at Kanappa continued, with 812 meters completed during the quarter. The first drill hole of the 2 drilling program was completed, with the second hole ongoing at its quarter end. Core logging and data collection is underway to prepare samples for chemical analysis to determine the next stage of the exploration. In closing, the September quarter has seen a continued growth of copper production, resulting in an increase in cash at hand and a decrease in our all-in sustaining costs quarter on quarter. We are on track to meet our production guidance and be at the bottom end of our cost guidance.
Bob Fulker: Our third annual MROR release is expected in the coming weeks, and we have an internal and external growth platform which we can fund from operating cash flow. I will now pass over to Luke to discuss financial performance.
Luke Anderson: Thanks, Bob, and good morning, everyone. I will now walk you through the financial performance for the September quarter. All amounts I refer to are in Australian dollars, and all unit cost metrics are calculated on a payable copper pound sold basis, unless otherwise stated. As Bob has mentioned, the September quarter delivered another solid financial performance as the company continues to build a more robust financial base to support the business's growth going forward. The headline results include the highest underground quarterly copper production of 3,419 tons was achieved at an all-in sustaining cost of AUD 5.44 per pound, bringing the year-to-date all-in sustaining cost to AUD 5.78 per pound, within the lower end of the 2026 guidance range. 3,386 tons of payable copper was sold at an average realized price of AUD 18,096 per ton or AUD 8.21 per pound.
Luke Anderson: Kanmantoo generated AUD 32.1 million in operating mine cash flow, contributing to net group cash flow of AUD 14.2 million and a quarter end cash balance of AUD 44 million. Beginning with revenue increased 14.8% for the quarter to AUD 73.2 million, reflecting an increase in copper tons sold at a higher realized price. This was slightly offset by the reduced by-product credits driven by a lower realized gold price. The average realized price of copper sold during the quarter of AUD 18,096 per ton was up from AUD 17,096 per ton in the June quarter.
Luke Anderson: This also included delivery into a number of lower-priced hedges. The balance of the Freepoint hedge book was closed out, representing 850 tons of copper at AUD 14,707 per ton. Mine operating costs increased 2% for the quarter to AUD 41 million, reflecting greater activity and some impact from higher fuel costs and increased royalties.
Luke Anderson: Sustaining capital increased half a million to AUD 8.7 million, which was consistent with the company's 2026 mine plan. The operation spent AUD 4.3 million on major growth capital, with AUD 2.2 million spent on Emily Star and AUD 1.8 million on the Kavanagh North exploration drive. A further AUD 800,000 was spent on Kanappa exploration drilling. With Coburn ramping up, AUD 600,000 was spent on the PFS during the quarter. Overall, operating mine cash flow for the quarter increased 38% to AUD 32.1 million to generate total group net cash flow of AUD 14.2 million. This has seen the company's cash balance increase by AUD 11.9 million for the quarter to AUD 44 million as at 30 September, with a trade and other receivables balance of AUD 8.6 million and unsold stockpiles of AUD 5 million.
Luke Anderson: On hedging, as I mentioned earlier, the company closed out the remaining 850 tons of copper hedges with Freepoint at an average price of $14,707 per ton during the quarter. As the hedge price was below prevailing spot prices, these settlements tempered the revenue benefit from the stronger copper market. The company also established a new hedging program with CBA. The program is designed to provide greater cash flow certainty and cover a proportion of the company's fixed costs while retaining exposure to prevailing copper prices on the majority of forecast production. As at 30 September, the company had 3,600 tonnes of copper hedges outstanding at a weighted average price of $20,099 per tonne. The hedging arrangements with CBA were put in place following a broader competitive process to appoint a tier 1 banking partner for the business.
Luke Anderson: The appointment enabled the company to consolidate and simplify its existing security arrangements, including its current rehabilitation obligation. While the company does not currently require debt funding, the relationship establishes a strong banking platform and provides the potential access to future financing as Kantra advances its growth strategy going forward. Moving to costs, all-in sustaining costs for the quarter of $5.44 per pound was below the full year all-in sustaining cost guidance of $5.75 to $6.25 per pound. With the year-to-date all-in sustaining costs of $5.78 per pound at the lower end of guidance range, we will continue to monitor costs as the quarter progresses and update the guidance if necessary. Unit mining costs reduced 11% for the quarter to $3.35 per pound, reflecting the benefit of higher throughput. Unit processing costs also reduced as higher production volumes improved fixed cost absorption.
Luke Anderson: With higher diesel prices, high diesel prices have impacted site costs. However, the impact of this has been tempered by the relatively short underground mine hauls and the processing plant operating on grid power. In summary, another good quarter for the year. The highest underground quarterly copper production of 3,419 tonnes and copper equivalent of 4,154 tonnes. An increase in cash balance of AUD 44 million from strong cash flow generation. Year to date unit all-in sustaining costs within the lower end of guidance, and continue to establish a robust financial base to grow the business. I will now pass back to Jane for any questions.
Jane Brunton: Thank you, Luke. We are now entering the Q&A session open to analysts. If you wish to ask a question, please press the right-hand button and wait for your name to be announced. Chris has asked the first question. Chris from MST, please unmute and go ahead.
[Analyst] (MST): Jane, can you hear me now?
Jane Brunton: Yes, we can, Chris.
[Analyst] (MST): Great. Thanks. Thanks very much, guys. Congrats on a really solid quarter. Good to see some nice numbers coming through there. A couple of questions. Firstly, I guess just looking at the near-term production outlook.
Luke Anderson: I do.
[Analyst] (MST): Do you think we are kind of maxing out in terms of mined tonnes at the moment, or is there a little bit more to go there, do you think? Secondly, just relating to that, how is that near-term grade profile looking? I know Mr. talked a little bit about pinching and swelling and things. Where are we at with that?
Luke Anderson: Yep. Thanks, Chris. We have a lot of background noise. I will just repeat the two questions. One is the near-term production, and the second is the grade profile. Just on the production profile for this year, we always said that the H1 was a smaller half and the H2 was running at that 1.7 to 1.8 million tonne rate. We are currently running in the middle of that rate now, and we intend to stay at that rate for the rest of the year. Obviously, if we can get higher rates, we will, but the aim is to get that 1.7 to 1.8 over the next quarter as well in preparation for next year. The grade profile, with the additional areas that we are mining with Nugent online, with Kavanagh passing through that last pinch zone, we are actually seeing the widths come up in the diamond drilling.
Luke Anderson: That has been evident in some of the releases that we have been putting out recently. So we are seeing the repeatability of the ore body in the mineral zones as we were expecting. So, yeah, it is all going to plan and all producing as we would expect.
[Analyst] (MST): Great. Thanks. If I could just sneak one more in. I noticed there was a comment in the quarterly there about the aging fleet and some reliability issues. I am assuming there is a plan in place to work through this. Those numbers are in the sustaining CapEx.
Luke Anderson: Yeah. No, look, the fleet is getting older as we go forward. Most of it has been here for the entire life of the underground. We are starting to look at plans and strategies for next year and the next 5 to 10 years, to put it bluntly. We have not come and landed on the final solution at the moment, but as we work through it, we will let people know. So we are having some reliability issues, but it is not affecting us at this stage.
[Analyst] (MST): Okay. Thanks very much, guys.
Jane Brunton: Thank you, Chris. Once again, if you wish to ask a question, please press the right-hand button and wait for your name to be announced. There are no further questions. Oh, here comes one question from Paul. Paul Hissey, please unmute and go ahead.
Paul Hissey: Thanks, Jane. Couple of questions from me, just on cost. I mean, you're trending very well year to date. It wouldn't be a stretch to imagine you guys could actually come in below the bottom end of your all-in sustaining cost. Just keen to understand what's changed since the start of the year that's helped you have such a strong, at least year to date, performance from a cost perspective, or was the cost guidance particularly conservative at the time?
Luke Anderson: Thanks, Paul. It's Luke speaking. Look, I think we have seen the benefit of increased throughput right through the operation, both within the mine and the processing plant itself. I think we've realized some benefits in the mine as that efficiency has been improved. We've also seen some procurement benefits through renewal of a number of our contracts, which has reduced costs. I think there's a number of things there, some planned, some probably less planned, in some of the benefits that we've achieved there. Look, yeah, I guess in terms of guidance, we are at the lower end. There is a number of things that will affect that in the last quarter. We're cognizant that there will always be some year-end adjustments and one-offs as we head into the last quarter, so that's just something to be aware of.
Luke Anderson: The other factor is the timing of sales, which impacts your all-in sustaining costs on a sold basis. So there's a few variables there that we'll have to sort of monitor through the last quarter.
Paul Hissey: Well, I asked the question because you're probably one of few in the industry who it appears might be enjoying some tailwinds here from a cost perspective. I suspect there's quite a lot experiencing challenges in the other direction. Then one last question from me, just around TCRCs, a relatively minor point, but it looks like these were virtually zero for the period. Is that correct, Luke?
Luke Anderson: No. I think we probably got an adjustment to TCRs in Q2, so they have been consistent since then, Paul.
Paul Hissey: Okay. Approximately what values are you guys seeing at the moment for those costs?
Bob Fulker: I will try and answer this one, Paul. We actually sell from a marketing perspective, and it is into the Japanese benchmark, so it is a bit of a hard one to answer this year. But we have got general terms which are comparative with the rest of the market. Obviously, they are commercial and sensitive. They are not zero, but they are definitely not where they were in days gone by.
Paul Hissey: Okay. Understood. Thank you.
Jane Brunton: Thank you, Paul. Once again, if you wish to ask a question, please press the raise hand button and wait for your name to be announced. Chris, I can see your hand still raised. Is there a further follow-up question from yourself?
[Analyst] (MST): Sorry. No.
Jane Brunton: Thank you. There are no further questions at this time. I will now hand back to Bob for closing remarks.
Bob Fulker: Thanks, Jane. In closing, the September quarter has seen an 8% increase in copper production, a 37% increase in cash at hand, and a 6% decrease in all-in sustaining costs, demonstrating the strength and consistency of the Kanmantoo operation. Our disciplined approach to the operational execution and cost management has enabled us to advance key growth initiatives while continuing to strengthen the balance sheet. During the quarter, we commenced development of Emily Star. We continued to develop future diamond drilling platforms for extensional drilling in 2027 and continued to progress the Coburn pre-feasibility study, further enhancing our future growth pipeline. Operational performance remains solid, cash flow generation is strong, and we are well-positioned to deliver our 2026 guidance and continue to grow the business into 2027. Thank you all for your time today and for your ongoing support. We look forward to updating you on the Q4 results post-Christmas.
Bob Fulker: If we do not see you before, please have a safe and enjoyable festive season. That concludes the day. Thank you very much, everyone can disconnect.
