29Metals Limited

Thanks, Melanie. Good morning, ladies and gentlemen. My name is Mike Sliferski, and I'm Group Manager, Investor Relations for 29 Metals. I have our full executive team with me this morning to present 29 Metals December quarterly and full year 21 production report, and then to provide production and cost guidance for calendar 2022. Additional financial guidance points will be provided with our 2021 financial report on the 23rd of Feb. So this morning you'll hear in order first Peter Albert, our CEO and Managing Director, then Ed Kearney, Chief Operating Officer, then Peter Herbert, Chief Financial Officer, and then Mark Van Heerden, Group Manager Exploration, after which we'll open up for Q&A. At the conclusion of the call, the transcript, sorry, the recording will be available on both the 29 Metals website and on Open Briefing. This call is available via Open Briefing as a webcast and also over the phone. So I'd like to now hand over to Peter, Peter Albert, to open the call. Thanks, Peter.

Thanks, Mike, and thanks for the introduction. And welcome, everybody, and thank you for joining us this morning. Of course, it's a busy time right now with quarterly reports and results coming out from multiple companies, so very pleased that you can join us this morning. Mike's already done the introduction, so I don't need to do that again. and I'll go straight into an overview of the quarterly results. And then, as Mike said, I'll hand over to Ed, Peter Herbert and Mark Van Heerden for a bit more cover in each of their specific areas. First of all, of course, safety. Whilst we have held our safety performance steady, we have not yet been able to reduce the number of minor accidents, mostly hand injuries. This is disappointing and there is a strong focus across both sites to improve our performance in this area. But I can say from a cultural point of view, the focus on safety and the reporting of any incident or potential incident is very, very good. COVID, of course, has been a significant business matter for us and for all other mining operations. The difference in the regulatory environment between states presents challenges, although at the same time, it also provides learning opportunities that we are able to share between the sites. With the Queensland borders open up in mid-December, we have seen the inevitable spread of COVID in the community and early this year, the first appearance of cases in our workforce at Capricorn Copper. However, as described in the quarterly, through our COVID management plans, we have to date successfully managed to limit transmission and keep case numbers low. Whilst there's been some impact on less urgent project activities, the operations have been sustained. And I'm also pleased to be able to report that to date, we've had no person seriously ill or hospitalized as a result of COVID infection. At Golden Grove, our workforce is all double vaccinated, and all will soon need to have had their third dose. Whilst this will not stop the spread of COVID, it will almost certainly assist in the reduction of serious illnesses, and we are cautiously optimistic given the effectiveness of our COVID management plans at Capricorn to be able to manage cases at Golden Grove. The recent change to the highly anticipated West Australia border opening is disappointing. However, the last two years have demonstrated that we can tightly manage sites remotely and we will continue to do so until borders normalise. Actually, I couldn't be more proud and pleased of our teams at all three sites and across the business Under 29 Metals, the communication, the sharing of information, and the support across the business has just been great to see. On the ESG front, plenty of activity in these areas across the group, as we have said out in the report. We are progressing work on our first formal sustainability report, which will be included in our annual report later this year. We also commenced work with an expert external group during the December quarter to assist us. a company called Point Advisory. They've been working with us over the last few months to develop our roadmap for reporting against the TCFDs, an important step as we refine our contribution to actions against climate change, including setting specific targets. As noted in the report, we are working to increase our capability at the group level in this ESG space, in addition to engaging expert external parties to assist as required. Moving to operating performance, with a really strong finish to the year at both operations, Capricorn achieved a record in December of over 3,000 tons of copper. At Golden Grove, zinc production was lower than the prior quarter, as we had expected and indicated, but very strong copper production reflected significant improvement and a strong quarterly result overall. The improved and improving production performance resulted in significantly improved unit costs and solid operating costs for the year, notwithstanding the challenges of the first quarter, March quarter last year. Production at 68,200 tons in copper equipment terms exceeded the forecast that we're putting into the market at 67,400 tons. So we're very pleased about that result. And based upon our full year production revenue and costs released today, we expect full-year EBITDA to meet or exceed the prospectus forecast of $221 million Aussie dollars, subject, of course, to the finalization of full-year final results and the audit process. There is, of course, lots of discussion in the general mining space about cost pressures, and 29 Metals is no different. As mentioned earlier, to date, COVID impacts have been well-contained, albeit, of course, this has come at some cost. Labor costs are largely well managed, recognizing that the labor skills shortage has an impact on wage rises, especially in some areas of the business. Overall labor costs increases in 2022 are not expected to be extraordinary and in line with the rest of the industry. Where we have seen cost pressures has been in the supply of goods and materials, both in terms of inflationary costs for those materials, as well as the freight and logistics costs for delivery to the sites. Nonetheless, the 2021 costs have come in at the bottom of the range of the guidance we provided in the September quarterly report. So, now let me move to guidance. In today's quarterly, we have provided guidance on production, operating costs, corporate costs, and capital. I should note that going forward, 29 Metals will no longer provide guidance for copper equivalent outcomes. We will provide guidance on metal production, and we will report actual copper equivalent outcomes on a quarterly basis. for reference purposes. So for 2022, we are providing a guidance range for key parameters, which you'll find in the quarterly report. I don't intend to go through each of those numbers here, although obviously happy to take questions later. Overall, we expect strengthening performance driven by continuing strong copper production and a material increase in zinc production year on year. Cost guidance reflects the continuing cost pressures we are seeing, particularly in Western Australia, and planned increased activity levels at the mine sites. Concentrate transport costs are expected to be materially higher than 2021, reflecting the significant increase in shipping rates and the market that continues to be volatile. Supply chains, high demand for people and materials, and border closures have all contributed to rising costs. And as a business, we are very focused on managing through this environment in the best way possible. Guidance for a number of the accounting measures will be released along with our full year financial results due on the 23rd of February. There were a number of important operational and de-risking milestones in the December quarter, including first ore from the Xantho extended ore body at Golden Grove, completion of the TSF-1 lift at Golden Grove, as well as the advancement of the TSF lift at Capricorn to the point where we will imminently commence depositing tailings into that facility. Advancement of the Gossam Valley feasibility study and breakthrough of the Esperanza South Cave to the surface at Capricorn Copper. On the Gossam Valley feasibility study, the key study inputs have been completed and validate the prior PFS outcomes. We are now focused on optimizing Gossam Valley as part of an integrated and optimized Golden Grove mine plan, which will potentially include the role of Cervantes. The Cervantes drilling results reported in September were very encouraging, and the results from the continued drilling through to the end of 2021 will be reported shortly. We aim to include the majority of the Cervantes drilling results up to end of December into our updated mineral resource estimates in our annual resources and reserve statement to be released to the market in this current quarter. We will be considering the optimum and best value proposition for the company in the context of timing for potential development of both Gossam Valley and Cervantes. This year also, we will be focusing significantly on our organic growth opportunities at our sites. For example, the regional work at Capricorn Copper, extensions to the Esperanza South ore body, grey ghost and eagle's nest on our regional tenements that we have, as well as extensions to the greenstone orebody. At Golden Grove, Contable is an orebody which has a potential extension to Gossam Valley. Xantho Extended North aligned with Xantho Extended and the Scuddles Football, commonly known as GG4, as well as the work we are about to commence at Red Hill, and Mark will talk about that shortly. The team at Red Hill has mobilized and we're about to commence activities there. So overall, a great quarter, a great finish to the year, setting us up for an even more successful 2022. With those overarching remarks, I'll now hand over to Ed Cooney, Chief Operating Officer, to give us a bit more color around the production activities at the two operating mines. Ed will then hand over to Peter Herbert on commercial and financial, and then we'll finish off with Mark Van Heerden, and more detail on the exploration and organic growth activities. So with that, thank you Ed. Thank you and over to you Ed.

Thanks Peter and good morning everyone. Really great to be here today presenting our December quarterly performance. In terms of production, as Peter mentioned, we delivered a strong performance for the December quarter. It was our best quarter for the calendar year for copper metal produced and on a copper equivalent basis. A very pleasing quarter to finish the year with both operations achieving their best production quarters for the year and really reflecting the significant combined efforts and contributions of the site teams. At Golden Grove, mining volumes exceeded mill throughput as we navigated our way through completion of the TSF lift and commence deposition. Opening stockpiles for 2022 ahead of the mill put us in a much better position relative to the start of the 2021 calendar year. Copper production for the quarter was significantly higher than the prior quarters with lower by-product metals. Development and backfill maintained good rates during the quarter. As we started last quarter, establishing access to and production from new high-grade ore sources remains a key priority. During the December quarter, we commenced first ore production from the upper levels of the Xantho extended ore body, And this represents a significant milestone and it's the culmination of a lot of hard work by the Golden Grove team over a number of years. Our focus for the March quarter will be to continue activities upgrading ventilation in the area and extending the decline linking the Xantho extended, Oizon and Hugomont ore bodies. Completion of these will enable us to deliver chilled air directly from the surface to working fronts underground and further optimize our truck haulage and traffic management. In terms of the mill, throughput of 365,000 tonnes was marginally lower than the September quarter, impacted by the restrictions associated with completion of the TSF lift. Post completion of the lift in late November, the mill has been operating unconstrained at higher throughput rates. From a recovery perspective, the processing team have achieved improved copper recovery from lower grades as a result of further optimisation of the flotation circuit enabling us to produce concentrate from grades we previously weren't able to. The Pacewell project has now received final regulatory approvals. However, progress has been delayed due to ground conditions experienced when drilling the surface hole. A new hole was commenced in December, which is progressing well and pleasingly is now through the area of poor ground conditions we experienced in the first hole. We expect to commission the plant towards the end of the June quarter and in the interim the site team continue to maximize cemented hydraulic backfill delivery rates and focus on optimizing the remaining construction schedule of the plant. Moving on to Capricorn Copper, we achieved 10% higher metal production in the September quarter. Mining performance was good with volumes broadly consistent with the prior quarter. High grades were attributable to mammoth and in particular the greenstone ore body during the December month, resulting in the site monthly production record Peter mentioned of more than 3000 tons of copper metal produced. At Esperanza South, the sub level cave successfully broke through the surface and this was a welcome outcome and eliminates the need for any additional measures to initiate further propagation. We also commenced raised boring activities of a new ventilation shaft to surface at the Esperanza South ore body to increase underground air volumes and reduce working temperatures, with the pilot hole successfully breaking through and back reaming now underway. In terms of the mill, we processed similar volumes to the September quarter, though at higher feed grades. Recoveries and overall metal production were higher as a result. Preparation for the transition of the processing operations and maintenance activities in-house is progressing extremely well and we look forward to the transition occurring in February and pursuing the benefits we believe this transition will afford. Completion of stage one of the Esperanza TSF lift is imminent with commencement of deposition expected by month end. And in parallel with these construction activities, we've also progressed multiple surface site water projects. I'll now hand over to Peter Herbert, our CFO, to address some of the financial outcomes across the business.