29Metals Limited

Thank you for standing by and welcome to the 29 Medals June quarter investor conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. Michael Sleferski, Group Manager of Investor Relations. Please go ahead.

Thank you, Darcy. Good morning, ladies and gentlemen. My name is Mike Sliperski. Welcome to 29 Metals' second quarter conference call. The call is being recorded and will be available for replay via the 29 Metals website and the Open Briefing website. 29 Metals' Managing Director and CEO, Peter Albert, will commence the discussion before handing the Chief Sustainability Officer, Cliff Tuck, to talk to Sustainability and ESG Activities and Achievements. This will then pass to our Chief Operating Officer, Tim Cooney, who will lead you through our operating performance, and then Ed will pass to our Chief Financial Officer, Peter Herbert, to discuss financial performance before handing back to Peter Albert to facilitate questions and answers. Our Group Exploration Manager, Mark Van Heerden, is also on the call to address any exploration questions during Q&A. So I'd now like to hand over to Peter Albert to commence the discussion. Thanks, Peter. Thanks Mike and thanks for the introduction and welcome everybody and thank you very much for joining us this morning. Mike's already done the introductions so I won't 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 Cliff, Ed and Peter Herbert for a bit more cover in each of their specific areas. First of all, as always, safety and health. There's been a significant improvement in the safety performance over the quarter, especially at Capricorn Copper. This has been especially pleasing given the labour challenges we've experienced across the business during the quarter. The West Australian Inquiry into the Sexual Harassment on FIFO Sites released its second report in June. We're in the process of reviewing this report to understand any areas of our operations in which we could improve. Our indivisible working group comprising members from across the business has been active in identifying improvement opportunities. I'm pleased to say that we do not appear to have any endemic or specific concerns at either operating site, although we will always remain vigilant and demand that our values, commitments and policies are well articulated, shared and adhered to. COVID cases have continued to be a part of our lives at 29 Meadows but pleasingly numbers on site have been contained to a handful at any point in time. Absenteeism due to COVID and other winter illnesses has caused operational challenges exacerbated by labour pressures especially in WA. Nonetheless our overall performance has been very pleasing which I'll come to shortly. In our quarterly, you will read a fulsome report on our sustainability and ESG activities during the quarter, which follows on from 29 Metals, our approach to sustainability and ESG, released in May. Cliff Tuck will elaborate shortly. I'm pleased to advise that Tara Garup joined us this week as a group manager of sustainability and ESG. Tara brings a wealth of experience and capability in this area and we are looking forward to significantly progressing our activities in this space in months to come. A highlight for me personally was attending the smoking ceremony at Capricorn Copper, a great experience helping to build our relationships with the Kalkadoon people. Also very pleasing was the attendance and participation of a large number of our team members at this event. Notwithstanding the multiple challenges relating to absenteeism, COVID, inflation and labour market pressures which continued to impact the whole industry during the last quarter, 29 metals performance was solid. Copper production at 11,100 tonnes was an almost 20% increase on Q1. While zinc production, which is weighted to the second half of the year, was 10,800 tonnes, a decrease of approximately 12% on the prior quarter. Overall, on a copper equivalent basis of 18,200 tons, production was up by 15%. Importantly, our guidance for the year remains largely unchanged, with reduced zinc TC costs, a reduction in precious metals production, and a modest $2 million increase in growth capital. Ed will discuss the production outcomes in more detail. Overall, we have delivered a solid quarter two result, and with some of the external factors predicted to abate in the balance of the year, we should continue to see good performance. Indeed, whilst we are still very early in quarter three, Capricorn Copper specifically has had a very strong start in respect of copper production. Commodity prices, of course, fell back during the second half of the quarter, which have had an impact on revenue, notwithstanding the improved production result. And whilst 20 Iron Metals is, of course, a taker of prices, we remain, like most commentators, bullish on the long-term outlook for energy transition metals, and especially copper. Our focus in any price environment is on delivering production and controlling costs. In relation to costs, despite industry-wide costs and inflationary pressures, our costs have been well managed across the business. The operating conditions we experienced in late 2021 informed our expectations for this year and largely played out as expected, albeit some costs have been higher than we had anticipated, such as, for example, diesel. High-grade underground mines typically consume less diesel and power, which is, of course, a competitive advantage for 29 Metals. Nonetheless, we recognize that our unit costs on a backward-looking basis are relatively high compared to current commodity prices. This is a reflection of 29 Metals committing to capital projects to ensure the long-term sustainability and growth of the business. Noting that the 29 Metals AISC reported numbers are almost a complete see-through to total business costs. With higher production in the second half of the year, unit costs will reduce, and if required, we're able to optimize our capital spend to further enhance unit costs. Access to labor and labor costs have remained a significant issue for the industry, with almost historical low unemployment rates prevailing across the country. 29 Metals remuneration, attraction and retention strategies are continuously reviewed and updated as necessary and we have been successful in balancing business costs whilst retaining our teams and recruiting new members as required. In relation to my prior comment regarding investing for the future, a number of key projects have been advanced in the June quarter. including the Paceville plant at Golden Grove, now being commissioned with the first place to be placed at Gosselin Hill in August. The ventilation upgrades that have been completed in recent months are now delivering cooled air direct to the Xantho Extended Mining Front. The Chilling Plant and booster fans at Gosselin Hill have been ordered and due for delivery by end of the year, which will further enhance operating conditions at Xantho Extended. The next tailing storage facility extension at Golden Grove is underway and is due for completion in the December quarter. The Cervantes PFS is well advanced and will be completed in the September quarter. At Capricorn Copper, the new ventilation shelf has been concrete spray lined and the new fans installed and will be commissioned in this September quarter. Exploration activities at all three sites continue during the quarter and we anticipate providing a more fulsome report early in this current September quarter. In terms of financial outcomes, I've reflected on revenue previously and Peter Herbert will talk in more detail about those outcomes, noting that we will be releasing our half-year results in late August. I'll now hand over to Cliff Tuck to give us a bit more color and insight to our sustainability and ESG report and some of our plans for this year. Then Cliff will hand over to Ed Cooney, the COO, on production activities of the two operating mines, and Ed will then hand over to Peter Herbert on commercial and financial. So over to you, please, Cliff. Thanks, Peter, and good morning, everyone. In the quarterly report released today, we've outlined our sustainability and ESG activities during the quarter, including our progress against the priorities for 2022 that were outlined in our annual report. The presentation of sustainability and ESG in the quarterly report has been updated to reflect the 29 Metals, our approach to sustainability and ESG, as launched in the annual report. In this way, and on an ongoing basis, 29 Metals seeks to report its performance and activities as it has on previous quarters, as well as outlining progress against our sustainability and ESG priorities for the year. As you'll see from the quarterly, there was a lot of activity during the quarter, with the First Nations Welcome to Country and Smoking Ceremony at Capricorn Copper in June, as mentioned by Peter, a highlight, both from the perspective of engaging with our First Nations stakeholders and also because of the enthusiastic participation and interest shown by our workforce. Events such as these provide a strong foundation for a long-term sustainable relationship with the custodians of the land where we conduct our business. Waste and water management at both operating sites remains a key priority, with activity on both fronts and the formulation of further initiatives to reduce waste notable across both sites. Pleasingly, as shown in the report, we've also made progress against all of 29 Metals' published 2022 Sustainability and ESG priorities. This has included commencing work on better understanding Twin Iron Metals emissions profile to inform how we look at emissions targets under our CCSD roadmap, also launched in the annual report. Our work to promote a safe and inclusive workplace progressed on a number of fronts during the quarter, with improved safety performance reported, as well as activity to identify potential barriers to an inclusive workplace environment, and rolling out 29 Metals policies regarding workplace behaviour and code of conduct. In that rollout, we've highlighted the support available to our workforce and the different mechanisms through which concerns may be raised if they arise. Workplace behaviour remains an important topic for all of us in the sector. We're working through the findings and recommendations of the second report of the WA Parliamentary Inquiry regarding sexual harassment against women in FIFO, released late in the quarter, so that we can identify any opportunity to enhance our workplace environment and safeguard against the sorts of behaviours that have been highlighted by the inquiry and media. In summary, a lot of activity across sustainability and ESG at Tweenine Metals and with more to do. As Peter mentioned, we have bolstered our internal capacity to further shape and implement Tweenine Metals' strategy in this space with the targeted recruitment of our first group manager, Sustainability and ESG. We're very pleased to have welcomed Tara to the team this month and look forward to working with her and the broader management team as we move forward. We look forward to updating you and the market further in future quarters as we advance our approach to sustainability in ESG and with that I will hand over to Ed. Thanks Cliff and good morning everyone. In terms of production as Peter mentioned the June quarter saw an improvement on March quarter's performance with metal production of both operations higher. Copper, gold, silver and lead were all higher with zinc lower. At Golden Grove, mining volumes were lower relative to the March quarter, largely as a result of ongoing related absenteeism levels, combined with a difficult labour market, particularly in WA, and exacerbated late in the quarter by seasonal winter illness. The labour market in general remains challenging, however 29 metals, along with our contract partners, continue to both attract and retain good people. To better manage available resources we have adjusted our operating plans to exploit all sources nearer to surface where ground support and truck haulage requirements are both lower. Some of these sources do contain lower precious metal by-product credits which has contributed to the updated guidance range for gold. Ventilation upgrades remain a key focus for us, with further progress made during the quarter. We have now established fresh air delivered to the Zanto extended decline phase, which has significantly improved operating conditions. And as a result, we do anticipate advance rates in the decline to improve during the second half as a result. In terms of the mill, throughput was marginally lower than the March quarter, which was impacted by a higher proportion of relatively harder copper ore. and some additional planned downtime due to labour availability. Mill tonnes were higher than mine tonnes, reducing surplus rum stockpiles. During the March quarter we sustained a failure of our zinc regrowing mill. Sourcing replacement components and labour to rectify the tissue has taken markedly longer than anticipated. However, maintenance activities to reinstate the mill have commenced during the June quarter and we expect the mill to be reinstated in the September quarter. Moving on to Capricorn Copper, we produced higher copper metal production relative to the last quarter on the back of improved grades. Mining volumes improved as a result of both lower absenteeism rates and a moderation of seasonal factors experienced earlier in the year. On the back of good mining performance, we ended the quarter with good ROM stocks ahead of the mill. Grade mines also improved relative to the March quarter, largely due to improved grades from the Esperanza South sub-level cove. Ventilation projects advanced with the installation of two new surface fans following completion of the vent shaft and commissioning of the fans as expected imminently, which will serve to improve operating conditions at the lower operating levels of Esperanza South. In terms of the mill, volumes were marginally lower than the March quarter due to higher than planned downtime and reduced throughput rates associated with a higher proportion of barred ore types. Feed grades and recoveries both improved relative to the March quarter. Moving on to exploration, during the quarter drill testing of prioritised areas continued at both Capricorn Copper and Golden Grove. along with regional drill testing of the eagle's nest and grey ghost targets at Capricorn Copper, and completion of field work for the season at Redhill in southern Chile. At Golden Grove, drilling of Cervantes ore body below scuttles continues to deliver good results, with a focus on infill drilling the upper extents of the ore body. Drilling below the ore body indicates further extension drilling is warranted. Drilling will continue in the September quarter. Drilling also took place at Xanto Extended targeting the conversion of the deepest parts of the known resource and this highlighted opportunities to add to the mineral resources estimated down plunge and a long strike. An extension drilling also occurred at Conterville north of Gossam Valley. These holes focused on testing south of the existing mineral resource estimates towards Gossam Valley. This drilling has not intersected any significant sulphides and has concluded for the year. Contaville does remain open down punch. So drilling is planned to occur at Xantho Extended, Cervantes, Oizon, Cougarmont and Xantho Extended North during the September quarter. At Capricorn Copper, near-moline surface drilling focused on Esperanza South with a combination of resource conversion and extension drilling undertaken in the quarter. Results of this drilling have been very favourable and warranted commitment of an additional $2 million to expand this program and continue drilling into the September quarter. Underground drilling also occurred across the three old bodies, Greenstone, Leather and Esperanza South. Regionally, drilling occurred at Grey Ghost with three reverse circulation holes completed and assay results pending. Drilling at Eagle's Nest also commenced in the June quarter and continued into the September quarter with a total of three holes planned. Looking forward, planned regional activities for the remainder of the year include ground geophysics at six regional prospects as well as some minor drilling at Merlo and Coshy's East prospects. At Redhill, the field season has now concluded. In total, 390 tree holes were completed using portable small drills to obtain rock samples below the peak cover. Field mapping was also completed, identifying other prospective veins of cutters and unglaze. Rock samples from this mapping campaign have been sent for assay. A drone-based magnetic survey was also conducted as part of the field season. All assay results are expected to be returned in the September quarter. I'll now hand over to Peter Herbert to address the financial outcomes across the business. Thank you, Ed. Starting with revenue outcomes for the quarter, the 29 metals revenue of $165 million in the June quarter declined on the March quarter results reflecting flat copper sales for the quarter with increasing copper volumes at Golden Grove offset by lower volumes at Capricorn Copper. Lower sales of zinc and silver, partially offset by higher gold sales in the June quarter, and lower prevailing commodity prices, resulting in a materially negative QP adjustment of approximately $44 million on realized and unrealized sales. Turning to costs, group site costs in the June quarter were approximately $5 million higher than the prior quarter, reflecting increased costs of diesel. At Capricorn, higher mining activity levels and a planned mill shutdown completed during the quarter. and at Golden Grove, a write-down of obsolete stock and other G&A expenses. Group C1 absolute costs were approximately $8 million higher than the March quarter, reflecting the highest cost just discussed. A stockpile credit of approximately $12 million, reflecting the timing difference between higher production and sales, and lower by-product credits due to lower sales of zinc and silver and reduced commodity pricing during the quarter. Group transport and TCRC costs were flat quarter on quarter. Group AISC absolute costs were $2 million higher than the March quarter, reflecting the higher C1 costs, partially offset by lower royalties, sustaining capital and capitalised development. AISC unit costs of $3.57 per pound US were marginally higher than the March quarter, reflecting cost outcomes and flat copper sales for the quarter. Unordered cash at 30 June was approximately $228 million, an increase on the unordered cash balance at 31 March of $188 million, reflecting a strongly positive working capital movement due to the timing of sales prior to the end of the quarter and the reversal of working capital which accumulated during the March quarter. The settlement of approximately $11 million out of the money hedges and a positive market to market of approximately $8 million on US dollar denominated cash balances. Following the hedge settlements in the June quarter, approximately 3,200 tonnes of pre-IPO copper hedges remain in place, all of which will crystallise in the September quarter. Drawn debt remained constant during the quarter at US $150 million. 29 Metals will make its first principal repayment of its term loan facility at the end of the September quarter. And finally, following further engagement with the WA Office of State Revenue, 29 Metals expects to receive an interim assessment of stamp duty payable in connection with the acquisition of Golden Grove during the September quarter. As a reminder, 29 Metals recorded an Aussie $26 million provision in relation to stamp duty in its four-year account released in February.

Thank you for your time. Back to you, Peter.

Thanks, Peter. So Darcy, that's the presentations complete. So we're now available for any questions from the audience, the attendees.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Tim Hoff from Canaccord. Please go ahead.

Thanks guys and well done on the results today. Just at Golden Grove, you've given an update on Gosselin Valley and Savannah. Just looking to bring that into the mine plan earlier. Just given the rapid deterioration of pricing and some of the cost inflation that we're seeing across the street at the moment, How does that change your thinking if pricing doesn't improve? Do you end up pushing back Goldstone Valley development?

Well, thanks, Tim. Thanks for the question. That work is still in play, as I think Ed indicated there. Obviously, we're looking at all of those factors. um and uh we don't have a conclusion at this point in time uh we've never uh formalized which which of those would come first and the cervantes obviously at brownfields extension has uh certain um advantages in terms of time and cost and that that may well be the way it plays out we get to see that come to a conclusion in terms of the the current commodity price of course we We're, as I said earlier on, looking to the future and building a business for the future. We're not at this point in time considering a delay to those projects, notwithstanding that we haven't decided exactly when they may or may not come into the business. You know, we're using the long-term commodity price outlook in terms of evaluating those projects, but also we'll look at sensitivities as we evaluate those projects. So no specific answer at this point in time, but certainly not considering delays, as you have indicated in your question there, Tim.

Yep, excellent. And then at Capricorn Copper, obviously your unit cost there is at all in sustaining level above current pricing. But just wondering how much of the 80 cent differential, which is probably sustaining capital, you could perhaps cut out and work on that side of the equation. But also on production rates, it's good to see the list there. Is that something you can anticipate sort of improving going forward or? or sustaining at those levels. So whether there's an opportunity to be lifting in production as well. So attacking that unit cost on both ends of that equation.

No, no, both of those contribute to the AISC outcomes. Of course, a couple of comments. I mean, our AISC at 29 metals, almost a complete see-through to our total cost. So there's very little that's not included there. So on a relative basis, you need to understand that. Notwithstanding that, yes, AISC at Capricorn at these levels is higher than current copper prices. We recognize that. We have operated at Capricorn at much, much lower copper prices than today and sustained the business. So we know what we would need to do if prices fell further and were sustained. Notwithstanding that, in terms of the numerator and the denominator that you've discussed them, certainly copper production, As we've indicated in our preamble, certainly a very good start to July. No numbers, of course, Tim, we can talk to today. And that's what we've always anticipated, that as we get into the the depths of, and as we get deeper into Esperanza South, that old body at Capricorn that provides 60 to 70% of the feed to the mill, more tonnes per vertical metre and improved grades. And that's really what we're anticipating and what we're experiencing at the moment. So yes, certainly on the on the production side and that component of the equation anticipating that increase in terms of outcome on the production side. The cost side, as I said up front, if we needed to, we could pay it back. We're really thinking about the future, and we're making capital commitments for the future, but certainly there are opportunities if we had to do that. to modify that and to reassign, but certainly our investment is really committed to the future of this business and the long-term sustainability of the business. The capital that we've deployed last year and this year has really been at the higher end of where we would normally expect it to be really. making those longer term commitments to the sustainability of the business. So hopefully that answers your question there Tim.

Yes, that's good. It sounds like it's a downwards trajectory which is positive. I might hand it over. Thank you.

Thank you. Your next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi. Just looking at the expansion studies that are due in the next quarter, can you just talk about the scope of those and obviously the commodity price outlook where that's deteriorated a lot, similar to the tenor of Tim's question. Does that cause you to delay these studies or modify them in any way? Do you right-size it, make it smaller, or will you just present those studies to the market? Yeah, thank you.

It's a question related to Cervantes and .

Yes, I should have been clearer.

Yes. Sorry, Daniel. Just to recap, the question was in relation to those studies. I missed a bit of that. Did you delay or change the scope of the study until you proceed with what you've got? We're proceeding, Daniel. We're certainly proceeding. We're looking to bring those to a conclusion in the near term and as I've articulated a number of times over the last few months, we're looking to get information on the outcome in this coming quarter. I'm not too sure if that answers the question, but let's... Yeah, thank you.

And I guess similarly, I know commodity prices have suddenly and severely dropped, and they've only been low for, you know, call it five minutes, and you don't manage your business to short-term movements in commodity prices. But, you know, just wondering if that's entered your thinking about, you know, whether you need to right-size, you know, any operations. Can you... Can you reduce production, high-grade, to bring costs down, particularly at Capricorn? Or if the situation persists, is this something that you might need to look to mothballing? Thank you.

Certainly not looking to mothball anything there, Daniel. And as I indicated just now in response to Tim, we anticipate copper production enhancing, improving at Capricorn, which will improve those financial outcomes markedly. And no, we're not looking at high grading or anything like that. It's a sub-level cave. and the mining efficiency there, tons per vertical metre, and as we get into that cave, then the cost in terms of the tons extracted and the grade increases, that all works for us. So the real focus is on the efficiency of existing operations, certainly not looking to make any changes to high grade and therefore put constraints on the future of the business. They're far from it.

Okay, thank you. And do you mind just reminding us how your QP adjustments work? I know that obviously it's a material movement and you give it and you get it and you give it back, obviously, when commodity prices change. But just what's the mechanics of it?

Yeah, sure.

So we, you know, at the end of each... Well, actually, at the end of every month or at the end of the quarter in this instance, we mark the market, you know, our sales for the quarter.

And what that mark-to-market picks up is the sales from the prior quarter that settled with a negative adjustment as process declines, but also the sales during the June quarter that are yet to settle or indeed will return to the quarter and then be shut down

and it also picks up that amount as well.

So it's price, period, and sale that will settle in future periods. The way that is done is by picking up the forward curve of commodities and applying that against the expected settlement dates of those sales.

Hopefully that answers your question.

Okay. Thank you very much.

Thank you. Your next question comes from Chris Cahill from Quest Asset Partners. Please go ahead.

Thanks. My question is in relation to Golden Grove and your discussion about mining near a surface due to labour shortages. I'm just wondering what can you say in the September quarter to the extent that will improve and you'll be able to go deeper for better grades particularly in zinc given the labour situation?

For the remainder of the year, we have adjusted the plan for the remainder of the year. Given current constraints, I guess the relative tons from depth will reduce and the relative tons from near the surface will increase. So we envisage that will continue. That's not to say there won't be mining at depth. You know, we are very active in Xantho Extended and other ore bodies, but aggregated, the weighted average depth of material movements will be nearer to surface for a major reason.

Thank you. Your next question comes from Raoul Anand from Morgan Stanley. Please go ahead.

Hi Peter and team. Thanks for the opportunity. Look, I've just got one question relating to Golden Grove. Obviously you've had a one month delay for that paste fill plant. I wanted to understand in terms of your zinc guidance, which hasn't been updated today, if we do have any further delays in that paste fill, how should we think about the guidance, especially Given the year-to-date run rates are clocking about 20%, 25% below guidance on a run rate basis and they are somewhat reliant on that landfill plant coming in for using production to increase on the back of Xantho extended grades. If you could perhaps provide a bit of sensitivity or how we should think about the risks to that.

Thanks. I'll take that one as well. The zinc grades relative to the first half are expected to be higher in the second half. That's not simply a function of Xantho Extended, it's other ore bodies as well, including some ore bodies nearer to surface, such as D-Zinc. Yes, absolutely, stoke production from Xantho Extended will be contingent on the successful commissioning of the pasteful plant. We intend to trial the paste commissioning in a separate all-body near surface to iron out any kinks, ensure all the QAQC passes the requisite checks, and then commence directly delivery of paste fill into Zandberg Standard in August. So any I guess delay to that may impact production out of xantho extended but some of the zinc or quite a large portion of the zinc from xantho extended for the remainder of the year is also from all body development which should mitigate any impact.

Okay so if I got that right August is when you're expecting the paceful to be fully up allowing production from Xantho Extended or backfilling for Xantho?

Yeah, so the first 45 metre height stove is currently in production at Xantho Extended. That will be the first stove that face fill goes down, aiming for face delivery in August into that stove.

Perfect. Okay. Thank you.

Thank you. Your next question comes from Alexander Papanau from Citi. Please go ahead.

Hi Peter and team. Just one question from me. Are the lower than planned fill grades and recoveries at Capco and Coppa likely to continue past this current financial year? Thanks.

Sorry, are you able to repeat the question please? Lower grade recovery from Capco will continue beyond this financial year. Lower grade, yeah.

Well, for the remainder of this year, we're anticipating higher grades out of Capricorn Copper, really a function of where we are in the sub-level cave in Australia South as we move into the distal cave. So we expect the grades to pick up. Recoveries, I would say Capricorn Copper have been performing very well this year and we expect they will continue for the remainder of the year.

Okay, thanks.

Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone keypad. The next question comes from David Radcliffe from Global Mining Research. Please go ahead.

Hi, good morning Peter and team. My first question is based on an earlier question about growth at the moment in the current market. Do you think about, have you thought about a strange change in strategy here in terms of the organic opportunities you've sort of outlined versus M&A? Obviously, it's still hard to deploy capital in places like WA, but do you start to see more value coming into the market now and more opportunities on the M&A side?

That was an interesting question. Not yet, but one would anticipate that that's likely to be the case. And in terms of inorganic opportunities, we've always said and said quite clearly in the last few months, you know, we're opportunistically interested in the right opportunity, the good opportunities, But our focus is on delivering value and value accretion, not growth. So yes, we certainly would be interested, but definitely what we would anticipate in the current circumstances we'd see more realistic value on some of the assets that may be in the marketplace. But it's early days yet, David, but certainly watching with interest.

Thanks. And then the sort of natural follow-up then comes to obviously cash building on the balance sheet, whether you're feeling a little bit more conservative now and you'd rather hold that cash. or whether you're still considering things like dividends in the short term?

I think the natural point for us to accept that is through the release of our half-year financials and I think we flagged that previously as a bit of a waypoint for us.

Look, any consideration there will naturally take into account, you know, I look forward, you know, of the needs of the business. So it's clearly too early to speculate on that, but it will naturally look at those sorts of things, including our forward view on projects and cash generation.

All right, brilliant. Thank you.

Thank you so much. Your next question comes from Matt Green from Credit Suisse. Please go ahead.

Hi, good morning. I've just got a follow-up question from Daniels on pricing. Peter, are you able to give us a sort of a quantum or percentage of sales in the June quarter that will be provisionally priced in the September quarter?

I don't have that number specifically in front of me. I mean, it's sort of a, you know, our sales are generally fairly even through the year. It's not that we have too many months that are terribly lumpy, but I couldn't comment on whether this month specifically has a high percentage or not. Apologies, I don't have those numbers. I think it does.

No, that's fine. Thanks. And I guess just on Golden Grove to start with,

The maintenance on the zinc regrind mill, are you able to isolate that when it comes to fixing it, or will this require a whole mill shutdown?

No, no, it's able to be isolated.

Very nice. Okay. And so it sounds like you're commencing that now.

When do you expect that to be back up and running?

I'd hope by the middle of the September quarter, at the latest, I would hope. Cool. Thanks. And just on energy pricing, more broadly, I guess CapCopper, you signed that gas contract with Cenex at the start of the year, three-year contract. Sounds like a fixed price. Are you able to just provide some commentary on if there's any linkages to what we're seeing in the broader gas markets, or are you seeing sort of minimal cost escalation now on the energy? You're right, that contract is fixed pricing, so I'm not subject to any escalation this year. Probably couldn't comment on the broader gas apart from what's reported in the media, but the energy impact that we are feeling absolutely is diesel-related truck haulage rather than main power supply to the sites.

Okay. Thanks very much.

There are no further questions at this time. I'll now hand back to Mr. Albert for closing remarks.

Well thanks Darcy and thank you everybody for good questions this quarterly. It's a good thorough set of questions there. Hopefully we've been able to address and respond appropriately to those questions but certainly as always willing to enable and available for follow-up. Mike Slaberski being the first point of contact but certainly we're all available to respond further. Well thanks Cliff, Ed and Peter for your presentations. A couple of closing remarks from me Darcy. As I reported at our last quarterly update, we did expect a flattening and a gradual decrease in the absenteeism curve in the June quarter, which we have seen, although West Australia was impacted, still impacted more significantly than Queensland. Nonetheless, as we've reported, production for the group across the quarter has been solid, and we are well positioned for further production improvements during the balance of the year, and we've made some reference to those today and a bit of focus on what we're anticipating out of Capricorn through the rest of the year. The mining industry is normally a cyclical business, which in this cycle, and a few questions around that this morning, has been exacerbated by the pandemic and other geopolitical factors. And whilst we are currently experiencing a downturn in commodity prices, in my opinion, the fundamentals of transitioning to a green and decarbonized economy and meeting global net zero targets is stark. Copper is the key commodity which the world will be desperately short of in the near future. S&P this month released a report that concluded that copper demand by 2035 will increase to 15 million metric tons from 25 million metric tons today, a doubling of demand in the next 10 years. It's highly comprehensible. It's mind-boggling, that sort of equation. 29 Metals is positioned and is continuing to position itself for this future. We are investing in sustainability in the future of our business. We will continue to review growth options, both organically and inorganically, and we had a good question on that just now, in order to deliver optimum returns to our investors and other stakeholders. In my opinion, the current reversal in prices will be short-lived. 29 Metals will focus on those aspects of our business that we can control and will sustain the business today and for the bright future ahead, i.e. focusing on production and cost. Thank you, everybody, for listening to our presentation today. And we'll close off there, Darcy.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.