29Metals Limited

I would now like to hand the conference over to Mr. Mike, sorry, Starsky. Please go ahead.

Mr. Thanks Lexi. Good morning ladies and gentlemen. We will be speaking this morning to 29 Metals September quarterly report which was released to the ASX this morning. The call and parallel webcast has been recorded and will be available for replay by the 29 Metals website and also the open briefing website. 59 Metals Managing Director and CEO, Peter Albert, our COO, Ed Cooney, and CFO, Peter Herbert, will lead you through the highlights of the quarter before we open the call for your questions. We'll now hand over to Peter Albert to commence the presentation. Thanks, Peter.

Thanks, Mike, and welcome, everybody, and thank you for joining us this morning. In this long order, we've made significant progress on a number of key milestones at both Golden Grove and Capricorn Copper. The Capricorn Copper team has been focused on phase one of the restart at the moment. Whilst at Golden Grove, the team focus has been on the de-bottlenecking activities to support acceleration of production in the coming next quarter, quarter four. I'll come back to some specific activities shortly. As always, the safety and well-being of our people is our primary focus. The trip-up total recordable injury frequency rate continues to fall and is now at 7.7 for the group. although we did have one lost time injury during the quarter. Now to some detail. First of all, let's talk about Capricorn. We restarted operations ahead of plan on 1st of August. This does seem like a long while ago now, but worth remembering this major achievement by the team following the extreme weather event allowed us to restart operations in the last September quarter. During the first phase of restart, we are mining at the Mammoth and Greenstone Mines, producing contingently at approximately 50% of normal total ore production as a result of the sub-level cave Esperanza South ESS being offline due to the extreme weather event in March. Milling is operating on a campaign basis with approximately two weeks on and two weeks off. The fundamental enabler for mine and mill restart was our ability to produce clean water from the low pH mine-impacted water from one of our holding structures, which was full as a result of the extreme weather event in March. You will remember that as a result of the weather event, we lost the water treatment plant and the workshop warehouse. So what we have done was to create a relatively basic but effective interim water treatment facility from two existing small ponds or dams adjacent to the larger water holding structures. By adding lime and flocculates to the water, we're able to adjust the pH and precipitate metals out of the water. Inevitably, at startup, this system had dealing problems, but through trial and error and addition of sophisticated dosing and control systems, we now have a reasonably robust system. The success of the solution is a great example of the ingenuity, tenacity, and skill of our people on site and across the wider 29 Metals team. The clean water we produce is used effectively in all of our underground mining equipment and in the operation of both the process plant and the paste plant. paste plant. There are multiple advantages with this system. Firstly, we're no longer bringing in fresh water to run the operation, demonstrating our ability for the mine to eventually move into a negative water balance situation. Secondly, it uses the water held on site and therefore helps our overall water management and reduction strategy. And thirdly, the water used then gets locked up in the tailings that are stored in our tailings facility and in the pace that is pumped back underground, further assisting in water reduction. The other key effort at Capricorn has been our broader water reduction strategy. We now have 18 evaporators installed on site, a number of which are floating units on the surface of the Esperanza pit, so-called EPIT. Water reduction has been significant, with more than 3.5 meters drop over the quarter in the EPIT. In addition, we've been able to remove some of the water in the sub-level cave, ESS, to enable inspection of the higher levels of the decline. Unfortunately, in July, we did have an unseasonal 52 millimeters of rainfall, which had a short-term negative impact. as well as some short-term warranty issues affecting some of the new mechanical evaporator units. These warranty issues have been resolved, and we're seeing good progress in water reduction. The ability to treat and bulk release large volumes of water during the coming wet season remains a subject of continuing engagement with the regulator, DESP, The proposed bulk treatment of wet season release is not dissimilar to the water reduction strategies that applied in previous wet seasons, which supported a significant reduction in water levels before the start of the 2022-2023 wet season in November last year. In addition, large pumps for dewatering ESS are in progress of being delivered. These will enable greater removal of water from the mine. As mentioned previously, we have pumped enough water out of ESS at the moment to inspect ground support in the mine. And whilst we have known that rock faults will need replacement, we're pleased to see that the fibre creek that we've been able to inspect is in good condition, and we don't anticipate requiring refurbishment or replacement. As part of our water management strategy, we had applied to DES late last year to increase the authorised level for water held in the EPIT. As I mentioned, this application was made last year, prior to the extreme weather event in March, and it followed a detailed update to water balance modeling for this site by external experts. And whilst not directly related to tailings management, the application and its progress was intended to inform our approach to further approvals associated with tailings management, including potential to return to tailings deposition in the EPIT for a short period as we transition to the planned new long-term tailings storage facility. Unfortunately, DES has decided to refuse this application, and we are moving promptly to appeal that refusal. In addition, we have had engagement with regulatory stakeholders and government, including at ministerial level and some of the senior ministerial team and bureaucrats who I met with yesterday, to improve confidence in the path going forward and ongoing engagement with DES. In parallel, this decision does not impact our immediate plans for operations and recovery, and we will now be proceeding with approvals to support ongoing recovery activities and approvals related to tailings capacity. Topper production through the reduced period of operation at Capricorn in the September quarter was 1,100 tons, which were transported and sold directly into Glencore's Mount Isa smelter. Pleasingly, the last milling campaign at the end of September and early October continued to demonstrate improved consistency of operation and good production, which, if sustained, will support higher production outcomes in the December quarter. Moving to Golden Grove. The key focus has been on the final installation and commissioning of the large underground fans to support development and production at Zampo Extended. a very rich ore body called Xantho Extended. The fans were commissioned in September. In addition to the fans themselves, significant underground ventilation reticulation has been modified to ensure maximum volume of air delivery to Xantho Extended. Development and production from fans at Xantho Extended is now ramping up consistently. For the quarter, we achieved a nearly 20% improvement in development meters at Xantho extended at 673 meters, noting that a significant component of this improvement was in the latter half of the quarter, with a record 287 development meters recorded in September. Really pleasing progress in what is 29 Metals' highest value all-body. Overall production of Golden Grove was in line with our plan, with 5,500 tons of copper and 8,600 tons of zinc. In quarter four, with improved access to high-grade oil sources at Xantho Extended, we have three production stopes ahead of us, each around 25,000 to 40,000 tons, and each with planned and grades of approximately 15% zinc. we remain confident of zinc production for the year achieving the lower end of guidance as previously guided. Like zinc, all other parameters remain within previously stated guidance. Costs across the group were well controlled despite materially high activity, high production, and continuing inflationary pressures. Capricorn copper is obviously a bit anomalous at the moment, so to focus on Golden Grove, We have maintained our efforts on cost reductions and productivity improvements. C1 unit costs at $3.26 a pound U.S. were 25% lower than the prior quarter, with AISC costs showing a similar trend. We have focused on cost-add and productivity initiatives across the business, which, combined with anticipated metal production growth from Xantho Extended, is expected to further improve unit costs over coming quarters. On exploration, as reported previously, we are very encouraged by the conversion drilling campaign at Cervantes, at Golden Grove, with some tremendous results released over the year. These results will feed into our conversion analysis, leading to a revised resource and reserve statement expected to be reported in February next year. At Capricorn, we have committed this year to two holes of it. In this year, this quarter actually, this coming quarter and quarter four, the two holes of an initial five-hole program. This program is targeting the definition of a potential new ore body at Capricorn, which, if proved up, would be a brownfields mine development in close proximity to existing ground development. At the corporate level, of course, a very successful $151 million entitlement offer in late August. which was overwhelmingly supported by our existing institutional shareholders. My thanks and appreciation to those investors and for their long-term belief in not only the copper market, but importantly in our assets and the management team to deliver on our commitments. Through the entitlement offer, we also secured key covenant relief from our senior lenders through to December 2024, such that our next covenant test is June 2025. Again, thanks and appreciation to our syndicate of lenders for providing their support. Of course, you'll be keen for an update on the insurance claim for the Capricorn Copper event. And since the last quarter report, we've received an interim progress payment of $24 million coming within six months of the event. We continue to work with our insurers to progress our claim, including addressing the assurer's assessment that the underground component of our claim is not supported. And in relation to this underground component of the claim, we're working through the issues raised and with the insurers. I'll now hand over to Ed Cooney to talk a little bit more detail about our operations, who will then hand over to Peter Herbert to talk in more detail about our financial outcomes. So over to you, please, Ed.