29Metals Limited

Thank you for standing by. Welcome to the 29 Metals Limited June quarter conference call. All participants are in a lesson 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 one on your telephone keypad. I would now like to hand the conference over to Mr. James Palmer, CEO. Please go ahead.

Good morning all, it's James Palmer here and thanks for joining the 29 Metals quarterly activities update for the June quarter for 2024, my first as CEO. So today we'll be speaking to the presentation released this morning alongside our June quarter report and joining me here are Ed Cooney, our Chief Operating Officer, Peter Herbert, our Chief Financial Officer and Christian Stella, our Group Executive, Corporate Development. It's great to be speaking with you all today. I've met a number of you since joining partway through this reporting quarter and I look forward to meeting many of you over the coming days, weeks and months. I had to spend the first few weeks and months just listening, learning and recently shaping and executing our strategy and plans and look forward to speaking more about that over the coming days and weeks. In the meantime, let's get into the quarter that was. So briefly turning to slide three before getting into the quarter results, this highlights many of the attributes of the 29 Metals portfolio that certainly attracted me to the company. So specifically large Australian-based copper endowments with lots of upside potential. In my first near 90 days in the role, I've invested time visiting our sites, meeting our people and many of our key stakeholders and doing a lot of listening. It's clear to me the enormous potential embedded in the 29 Metals portfolio and importantly, we have a team committed to realising that potential for the benefit of all stakeholders. Slide four lays out our key priorities, so health and safety first always and then across the group discipline in productivity and in cost and in the way that we improve. At Golden Grove it's all about the drumbeat of delivery to maximise free cash flow and moving Gossam Valley forward in the near term. For Capricorn Copper, it's all about the imperatives for a sustainable restart with an immediate focus on meaningful water reduction. Slide five is the summary of the June quarter, a quarter that certainly provides a snapshot of the opportunity available for the company. Safety, single digits for TRIF and our significant potential incidents reducing. Copper up, zinc up, OPEX down, CAPEX up, and mining at Golden Grove's highest-grade ore bodies, Anto Extended, is ramping up, enabled by the significant investment in mine de-bottomlinking and surface infrastructure upgrades since the IPO. The value in the ground at Capricorn Copper was highlighted by the exceptional high-grade copper drill results received post-quarter end, With reduction on the water levels, the immediate focus and first step towards unlocking that value as we progress the site towards a sustainable restart of operations. So I'll shortly pass to Ed to talk through Golden Grove in some additional detail. I'll then provide an update on Capricorn Copper prior to handing to Peter to provide the corporate and finance update for the quarter. So over to you, Ed.

Thanks, James, and morning, everyone. So moving on to slide seven of the pack. So copper production for the quarter was 6.4 thousand tonnes. That's the higher copper production quarter under 29 metals ownership and up 11% relative to the prior quarter. Really largely driven by higher tonnes milled. Zinc production was also up at 15 odd thousand tonnes. That's about 200% up on the prior quarter. and really driven by a higher proportion of zinc ore milled and higher zinc grades and recoveries. Further improvement at Xanthox standard in terms of development rates continued during the quarter, which combined with good pace fill cycles earlier in the March quarter enabled the higher zinc and precious metals production. The site team continue to pursue continuous improvement opportunities in partnership with Burncut, with multiple enabling technologies being adopted to improve mining efficiencies at depth. And some examples of this include commencement of remote loading of development ore, remote monitoring of air quality and ventilation fans to really reduce re-entry times and maximize pace time. So the month of June saw another record for development advance at Xantho extended and for the remainder of the year we'd anticipate maintaining sort of first half development advance. Our second half ore production from Xantho extended is expected to be higher than the first half in order to achieve our full year guidance for zinc production which will obviously be second half weighted. Moving on to slide eight, the higher production also contributed to a pleasing result on unit costs for the quarter with C1 costs and AISC of about 14 US per pound and 283 per pound respectively. Mining and processing unit costs were in line with the prior quarter with byproduct credits and stockpile movements really the key drivers of the lower unit costs quarter on quarter. and on a full year basis the site costs continue to track to 2024 guidance ranges. TSF4 project is important to us. It remains on track for completion early in the 2025 March quarter with approvals from DMERS now received. The civil contract has been awarded, mobilisation and clearing activities undertaken during the quarter. Fabrication of the thickener has been completed and deliveries of components landing on site and the team are now focused on concrete pours within the thickener pad and finalising remaining tender packages. Fully growth capital guidance range has been increased to $35 to $40 million. Previously it was $20 to $25 million. And the prior TSF4 capital estimate for 24 was subject to final design and based on preliminary designs undertaken in late 21 and 2022. And approximately half of the TSF4 increase relates to additional scope, including certain electrical infrastructure and symbols that were not included in the prelim design. And the other proportion of the increase costs relates to labour, contractor indirects, material supply, foreign exchange, et cetera. In addition to the TSF-4 increased costs, we do anticipate some higher capitalisation of Xantho extended development over the year and also some additional activities to support Gossan Valley. And works during the quarter to progress Gosselin Valley towards a final investment decision included submission of the application material for regulatory approvals. We undertook a mine plan design review, commenced some geotech drilling of the planned box cut and raised bore locations really to de-risk in future and we also issued tenders for key work packages And really upon development, you know, Gosselin Valley is expected to enhance overall oil production and scheduling flexibility by providing an additional independent and relatively shallow production front at Golden Grove. But I'll now hand back to you, James, to talk through Capricorn Copper.

Great. Thanks, Ed. So yeah, with operations at Capricorn Copper now ramped down and suspended, attention turns to progressing the imperatives for a future restart which are outlined on slide 10. So short-term water reduction, long-term water solutions and life of mines tailing capacity. So on the mid to long-term we need to invest in replacement of the water treatment plant damaged in the March 2023 extreme weather event and we need a pathway for long-term tailings for the asset. In the short term the priority is on reduction of water levels and works to establish this sustainable water balance footing to the asset. To this end I'm going to spend some time and provide some clarity on just how much water we have on site and what our water reduction plans are and also provide a brief update on where we're at on tailings. Slide 11 outlines some of the investment made to progress the site towards a sustainable water balance post the March 2023 extreme weather event. Specifically the enhancement of water diversion infrastructure, additional mechanical evaporation and investment in bulk release infrastructure which was commissioned during the June quarter. So while mechanical evaporation is an important component of the overall water management strategy, bulk release of treated water will be required to rebase site water levels in the near term and effectively manage future high rainfall wet seasons. On slide 12 we outline the key work streams that have been completed and those that are in progress. So to optimise the capability for efficient and responsible release of treated water during the upcoming wet season and beyond. As mentioned, the infrastructure to enable treated water release from the Mill Creek Dam or NCD was commissioned during the June quarter. This increases release capability up to 100 megalitres a day, so a tenfold uplift on rates achievable during the last wet season. In addition, two key work streams are in progress to allow us to utilise the full potential of this infrastructure. works in progress to repurpose the processing plant as an interim water treatment plant which will provide additional and more efficient water treatment than existing options and then secondly engagement with the regulator to streamline the approvals process for bulk release slide 13 provides a summary of the water reduction task ahead of us so overall we have around one and a half gigalitres of net water reductions required to dewater Esperanza South and bring water levels below the maximum operating levels and towards the water levels prior to the extreme weather event. So how are we going to do that? Slide 14 shows a simplified flow sheet outlining how we're going to reduce the water levels on site. As mentioned, utilising the recently commissioned treated water release infrastructure which releases from the MCD is critical to enabling meaningful reduction of water levels in the short term. Once we convert the process plan to an interim water treatment plan, we'll treat the water in the MCD ahead of the wet season. Again, 1.5 gigalitres of water inventory is required to dewater Esperanza South and bring water levels below the maximum operating levels. The MCD holds just under half a gigalitre, so without accounting for wet season additions or evaporation, we need to release the equivalent of the MCD volume three to four times to remove 1.5 gigalitres of water. So is that possible? A lot will need to go right in the upcoming wet season to achieve that outcome. The team will work hard to control the things that we control, but some things like weather are not in our control. So more than one wet season is likely required to achieve the meaningful water reductions that we need. Hence, this puts the timing of a potential restart into 2026. So tailings, slide 15. An options review was initiated post suspension of operations to ensure the optimal path forward for its own tailings. Prior to the suspension of operations the team were pursuing TSF3 as the preferred option as this was seen as having the highest likelihood of supporting continuity of operations. The review to date has identified particularly an alternative site, Magazine Creek, which has the potential to provide a lower cost option along with other potential benefits but with likely longer approvals timeframes. Prior to the suspension decision, approvals for additional capacity from historic facilities were being pursued. again with continuity of operations in mind so although they remain as options with the time afforded by the suspension of operations focus has moved to long-term entailing solutions so in summary for Capricorn copper our immediate focus is on the reduction of water levels on site and preparedness for the upcoming wet season and beyond we see a pathway for the site towards a sustainable water balance and a life-aligned plumbing solutions These are critical steps towards unlocking the significant value in the ground at Capricorn Copper, highlighted by the exceptional high-grade drill results we received post quarter. So to this end, slide 16 highlights the opportunity ahead for us at Capricorn Copper. I've talked a lot about how we're going to deal with the immediate challenges, but I did want to put the recent drilling results on this slide as I think it talks to the opportunity at the asset. So two days ago we released the fantastic drill results that included 7.2 metres at 4.8% copper and confirmed the discovery of a new mineralised zone. We also had resource extension intercept of 45.4 metres at 2.5% copper, so the existing mammoth mineral resources estimates. The results from this drill campaign were to follow up the previous phenomenal results released last year that included 36 metres at 3.9% copper into the Woolley target zone as well as 70 metres at 2.8% and 48 metres at 2.7% copper which were resource extension drilling to Esperanza South. 7.2 metres at 4.8%, 45 metres at 2.5%, 36 metres at 3.9% and 70 metres at 2.8% copper. And all of these results around the existing 64.8 million tonne resource with established development and infrastructure, all in a 1,900 square kilometre land position within the highly prospective Mount Isa inlayer. There's lots of copper here. We just need to take care of the water issue so that we can unlock the value of the copper in the ground. So with that, we'll hand over to Peter to provide a finance and corporate overview of the June quarter.

Peter. Thank you, James. And I'll be speaking to slide 18 of the presentation materials. I'll start with the revenue outcomes. 29 metals, unaudited revenue of $127 million for the June quarter was a decrease on the prior quarter result of 18%. This decrease was due to lower copper and zinc metal sales realised during the quarter. Copper as a percentage of total revenue was approximately 50%, a decrease on the prior quarter of 59%, reflecting lower production of sales at Capricorn and a greater proportion of by-product revenue in Golden Grove sales relative to the prior quarter. These sales included the sale of a lead concentrate parcel. Efforts to identify costs and productivity improvement opportunities continued in the June quarter. Specifically, corporate cost reductions and right-sizing post-suspension of operations at Capricorn were implemented. This reduces our full year 2024 corporate cost guidance to between $28 and $31 million, previously $32 to $36, with pursuit of further cost reductions ongoing. Capricorn copper June quarter cash outflows reflect lower copper sales and the unwind of working capital, including a reduction in accounts receivable, one-off costs associated with the suspension of production, including employee and contractor termination payments, and ongoing capital works to ensure readiness for the upcoming wet season. Going forward, cash outflows are expected to more closely align with a lower suspension period operating in capital expenditures. The expected ranges for rest of the year capital and operating costs between $10 million to $15 million and $20 million to $22 million respectively and incorporate increased commitments during the quarter towards the 24-25 wet season preparedness. Reduction of cash outflows are expected into 2025 as compliance and water reduction capital projects are completed and operating costs reduced to reflect lower steady state activity levels and ongoing efforts to implement cost reduction opportunities. During the quarter we strengthened the balance sheet with the finalisation of the subordinated offtake finance facility with Glencore and drew US$20 million under that facility before the quarter end. Debt servicing during the quarter included a US$10 million term loan principal repayment and for the rest of the year term loan repayments stepped down to US$2.5 million per quarter. The assessment of stamp duty payable in relation to the acquisition of Golden Grove was finalised at $27 million, consistent with our disclosures in our financial statements. An instalment payment arrangement was also finalised with stamp duty plus interest payable in 12 equal monthly instalments, which commenced in July. The applicable interest rate prescribed for this arrangement is 11.7%. Discussions with insurance continued during the June quarter. advancing the company's claim in respect of the 2023 extreme weather event. These discussions continue to be constructive and seek to resolve all matters in connection with the balance of the surface claim and matters relating to the underground portion of the claim. 29 Metals finished the quarter with unaltered available liquidity of $130 million, consisting of $85 million of cash and the undrawn offtake facility remaining of US$30 million. This compares to available liquidity of $106 million at the end of the March quarter. Thank you very much. I'll hand back to you, James.

Great. Thanks, Peter. Thanks, Ed. So just closing, as we spoke to in slide three, the team and I understand the immediate priorities for the business for the rest of 2024. We must continue to focus on safe, sustainable improvement in productivity and cost management across the business. We must continue the drumbeat of delivery that Golden Grove is establishing now that we're firmly into Xantho Extended. And at Capricorn Capital we must continue to manage our environmental responsibilities, manage costs and progress the imperatives for a sustainable restart of operations with the immediate priority and focus on reduction of water levels. And we must do all of this without ever compromising our commitment to health, safety and wellbeing. So I'm looking forward to working with the Board and the team here at 29 Metals to deliver all of this and look forward to speaking to shareholders, other stakeholders over the coming days, weeks and months on our priorities and our plans. So with that, happy to take your questions.

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 Daniel Morgan with Baron Joey. Please go ahead.

Hi, James and Tim. James, you've had a short period of time to review the business. I was just wondering if you could just give us some perspectives on coming into the business, what was perhaps better than expected and what are some challenges that maybe you haven't thought about prior to joining.

Thank you. Yeah, great. Thanks, Daniel. Yeah, well, I think we met very early in the piece, so I probably gave you some of those perspectives. Maybe before I do, I mean, I definitely intentionally spent a lot of time both inside the company as well as outside. Really just listening to people's perspectives on exactly as you outlined there, what are the issues and then from that, as you said, actually some things were better and some things I think have been well-publicised challenges. Maybe within that we've got some less well-publicised opportunities. So I'd probably put it into three buckets overall. For the ones that you raised there, what was better? I was very impressed with Golden Grove the moment I walked in. Very good standards on the sites. I've seen a lot of sites, a lot of BHP sites over the last couple of decades and a lot of other sites over that time. Very impressed with the standards which leads to safety, which leads to discipline. And then going right down to the bottom down there in Xantho, again, the standards and the partnership that we've got there with Burn Cup. So that certainly was one of the highlights. On the challenges, yeah, I mean they were not necessarily worse than I already had the view, I just got more detail on them. So obviously Capricorn Copper, the water issue there and hopefully as you've seen really just then bringing clarity and spelling out what are the priorities including near-term priorities. particularly around the water at Capricorn Copper, has been a big part of then the conversation, particularly with the regulators as well as lots of other stakeholders. So, yeah, in those two buckets, I could probably add three or five to each of those, but that would be my first big impressions, Daniel.

And the opportunity at Xantho extended, you know, obviously there's going to be or projected to be a big lift in grade and financial outcomes for the company. Just wondering, as a new person in the company, looking at that opportunity, do you think that's still on track or does it need to be further de-risked? Because we're expected to receive that benefit in 2025.

Yeah, no, so again, I was very impressed when I could see the investment that had been made, could see, you know, spent time with the mine planning team, time with the execution team, and I think you can see in one of the slides that we provided there, again, that one struck me when I just saw the build that the team had had, and then you can see there, you know, levelling out at a very good number. So that's been substantially de-risked, and I think you've seen that now in our quarterly results.

Yeah, thank you. And a big feature of this quarter's results was just the lag of sales versus production. It's my estimation there's about $70 million of cash you didn't book. Is that about accurate?

I think there's always a few moving pieces in there, Dan. It's a bit of a bit here. One thing to note is this quarter we had a sale of a lead parcel. We typically sell only one of those a year, give or take. It depends on how quickly we can accumulate a commercial parcel, so you'd have to normalise for that. You've also got to make sure you take into account the payabilities on the metals, not just take production-less sales, because we report on a payable metal basis. I think I'd probably say we try and give a reasonable proxy here as being sort of the stockpile movement as sort of a better sort of back of the envelope calculation there for that movement. We'd probably say that's on the more conservative side, subject to where commodity prices go, of course, because there's also some other moving pieces in there, including the difference between all mined and all milled. So hopefully that's a bit more of a steer to where we see sales going. And naturally, the other moving piece here is just the timing of shipments, which always, you know, we always try and sell as much as we can each quarter, of course, but, you know, we are subject to those vagaries as sort of a general caveat. Hopefully that's been helpful, Dan.

Thank you so much for your perspectives.

The next question comes from Adam Baker with Macquarie. Please go ahead.

Good morning, James. Thanks for the opportunity for the questions. Just wanted to maybe touch on your first few months at 29 Metals, maybe what your top three priorities are, how you see the strategy of the business moving forward. And I noticed in your opening remarks you touched on moving the Gosselin Valley project forward in the medium term. Do you see that as a critical step over the next couple of years for 29M. Thanks.

Yeah, great. Yeah, I've certainly outlined what I do see and what we as a team see as the priorities, but I think I would, I mean, I never go past that. Safety first, always. And again, I mentioned to Daniel there, I was very impressed with Golden Grove, but it's one that you can just never rest on. Good standards, good discipline leads to good safety. and it leads to good OPEX, good CAPEX, good everything else you're chasing. So discipline has been the thing that I've seen elements of, and we just need to drive on delivery. Then specifics. So, I mean, Golden Grove, just getting... Now that we're into Xantho, just getting that delivery that I think you can start to see, that's where the cash flow is obviously going to come from. So maximising that is a priority. Glaston Valley, as you mentioned, so, yeah, bringing that forward for decision, as well as the next one. So, you know, Cervantes and, you know, it's a highly prospective area. So, you know, what are the longer-term plans for Golden Grove? But, yeah, they'd be the big three for Golden Grove. Then Capricorn, yeah, I mean, it is certainly when I have been speaking with regulators, actually priority one, two, three are getting the near-term, short-term water reduction. Everything else becomes a possibility once we deal with that. But then you do need to quite quickly be moving to the long-term sustainable water solutions and the life of mine tailings. Then exploration at Capricorn Copper. You can see there we've got lots and lots of copper. We just need to deal with the issues that are on the surface at present. If I just have those three buckets, those are the big ones. You mentioned there on strategy. If I go right to the top, we're playing in the right field around copper. megatrends of electrification, decarbonisation, et cetera. We've got lots of copper. We just need to be able to demonstrate that delivery.

Thanks, James. And maybe on the water release at Capricorn, on the bulk-treated water release, my understanding is you can only do that during the wet season when the creek is flowing. um what are those subject uh to regulatory approvals required to uh to release that bulk treated water uh into the river during the upcoming wet season and maybe you can just talk through that thanks

Yeah, great. I might throw to Ed for a bit more of the detail on that. But yeah, certainly, I mean, we can release with the infrastructure that we've invested in now and so mentioned there on Mill Creek Dam. So to the existing EA, we can release that Mill Creek Dam water once we get it treated to the right levels. What our conversations with the regulators are is how can we release even more water? So we can release water as soon as the current EA is in the wet season when the creek is flowing, when you meet the quality components. What we want to be able to do is to streamline that release so that when we're able to, we can, and we want to be able to release the volumes that we need to be able to make a restart possible as early as we can. Just before I throw to Ed if there's any more detail you want to add, Ed, I'd just say there with the regulator and with the prescribed project status, so the coordinator in general has been able to reset and build some really strong relationships with the regulator. Getting everyone focused, so internally, externally, on that near-term water release being the priority. We'll have lots of time to talk around the sustainable water and the longer-term tailings. We need to focus on the short-term water has been the focus. But Ed, anything you'd like to add?

Just very quickly, I mean, it's really the crux of your question. The current VA does authorise release up to the certain thresholds, so we have an annual cap and a a limit imposed on a 72-hour window. So what we're seeking to do is remove those caps and update some of the release water quality criteria, along with certain dilution ratios on the creek flyers. That's the essence of what we're trying to achieve. And that submission is in with the regulator, so engagement ongoing.

Thanks for that. And maybe into 2025, the costs for managing that water seems to be about $15 million a quarter for the rest of this half of the year. What are you thinking it would be in 2025 to manage that?

Yes, so it will definitely step down. I mean you just have to understand the physical nature of the activity at the moment. We're investing a lot in terms of that Mill Creek Dam release infrastructure. We are refurbishing the lime slaking plant, installing new pumps, pipelines. So there's a lot of physical infrastructure going in and hence the capital investment at the moment ahead of the wet season. Once that is in place, really the physical activity drops back to lime dosing and release, probably the rental of some pumps. But order of magnitude, the cost of treating and releasing water will step down materially from the investment in the infrastructure.

Yeah, I might just add to Ed's point there. When Daniel asked the question on, you know, what were sort of some of the first impressions, actually that was a really good first impression when I got to Capricorn Coffee. You can see where the money's been spent and you'll be able to see that from some of the photos. So we've just got much increased infrastructure there in pumping, piping, therefore very believable we'll be able to release, as you said, you know, we've got tenfold capacity on it. You can see where the money's been spent. It's a good standard project. Thanks, Steph.

The next question comes from Daniel Roden with Jefferies. Please go ahead.

Good day, James and Peter. I just wanted to, I guess, unpack, you know, having the ability to release additional waters all well and good, but you still don't have effective tailings capacity at Capricorn Copper yet. And I understand that's with the regulator, but I just wanted to unpack, I guess, your expectations around you know, Magazine Creek versus TSF3 versus potential other options in the near term. So when you do get to 2026 and the water levels are, you know, amenable for a restart in production, you know, what are your expectations around the tailings situation is going to be around that time?

Yeah, great. Thanks, Daniel. So, yeah, you're right. Water is the priority. And then, as you said, getting into 2026, If I start really high level, you can see, and it's on one of the slides there, so yep, TSF3 has been further advanced, so from an approvals perspective, and that's the rate limiting step. Magazine Creek, potential for longer approvals, but also the potential for lower long-term costs. So when you really talk around sustainable solutions for the asset, anything we can do taking the opportunity of the reset to reset the cost base, that's why the team are looking at that magazine creek as an option. There are other options as well. That's just the one we chose to demonstrate the difference between the two. I think you'll see on the other side of the country, so building a tailings dam, building a tailings dam used to be the longest part of the process. These days approvals are the longest part of the process. So we're definitely focused on relationships, early engagement with the regulator so that we can just move those approvals forward. Once you've got that, building a tailings dam doesn't take that long in the scheme of things. But Ed, anything you want to add?

No, I think you covered them. The key is the activities to progress gunpowder creek, sorry, magazine creek option to the same level of sort of technical detail as TSF3 and then get it in front of the regulator, really. I mean, the team absolutely focused on that in parallel with dealing with the water.

Yeah, no, perfect. And you kind of touched on my follow-up to that was, I guess, the build assignment while stepping back. If, you know, this is getting into production by 2026, you've got to six, 12-month build time for the sailing stamp facility. So you really need approvals by the end of the year. Am I reading that right?

So, no, on your numbers, it was just a bit hard to hear you there. But if you do, we definitely got that late enough on. So critical path we're acutely aware of with each of those three imperatives as we've laid out. So, no, you don't need approval until potentially the very end of next year, not end of this year.

Okay, no worries. Thanks for the clarification.

And maybe just a clarification on the stamp duty. So you've got an 11.7 grand interest that's payable as well. Is that from this June or is that from the acquisition period?

So the 11.7 is applied to the $27 million. No, it doesn't. That only starts from the point that we had an assessment delivered, which was partly through June and with the first payment made in July just recently. So, no, that doesn't go back to the date of the IPO. I think that was your question, but let me know if that's not right.

No, that's perfect. No, thank you, guys. And I'll hand it over. Thank you.

The next question comes from Paul Wiggers-De Vries with RBC Capital Markets. Please go ahead.

Hello James and Peter. Just a really quick one on the tailings for Golden Grove. Obviously the cap has gone up but can you just give us sort of an idea on the split between what's on scope and what's on actual cost increases? Is it a 20-80 split or 50-50 split?

Yeah, so the total capital increase on that facility was from about $20 million to $30 million. So of the $10 million, about 50% or $5 million was scope related and the remainder cost escalation.

Perfect. Yeah, that's all for me. Thank you.

Thanks, Paul. The next question comes from Ben Lyons with Jarden. Please go ahead.

Thanks. G'day, James and Peter. My first question, I'd like to come back to Xantho Extended, please. I'm just really trying to connect the dots between the comments made with the March quarterly and today's disclosure. Going back to the March quarter, it looked like you were in a good spot where you were exiting and you had a good pace cycle, enabling you to pull some stopes early in the June quarter. But then looking at today's disclosure, and you've made some comments around good pace fill cycles early in the quarter, but it just doesn't appear that sufficient tons really came up the hole from the stopes. So I guess the key question I'm asking is, what is the biggest challenge with getting more material out of Xantho extended? You appear to have the vent under control. Is it the trucking movements? Is it the stoping cycle? Is it the pace cycle? If you can provide some additional colour on that, I'd be very grateful. Thanks.

Yeah, Ben. Ed here. I'll take that one. First quarter Xantho ore tons were order of magnitude about 70,000. This most recent quarter they increased to about 200,000. For the remainder of the year, you know, they should be at the same sort of run rate as the second quarter. So we are expecting more xanthotons second half to first half. Yes, correct. Vent now well under control. And, you know, you'll appreciate there's always some operational challenges. I mean, some of the things that we see are, you know, making sure that we've got sufficient operators to man up the trucks and achieve TKMs to, you know, sometimes we'll We'll get a loader, a remote loader stuck in a stoke which prevents access to some of the higher grade and we need to supplement it with lower zinc grade from scuttles for example. So they're some of the challenges that ordinarily you'd face in mining that we seek to overcome but the team are very focused on increasing the proportion of xantho or tonne second half relative to the first half.

Awesome. Thanks Ed. Thanks for the colour. I hope you got that remote loader out eventually. Okay, that's reassuring. The second question, maybe just moving on to the finance side, possibly Peter. Any constraints upon drawing the remainder of that Glencore offtake finance facility? Thanks.

No, that's a simple one. No further conditions or restrictions on that. So that's obviously available to us as we need it, with obviously the focus on not drawing it to the fullest extent possible.

Okay. Thank you, Peter. And then final couple, just coming back to Cap Copper. I know it's early days, but whether you've sort of costed what a new water treatment plant, the capital costs would look like for the scale that you're sort of imagining and any further comments you can make around repurposing the existing concentrator as a temporary water treatment facility. Thank you.

I'll take that one. So we've got a Senco engaged for a detailed design of the water treatment plant. We don't have a capital estimate as yet because that's still sort of the tender packages are being worked through to arrive at a capital estimate. We did earlier guide I think back last year to order of magnitude I think it was about $35 million if I'm not mistaken for a new water treatment plant. That is being designed to be twice the size of what we had in place previously, which will really help the asset. And in terms of the conversion of the existing process plan, that's a temporary initiative. While we're not producing copper, it is completely reversible. It's a very modest capital outlay relative to a new facility, and it just ticks a lot of boxes in terms of a fit-for-purpose facility. It's got a thickener separate solids. It's got the residence time, so it should place us much better to be able to treat water much more effectively than we did last year.

Okay, great. Thank you very much for the answers. Thanks, Ed. Thanks, Ben.

Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from Tim Hoff with Canaccord. Please go ahead.

Hi, Tim. My question's already been answered. Thank you very much.

Happy to help.

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

Great. Well, thank you. Yeah, thanks for the questions. And again, I think you'll see in the release certainly shooting for transparency, clarity on the issues, and you can clearly see the priorities. From that, yeah, much to do. We've got a really clear idea on the priorities and we'll execute against them. Look forward to speaking with many of you over the coming month. Thank you.

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