South32 Limited

Good morning, everyone, and thanks for joining us today. On the call with me is our Deputy CEO, Matt Daly, for his first call, our Chief Financial Officer, Sandy Sibenala, and our Chief Operating Officer for Southern Africa, Noel Pelé. I'd like to start with safety, where we're seeing improvements in key measures following our sustained effort to improve performance through our Global Safety Improvement Programme. During the half, we achieved further improvement in significant hazard frequency, which demonstrates improved hazard awareness and a more proactive reporting culture. We're also seeing positive reductions across our lag indicators. While the data is encouraging, we're determined to continuously improve on our safety performance. Turning to our financial results, I'm pleased to say that we have delivered strong financial results for the half, underpinned by our operating performance and higher prices for base and precious metals. Our FY26 production and unit cost guidance is unchanged across our operated assets off the back of our continued focus on delivering safe and reliable operating performance. This performance enabled us to capture the benefits of positive market conditions for our key commodities. We delivered underlying EBITDA of 1.1 billion US dollars with a group operating margin of 28.2% and growth in underlying earnings to $435 million. Group free cash flow improved to $57 million after growth cap and investment of $338 million at our regional scale Homosa project. Our balance sheet remains strong with net debt of $25 million at the end of the period, enabling us to invest in both high returning growth and deliver returns to shareholders. Looking ahead, commodity price tailwinds, coupled with a planned drawdown of entries at Moselle Aluminium, is expected to add to the group's cash generation in the second half. A strong financial performance is translating to high returns for shareholders, with today's announcement of a fully franked ordinary dividend of US$175 million in respect of H1 FY26 and 100 million US dollar increase in our 2.6 billion US dollar capital management program, with 209 million US dollars remaining to return to shareholders. We're continuing to work to increase our production of copper, zinc and silver into structurally attractive markets. During the half, we advanced construction of our large-scale, long-life Taylor zinc-led silver project and across our broader Hermosa complex, we return further high-grade copper exploration results from the peak deposit, which supports the potential for a continuous copper system connecting to Taylor. As part of the scheduled project execution at Taylor, an assessment of project milestones and capital expenditure will be completed in H2FI26 and will be informed by the pricing of additional underground and surface infrastructure packages scheduled to be awarded during this period. At Cannington, We announced a 28% increase in the underground ore reserve while also targeting further potential growth through both underground and open pit development options. Sarah Gorder progressed options to grow future copper production. We've defined an exploration target at Caterbella Northeast adjacent to the Caterbella pit ranging from 1.1 to 2.9 billion tonnes, highlighting the potential for future mine life extension. In addition, the feasibility study for Cerro Gordo's fourth grinding line is nearing completion, with an independent review of the feasibility study to be completed by the joint venture partners to support a potential joint final investment decision in mid-calendar year 2026. We are also pursuing further growth in copper and zinc for our Ambler Metals joint venture in Alaska. with the US government's decision to issue federal permits for the Ambler Access Road, a key enabler in unlocking the potential of this highly prospective unexplored region. In closing, I'd like to thank our teams around the world for their work to deliver these results. Our operations are performing to plan, capturing the benefits of high commodity prices, our balance sheet remains strong, and our performance is translating to increased returns for our shareholders. Looking ahead, we're focused on continuing our positive momentum into the second half of the year and delivering our growth projects in base metals. Thank you. I'm now happy to take any questions that people have.

Thank you. If you do 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 and if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Paul Young from Goldman Sachs. Please go ahead.

Good morning, Graeme, Sandy and Noel and also Matt. Welcome. G'day and I look forward to meeting you in due course. Graeme, first question is on Sierra Gorda and I guess the last three or four months have sort of all been about copper in the market and I know you're still studying the fourth milling line which has been under study for probably three years now and I know there's been a lot of changes at the JV level in country and in Poland as well with respect to management. So just curious around what do we need to see to actually get this That's the first question. And then just on Caterbella Northeast, you said it's about possible life extension. Really interesting as far as the exploration target is concerned because it could be as big as Caterbella. So what's the forward look now as far as studies and the high-level thinking on this? Thanks.