ACG Metals Limited

Good afternoon and welcome to the ACG Metals Limited investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated on the right-hand corner of your screen. Just simply type in your questions and press set. Before we begin, I'd like to submit the following poll. And I'd like to hand over to the management team. Artem, good afternoon, sir.

Hello. Thank you for finding time to speak to us. Pleased to present last year results. which we are happy with. Before we go into the financials, let me make a couple of overall comments. And today presenting Patrick, who is our chief financial officer, and me, chair and the CEO of the company. So, what is ACG? It's an 18-month-old company that has already generated quite significant cash flows. Last year, we had $76 million. We are traded on the main board of the London Stock Exchange. We have 200 million bonds outstanding, but the net debt is quite manageable at 55 million, which indicates that we are producing and generating very significant cash flows. um last year we did just under 40 000 ounces of gold equivalent this year is a transitional year for us we are producing gold and silver dory for the first half of the year and then moving to the production of copper concentrate and zinc concentrate from the middle of the year as we complete our sulfide project building a flotation plant, which you have seen on a picture of that on the first slide. The average target price between our four brokers is about £21, but our NAV per share is just shy of £40, so there are plenty of upside opportunities. We pride ourselves on focusing on health and safety first, and this continues to be our overall objective of operating our Geddeteper mine in Turkiye with excellent health and safety record. Last year was a busy year for us. We started with raising $200 million in bonds to finance the sulfide expansion project. We have streamlined and simplified the balance sheet, reducing the number of outstanding warrants by 70%. we have appointed four brokers who are now producing good quality research on the company. And that resulted in increased liquidity in shares, as we've seen throughout the year. A very good performance in all of our securities. Don't need to have that specifically mentioned here, but obviously if you look at our share, you'll see that it has grown 250% over the last year. So the warrants increased 800% and our bonds are trading at 109. So we have an obligation to our investors to continue to perform. And as Patrick will show you through our financial results, that's what we do. Maybe just to remind everyone about the asset that we have. Our first asset is in the western side of Turkey. It's a classic VMS deposit. We have been producing gold and silver from the oxide cup of the deposit. And in the middle of this year, we are moving to the sulfide part of the ore body. uh to produce uh roughly 20 to 25 000 tons of copper equivalent over the life of mine which is initially 11 years but we expect this to double and triple as we go deeper into this high reach ore body The grade is 2.3% plus, which is very good in today's world as the world is running out of high-grade copper deposits. Moving on to the operations again to remind ourselves what we have in the ground. We have essentially three types of ore. Oxide is from where we've been producing gold and silver dores through a simple heap leach and metal crow facility. This year we plan to produce about 17 and a half thousand uh gold equivalent answers from the remainder of oxide or which we have mined last year so meaning no mining cost uh for that part of the business this year meaning higher costs higher higher margins lower costs in the main ore body of our deposit is sulfide we are finishing a flotation facility to produce copper concentrate and zinc concentrate and that is a backbone of the mine In the meantime, one other thing we have done last year, we have developed the process to produce all the four metals that we have in our deposit, copper, gold, zinc and silver, from so-called enriched ore. which when we acquired the asset was classified as waste. We have over 3 million tons of that quote-unquote waste, which is a high-grade ore, and we will be significantly increasing our production of all the metals by utilizing this so-called waste. The number one priority for us this year is to bring the sulphide project online. We are on track to do that in the middle of the year, aiming for July. This is a very conventional flotation facility. that will produce copper concentrate and zinc concentrate. As you can see on these couple of pictures, we are well advanced on the project. We are on budget and on track to start production in the middle of the year. Enriched O, as I mentioned, is a project that increases our revenues very significantly for a small, just under $40 million investment. We get over $300 million of free cash flow at consensus pricing at current spot. that will be even higher. As you can see on a small graph on the right bottom of the slide, with enriched ore project, our production in the next four and a half years go to over 40,000 tons of copper equivalent. Patrick, over to you.

Yeah, thanks, Artem. So looking at the financials in 2025, a couple of highlights for the start. We had a revenue of $136 million and adjusted EBITDA of 76 million, which means a 56% EBITDA margin for the year. And just to remind everybody, our realized gold price was about 3,300 last year. We had an operating cash flow of 65 million that we could report. And I just want to put this a bit into perspective versus the net debt that we have at the moment. So we're basically looking at a business that generated more operating cash flow than it had net debt. And this is during a construction phase of the Sulphide project. If we just recap on the operations, we obviously exceeded our guidance. And just to remind that in the beginning of the year, we started with a guidance of 30 to 34,000 ounces of gold equivalent ounces. We then upgraded this in Q3 to 36 to 38,000 ounces, and then ultimately finished the year with 39. So even exceeding that guidance. I think the best part of it is that we were really able to cost control the asset. Our C1 costs were actually 18% reduced and our ISIC costs were at about $1,250 per ounce, which is at an increasing gold price, especially in the fourth quarter than a super attractive margin that we generated in the business. Ultimately, that resulted in us having a very clear balance sheet and a still very healthy net debt position by the end of the year. Again, this is really simplified on the cash metrics of the net debt composition. Obviously, there's a lot of accounting, et cetera, in the balance sheet that we basically take out here. But this is the clear cash picture of our current balance sheet. If we then dive into the P&L a little bit more, just wanted to highlight a few things. Obviously, the revenue we discussed, we're looking at cost of sales of 57 million, which means there's about a 60% cross-profit margin, obviously driven by higher commodity prices versus 2024, but also the cost discipline that I just mentioned. um we had fair fair value adjustments of about 82 million negative and that's non-cash it's a pure accounting metric but it comes for a good reason because our warrant prices as arthur mentioned increased from 38 cents to 4.37 right now the warrants are even trading above five dollars So obviously, the good performance in our quoted instruments basically led to this fair value adjustment. And again, it's a non-cash, just accounting measure. The same applies for the copper. Thankfully, we obviously see increasing copper prices right when we need them. By mid-year, we're going to start producing copper. Copper prices increased quite a bit from 24 to 25, and even now. And we still have from the acquisition period a copper price bonus payment that is equal to about 10% of the additional incremental cash flow if we meet some hurdles on the copper price. And that basically also had to be revalued, leading to another fair value adjustment. Again, non-cash, pure accounting metric. Looking quickly at the balance sheet, I think the most important thing to note is probably that our balance sheet is now about 500 million, so half a billion dollar big. Obviously, the sulfide construction assets plus the bond that we raised increases that significantly. We also accrued for the next bond coupon payment that we had to do in January 26 and obviously done. That is more in the short term. and as you know we raised 15 million dollars for the SART project for the enriched ore project and we did a warrant buyback in the beginning of the year as Artem already alluded to in terms of cash flow important to note is that in the cash flows here there is already a bit of an advanced payment also for some of the sulfide spend we had in 2026 We actually have under the EPC in 25 spend about 58 million, but we also had already advanced for equipment pieces, et cetera, about 23 million. So overall, we are basically fully on schedule and on budget with the payments by the end of the year and obviously also to date. Regarding the financing, I think obviously the 200 million Nordic I think when it comes to our net debt position, people are asking why it's lower than expected. It comes down to three reasons mainly. On the one hand side, we had better than expected prices. I mean, if I look back at the bond presentation in beginning of 2025, We had basically a 2,500 gold price in there. It comes also down to the cost discipline in the ISIC, but there's one other aspect that we have not talked about at all with the market. And that is basically that we were able to manage our cash positions very, very efficiently. So we are in Turkey and Turkey, given it has a higher inflation than other countries, but it also has a Turkish lira that is depreciating, so the inflation is kind of set off. But what it also means is that in-country you get attractive interest rates. We have a benefit now that we have a big spend program on the CapEx. We're spending 146 million in country. We raised that in dollars, but it also means that I can optimize between the dollar income plus the oxide revenues that we generate in the business and actually the spend in the Turkish Lira on the ground. So what we did is actually did really look at how can we optimize the cash position and what can we do with it? and ultimately that led with a lot of support from a strong team we have and i want to especially mention graham and victor who've done a great job you know in trying to optimize also the spend on the ground and how we can manage the project but that resulted ultimately that we had a fixed income um basically a finance income of 23.7 million finance expenses of 32.1 million That includes two, three million, a few million on the sponsor loans that we had originally from the acquisition time plus the original acquisition loan. But if you look at the attributable net interest for the Nordic bond, that was about 6.3 million and if you just translate that it's a bit illustrative but ultimately translating this to our 200 million dollar nordic bond means that we had an effective interest rate of 3.15 percent on our cost of capital We also had a few questions from investors regarding our potential impact that we see from the current situation in Iran. I think we just wanted to emphasize today that there was a good article from The Economist with very fundamental and good reliable sources that put basically Turkey as one of the least impacted countries in the region. And I think we can just confirm that because first of all, we have a mining contractor with a fixed year contract. You know, there is a bit of inflationary adjustments to 3% that they could realize, but it's not going to impact us a lot. And also it's one of the three largest mining contractors in country, very big company. So, you know, their exposure to the oil price is also mitigated by their strong balance sheet. When we look at in the processing and the administrative costs, it's all grid connected where we are very good infrastructure. So we don't have any exposure there for diesel generators, et cetera. But also going forward and looking forward, when we have a flotation plant, we obviously need sulfur and sulfuric acid substitutes. But also there, we can say that Turkey is a net exporter of sulfur and sulfuric acid. Hence, we can source all of this in-country and we have already secured most of that that we need for this year. Concluding, I would just maybe highlight that we have a very strong operating cash performance in 2025. It makes us very robust and resilient for the ramp up phase in 2026. We have a few non-cash IFRS adjustments, which are all for good reasons. Basically, the increase in our securities that we have traded and the increase in copper is a very positive for the business and that we have to do some accounting adjustments for this is a side effect. But most importantly is that we really maintain discipline on the cost side and we have a really, really healthy net debt ratio for the business that we are having. And we actually managed to reduce our cost of capital significantly by efficient cash management.

Thank you, Patrick. Basically, it's good to have a German CFO who takes care about the cost management. What we're planning for this year is a mixture of production of gold and start of production of copper concentrate and zinc concentrate. Essentially, from oxide, we will be producing about 17,500 ounces of gold equivalent, which translates to 4.6 to 5,000 tons of copper equivalent. And from sulfide, starting in July, we aim to produce between 15,000 and 17,000 ounces of copper equivalent production. Our cost guidance at this stage remains unchanged, 2.4 to 2.6, which is pretty good given the fact that this is a transitional year. So what lies ahead in terms of the key catalysts for the business in 2026? First of all, it is a delivery on our operating guidance. We will be publishing our operating results for the first quarter, so I'll reserve my comments, but I'm sure it'll be great to see that RNS coming up in the middle of this month. We're on track and on budget to start production from the sulfide project. Those are the key operational deliveries. I'm pretty sure Patrick will do more to optimize our capital structure. The first ability for us to repay the bond will be in the beginning of next year, and we'll certainly look to optimize the cost on that. Even though, as Patrick mentioned, given the high interest we own in Turkish banks, our effective net interest rate is just over 3%. Still, we will look to reduce the headline coupon. We see significant increase in trading which is great that enable us to qualify into the first index microcap index but as we move forward we expect to be included in other indexes and obviously that drives the passive flows into the shares. Consensus between the analysts is over £21 per share. As I said, our NAV per share is just below 40 at Consensus and at Sport it's 46. So there is plenty of upside without any further M&A. But as always, we do work on a number of things. Let me pause here. I see some questions online already. So let me start answering those. Patrick, let me deal with the first two questions and maybe you can deal with the third one so far. So the first question is, with your strong cash flow generation, how do you look to prioritize capital between projects, debt reduction, and shareholder returns? Well, it's all driven by the shareholder returns. So we optimize our capital and our cash flows to increase the shareholder returns to the maximum. We also boss shareholders, so we have a strong alignment with our shareholder base. As I mentioned, we will look to refinance our bonds next year. We are fully funded for our existing projects. We do not need any further capital on the basis if we have additional projects, then we can look to the best way to finance it. But at this stage, we are fully funded. And yes, once we refinance the Nordic bonds outstanding, we will be able to pay the dividend and we will establish a dividend policy in line or better versus our London listed peers. Second question is, with the M&A strategy, what criteria needs to be met and how do you manage variation metrics? Well, I would say the following. While people in the sector were worried about volatility, newfound volatility in the copper prices, I was pleased with that because in any M&A discussion, when the commodity going in only in one direction upwards, it's difficult to have M&A discussions. Now it is slightly different. But we never, never, never going to overpay for an acquisition. One other thing we did last year or either did not do after many months of discussions, we decided not to proceed with acquisition of Anglo-Asian. You've seen our announcement at the end of last year, given the relative valuation of those companies, of our company and their company in the past. We are very disciplined with our approach. We've been blessed with a terrific first deal. I'm not saying that every other deal will be like that, but certainly we are very much focused on transactions that create significant shareholder value, and we will not be overpaying for anything that we're looking to acquire.

Yeah, maybe I look at the third question. It's a more technical question, but basically as a sulfur plant is approaching commissioning and flotation circuits will be critical. Could you please clarify whether I think the question is more targeted towards is the full design and everything complete, or is there still optimization to be done? I would say that obviously the detailed engineering you do as you go during construction, but most importantly, everything is finalized. In the slide that Artem showed earlier, you can see that we are already through every equipment purchase, design work is done. Everything is basically ready for assembly. So we are in a very, very late stage of the project already, which means that there is no further design or flow sheet update required. It's been optimized over more than two years prior to the final design. And we basically have everything in place that we need. What we obviously will see then is further optimization. You look back at our feasibility study and recovery rates and whatever you see there is obviously been optimized with the plant that we are building now. And I think there will be some optimizations once we are in full production.

Thank you. The next question is, with a shift to copper, how should we view this and the catalyst to monitor the delivery of production this year? Well, the catalysts are on the slide that you see in front of you now. The key ones, you will see our Q1 operating results in the middle of the month. That will be one potential indication of how well we are performing operationally. Second major catalyst is obviously start of production from the flotation facility in the summer. uh and those are the key ones so watch out for the our operating updates uh which we will be providing on uh on a quarterly basis uh we also have a mailing list where we send construction updates uh on a monthly basis um please indicate your interest and monday our investor relations manager will include you in that mailing list um next question um remind us of your near to medium term mna objectives and what capital structure you see is needing to support that so um perhaps we talk too much about mna because nothing is done until it's done and in my experience you need to work on three to five deal to get one done and We are working on 8 to 10, so we have potential of getting things progressed. But I don't like to talk about things which are not done yet. What I do like to talk about is the quality and value upside from our existing business. with going starting production of copper in the middle of this year, starting production from the enriched ore project. We'll see the cash flow generation double and triple in a very near term. And we are still trading at 0.4 price to net asset value and three times cash flow. There is plenty of upside in existing business. and we'd like to see that realized before we can consider using our shares for any M&A activity. Which brings me to the second point in regards to M&A objectives. At this stage, we're only looking to buy producing or near-producing assets. What this means? It means we can utilize the debt to 70, 80 or even more percent of the acquisition price, Using the debt is a classic kind of private equity strategy, which ensures a high return on equity, and thus we plan to continue to do so. Fortunately, as I said, I have a very conservative C4, so we're not going to take too much debt, but each transaction has to stand on its own. in terms of financing. That's our core philosophy. The cash flows from Getty Tepper will be used to optimize our capital structure, complete investments in Getty Tepper projects, and return money to shareholders via the dividends. The next project will have to be financed on its own, and given the fact that we're looking at producing assets, it is very likely to be financed with significant debt. Next question, have you been able to attract any blue chip equity institutions to register since you listed in London market 18 months ago? If so, which ones have invested during the time span? I suggest that you look at our shareholder register in Bloomberg. It's already include some pretty good institutional investors, and we have strong interest from others who are looking to participate as liquidity increases. The proof is in the pudding, so we are blessed with a strong shareholder support and some great institutions that have joined us and more looking to join.

uh patrick the next one is clearly yes yeah i'll take the next two ones and then probably we conclude um um but i go for what indices are you looking for at for inclusion throughout this year um so basically the the micro cap index from the msci was the first good indication that you know our liquidity is improving uh it comes also from obviously more institutions coming into the stock more you know shares been traded on a daily basis and that was a good indication that we are you know building the track record in the right direction What I would say is that the logical next step for us would be the FTSE All Shares, which you need to have certain requirements, but we are meeting all of them at the moment. As and when that happens will be decided in the coming months, I would say. And then as soon as we hit a market cap of about 750 million US. then you also get into eligibility for the FTSE 250. But that's a logical step up. And there's a lot of sub indices, et cetera, that will come and follow us or get into thinking about including us. And I think that's a real big driver, right? Because these indices, these passive followings, they will drive liquidity. they will also increase the awareness and they will also force basically these index holders to allocate capital to acg which means that the re-rating is also an automatic effect from that so very positive but to your question the ftse all shares and the ftse 250 would be the logical next steps I don't know if you care to take also the cash question. Can you add some color on how the cash position looks today and what the remaining capex on the sulfide expansion is? All we can say right now is that next week we'll publish the Q1 2026 results, the operating results. And in there, we will also have an update on the sulfide expansion, a bit more detailed. And we will also have the recent net debt position as by the end of Q1.

It's important to re-emphasize again that we're very much on budget for the sulfide expansion of $146 million project and majority of that money has already been spent. We are in the last few months in assembly and commissioning and the start of production. The last question I'll take and then we'll probably conclude this. The last question, are you planning on exploring for additional near mine oxide deposits to provide ore for existing mine? Yes, we are very much in discussions with several possible sources of additional oxide ore. we have mined out all of our oxide ore we are processing that in the first half of this year again meaning no mining costs on oxide this year and we're in discussions with several parties who have oxide deposits nearby from where we can take the ore put it on our heap leach process our metal crow plant so watch the space Thank you very much, everyone. Really appreciate your attention and good questions. We have to conclude the presentation now. Please do follow up with us. The contact details are on the website if you need any further information. And as Patrick mentioned, the next update for us will be operational results for Q1, which we'll publish next week. Thank you very much, everyone.

Thank you, Arthur and Patrick. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team of ACG Metals Limited, we would like to thank you for attending today's presentation and good afternoon to you.