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.