Central Asia Metals plc

Hello and welcome to the CAML results call. Please note that this conference is being recorded. I'm going to hand over to the host, Mr. Gavin Ferrer, to begin today's conference. Please go ahead.

Good morning and welcome to the Central Asia Metals plc H1 2026 results presentation. Thank you all for joining and I'm looking forward to presenting what are a solid set of results to you today. I think if we skip through the next four slides, which is basically disclaimer, disclaimer, disclaimer, disclaimer, it's getting bigger and bigger because of the multiple jurisdictions now, but onto an overview of our business as it currently stands today. We have a portfolio of producing base metal assets complemented by some exciting exploration prospects. The producers are the Kunrad project that is in Kazakhstan. and it's been producing copper profitably for us since 2012 and it's licensed out to 2034. We have the Sasa underground lead zinc mine in North Macedonia again owned that since 2017 and has been producing lead and consistently for a fair amount of time with a mine life out to 2034 based on our current reserve statement and adding a small proportion of resources into that life and mine plan. In terms of exploration, As I said, exciting prospects out in Kazakhstan where we have two exploration companies focusing on base metals exploration and targeting high-grade base metals projects that we can afford to build. So we've completed some maiden drilling programs at two of our projects and we've added another important project to that portfolio in Kazakhstan as well. And lastly but not least, Aberdeen Minerals which is a minority position we hold in an exploration company privately held looking for copper and nickel mineralization up in Scotland and most recently we've agreed to invest another 1.15 million pounds into that business to fund another drilling program and that'll take our ownership there up to around 38.9% so a great underlying asset base and today we present a string of solid financials which reflect this solid operational performance in an attractive commodity price environment. So having a look at the financial results on the left-hand side, we produced revenue of $145.5 million versus just under $100 million in the same period last year, with EBITDA correspondingly higher at $75.5 million up from $39.9 million, with a healthy margin of 52%. That has generated cash flow of $46.8 million, and that has driven a dividend that we announced today of 8p, which is right in the middle of our dividend policy range of 30 to 50%, so that 8p represents 40% of that free cash flow. Cash in the bank at the end of the period, $97.2 million, leaves us in a very healthy position in terms of our balance sheet. and moving on to the operations as you can see there we've achieved a slight increase in production in Kazakhstan which has been a really good result given the the weather that we experienced in Q1 up one percent from the previous period and importantly North Macedonia and Sasa we've seen some improvements in product production there we've got an extra five percent of zinc metal and an extra six percent of lead metal as some of the improvement initiatives start kicking in in that operation. Unfortunately, we did suffer two LTIs. We do strive for a zero harm workplace. So the focus for the rest of the year is really getting that number of 1.73 down to our targeted number, but it's looking good so far in terms of that. But as I said, very focused on health and safety there as well. So if we move to the next slide, please. Which is our investment case for camel and I think if anything this investment case has become stronger over the last few months But we'll go through the three elements of it just quickly for you So first of all, we've got cash generation as I said earlier 40 almost 47 million dollars of cash generated which is almost threefold increase a period on period and with 97 and 97.2 million dollars in the bank, you know it is a really healthy position to be in. That cash generation is from the higher margin, current rate of copper production and improving size of performance. Returns, we've demonstrated consistent shareholder returns, returning over $437 million. In fact, our shareholders in cash since our IPO, which is a lot more than we've ever raised from the market, and we will continue with disciplined capital allocation. And importantly, we are now adding some really good growth to our portfolio. As I've mentioned earlier, the advancing exploration portfolio in Kazakhstan, Aberdeen Minerals, and the proposed Signus transaction, which we'll talk about a bit later in the presentation, has the potential to add a near-term producer to our portfolio, plus with significant exploration upside. So at this point, we'll just talk about that capital allocation on the next slide a little bit. And I think what we've got here is the balancing of capital allocation which is reflected in that AP dividend which I spoke about earlier and that we've announced today. That basically provides attractive returns to our shareholders while retaining enough capital and cash on the balance sheet to finance our growth ambitions. So as you can see in these three sort of bullet points here we'll see sort of columns of the slide you know we've we've returned a significant amount of money to our shareholders via the share buybacks and dividends the strong balance sheet supports our growth ambitions we've paid over 208p of cash to our dividends since IPO and now we're going to continue with a balanced approach to capital allocation funding both returns to shareholders growth and continuing with financially strong base on our balance sheet so effectively this allows us to build on the strong foundations that we currently have and set the business up for long-term success so I'll hand over to Louise now who's her and her team have been slaving over the summer to generate the sort of financials that we're presenting today so thanks Louise thank you yeah keep going to the next slide and then next slide yeah perfect thanks

And so if we just start off by looking at some of the macro conditions that are important in understanding the very strong results that we have announced this morning. Obviously, we've had strong production performance in the first half of this year, but I think it's important to acknowledge the commodity prices, which has been very supportive of our financial results today. in particular and we can see in the little table at the bottom we've got a copper price which is 39% higher on average for the third half of this year versus H1 2025 and also the zinc price 26% higher in the first half of this year versus the third half of 2025 also it's worth pointing out silver the silver price has had spikes of up to 115 dollars an ounce in the third half of the year As we've explained before, silver doesn't affect our profitability, but it does affect our revenue and it does affect our cost. So you do see increased revenue and increased cost to sales because of that silver. So that's been very high silver prices during the period, which affect the way the P&L looks. Looking over to the right-hand column, treatment charges. this has been very supportive for us as well during the first half of this year so in total our treatment charges came in at 2.7 million and that's 2.2 million less than they were for the first half of last year and that was very much supported by lead treatment charges actually turning negative in the second half of this year and we have those contracts to remind you from the 1st of April all the way through to the 1st of April 2027 so we've locked in those negative lead treatment charges And then finally, just to look at foreign exchange and inflation, this is a little bit more of a negative story for us, with a weaker US dollar against both of our operating currencies. So US dollar 7% weaker versus the third half of last year for the Dinar and 5% for Kazak Tenge. And that's really... It has the impact of increasing local costs in both of the areas. Inflation, it remained elevated at 11% in Kazakhstan, a little bit lower at 4% in North Macedonia. What I should point out in terms of the zinc and in terms of foreign exchange, we had entered into some hedge contracts. So 50% of the zinc production at Sasa for this year, we've hedged at 3,011. So we've recorded the P&L a loss of around 1.4 million for that. And on foreign exchange, we'd also hedged some of the US dollar euro exposure because the DNR is pegged to the euro. And that's been more or less flat. I think it's a tiny loss of around 0.1 million for that hedge as well for the foreign exchange. Moving on to the next slide, we can talk through the income statement. So I think first to point out, Our revenue is up 46% period on period, and that is from 99.5 million up to 145.5 million. That's driven by the commodity prices being much higher that we've talked about, the copper, the zinc and also the silver of 128% versus the previous period. But it's also due to not just strong production performance, but also higher sales. Interestingly, in H1 2025, we ended that period for copper with a fair bit of copper in stock. So our actual copper sales this year versus the first half of last year are 9% higher as well. And zinc can really just reflect the increased production of the two periods of around about 5% and 4% respectively. And of course, we were also helped on the revenue line with a reduction in treatment charges because that comes off on the revenue line in the P&L. Cost of sales, that was up by about 10 million. You couldn't explain more than all of that with the increased silver purchase price, the 8.8 million that we have to pay to purchase silver to fulfill our contract with OR Royalties. And also there was an increase in our depreciation, which I think was previously flagged. that was from 14 million to 15.9 and that really reflects the sort of mathematically shorter life at Sasa that we're currently envisaging to 2034 and that gets you to effectively an increase of 11 million and there's a big positive in cost of sales there because Kunrad's MET which is the revenue royalty that we pay that reduced from 5 million down to 0.8 million and there was a reduction in the rate by about 90% there so there's a positive for our cost of sales there We did also have cost increases of 2.4 million at the operations, and that was largely related to this week, a US dollar against our operating currencies. And then finally, the last main factor in there is an increase in concession fee at SATA due to the slightly higher production and due to the higher commodity prices as well. Admin, relatively flat there. It's up by 3% or 0.5 million. 0.3 million of that is increased business development costs mainly related to the potential sickness acquisition and there's also there's a few other ups and downs in there because actually UK costs were generally flat we had 0.1 million up in Kazakhstan and then at SASA there was also some elevated admin expenses in large part related to the severance pay that we've paid so taking all that into account EBITDA up by 89% to just under 76 million and a good EBITDA performance at both of the operations as well 78% increase in our EBITDA at Conrad and 62% increase at our EBITDA at Sasa up now to 19.3 million at Sasa So if we look as well at some other aspects to pull out on the P&L, one of the biggest swings there is this fair value movement in share-based payment liability. This is since we accounted for our LTIPS as being cash settled rather than equity settled. So there's a swing of around 9 million there. That reflects the weaker share price performance up until the 30th of June. And so clearly that will move up and down period on period depending on the larger share price factors. Tax. up quite significantly, up by 10.8 million. That's driven by higher profits at Conrad because those are taxed at 20%. And also there's been an increase in Kazakh withholding tax from 10% to 15%. And that's referenced from the 1st of January this year. We did bring all our cash back to the UK in the first half, but we just take half of that 50% of that through the P&L for the first half of this year. And then really just to finally focus on the EPS, which is up by 330% period on period. We've also highlighted there an adjusted EPS. All that does is strips out a 1.5 million unrealized hedge loss, which mathematically is accounted for the hedge loss maybe in the second part of this year. So we've provided the adjusted EPS just so you can see the underlying profitability of the business on that basis. So if we go on to the next slide please and we can look at the costs of both of the operations now and so at Kinrad our costs for the first half were up by 12 cents and that was really based on pretty much consistent cathode production as we say up by one percent. this was over half of that was related to the strengthening of Tenge versus the US dollar and actually if you look at that processing total line where we've gone up from 8.4 million to 9.5 million and over half of that was related to foreign exchange and the rest of the costs are up by about six percent which is less than inflation so all in all a pretty good result there and a couple of other factors just to point out we also see higher payroll there Again, payroll is very much linked to the strength of the 10-day and also to pay rises, inflation-related pay rises, which we gave the workforce in January this year. It's also worth pointing out power costs were slightly lower period on period. That was rather due to a large amount of power used in H1 2025 rather than necessarily a reduction per se in this half. That's just due to some changes in the chemistry. but it's worth pointing out that we know we're going to get a power increase and for seven months this year starting from the 1st of June and that's because the tariff has been increased from round is from six cents per kilowatt hour to seven cents per kilowatt hour so we will see a slightly higher power charge come through in the second half of this year But all in all, I think a good performance in costs given the headwinds from the exchange rates. And we've delivered an EBITDA margin for Conrad of 84%, of course, helped by the strong copper prices for the first half of this year. So if we go on to the next slide and we can look at SASA now. So we're very pleased with the performance of SASA. So site operating costs, More or less flat or up by 2% or $0.4 million. Again, we're dealing with a weaker US dollar there, so stronger operating currencies of 7% and that cost is factoring that in. We can also see the largest increase in costs that you can see in the processing line. and a million of that increase is due to our tailings disposal costs where was purposefully prioritized putting our tailings in the paved backfill underground and on the dry stack tailings as well to maintain the capacity in TSF4 so that's the main factor but actually our mining costs have been very encouraging that's an area where we've had a lot of emphasis on our improvements So all in all, our mining costs are lower by 0.7 million. There's actually an increase there in fuel, which is just to do with some of the conflicts that we see in the world. And actually, so taking that out of our savings would have looked would have looked even higher. Reduced spare parts and payroll savings as well were two key factors from the headcount reductions which we pushed through in November and also some additional ones in the first quarter of this year as well. Electricity costs remain stable because we hedged the electricity price for H1, so they remain stable versus H1 2025. All that's very positive on the site-based costs and encouragingly our C1 cost base is actually lower period on period. That's fallen from 32.1 million down to 30.8 million and that's really helped by those lower treatment charges that I mentioned and so that brings the overall package of realisation costs down from 6.4 to 4.7. And we've got an EBITDA margin now back into the 30%, which we're very encouraged about. We move on to the next slide. and just a quick look at our capex which is very much on track so group capex for the first half at 9.5 million staff the capex of that was 8 million underground development underground equipment and also the raised boring project there was 1.4 million of that and that project concluded in July this year at Kunraz we spent 1.4 million which is the usual drip of pipes Some new anodes and also 0.2 million on replacement boilers as well. And then we reiterate our guidance from 14.5 million to 17.5 million for the two operations for the full year 2026. Exploration-wise, it's worth pointing out we spent $1.6 million at Kamalex and Kamalex-D. We've done maiden drilling programs at two of those sites, and we've done some geophysics at the third site as well. We still intend to do some more drilling as the year progresses there, and we should still spend between $3 and $3.5 million in Kazakhstan as well. We turn to the next slide, please, and we can look at the balance sheet. So PPE, what we see there, the difference there reflects depreciation plus capex and a little bit of adverse foreign exchange movements in the difference between the £239 and the £226 million on the balance sheet. Investment in Associates, that's our holding in Aberdeen Minerals. We have, since the period end, we've agreed to invest in The final £1.15 million or just under $1.6 million to take our percentage ownership up to 39, just under 39%. So the 1.2 million of warrants mentioned there is what we exercised in January. So the second half will see the last portion of those warrants exercised. inventory we were very pleased to see that that's decreased by three million that reflects a lot of effort that we've put in at Sasa in a program to reduce our inventory which is actually reduced from around about this time last year to here by almost five million and we see three million of that reflected in these in these results so that's very pleasing to see other factors points out there is as we announced we completed share premium cancellation in April this year and that really transfers from the share premium account 206 million into our distributable reserves into retained earnings sorry to create distributable reserves primarily for future dividends so that sees that bigger swing on the balance sheet there and then finally just to say that we've got a really strong balance sheet ended 30th of june with 97 million dollars of cash we also have 0.4 million of restricted cash and the 97 million does include a 0.9 million overdraft but that's all the borrowings that we have and then Final slide for me, if we move to the next one, thank you. And we can look at the H1 2026 free cash flow. So if we go across the waterfall chart, we've got cash generated from operations of 71 million, the 17.3 million of dividends, that was the 2025 final dividend of 7.5p. income tax and withholding tax at 19.8 and that's less cash tax than we see on the P&L that's because particularly Kazakhstan you pay your tax based on last year's profits and so there'll be a catch-up that we'll have to do in paying some more tax from August to December this year we've put that plan in place But that does, that 19.8 million does include the full amount of the withholding tax of around 10 million that we paid when bringing our dividends back to the UK, all of them in the first half of this year. CapEx exploration as a big investment, we've already talked about. The share buyback of 4.8 million. We completed a 10 million share buyback, half of which was in the second half of last year. And the 4.8 million was completed by March this year. So that was the final portion of that 10 million that we committed to buy back. And so we ended the period with the 97 million of cash that I mentioned, excluding the 0.4 million restricted cash, but including the 0.9 million overdraft. When we look at our free cash flow and our adjusted free cash flow, which informs the dividend calculation, we have added back on half of that withholding tax just to spread that evenly over the two six-month periods. So that gives us adjusted free cash flow for the six months of 46.8 million, and that's an 189% increase versus the 16.2 million that we generated in the first half of 2025. So I'll hand back to Gavin to come through the operations.

Thanks Louise. We're going to start with the Conrad on the next slide. Thank you. Yes, solid performance of Conrad as you've seen in the numbers that Louise was talking about both in terms of costs and revenues. As I said earlier, the cathode production was up 1%. sales up a little bit against the previous period just due to inventories held in 2025 but we're on track to meet that full year guidance of 12 to 13 000 tons we're solidly on track for that and copper prices continue to be high so looking for you know good revenue from Conrad from the end of June out to the end of the year as well so we did have that one LTI fortunately it wasn't too serious but again lots of learning to be taken from these things and you know procedures in place to try and prevent a similar accident happening again and in terms of cumulative production at Conrad really good since we started producing in 2012 we've done over 185,000 tons of cathode copper all at very good quality all sold into the market so no problem so you know excellent performer here and as I said earlier licensed out to 2034 so we jump onto the next slide please we talk about a little bit of the outlook for the business at Kunran. So with those record high copper prices we achieved in 2020, in the first half at least, we're leveraging the strong operational performance and we're looking to continue that into the second half of this year. Our focus remains on maximising the efficiency of the asset. We've got industry heating margins there and we'd like to keep it that way. The only significant update really in terms of resources and reporting is that in support of the Cygnus transaction, we've published, updated a mineral resource and made an ore reserve actually at Conrad out this month as well. So that is both JORC and 42-101 compliant. And the JORC ore reserve currently stands at just shy of 408,000 tons of contained copper. As those of you who have followed us for a while know, the amount we can recover from that, recovery rates range between sort of 38% and 55% really, depending on where we're leaching. So we're never going to recover that whole 407. And as I said before, we've taken out 185. And that leaves, in terms of theoretically, 75,500 tonnes remaining. And that's more than sufficient to support operations out to 2034. But if you look at that little chart that we've got in the middle of the slide there, We have outperformed our forecast recoveries all the way through the operation, so we would look at that 75,400 tonnes as a minimum to 2034, with potential to extend beyond that if we can get the licence renewed. That solar plant, as Louise was saying, with an increase in electricity tariffs, is becoming ever more valuable and has supplied 18% of our electricity for the first half of the year. Moving on to SASA, as I said before we started to see the benefits of the full review that we conducted in 2025. Now that review spanned resources reserves, operating procedures, financial metrics and we are seeing some of the production metrics coming through that are reflecting an improved performance at SASA. Not only are the ore mine tonnages higher but also the metal that is contained within that ore, as I said, is 5% higher in zinc and 6% higher in lead. Again, timely given the enhanced zinc prices we're benefiting from right now as well. So guidance of 18,000 to 20,000 tonnes of zinc and 26,000 to 28,000 tonnes of lead is still in range. We're looking to achieve that this year. And again, with the zinc prices remaining robust, we're looking for a solid financial performance coming out of SLASA over the rest of the year. Similar to QNRAD, we've published JORC and 43-101 compliant all-reserve statements and all-resource estimates in support of the Signage Transaction. And just getting back to that improvement program I was talking about, we still continue to do that with the emphasis on mining performance and cost control and you can see from the chart on the right hand side we have you know you can see the improvements in tonnage improvements in grades which means less dilution and that's reflected in the higher metal times that we've produced next slide please we're not going to sit on our laurels at uh at uh sasa we continue to strive for uh more more improvements there and so far you know we're looking at these improvements in productivity staffing levels and cost control and as Louise was saying you know really good results on the inventory management there as well so you know for H1 2026 I think we've done some really good things in terms of you know drill meters that we're getting in lateral development enhancing that grade control model and reducing the the inventory numbers there and those will continue and into H2 We're going to continue to focus on executing on our life of mine plan and our 2026 budget. We're trying to improve maintenance planning through data collection and analysis there and also strengthening the team further. We had a new geologist join, new chief geologist join in H1. We've got a few key hires coming in. We've actually joined already a few of them already to strengthen the team mainly around planning and execution of underground mining, which is where we see the major opportunity for improvement there. So moving on to the business in more general in the next slide, please. So sustainability remains a core part, a core sort of element of our business success. I won't go through the slide in a lot of detail, just provide you with a few of the highlights that we achieved during the period. So in terms of health and safety, in 2025, we actually instituted a full review of the health and safety on both sites. We workshopped this all with the site guys. as well and came up with a new sort of structure for a group safety culture which we started implementing into 2026 so that's been really well received on site and at head office as I said unfortunately we did suffer those two LTIs during the during the half but the really stringent focus on health and safety always and moving forward in terms of community investment we continue to invest in education infrastructure and importantly and more fun is some business acceleration program that we've got in in slatter where we've actually now financed four businesses and four startups there and that's in in conjunction with the you know the other things that we're doing in terms of steam children's children's centers and just generally looking after our communities and maintaining that license to operate and part of that is obviously environmental management and that's been a continued focus Three key elements there that we've kicked off this year is we've actually completed our biodiversity management and climate resilience reviews across both operations. We're updating our closure plans, specifically given the changes at Sasser with the two new plants that Louise mentioned there. And in terms of tailings management at Sasser, we've managed to put 77% of our tailings either back on the ground through pace backfill or onto the dry stack landform, thus preserving PSF4, which is the last retailing facility for 2034 and beyond. So if we look at the capital outlook and allocation, if we can jump forward two slides, please. Thanks. We've made really good advances across the entire exploration portfolio. Just a little more detail of what we've spoken about before. So the Camel XD, which is 100% owned by us, we have the option of an additional project in the Tengiz Basin. This is a highly prospective region for sediment-hosted copper, and it also sits adjacent to the system license that we've got already. We've undertaken some field work there. The minute we got hold of that option and have delineated drill targets with drilling of about 4,600 meters planned, in the latter half of this year and into 2027. So that's a highly prospective license that we've got hold of there. And that option is for three years and we can extend it for another year basis exploration results there. CamelX continues to churn through its licenses. Excellent team out there. and we've had maiden drilling programs, very exciting, at Occia and Usnoia. 4,300 metres were drilled across 15 diamond holes and actually we've intersected mineralisation in both. At Occia a structurally controlled polymetallic mineralised system was discovered with visible sphalerite and galena and at Usnoia we've actually looked at the core and seen copper moly mineralisation and this system extends over 1.2 kilometers of strike. So, assay results, we're all on tenterhooks for those coming in quarter three, and those will guide future explorations on those two licenses. The third license we focused on in Kazakhstan was Cheyendi. That was a geophysical survey that we've undertaken. We're in interpretation mode there to generate drill targets, and we'll decide on where to target that drilling in the second half of this year. Aberdeen Minerals, I think we've both spoken about that a fair amount. Effectively, we financed Phase 3 drilling through that first warrant exercise. Phase 4 drilling will be financed through the final warrant exercise of $1.15 million. That will take our shareholding up to 38.9%, so wishing Fraser and his team in Scotland all the very best for that fourth phase of drilling. And in terms of growth, on the next slide please, we've made lots of progress. We've been talking about adding an asset to the business, and the proposed transaction with Cygnus is reaching its final phases here now. We've effectively put out the scheme booklet, which is the one that gets lodged with the Australian Exchange. That was published on the 13th of August, and the UK circular to support the UK shareholder vote was published on the 14th of August. Now, just to remind you, it was an all-share transaction. We value the Cygnus equity at around $232 million Australian. And we're targeting completion in October this year. So if all goes well, there are two key dates in that timetable on the right-hand side. Fourth of September is the Camel shareholder vote. So those of you listening in, don't forget to lodge your votes by the 2nd of September, please. And the Cygnus scheme meeting occurs on the 18th of September where the Cygnus shareholders will vote Now we do have both boards of directors strongly recommending that our shareholders vote in favour. We've had proxy advisors, Glass Lewis, ISS and PERC all on the camel side suggesting that shareholders vote in favour as well. And the scheme booklet I mentioned earlier sets out all of the advantages and disadvantages of the scheme and I urge any Cigna shareholders listening today to have a careful look at that and vote accordingly. Assuming this completes in October, what we really end up with is more copper exposure in the business in a tier one jurisdiction. So really populating that area of the pipeline between the early stage exploration we've spoken about and the operations that are underpinning this excellent set of financial results. So if we move to the next slide, please, just a reminder to our shareholders of what we're buying. The Shibutomo is a high-grade copper gold suite of assets in the tier one jurisdiction. There's effectively five copper-gold deposits, most of which are located within 30 kilometres of an existing processing facility. Now, this processing facility will need significant refurbishment and upgrading, but it is a brownfields opportunity for us that sort of accelerates permitting and timetable to production there. Cygnus had started a preliminary economic assessment. That's been underway and they needed to do quite a lot of drilling under the Australian rules to sort of get a lot of the resources into the PEA. We will continue with that drilling program. We'll also continue with that PEA study which will probably be published if all goes well sometime early next year. Not only have we got these five deposits but there's also significant exploration potential if we go to the next slide. you know this is a district that's produced over a million tons of copper and three and a half million ounces of gold historically so we really are in elephant country here and if you look at the the uh i guess there's five plus copper rand um on the left hand side that's the the sort of five core assets that will form that 6.4 million ton uh it moves an indicated resource with that 18 kilometer strike length all of those red arrows that you can see on that chart show you where the mineralization is either open at depth or a long strike. So there's a lot of exploration potential there, a large existing data set that the Cygnus team has been analyzing and we will continue with the same team in Canada, remember, so we're not looking to change the team up at all in Canada, so we'll have a lot of continuity in terms of exploration knowledge and driving the exploration potential of this suite of tenements that Cygnus has pulled together. Not to mention that Cygnus itself has actually increased that resource base by 78% just to show you what potential actually exists with this suite of tenements that exist out in Canada. So, you know, key dates there, as I said, 2nd of September for our shale and 18th of September for any Cygnus shales that are listening in today. Final slide in terms of our outlook for the year, you know, as I said, a couple of times now we still benefiting from very good prices both copper and zinc and we expect that to continue for the rest of the year and that is going to drive you know good revenue as we look to achieve our 2026 full year guidance and we're on track to to achieve that both at Conrad and at Sasa. Spoken about the shareholder votes in support of the Cygnus acquisition one thing I didn't mention earlier that we have a TSX listing application underway also in support of the Cygnus transaction that's gone particularly well we're waiting for a conditional approval from the TSX you know within the within the next few weeks certainly in time for the closing of that transaction and then as you know all of the technical guys in our management team which is three of us plus others all waiting on tenterhooks for those assay results to come out of Kazakhstan because the call certainly looks interesting but the proof of the pudding is still awaited so looking for that and then in terms of capital allocation going forward you know AP dividend we're very pleased to announce that today 40% of our adjusted free cash flow CapEx of both operations moving forward now is really just going to be sustaining CapEx and guidance, as Louise said, we are looking to land within that $14.5 to $17.5 million range. Cash on the balance sheet of $97.2 million provides us with a huge amount of optionality going forward, both in terms of investment into exploration, both Kazakhstan, Scotland and Canada, and at the same time providing our shareholders with a look through value in terms of capital returns there. So a lot of flexibility and optionality now moving forward with Camel and the cash generation underpinning all of our growth ambitions. I think we set up for a really good future for the business. So thank you very much all for attending and listening today. I think it's time to hand over to the floor now for questions.

Thank you very much, sir. Ladies and gentlemen, if you could ask an audio question. Please press star 1 on your telephone keypad and just make sure that your line is not muted. That is star 1 for questions. Our first question today is coming from Laura Chan, cloud from RVC. Please go ahead, Laura. Your line is open.

Hi, morning. Morning, Gavin, Louise. Congrats on the results. Just one question from my side. Mainly on capital allocation, the H1 payout was at the midpoint of your policy, with the transaction completing soon and should promote development spend ahead how should we think about the h2pr ratio and the theory capital allocation framework change structurally post-close and i guess just a related question is how should we think about your traffic's profile on a good level with the next kind of 12 to 24 months worth that development spend likely to come in okay um thanks laura so in terms of

The dividend, we made the decision a year ago as a board to get the dividend back into policy, and I think that provides us with the flexibility to finance both capital returns and also our growth ambitions. And the AP dividend is, as I said, right in the middle of the range of that, and I think, apart from you, Laura, I think it would be mostly discrete consensus expectations. But look, and I think the same remains. I think if we continue to benefit from really good commodity prices, that'll give us a little more firepower to keep the dividend in that sort of towards the mid to upper end of that range. But at the same time, we will have a larger shareholder base if the sickness transaction closes. So there will be necessarily be some dilution on a per share basis of that dividend moving forward. But we will look to continue to pay a dividend and depending on what we end up doing with Shibugamo and the timelines there, we'll have to flex within that policy in order to finance the development there. So in terms of development capex, the second half of your question, look, we've got, I think Guriza set out quite well what the rest of the year is for the Kazakh exploration. and sort of set out in this presentation as well. Shibugamo, we've got a fairly good handle having spoken to management there over the last few months of what we're going to be spending. So, you know, I don't think it's going to be an enormous amount of money for the first year. Certainly, we're going to be completing drilling programs. We're going to be completing that PEA. and looking at options to accelerate into a DFS and it's really once that DFS starts that the capitalist, well if you want to call it CapEx really, will start, development expenditure will start ramping up probably into the latter half of 2027 and into 2028. So I don't know if that answers all of your questions. Just let me know if it doesn't.

Yeah, no, that's fairly clear. Thank you very much. Thank you very much.

Thank you for your questions, Laura.

next we'll be going to Nick Chalmers of Cavendish please go ahead I hope you well improved performance at SASA in the first half obviously you're still in the midst of the operational improvement program is there much more in the way of cost cutting that's that's going to be undertaken there or is it more about optimization of the the underlying performance going forward and how should we be thinking about per ton mining costs there in the second half? Do you think there's more improvement to come or is the H1 level the sort of normalised level we should be thinking of going forward?

Look as I said we're continuing to you know try and improve there Nick so I think you know probably a conservative approach would be to keep those costs flat um you know through the year if i were you you know we do we are looking for more operational efficiencies um the efficiencies around planning and making sure that we don't we're not presented with any sort of geological surprises which i think is the message we gave the market about a year ago we were struggling a little bit with uh with grade control and with drill density informing the planners and hence the miners so you know a lot of investment into that um has been made you know just to try and make that a lot more efficient and then as I said earlier there's a few mining efficiencies that are coming through but I think a lot of the cost it's an interesting one because you know we obviously always been a sort of cost conscious business but in the inflationary environments that we're operating in right now it does make it quite difficult to reduce the cost significantly so we're kind of fighting a little bit of a rising tide but as much as we can at the same time introducing all of the sort of initiatives and savings there as well so um you know next steps really once we get a you know a firmer grip on that asset you know we'd be picking it apart again and seeing if we can go beyond 2034 and looking at what the mine plan could be moving forward if we inform ourselves with a little more drilling as well so um quite a way to go yet but we are pleased to be seeing the benefits of some of those initiatives now reflected in these results one more question for me um

appreciate for Shibugamu until the transaction has got over the line but I mean assuming it all closes on on time what should we be thinking of in terms of timing of that PEA and budget to get there well in terms of timing you know as I said earlier we're probably looking at you know doing a little bit more drilling I think you know

The Cygnus continues with the drill rigs on site anyway, so we're just going to be picking up that program and pushing it forward into the middle of next year. And then once we've got a handle on those resources, we could drive that into a PEA that's been run in parallel. So we're probably looking at quarter two, quarter three next year.

some might depend on one of the things we've talked about is obviously you can make changes to your approach after a PEA but we want a PEA to reflect as much as it can at this stage what we want to do so one of the factors will be some trade-off studies that we plan to do where there's some obvious questions we've asked throughout the process would we go about that aspect like that would we change something else so it will be a little bit dependent on those kind of isolated pieces of work that we might do to feed into a PEA as well

So there's an opportunity for us to sort of pause, step back and have a look at different approaches. And we've already started doing that in conjunction with the Canadian management team of Cygnus. So we're trying to, as best we can, to hit the ground running in September, but there may well be some reflection on the way forward there. And in terms of budgets, I know that the finance team has been working together with the guys in Canada again to set out what we're going to be doing and

um it's fairly modest for 2027 at least first half of 2027 just you know finance probably you know two to three weeks plus uh the gna there and the study works yeah i mean again it depends on what we choose to do but we will be probably in terms of the drilling and the kind of run of the business we we'd certainly be talking millions rather than tens of millions so yeah thanks thank you

Thanks to be going to Richard Hatch of Barenburg. Thank you.

Yeah, morning. Thanks for the call. Just two questions. The first one is just on strategy. So, obviously, with Chibigamo being a bit longer dated in terms of volumes, how should we think about possibilities for additional sort of near-producing transactions? I mean, just looking at your portfolio as it stands at the moment with the exploration potential that you flag and also perhaps some improvements that some of the existing operations should we view that the potential for a near producing additional asset is probably lower than the more probable and the second one is just on working capital I mean it was just very well controlled again just a small sort of increase in working cap but should we think about any working cap movements in the second half thanks

Okay, I'll take the first question and hand it on to you. Thanks, Richard. So in terms of strategy, look, I think, you know, if the sickness transaction closes, then clearly our focus for the next 12 months is really going to be integration of that asset, you know, setting up the direction of travel to get through to a feasibility study and a production date. So that's, you know, the next 12 months is going to take up a lot of our focus and management time on that. We've got a pipeline of opportunities and we've always kept warm in the background. But let's assume that Cygnus does close, so I can't see us doing anything else significant for the next 12 months. But once we've got that set up and running and we're happy with the way it's, you know, with the direction of travel and we've got a firm focus on what we're looking to achieve and a timeline to production there, then we may or may not have a look at something else. And it depends on what comes along. As you know, you know, this is not an easy exercise, BD in the junior mining space and particularly in the base metal space. But, you know, we always say never say never. We do have that flexibility on the balance sheet. So we've proposing all share transactions so that we can have the flexibility to finance our growth ambitions. I'm not saying we're going to go and spend a huge amount of money on a new operating asset, but if an opportunity arose for a merger with someone that's operating or close to operations, then clearly we'd look at it if it made sense for the shareholders. But I can't see us doing anything significant in the next 12 months.

on the working capital yeah um yeah Capital. Yeah, I suppose a couple of things just top of my head would be on the inventory side, we'll still push harder at Sasa. We've done a lot of work and a lot of analysis. I think it had got a bit too high, the inventory, but we've also put a kind of system in place to better analyse what we need, how quick items can turn over, how long it takes to reorder certain items, making sure we're not being overcautious, but ensuring that we've got a key key items to ensure production continues. So that's an area we'll still carry on focusing on. The other thing off the top of my head that you might see is in terms of payables, the tax aspect in Kazakhstan. So it looks quite high that we were owed money back from VAT in terms of receivable. We've actually got, I think we've got a couple of million back since the 30th of June. But then on the sort of payable side, there was that aspect I mentioned about CIT so you end up paying your tax on the profits from the previous year but obviously commodity price has been higher than the copper price in particular so we'll end up owing money on CIT in cash terms by the end of the year. So we've decided we're going to pay that in kind of effectively equal installments from August through to December. So by the time you see those accounts in March, then that will be more normalized as well. So those are the three aspects in terms of receivables, VAT, payables, CIT, and then keep pushing on the inventory aspects as well.

Very clear. Well done for keep pushing at it.

Thanks for your time.

Thanks.

Thank you, sir. ladies and gentlemen once again if you have any questions or please press star one at this time pause this moment we do not appear to have any further questions coming in mr fairer alexander call back over to you for any additional or closing remarks if Thanks, George.

So thanks, everyone, for joining us this morning to attend this presentation of our results. If any other questions come up, please, you've got Richard's address and details on the slide there. Please direct them there, and we'll do our best to get back to you who have asked questions as quickly as possible. Lastly, I'd say, you know, again, just to reiterate, there's a couple of key votes coming up. Please do exercise your right to vote. So thanks very much for that, and Once again, for your continued support of our business. Thanks very much and good morning.