Kenmare Resources plc

Good morning and welcome to the Kenmare Resources plc h1 2026 results and presentation. Such recorded presentation and rest will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q&A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin I would like to submit the following poll and I would now like to hand you over to managing director Tom Hickey. Good morning.

Good morning and thank you thank you all for taking the time to join us today to run through our half year 2026 results and while you're reading the disclaimer I'll just highlight that in the room with me I have James McCullough our CFO, Ben Baxter our COO, Cillian Murphy our Head of Marketing is also on the call and Catherine Sutton our Head of Investment Relations so we'll be running you through the the presentation today and hopefully answering any questions that you have. Just a few quick reminders about Climber's business we operate the MoMA titanium minerals mine in most Plc Plc Plc Plc And of course, if you're going to be in a country for a long time, you've got to behave well. And we believe we do. We're a good corporate citizen. We work hard to improve the lives and outcomes of the community around us, to contribute to the country, and to the economy as a whole. And I think that's recognised by us being included, once again, in the FTSE for Good index. And I'll talk a little later about our negotiations around a critical agreement with the Mozambican government, where I think you may have seen we've seen good progress in recent weeks. Our production, we produce Titanium Minerals principally, Aluminum Lime and Rutile. You use them every day, you see them every day. They're part of every day life. We're a decent part of the world market, about 6%. And Titanium Minerals are part of the critical minerals for Europe, UK and the US. So there is a lot of focus on them, but I think we're, you know, as we hear when we come to talk about the market, the market has been through a couple of ups and downs in recent years. To go back to my comment about investing for the long term, we have made material investments in recent years to upgrade our biggest mining plant, WCPA, to move to our biggest ore body, Nataka. Nataka is 70% of our reserves. It's the future of the company. All our mining plants will end up there and we've been working on WCPA to prepare it to work effectively at Nataka. It's taken a little bit longer than we would have liked and it's still a work in progress but Ben Baxter will run you through the good progress we've made there recently and what we expect over the remainder of the year. Our strategy overall, as I said, we want to operate responsibly. We have a 97% Mozambican workforce. We've spent nearly $25 million or over $25 million in working with community over the last 20 years plus. And for our own employees, we're really focused on safety. We had a really good safety performance in the first half. We're over 4 million hours without a lost time incident. Our lowest ever all injuries frequency rate achieved in the first half. So we're very proud of that. It's something that we work on every day. We're very focused on our industry position and operating effectively. We've done a good job so far in 26 in managing and reducing our operating costs and enabling us to run through this point of the price cycle. We do want to invest carefully and manage the cash flows that the asset gives us over the long term effectively. We paused our dividend early this year. It's been an important part of our investment case in previous years and hopefully will be again. But it's a sensible thing to do at this point in the cycle when debt is elevated. And we have made over 300 million in shareholder distributions since 2019. So it is something that we do think about. So just to maybe recap on the first half of the year. I've already talked about our sales performance and we're proud of that. But it has been a difficult market and we are just after a big capex program. we spoke to you all at the start of 2026 we spoke about our priorities for the year and in reality our priorities were to control the things we can to ship as much product as we can to generate as much cash as we can to manage our costs well to maintain financial flexibility and to continue to improve the performance of our assets and to continue our agreements with the government around the implementation I think we've made really good progress on all of those in the first half but there's still things we can hope to achieve in the second half So from shipments, we're on track to achieve our 2036 shipments guidance. We've had some really good successes in the first half with our new Xertai product. You may have seen that we're reporting that in sales now as opposed to accredited cost of sales. And that's because it's an important part of our production this year, but it will be an important part of our revenue mix for many years to come. This is something we trialed in 2024 with customers. There was strong take on it and we sold over 80,000 tons in the first half of the year. We've done a good job on reducing our operating costs, James will run you through that, maybe a little bit more to go there. The one area where I think we would like to see improvements in the second half is our Illuminate production. It's a little bit softer than we would have expected, and we kind of modestly adjusted our guidance to approximately 800,000 pounds, and we are on track to achieve all our guidance at the moment, with a close line needed on second half performance. On the financial side, you know our balance sheet has been an area of focus for us you know our net debt fences around a bit you've seen it increase slightly in the first half but you know cost discipline gave us a 12% reduction in cash operating costs our lenders as ever have been constructive they've assisted us with waivers where required and they've increased our revolving credit simply by 30 million dollars yeah we hope we won't have to use that additional flexibility but it's nice to have it there because you know who knows what happens in the future but look With the strong performance we had in the first half, we were cash flow positive before development topics in the first half. And development topics will be much lower in the second half. So we're managing what we can. We're maximizing our cash flow. We're paying attention to things on a day-to-day basis. And we're positioning ourselves hopefully to recover well when the market recovers. And on the market, we've seen some progress on Zircon in the first half. Strong price increases. And I think we saw a comment this morning in a manner very similar to us. We do expect to see those pricing cases maintained. Hillmines is taking a little bit longer. We don't currently see any near-term recovery, although we would be hoping for next year. But we're having some frequent price increases in recent months and Hillmines generally follows them, albeit with a lag. Just a moment on WCPA. We're making steady progress on the commissioning. Even in July and August, things have improved. and we're working to a consistent to to get us up to to maintain capacity um no fatal flaws in the project but it is taking longer than we'd like and we know it's a focus of investment and finally in this area just to talk a little bit about the implementation agreement um this is an area that you know we've focused a lot of time on um we work very closely with the government to move them we've had we've had really good engagements in the first half there was a little bit of volatility in the first quarter related to the tax authority but that's now concluded we've got no more issues we've had written assurances we continue to operate under the old terms and the negotiations have continued constructively I met the Minister for Mineral Resources in late July to really help the discussion help understand what was important to their key stakeholders which we already understood well but to kind of forge a path towards an agreement and I think what the technical team in Mozambique are doing is just trying to foresee any questions or queries that they might receive during development to approval or consideration of this by the Council of Ministers. We're in that usual part of the process now, the back and forth of comments, so while there's no express timeline, we're very hopeful this will be, the progress that we've achieved will be maintained. As you can probably tell, our language here is warmer than it has been in the past. We certainly feel that So with that, I'll hand over to James McCulloch who will run you through our financial results for the first half of the year. James McCulloch Thank you.

James McCulloch Thanks Tom and good morning everyone. Thanks for joining. In summary, as Tom outlined, we have faced challenges in H1, notably the market and what prices are for our products at the same time as we're wrapping up WCPA and that's taking a little longer anticipated. Those factors are certainly affected in our financial performance. If we start at the top line, average prices perceived were down significantly in the half versus both H1 last year, we were down 26%, and H2 last year, then 31%. So our average price came out at 242 dollars per tonne. That's a reflection both of the as well as changes in our own product mix, and I'll go through that in a little bit more detail shortly. Shipments were strong, as we disclosed back in July, 565,000 tonnes, that's up 13%, but that wasn't sufficient to offset the climate prices, so revenue outcome was 16% versus H1 last year. We did, as Tom mentioned, have a very strong focus on costs in the half and managed to reduce cash operating costs by around $15 million or 12%. I'll focus on that shortly. But notwithstanding that, we still saw the price impact fall through to the EBITDA line and came out at $4 million for EBITDA in the half. Net death went up to $176 million from around 1959 at the end of the year. That, as we've kind of seen over the, well, historically, that's a very lumpy metric. It depends very much on the timing of receipts coming in and cash going out. and we shared in our Q2 update that we had very strong receipts coming in at the beginning of July which sort of largely offset the increase and so the lumpiness is sort of part of the business but not something that's an increase of around $16 million. If you go to the next slide please. So just looking at a summary income statement You can see the revenue line there reflecting the markets in the mix. If we think about pricing for the different products that we sell, film and light pricing for the app went from $286 per ton down to $203 per ton. Zircon from around $1300 per ton down to $1100 per ton. The average price from $326 down to $242. Looking at that product mix, our actual percentage of zircon tons sold stayed flat, or went up a little bit from 3% to 4%, and zircon is our most valuable product, so that's positive. But it's really offset by the increase in concentrates that we have in the year, so that's particularly zirti, which kind of brought us from a concentrate 20% or as a share of actual revenue generated from 6% to 17% and those concentrates sell at a lower price and therefore impact the revenue generation through deterioration of product mix. Zeratai has been a tremendous benefit for us this year. Those sales came out of tailings that we previously hadn't valued so it is very much a positive story but we do see that Notwithstanding the lower cash costs that we had, the cost of sales is up significantly from $150 million to $175 million. That's really reflecting the inventory drawdown that we had in the first half. So we've said all along that shipments are our primary focus and we intend to monetize the inventory that we have accumulated. over the course of last year. That's provided very valuable liquidity for us. It doesn't provide as much EBITDA because we took an NRB adjustment to it at the end of last year. So EBITDA from those sales is largely passed, but it does contribute significantly to up from last year reflecting the increased debt that we have so we're we're up at around 200 million dollars of debt drawn and and all of that sort of well not the finance itself but the rest falls through to lower EBITDA four million and uh all that falls through to the lower profit numbers so a loss after taxes for big four million dollars Just looking at the cost side of things, so the bridge from cost to sales to cash costs. First of all, admin expenses were down by around $3.5 million. That reflects the recognition of Illmanite stock, or the recovery of Illmanite stocks from a sale that we had made to a customer last year, which that customer went into administration. We recovered those stocks last year. and through the admin expenses line. There's also a reduction in head office costs there contributing to that reduction. We'll also see the contribution of inventory in the product stock movements of 20.5 million, so that's really reflecting that inventory drawdown that we had in the first half. And then when we get down to cash costs, you can see that reduction from 124 million to just over 110 million, so taking around $15 million out of the cost base. That's across all categories. So the major contributors there were labor, where our costs reduced by around $5 million, which is over $5 million versus H1 last year. Production overheads also came down by around $5 million. Major contributors to that was equipment samples. reduction in the amount of heavy mobile equipment that we're renting. And power, fuel and chemicals, so we had significant reduction in our diesel consumption and electricity consumption. So notwithstanding the increases in unit prices for those things, particularly diesel, reflecting the US Iran conflict, our overall power, fuel and chemical costs came down to around a half million And unit costs, notwithstanding the reduction in total costs, unit costs were up to $255 per tonne. And that's really the reduction in production overall. So a reduction in tons to absorb those total costs. And that applies both at the total cost line as well as the net demand cost line. and just to note Tom mentioned the DIA and the discussions ongoing there as we've discussed before we're accruing at a rate of two and a half percent on the on the other royalties that we pay under the DIA but we're only actually paying at one percent which are one percent being our So our total cash payments on that 1% royalty was 1.5 million and a half and over and above that we accrued further 2.2 million and that total accrued amount now is 7.9 million. Just looking at cash movements, you can see really that the standard feature here is the contribution of liquidity or of cash from the inventory drawdown. And as I said, given the net reliable value adjustments that we took predominantly to Illmanis at $14 million at the end of 2005, those funds don't generate significant EBITDA, but they do generate significant cash. That cash has been adored through both the higher interest costs but also sustaining capital. So sustaining capital we incurred $12 million of the cash outflow was 7 million dollars and a half leaving us with a cash flow before development capex of 6.1 million and the development capex outflow was 23 million dollars a large chunk of that 12 million dollars related to two spend from 2025 so there was 11 million of new in current effectively within 2026 H1 but a 23 million dollar outflow led to a $17 million change in debt. Looking at the balance sheets, just a few things to note. First of all, a large inventory reduction. So we had a 128,000 ton drawdown of finished products all in. That's a mix. We had more than that, around 140,000, 150,000 tons of humanite drawdown, but we also had The inventory value does include a further NRV adjustment at the end of page 1 of around $5.9 million. That's reflective of the current elevated unit costs that we have, predominantly relating to the WCPA ramp-up, in that the cost reduction is actually above the net realisable value of those products, and so we took a $5.9 million adjustment at the end of the half. The net current assets at 135 million, so a very comfortable position, a strong position on the net current assets side. We test for impairments at the end of each period at the moment and we had headroom of $67 million on that. And the RCF upsides that we did, so as well as the $30 million of upsides that we agreed with the Times, we also agreed a number of waivers and new covenants in the debt package. So new covenants are predominantly balance sheet related, reflecting kind of where we are in the cycle. and all of those problems have been met at the end of that. With that I will pass over to Ben.

Good morning everybody. I'll commence with the sustainability goals and how they've advanced in the year. To start off with let's talk about health and safety and We had zero LTIs and we've amassed more than 4 million hours now since our last recordable lost thumb injury. Over and above that all injuries are also down and this is actually our best ever half year or our best ever year for all injury frequency rate and To support thriving communities around the mine, we've now completed more than 95% of the building of a hospital, a district hospital, which supports the other KMAD health centres that have been built over the years. And then we've also launched what we're calling our Padrinia projects. This is the outsourcing to small micro enterprises within the local community for goods and services that can support the mine. That's a process that we've been working on for some time and it's now been launched this year. We continue to advance agroforestry and our waste management approaches. We get more yields from the farms that we support now and and more than 97% of our waste has been recycled. And then lastly on trusted business, our governance continues to improve and has been recognised by EcoVadis this year and on the ground to support the safety of the operation and the people there, we're making sure that take part in voluntary principles training. Moving to the next slide, I'll talk to the production. The highlight of the bar was the strong demand for the new product called Zertai. This partially upset the mining performance, where H&C production was down 34%. That was mostly 26% down due to lower oil at WCPA but also due to the lower excavator volumes that were mined at WCPA because of the slower conditioning and also the forced dry mining that took part that we did in Q2. Right now production is improving and as we expect it to do through the second half of the year and that's supported by the fact that WCPA continues to make steady improvements and also we're having very strong performance from the other plants, particularly from WCPA. Finished products were down 14% year on year and that was really down to the lower HMC production that I've mentioned. However, it was boosted by the concentrates production. The concentrates production was up 599% year-on-year and that's principally due to this new product reserve type. We prepared 102,000 tonnes of this former paling and converted it to saleable products during the first half of the year and we'll continue to draw down those stocks with sales during the second half. Shipments are our main principle KPI metric for the year. They were up 14% year on year. to meet demand through the first half. We drew down 128,000 tonnes of stockpiles and our stocks on site are now what we would say is at normalised levels. There is a remaining 17,000 tonne stockpile and so overall we've got improved production through the into the early part of this park and that's giving us the confidence around our Illini production which is expected to be approximately 800 000 tons for the full year on to the next slide and I'll talk a little bit more about the WCPA projects we've been making steady improvements as we've said and you can see that in the same profiles we sent 23 million dollars in the first half of the year of which 12 was an accrual coming from 2025 and we expect to only spend seven million dollars in the second half of this year as we spend capital on the preparations for the transition to TACA Our performance though has been underwhelming so far. We have not got to the nameplate capacities that we had expected to in Q2 and in the first part of the year we averaged 2,800 tonnes per hour compared to the nameplate of 3,500 tonnes an hour. There's a lot of focus on this area as you would expect. We had some good breakthroughs in Q2 and those continuing into H2. The feed preparation units were de-bottlenecked successfully and they're performing very well now. And the off-plant tails management has been made significantly more reliable at the identification paddock and at the tail storage facility. However, what's holding us back or what's limiting production at this moment remains the dredge and throughputs and utilizations are being addressed with the dredge supplier in order to strengthen the consistency of the feed that we can get into the plant. We had a good win in that we've redesigned with the OEM the Brookdredge winch braking system. That has been approved and we are now at orders of place and we expect to commission the new system in Q4. But we also do have remaining issues around the pumping system performance and that's our main focus right now. we are mitigating that with continued improvements in the way we operate the plants and also making sure that we have increased levels of spares available to us to bring those mitigations when reliability fails but overall we've seen throughputs and utilizations increase through Q2 into Q3 and we've taken an approach to make our improvement profile a more realistic forecast through the rest of this year and that's I'll also talk a little bit on the next slide, slide 17, about our selective mining operations and our expectation to increase production from those units in the second half of the year. You'll recall that SMO1 has been making a really valuable HMC contribution at particularly low capital costs and it's been delivering to the expectation. That's prompted us order a second SMO which will be SMO2. It will have some upgrades on it based on the knowledge and the learnings that we've had with SMO1 and those design improvements will be brought into place to eventually have a 1000 tonne per hour SMO2 in place. Construction of the first phase has just started and that will be for 500 tonnes per hour Phase 2 will follow on in 2020 and so with that I will pass on to Cillian who is going to deliver the master page.

Thanks Ben and good morning everyone. The first half of this year was challenging. We saw strong demand across all of our products. However, particularly on the Yeomanite side, there was sufficient supply to meet that and that's what resulted in the decrease in price through the first half. The second impact that's clearly impacting pricing in the first half was the freight. Following the US and Iran conflict in late Q1, we saw elevated freight increases, particularly on normalised shipments into China. And given the weak market, we've been unable to pass them through and that has impacted IRC prices further. The steady demand has allowed us to destock which I think James is talking about and that coupled with the strong Xertai demand and strong Xertai sales resulted in the steeper gradient of lower average prices across all products as the product mix worsened in the first half as a result of those sales. Zircon is the bright spot. We saw stronger Zircon price in the first half across all of our products and that accelerated in the second quarter. As we said previously we see that more of a supply constraint issue rather than an improvement in demand. Let's move to the next slide. We will talk about the supply and really the reason we've seen the weaker prices. We believe this is supply driven and coming from two main areas and centered around China. Firstly, the major reason is elevated ilmenite production in China. We've seen that increasing in recent years and remain at elevated levels. Encouragingly, the major region in China has reduced over the last 12 months, being partially offset by the increase in Xinjiang. But that's on the back of environmental reasons, which is encouraging. And the second place we're seeing strong competition is the import of HMC into China. That's increased again over the last 12 months. principally from Mozambique, but there are other regions in Africa as well. And that's stepping up their competition. It's important to say that still this product, both the domestic and the omelette contained in HMC, it's all staying in China, so it's captive there. It's leading to intense competition there, but it's captive. However, lower price in China, you have the ability to impact global pricing, and that is something we've seen really in the first half. And move to slide the next slide. Yep. Encouragingly, we are seeing strong demand and that's what supported the drawdown of stocks and the third side demand. It's all in the back of improving pigment conditions. So the graph on the left looking at pigment is Chinese pigment production so record in the first half on both sulphate and chloride which is a positive for us but what's particularly encouraging for Kenmare is that the chloride pigments continues to gain market share that is accelerating at the moment due to the high sulphur and sulphuric acid prices and we have customers that are ramping up capacity of both fluoride pigments and of beneficiation in order to take advantage of those market conditions. So that's a real positive for the demand for Kenmare type ilmenite. And even outside China, I think the last couple of weeks we've seen results from the Western pigment producers which talk of improving volumes and prices to levels we haven't seen recently. So I think encouraging both inside and outside China on the pigment side there. And on the metal side continue to see strong growth It's a market that we like in the market that likes our type of product and so when we will continue to try and push more of our own like towards Turning to the Outlook then on the next slide. Like those positive demand trends, continuous Q3, obviously we have to compete on price, but the demand is there. As a result, we see solid order book for the third quarter. One point probably important to make is in the first half, as we were slowing down stocks, that was predominantly IP2, so our lowest TI2 product. So as we move forward in the year, we expect a more balanced Illmanide supply mix and therefore higher value Illmanide products being sold. On the Zircon side, we expect the momentum to continue, particularly in China. We saw European prices more stable over the last 12 months and starting to increase now, whereas China decreased. uh so has a bit of patching up to do and we expect that to continue in the third quarter um finally just to touch with ben mentioned it on on our stockpile in malaysia we have title to it uh we understand that sales process is ongoing we're in discussions with the potential buyer and we would hope to be a supplier to that plant in the future so and yet we hope to see that come through quickly and the plant restarting and then we can restart our supply into it starting with that stock well and with that I will pass back to you Tom.

Thanks very much Cillian. Thank you for your time today. In summary before we move to Q&A you know at the half year we're still on track to achieve our guidance and deliver our 1.1 billion tonne shipments which is the The biggest objective for us and as Cillian said the first quarter demand and order book certainly supports that objective but of course we have a keen focus as well on achieving all the other metrics and particularly the continued ramp up of WCPA as we go through the work programme that Ben mentioned. But I think that there's certainly been some good achievements in the first half on all of those areas. And if we look more generally to business, a couple of things just to emphasise before we close. First, just to remind everybody, this is a world-class asset that's going to be around for a very long time. We're investing to be ready for that and to be ready for the recovery in our markets that maybe we're seeing signs of, but certainly A little more proof that needs to come through before we start to promote that a little bit more. But we are invested for it. We're ready for it. Our development topic is behind us. Our SMO, second SMO is coming to help maintain and increase our production. So we're certainly prepared. We've worked hard in the first half to keep operating across improvements as James said. and they've supported our liquidity objectives and I think that's been something that we've done well on in the first half and despite the wider geocidical uncertainty which obviously has caused some turbulence but I think we've managed so far to navigate it well and mitigate its impact. The nature of the moment, as Gillian said, the quality of our products means that we're a preferred supplier to most of our suppliers and our customers, and our customers stay with us a long time. They've been with us 20 years plus, we're amongst the first ones they buy, that hasn't changed. and that's what gives us the visibility on our sales and our order book and means that we can achieve our shipment objectives. As you can probably detect, we're certainly more hopeful regarding our position in Mozambique, our ongoing decision over implementation agreements, the eagerness shared by government to get that finished and to enable us to get back to our long-term investments in the business, in the community So thanks very much for your time this morning. We will now move to Q&A and take any questions you might have.

Great, thank you all very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would like to remind you that recording of this presentation, along with a copy of the slides in the published Q&A, can be accessed via our invested dashboard. Catherine, at this point, if I may hand over to you to chair the Q&A, and I'll pick up from Tom at the end. Thank you.

Thank you. So our first question comes from Colin Grant at Davey. He noted that production improved in July and August. How does this shape your outlook for Illmanite production in 2027?

Maybe Ben will hand over on that. I think that's something we will focus on over the remainder of this year and like our plans for next year. But Ben, do you want to do a bit more further?

Yeah, I was sort of going to say the same thing. You know, I think we are entering the transition back to the was an attacker with WCPA and you saw that the grades came down this year because of that and that will be the same next year so I think that's a main consideration there but to try and offset that we have the SMO capacity that we need to bring further into place and you saw in the table on the slide there that we have an increase of 1500 times per hour So it's certainly top of the line. We're going through, starting our detailed planning processes right now, ready for 2027 and that's where we're going to be able to get to by the end of the year.

Next question reported from Colin. Is there a price level where you expect oversupply in the Illmanite market to diminish?

you know on that billion but I think we are already seeing some distress amongst certain producers and I think once you know we talked about Chinese concentrate producers or concentrate producers generally you know one thing we should emphasize is they're very dependent on diesel as our primary fuel source and obviously very exposed to the cost as a consequence of that but billion I'll let you jump into a bit more detail on that yes uh okay I think I think that's a key point that we do hear and totally that these diesel prices uh coupled with the lower price

All finished products in the Chinese market are really hurting these concentrate producers. So that is an indication we're getting there. And then the other thing is we have seen significant supply come out of the market over the last 12 months as a result of those prices. And while maybe we're not seeing new announcements, I think we're also not seeing the restart of those. and that's because they probably would need it higher prices but it's not coming back in line at the moment because it's not possible to do so. So I think we're getting there but no clear sign yet that there's been sufficient product taken out of the market that's going to swing it in the near term.

The next questions or few questions come from Pete Malin Jones at Peel Hunt. First question. How much further cost cutting performance can we expect in H2 on H1?

We're looking at it very closely obviously, there's a couple of things that I see a potential Electricity and more time to produce electricity will consume. So that's probably a headwind against us We'll be looking to continue the programs that we put in place across all the different cost categories I think you know, I would certainly be able to offset that and I wouldn't be expecting that there would be significant Other other cost areas that will be able to again but I think it'll be a series of incremental benefits across all the different categories. So I think continuing on the same trend, keeping the sort of run rate that we have with small gains where we can find them.

Yeah, I mean, we haven't changed our guidance.

So, I mean, there's a message in that as well. Yeah, so we came out at, you know, we're right in the middle of guidance at the moment. Our guidance was 215, 225 this whole year. We came out at just shy of 110. and so if we continue that progress we'll be within that range. But we're looking at it very closely and obviously we'll execute on any opportunities that we do see.

Next question also from Pete Mallon-Jones. Can we expect to step up in realized Illmanite prices in H2 simply from selling more to Western customers than in H1? Does this come from a higher quality product mix or higher prices for like-for-like products?

Maybe I'll let you develop a little bit more Yep, and I think we'll guide on the H2 prices and you know, we've we said we could strong order book for quarter three and Well, we still have work to do on quarter four Freight will come into it. But I suppose what we're what we are seeing is that H2 will have a better product mix and that is supportive for pricing and but we're not seeing a step up in prices in the second half on the same product as the first half, so it's not an increase in prices, it's really product mix driven, particularly in quarter three that we can see at the moment. Yeah, I think that probably answers it.

Third question from Pete Maren-Jones. How big a step up in output at WCPA in volumes mine are you expecting when the new winch brakes are installed? Is that the single biggest factor in releasing increased asset utilisation?

It's certainly one of the big ones to get the utilisation but I think that you're looking at sort of between 10 and 15% is my rough answer to that in terms of how much extra utilisation we will get out of the plant. But there are also the ones which we're actively talking about. I mentioned the pumping system. The one where we placing most of our energies with the with the manufacturer right now so I did you know we are we in the H1 report here probably they've come up already by a good 10% and as I said it's in steady progress but before we sort of talk too much about those I'm looking for August and September to really get those numbers in and be able to be more sure about them then we get to the The winch break will change out in hopefully in the earlier part of Q4 and later part of Q4 and we'll sort of get that in by the end of the year and be able to see the true benefits of that. In the meantime, the pump system will be, we're working very closely with the OEM to get to a conclusion on that. So yes, there's more times to come. I'm confident that those things can be remedied. Where it's a bit more tricky to give detail is exactly how long it takes to fix those things because in some cases those pumping system challenges have not yet been resolved.

Next question comes from Justin Manoring at Barenburg. Making a more positive language around the implementation agreement, could you please provide a steer as to when you expect this to be finalised?

I'd love to. Look, I think we have to be cautious on this. The steps once we reach an agreement and an agreed form text with the MIRAM who are effectively the Ministry for Mineral Resources are that it goes to the Council of Ministers for approval and that's the key step. Council of Ministers meets regularly probably three times a month generally every Tuesday and you know we certainly are not far off being in that position assuming the current dimension is maintained but I think the experience we've had on this process you know reflect challenges that the government in Mozambique can have from time to time with other priorities emerging and you know so I think we just need to be cautious and note that there's no set timetable but we're very hopeful that they're as committed to maintaining the momentum we have at the moment as we are so I'm sorry I can't be more definitive but you know we've had a couple of false starts on this over the last year and year and a half and I don't want to promise something that really isn't within our control today.

The next question comes from Charles Lamport-Beal at Fortified Securities. Given the mixed results for H1 and promising outlook for H2 in 2027 Do you expect the $213 million RTF to be sufficient funding for production against a mixed and unpredictable economic and market backdrop?

At the moment we haven't drawn nor do we have plans to draw the additional $30 million. So the upside is from $200 to $230 million June. I think it provides buffer. We did have a shock or a surprise last year when the customer we had shipped tons to didn't pay, that was 9 million and now we've recovered substantially all of that plus equally we need flexibility to be able to do that and to make some of the investments that Dennis talked about in terms of selective mining operation too and renewal and as you know it's a very uncertain market and we're still working through the WCPA upgrade and as we've said we expect and we need the WCPA upgrade And so those are our expectations if there's deterioration from that then obviously we'll have to look at what capital we have available but that's the nature of being in the industry. at the moment is quite comfortable but I always say that looking at making sure we are prepared for anything that is going to be in the track.

Yeah, I suppose maybe just to say that the step up or the increase wasn't to address an identified need, it was just purely precautionary to reflect the volatility and uncertainty that is around the moment.

Please give colour on development capex going forward for the rest of 2026 and 2027.

So we said in this release that we will spend about $7 million in the second half of this year. Those monies are related to infrastructure. So as the plant moves into the transition channel and starts its move towards Nataka, we have to bring in additional pumps, additional pipes, and also electrical infrastructure. So nearly all of the 7 million relates to those sorts of items. Now there are rectification costs and debotting costs that the project has been taking on but they are so far small and they are sitting in the contingency and they don't make a large difference and of course many things are being done under warranty at the moment so they're not reflecting the cost of the project. Looking into 2027 it's a little bit more of the same. I don't have it to hand here but in our premium results that we published in March, there is a curve that shows that we have quite a tail in the development costs for the project as we progress quite a lot of distance into Metacra itself. That remains broadly correct. In fact, I think that certainly we've been looking at 2027 to see where we could reduce some of those commitments and certainly that's our focus. What cost quartile do you fit in? We've talked in the past about where we want to be. I think probably at the moment we're sitting in or around the midpoint.

and certainly our objective is to get well into the lower cost quartiles. Of course some of that curve changes as the mix of participants in the market changes and I think what we've emphasised, and Cillian talked about earlier, was certainly over the last couple of years the Chinese competitive producers have lower operating capital costs, they increase production quickly, but when perhaps the where resources or bodies are mining become more challenging, where costs increase, they can reduce that production quickly too. So look, I think we're comfortable that we're working hard to be as efficient as we can be and to survive through cycles and because of the long life of our assets, in many other cases we're talking about assets with much shorter lives.

Another question in a similar vein. Where would Ken Mair be on the global cash cost curve once the TACA starts production, assuming elevated diesel prices and your base case scenario for the IA?

Yeah, look, as Tom mentioned, the cost curve is moving around quite a lot, and certainly it has evolved significantly over the last couple of years, and you're now seeing Q1 of the cost curve largely amplified by iron ore miners for whom TiO2 is a byproduct, which means that it's we're sort of looking at Q2 really as where we would like to get to in the context of the overall industry cross-curve so that's over as concept left hand side of the cross-curve of mineral sales producers when the DACA is up and running and under the terms of the IA as you say I think it's concept we would be looking at being somewhere in the middle of Q2 would be where we would

Please give some colour on the underlying commodity market you're in. Why are the prices down? Is it a supply or demand issue?

Yeah, from our perspective, we see it as mostly supply.

We see the increase of production of ammonite in China and this new trend of shipping concentrate into China as Adding a lot of supply to the market and that's the primary driver. Demand could be better, I think, is the thing. We have seen slow housing markets in China, US, Europe. Improvements in them would give a boost. So demand isn't bad, but it's not as good as it could be. We would expect this to improve, but I think the primary reason for prices being down is an oversupply, mostly concentrated in China.

Now a question on dividends. For someone who relies on dividends to finance my retirement, when will we be able to receive dividends again on a regular basis?

Thanks, maybe I'll start with that and James can jump in. Look, as I said at the outset, dividends we recognise has been an important part of the investment case in the past and we'd like it to be in the future. I think we need to see an improvement in the market, we need to see an improvement in our balance sheet and I think that the important thing with dividends is when we recommence paying dividends that we can do it on a stable continuous basis. We recognise that we have investors on our register to whom this is important and we do speak to those investors regularly and I think we will give Good notice of our plans for resuming dividends or resuming shareholder return in any form as we navigate the next number of months and see how the market evolves. But certainly from where we stand now, maybe the easiest way to say this, the reasons why we suspended or paused our dividend in the first quarter of this year hasn't changed. And until they do, I think we'll have to assume that that will remain the case.

Why does the management team continue to be negative in relation to the company's announcements to the market?

I don't think we do, but the market, I mean, it's very hard to be unremittingly positive when your resource price is falling. And look, I think, you know, we have a responsibility to balance in our commentary and try and give people a fair view on what's happening in the market and what their expectations should be. It's worth noting, for example, that one of our peers, Eluka Resources in Australia, reported this morning, and if you read that commentary, it's pretty much exactly the same as ours. So I think we, you know, as I said at the outset, we have a lot of things we want to achieve this year and I think we've made really good progress on achieving them or working towards them and controlling the things that we have. And the team has worked really hard on it. You know, our shipments have been good. We're making progress on companies each day, albeit slower than we might have thought or liked at the start of the year. We're making progress on our implementation agreements. And, you know, we've stabilized and maintained our cash flow and balance sheet. And these are all the things that you do and the behaviors you show. Even the significant decline in the share price, does management believe the current valuation represents an attractive opportunity for long term investors and what key factors could drive a re-rating? We feel that can mayors well positioned for the long term. I suppose it depends on your investment horizon. It's worth noting that we all committed to investing our bonuses for 2025 in company stock and obviously there have been external factors that have limited our ability to do that. We all are holders of stocks. I think history would show that as price cycles turn Significant returns are achievable. And what we're trying to do is give people a view on how we see that trajectory playing out. I think many of our investors have been with us for many years, and they take a multi-year view. I suppose it just depends on people's investment horizon. Of course, there's risk at any point. But certainly, we believe that if we continue to control the things we can control, that can form well over the coming years, assuming our market Okay, thank you all. It was a good range of questions. I think we've got good feedback on the results today. You know, we've done a lot, but we've got a bit more to do in the second half of the year and we'll continue to report on that. And obviously, as ever, if you have any queries or questions or anything you'd like to follow up on or omitted questions on, please get in touch and we'd be delighted to respond and help you navigate it. Thank you all and have a good day.