Metals Acquisition Limited

Thank you for standing by. This is the conference operator. Welcome to the Metals Acquisitions Limited second quarter 2024 results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Mick McMullen, CEO of Metal Acquisitions Limited. Please go ahead.

Thank you and thank you everyone for joining us, evening in North America and morning in Australia. This is the Metals Acquisition Q2 quarterly presentation. and we'll just go through to the slide with the list of speakers today, if we can, to run through who will be speaking. So I'm actually Nick McBowen. I'm the CEO. I'll run through the highlights. Mornay Engelbrecht, our CFO, is on, and he'll go through the more financial metrics. And then Rob Walker, our general manager of the CFA Copper Mine, is on, who can give a bit of colour in terms of how... how the quarterly went about and some of the more important projects and the like that we have underway for the future of the business. So if we can just go to the next slide, I think everyone would understand, you know, we own the CSA copper mine. We bought it just over a year ago out in Western New South Wales. We currently have 74 million shares in issue, fully dollar. We have about 78 million shares and based on the closing price on the New York exchange on Friday, we had a fully diluted market cap of about US$980 million. I guess the mine has been running for a very long period of time. Most people will have heard this before, but it's been running since 1967. Very well-established infrastructure, strong relationship with local stakeholders, and one of the things we think Cobar is a fantastic place to operate. It truly is one of the great jurisdictions to operate for mining. very stable regulatory tax and royalty regimes there and good relationships with our local stakeholders. So I guess the thing that people are really interested in is how our quarterly's gone. That's gone out into the market as of the last hour or so and the word record will get used a bit in this presentation because it really was a very strong quarter. So under MAC, you know, we produced a record 10,864 tonnes of copper, which was up 24% quarter on quarter. We had the highest daily production under our ownership of 265 tonnes of copper. The C1 was down about 11% quarter on quarter to $1.92 a pound. And our average realized price was brought in on the spot at $4.41 a pound. The balance sheet portion, we've got some slides coming up and I think I'll let Morne speak to that. Some other highlights during the course of the quarter were copper grade was up significantly, about up 20% for the quarter to 4.2% copper. And actually when we went back through the records, the month of June is the highest monthly revenue number in the history of the mine. Very strong quarter, I think, particularly in light of, as we go through these slides, we actually had the processing plant down for fairly planned maintenance scheduled in April. And so actually the bulk of the production was really through May and June. So it was a very strong quarter in light of that. We're on track for our guidance. We're tracking to the midpoint of the guidance that we put out to the marketplace, between 38 and 43,000 tonnes of copper for the year. And we've also, during the course of the quarter, we've announced a very significant increase in the life of mine, the reserve life taken out to 11 years. All of those deposits are open. We made a small investment in polymetals. which has the mine approximately 40 kilometres to the north of us, the Endeavour mine. We've also got some water rights as part of that, and it does give us a low-cost processing solution for anything we may be successful in managing the mine at some point. We've got some slides on capital projects coming along towards the end of the deck. And we spent just under $13 million of capital during the quarter, which is pretty well in line with the annualised $52 million that we said we'd spend for the year. So overall, it was a really strong quarter. If we can go to the next slide there, you know, we like to use these scorecards to sort of say, well, what did we say we would do a year ago? Where are we in that journey? For those of you who can remember the last quarter, these were all more or less green except the operational turnaround, which was still a bit of a work in progress. I think we've delivered a very strong result here. We think there's more to come out of the mine, but I think we can give ourselves a pretty reasonable score here compared to where the mine was 12 months ago. You may have also noticed that we've made some additions to the board. today and we've welcomed on a very strong candidate, Anne Templeman-Jones, to the board and that's sort of also been in line with our diversification and strengthening of the board with some strong Australian board members. We'll move on to the next slide if we can. We can dig into a bit more detail. And obviously, you know, it's all fantastic to have great production and, you know, increasing production and lowering costs. What does it all mean? It all comes down to the cash flow. And so with that, I'm going to hand over to Morne, our CFO, and he can run you through this slide and really be able to highlight, you know, what the benefit has really been for the business.

Thanks, Rick. Good morning and good evening, everybody. My name is Mourner Engelbrecht. I'm the CFO here at Mellis Apposition. I'll be taking you through the slide eight and nine at the same time, which covers the sort of cash flow waterfall for the quarter in US dollars and then also AUD from an AUD perspective as well on slide nine. And then going through slide 10 as well, just updating the capital structure. Also, please note that all these numbers are unaudited So just on slide nine, all the great work that Mick has been talking about in terms of all the records on the operational side and meeting our key goals really culminated in a great quarter from a cash flow point of view for the company. Our cash and cash equivalents materially increased by 25% quarter on quarter from $71 million U.S. to more than $88 million U.S., or in AUD terms, around $109 million Aussie to $134 million Aussie. And that's after inclusion of material one-off payment of $23 million US relating to stamp duty paid on the acquisition of the CSA copper mine. It was payable to the New South Wales Revenue Office and also includes an additional quarter of cash interest for Q1 on the MES debt, as well as almost $5 million or $7 million in Aussie captured in Q2 as well. Also key here is that we have some 24,000 trimetric tonnes of concentrate at site as of 30 June 2024. So due to this large component of concentrate produced but not sold, we decided to pre-sale a portion of this pre-30 June to match the timing of the cash outflow in the quarter. This resulted in some $74 million U.S. or around $112 million U.S. of cash flowing in from our operations, including those pre-sales and the quarter. Based on the terms of our offtake agreement with Glencore, RIF does not transfer until the concentrate is loaded onto the ship. So as a result, we recognize the cash, but not the earnings or revenue in Q2 or the half year. Another key point I wanted to make is that we still had some 8,000 geometric tons of concentrated port and site unsold. This represents some $21 million U.S. or $32 million Aussie of available liquidity to the company over and above the $25 million U.S. of revolving facilities available to MAC at 30 June 2024. The other key elements of the cash flow to note is the sustaining capex, as Mick mentions, almost $13 million, which is in line with Q1. And we also further reduce our interest-bearing liabilities by around $8 million U.S. and then paid interest, as I said, of almost $14 million, which, as I noted before, includes that $5 million U.S. in relation to Q1 interest on the MES debt. Overall, since we completed the oversubscribed equity raise in February on the ASX, which brought us in some $215 million US, we have repaid a total of around $140 million US in interest-bearing liabilities since the start of the year. So quite a significant reduction in those liabilities. We ended the quarter with more than $88 million in cash. As I said, with further liquidity of around $46 million U.S., which includes the undrawn $25 million revolving facility, and as I mentioned, the $21 million of unsold concentrate ready for shipment at 30 June. So overall, an extremely healthy cash flow position, and we continue to build on our strong banner sheet from the last quarter. Just moving on to... Slide 10. Just quickly wanted to cover off the capital structure. We did meet one of our goals for the quarter, which was the further simplification of our capital structure. As announced in June, we completed the redemption of some 15 million private and public warrants. We've almost 100% redeemed through cashless redemption mechanism that's available in those warrants. So we issued around 4.7 million shares to redeem those 15 million warrants. There were only some 1,026 warrants exercised from cash holders, for cash by holders, and then some 27,000 warrants redeemed for 10 cents each by the company. Overall, this now means that we have 74 million of ordinary shares on issue. We've still some financing warrants outstanding there with our fully diluted securities now down to 78 million shares. Also noted on there is our net debt, which reduced further over the quarter to some $320 million. Take into account we paid down that $8 million that I mentioned previously on the senior as well. So overall, a very strong cash position and reduction in net debt as well. from a capital structure point of view. So with that, I'll hand back to Mick.