Metals Acquisition Limited

I would now like to hand the conference over to Mr. Mick McMullen, CEO. Please go ahead.

Thank you very much and thank you everyone for joining us. I'm joined on the call by our CFO, Mornay Engelbrecht. I'll run through the slides and these will be released as well so that everyone can refer to them at your leisure. So this is our second quarter 2025 quarterly presentation. Obviously, this is the usual disclaimer at the front that people can read at their leisure. uh and if i go to slide four you know in summary um you know look mac copper at a glance it's a well capitalized low cost a high grade copper mine in a tier one jurisdiction and we're trending towards greater than 50 000 tons of copper by by 2026. uh obviously during the quarter we we announced the transaction uh with harmony to sell The company, in the absence of a superior proposal, at $12.25 US a share, all cash. And there's been various announcements made about that. We are on our growth pathway. We have a very strong balance sheet. At the end of 30th of June, we had about $196 million of liquidity. And Mornay will run through the components of that here shortly. Um, you know, we have been advancing our key growth projects, which are the ventilation project and the Marin mine. Uh, and we did the refinancing and, and we'd sort of said that we wanted to have, um, less than 20% net gearing, which is where we are. Uh, and again, there was separate announcements about that, but you know, that has reduced our interest costs by around about 14 million us dollars per annum. Um, it's reduced our interest rate to, to floating rate, just under 7% right now. and we had 102 million US dollars of actual cash on the balance sheet at the end of the second quarter. So overall, we ended Q2 in a really good position. Moving into the next slide, that position is always underpinned by operations. We've got a slide on safety here, and very importantly, we've seen a significant improvement in our safety record. We produced just under 10,600 tonnes of copper, which was a 23% increase quarter on quarter. And like we've said before with CSA, you know, we can produce anywhere from 2,000 tonnes of copper in a month to five and a half. And in the month of July, potentially 6,000 tonnes. It really comes down to where we are in the stope sequencing. And also, I think, you know, in the full form quarterly production, We made some commentary in there about, you know, how disruptive it is when you have a transaction like we announced. And that was certainly the case here during the first quarter and April as well, which, you know, if you look at how much we produced in April versus June, there was a significant difference there. Grade was great, you know, 4.4% copper grade. It was an 8% increase quarter on quarter. We hit a few records during the quarter. So under our ownership, the most copper produced in a day, uh was actually i think the 30th of june was 385 tons we had quite a few days around the 300 ton mark uh c1 for the quarter was was a good dollar 48 us a pound uh whenever we talk about numbers it's always in us unless especially stated otherwise uh and that's consistent with the goal of where we said we thought we could get the mine to and and really pleasingly you can see in the month of june we're at 94 cents a pound c1 so um overall you know good operating results everyone sort of settled down at site after the transaction was announced and then really delivered for us record quarterly operating free cash flow for us of about 42 million us dollars and we do note here that the first Glencore contingent payment conditions will likely be satisfied in August of this year. And in the absence of the transaction that's proceeding right now, that would then get paid in June of next year. We've had really strong production the last few months. We're maintaining our guidance of 43,000 to 48,000 tonnes for the year. I would say we'll be in the sort of bottom half of that maybe. Grade, you know, again, keeping the same grade, not withstanding the fact that we have been producing well above that grade. We do sort of see the stope sequencing towards the, I guess, the middle to the back end of the current quarter will start moving into a bit of that lower grade material. And then again, towards the back end of the year, we'll see a pretty strong run in terms of production and grade. Growth CapEx and Sustaining CapEx, again, maintaining those guidance ranges where we're tracking for those. Again, you know, the Harmony transaction, you know, we have announced here in the last day or two that the restructuring agreements that were required with both Asisco and Glencore for Harmony have been executed, got various CPs in them still to be satisfied, including, you know, the votes and Ferv and Saab, but that has allowed us to schedule a Jersey court hearing, the first court hearing for 30 July, which will then allow us to dispatch the circular on the 4th of August and targeting a vote date of 29 August at this stage. Expiration, I've got a little slide at the back. We don't really give a lot of information on expiration these days because quite frankly, I don't think the shares trade on the back of the, exploration results that we get, notwithstanding that they are world class, but we've got some interesting stuff happening on exploration as well. So look, our key goals for this year are really consistent, safe and low cost high grade production, which we are delivering on. Progress the Harmony transaction to close in the absence of a superior proposal, advance our ventilation project through, get first order out of the new Merrin mine in Q4 of this year and maintain balance sheet strength. And I think, you know, based on Q2, we are absolutely delivering on all of those things. Safety and TSF, as I said, you know, safety had, our TRIFA had been a bit sticky for about the first year, but you can see a very sustained reduction there, which again, against the backdrop of all the sort of corporate goings on with site visits and uncertainty around a transaction has been very pleasing. The team have worked really diligently to drive that incident rate down. Again, no reportable incidents for last year and none this year either. The stage 10 TSF embankment works are progressing well. They're on track for completion in the fourth quarter of this year, which is one of our, I guess, our three main capital projects for the year. And, you know, pleasingly, we worked or our team worked with the regulator to get a reduction of $4 million Australian dollars in our environmental bond, the RCE, so that was good. We also donated 100,000 Australian dollars to the local Cobar Shire Council's museum effort, which is really important in terms of selling Cobar as a destination and why mining is so important out there. And as we've always said, we're quite happy to put money into the local community because that's basically where we operate. On the recommended transaction with Harmony, obviously a lot of work has gone into both getting to announcement, but also then the restructuring agreements, and both ASISCO and Glencore have worked with us and with Harmony to get those things papered up. And again, the timetable is being published there, but we are working towards a vote date on the 29th of August. We will also hold our annual general meeting on the same day as well. And the circular, as I say, will have a pretty fulsome, you know, description of the transaction. We'll have a pretty fulsome background of the transaction. And that is planned to be sent around on the 4th of August at this stage. Record date is the 29th of July. So, you know, unlike in Australia, relatively long period between record date and vote date. But, you know, everyone has plenty of notice, I think, at this point. So production, as you can see, big jump on the previous quarter, which had been a bit of a slow start to the year. Really, a lot of that came in from the back part of May. Certainly in June, you can see the impact of a 6% copper grade in the month of June. Lots of copper coming out, very low C1, obviously. And grade has been in excess of 8% for much of the last couple of weeks of June and extending into July. As of yesterday, we produced 4,500 tonnes of copper in July. We expect this month to be somewhere in the order of 5,900 to 6,200 tonnes of copper at an average grade of around about 7%. And you can see some of that super high-grade ore coming from the bottom of the mine. You know, that is CSA. We've spoken about this many times before publicly. You know, we have a small number of very high-grade, reasonably bulk-tonne stoves that drive our annual production. and as we explained after Q1 you know we just didn't have those online we had them in Q4 last year didn't have them really in Q1 and then we got into them in Q2 and now that's extended into Q3 so you know I guess that is that is CSA for you right like it isn't a porphyry where we've got the same grade plus or minus a couple of percent for the for all year it's it's we have a small number of big high grade stoves that drive our production. And that's why we get a bit of volatility in our quarter on quarter production. You can see there we had a fair bit of concentrate laying around and that is that pile has only grown, you know, great results on costs, you know, obviously all in costs continuing to trend down, you know, notwithstanding, obviously just small amount of general cost escalation. The plan, again, has continued to demonstrate it can produce it far in excess of what we currently can mine. But that's why we're developing some other raw sources. And again, as I said, for the rest of the back half, I suppose, of the Q3, we do expect grade to moderate a bit, reasonable bulk tonne each stopes, but grade to moderate a bit. And we do have a planned... change out of some of the concentrate filter plates in August. But even so, we expect Q3 should be a reasonably strong quarter, particularly in this instance, we've actually started off with our best month in the quarter with July as opposed to having to come home with a wet sale, which has been the case in a few of the other quarters. So in general, we're pretty happy with the way sites settled down. They're operating really well. The team's all going well. We've made a few changes as well just to sort of, you know, get people enthused and add some extra resources. We've been bringing in some extra equipment. Now that we can probably utilise that, you know, we might as well put that extra equipment into the mine. With that, I might hand over to Mornay, our CFO. He can talk to the next couple of slides in terms of the financials.

Thank you, Mick. Good evening and morning, everybody. I'm going to slide 11 now. This is covering the overall capital expenditure and development meters, where we had another record on the MAC ownership and development meters for the quarter. So overall capital expenditure, as you can see, they increased by around 85% quarter on quarter. So this is mostly driven by, obviously, the increased activity around the vent project and the marine mine. which Mick will go through next, with the development metres overall increasing to that record-breaking 1,196 metres for the quarter. That's obviously under MAC ownership. With the Merrimine development, metres increasing by around 65% to 530 metres, and the Vent project increasing by 125% to 564 metres. So this translated into growth capital expenditure for the quarter, increasing by 139%, and this is mainly driven by those two key projects for us in terms of the Vent project, which is around $7.3 million spent for the quarter, and the Merrimine, which is around $3.5 million US for the quarter. Obviously, very pleasing to see those two key projects being executed really well by the team at site, and obviously to plan with the Merrimine coming online in Q4 this year. On the sustaining CAPEX side, that mainly consists of the stage 10 TSF, which is stepped up a gear and progressing to plan. And that's sort of a mark for completion in Q4 of this year as well. Moving to slide 12 now, and the all-important cash flow waterfall, where there's a number of key drivers to keep in mind that impacted the cash flow over the June quarter. Firstly, we had another record for the quarter on the MAC ownership, as Mick mentioned, relating to free cash flow from operations. And that's obviously after sustaining CapEx, which amounted to around $42 million US for the quarter. This was mainly driven by that 23% increase in production. The 8% increase in grade obviously made a big difference as well. And then there's a 3% increase in realized copper price over the quarter that added to that number. Secondly, as you can see, our interest costs have significantly reduced over the quarter. And that's after refinancing was completed in March, where we are starting to see the benefits of reducing that average weighted interest cost by more than 30% through that refinancing. And we're definitely well on our way to realize that 14 million US of interest savings BANM. Then moving to growth capital, which incorporates the Vent Project and Merrimine, as I said before, and then exploration as well. This ramped up for the quarter, a total cash spend of $13 million, which drove that development, which was driven by that record development leaders done in the quarter as well. Our senior facility still sits at $159 million, and we maintained a drawdown on the revolving facility of $66 million. dollars us as well with 102 million us and bank cash the bank at the end of june which leaves us with that net debt figure of 123 million dollars us uh and as mika said that's that's that's way under 20 so we're just over 17 at the moment in terms of that net gearing ratio uh we also had a very healthy 196 million uh us in liquidity that's almost 300 million aussie available to us at the end of the quarter, and that consisted of that under-owned revolving facility of $59 million US, outstanding QP receipts of 11, unsold concentrate at 30 June of 18 and a half, and then that investment in polymetals of around 5.5. That's still doing great for us. Finally, on the contingent copper payments to Glencore, we currently anticipate that based on the average daily LME closing price, over the last 18-month period leading up to June that the condition of the payment for the first contingent payment will be met around that August of this year, as Miki's previously mentioned. So under the terms of the CSL agreement with Glencore and the inter-creditor deed, that obligation to make that payment is deferred until the earlier of the payment being permitted by the current debt arrangements, and the three-year anniversary of when MAC actually acquired the CSA copper mine. So we therefore expect that the first continued payment, as Mick has mentioned, will become payable on the 17th of June, 2026. Given MAC's current liquidity position, the company expects to be able to fully cash settle this obligation when it becomes payable. So overall, a very strong and healthy balance sheet position at the end of the quarter with that $102 million of cash at bank and $196 million of liquidity available to us. And with that, I'll hand back to Ben.

Thanks, Mornay. And yes, as I sort of showed on that photo, we had even more concentrate last week sitting at the mine. And so, you know, we have a significant amount of liquidity over and above what's actually that 196 as well. So, you know, again, we've shown this before. Really, there's, you know, we're sort of all on track to moving towards that 50,000 tonne mark or greater than. Those key projects, you know, obviously the Capital Vent project and the Merrin mine, you know, that's where our, you know, growth capital comes in. And you can see clearly we're doing a lot more metres of development. We're buying more equipment for those projects. And therefore, that's why the capital spend is going up in those. And again, that's consistent with what our guidance is. So we are delivering on those things. And then, you know, the mayor and mine, we are moving fairly quickly on development out there now. The exploration team have also continued to sort of close out the drilling out of Cutia South Upper that we're, I guess, about halfway across or a bit more than halfway across. And they've drilled out Pink Panther, which has got some other material that is potential to be mined as well. Lower grade than Cutia South Upper, but it's still there. And this area of the mine has independent firing. The development rates in this, as you can see from the previous graphs, are materially faster than what we get at the bottom of the mine, just basically because it's so much easier and we can fire independently from the rest of the mine. So it's progressing quite rapidly there now. You can see that little schematic there where we are and you can see the sort of the ore body just on the very left of that thing there. So, you know, additional ventilations going in. You know, we are well on track for this. uh again we sort of said you know it's very slow to get started on it because you're interacting with the existing mine up until you get to independent firing and now that we've got that now now we can go much much faster so um that seems to be going pretty well up there um And, you know, not only do we have that sort of Q2 South Upper stuff that we're developing out to, but there's a series of zinc stoats that are being planned and some copper areas there that are not currently in resource. and we're sort of in the process of drilling that stuff out and sort of getting a plan around going to mine that stuff. So during the quarter, you know, you'd have noticed Polymetals has announced they've recommissioned their concentrator during the month, so that sort of, you know, that is up and running to provide the processing route for the zinc ore. We still think it'll be towards the end of the year before we would be ready to send some material to them, but we are certainly making plans to do so. Ventilation project, again, we are starting to spend a fair bit more money on this thing of part of your capital budget. If you want to get your project done, you need to spend your money. And we're not that far away from starting the vertical raise boring works on that as well, which will be the next sort of key phase of that project. Finally, exploration. We don't really talk about exploration much anymore. No one sort of seems to give us much value for exploration. The exploration team are quite excited. They've sort of done an EM survey about 15 kilometres north of the mine. It has picked up a very strong anomaly that looks quite similar to what we have at the CSA mine. So we have very quickly moved two drill rigs onto that. and we are currently drilling that and we shouldn't be far away from hitting the target zone on that. So we think that's quite an exciting area for us to go and try and explore. If we can find a CSA style ore body, that could be pretty interesting. So we'll come back to the market if we find something material on it, certainly ahead of the vote date so that everybody has the full amount of information. So closing off, you know, just in terms of our goals for this year that we've sort of been pretty consistent about, you know, we are accelerating work on many of these projects. I think we've having near enough to 300 million Australian dollars of liquidity on the balance sheet for a company our size would definitely tick the box for a strong balance sheet. I think the fact that we managed to, you know, get the C1 in the quarter down to $1.48 US a pound, but clearly June at 94 cents was pretty good. And if we produce more copper in July, well, I guess it's going to be even better. And then there's been a large amount of documentation required for this Harmony transaction. And so we've now managed to get that out of the way. And now we're moving forward through to getting organised for the vote. So with that, that's really the summary of the second quarter. I think overall, it was a great result from a safety point of view, good result from a from a production and cost point of view. And as I say, July has been quite exceptional as well. And so we think given where we started the year at the end of Q1, you know, where obviously we were a bit behind where we needed to be, we've now caught up and gotten a bit ahead of where we need to be. And that's always a good spot to be in as you're coming into the end of the year. So with that, I'm going to open up the floor to questions if anyone's got some.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2 and if you're on a speakerphone, please pick up the handset to ask your question. We'll pause momentarily for any questions to register. Once again, if you wish to ask a question, please press star 1. Thank you. There are no questions at this time. I'll now hand back to Mr McMullen for closing remarks.

Okay. Well, look, I appreciate everyone taking the time to dial in. Thank you very much. And we'll be back to you as we progress the transaction.

Bye. And that does conclude our conference for today. Thank you for participating. You may now disconnect.