Lundin Mining Corporation

Good day and thank you for standing by. Welcome to the Lundin Mining First Quarter 2025 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jack Lundeen, President and CEO. Please go ahead.

Good morning, and thank you everyone for joining Lundeen Mining's first quarter 2025 conference call. Yesterday, we reported our operating and financial results for Q1. A copy of our press release containing the details of the quarter and a presentation are available on our website where a replay will also be made available. All figures presented are in U.S. dollars unless otherwise noted. I would like to remind everyone that yesterday's results and certain comments on the call include forward-looking information. I will draw your attention to the cautionary statements on this slide for reference and our latest relevant filings on CDAR. On the call with me today, I'm joined by my colleagues, Titor Paulson, our Executive Vice President and Chief Financial Officer, and Juan Andres Morel, our Executive Vice President and Chief Operating Officer. We will be presenting our figures from continuing operations, Candelaria, Casaronas, Chapada, and Eagle. Touching on the highlights from Q1, Quarterly copper production for the company was 76,774 tons, while gold production was 31,849 ounces, which keeps us on track to meet our annual guidance of between 303,000 to 330,000 tons of copper and 135,000 to 150,000 ounces of gold. The operational performance supported by strong gold prices in the quarter translated into another quarter of almost a billion dollars in revenue, $388 million in adjusted EBITDA, and $337 million in adjusted operating cash flow, which excludes the impact of a working capital build of $215 million. When we released our annual guidance in January, we introduced a consolidated cash cost range. For the quarter, we produced copper at $2.07 a pound, which is in the lower end of our cash cost guidance range for the year between $2.05 and $2.30 a pound. In addition to the operations performing as per plan, the company executed on a number of strategic initiatives that I will touch on in the next slide. On April 16th, outside the current earnings period, we successfully completed the sale of our European assets Nevis Corvo and Zinc Reuben for cash proceeds of 1.4 billion US dollars. Following receipt of those proceeds, we paid off and canceled our term loan of $1.15 billion and repaid a portion of the debt drawn on our revolving credit facility, all of which has significantly strengthened our balance sheet in support of our future growth opportunities. In March, the company entered into an option agreement with Talon Metals to acquire a highly prospective exploration project called Boulder Dash adjacent to the company's Eagle Mines. This transaction provides a low-risk, high-potential opportunity that could extend the mine life at Eagle if exploration continues to be successful, improving out an economic ore body. During the quarter, Lundin Mining also announced a new shareholder distribution policy that commits an annual return of approximately $220 million per year to shareholders. This is in line with previous annual distributions, but we have increased the level of share buybacks and adjusted the dividend to maintain the set amount. On an annualized basis, we are now paying a dividend yield, which is in line with our peers. In February, we updated our mineral resource and mineral reserve statement for our operating assets. where we were able to successfully offset mine depletion and replace reserves associated with the sale of Nevis Corvo and Zinc Reuven. This past Monday, we announced the impressive initial mineral resource estimate for the Vicuña project, outlining the world's largest advanced stage copper-gold-silver development project, of which Lundin Mining owns 50% alongside our partnership with BHP. On January 15th, we closed the transaction to jointly acquire FiloCorp, and the mineral resource announcement is the first major milestone for the joint venture. It forms the basis for our upcoming integrated technical report that will continue to outline a multi-phase development plan for the district in the emerging Argentinian mining province of San Juan. I will now hand the call over to Juan Andres, our COO, to walk us through in more detail the company's production results.

Thank you, Jack, and good morning, everyone. The company is tracking to production guidance on a consolidated basis for all metals in 2025. As Jack mentioned, copper production for continuing operations for the company was 77,000 tons, and gold production was 32,000 ounces for the border. At Candelaria, production was 37,000 tons of copper and 21,000 ounces of gold. During the quarter, throughput was positively impacted by softer than anticipated ore from sections in the phase 11 in the open pit. This is expected to continue into the first part of the second quarter. Overall, production at Candelaria is tracking to guidance. Cazadones has performed well this quarter, and throughput was positively impacted by improvements to operations from the full potential program underway. During the quarter, the mill processed 8.7 million tons, which is a quarterly record for Cacerones. In addition, cathode production was strong at 6,500 tons due to continued benefits from ore material being placed on the pads and higher aggregation rates on the dung leach. Cacerones is tracking to guidance for the full year. Production at Chapada will be modestly weighted to the second half of the year. During the quarter, Chapada produced 8,900 tons of copper and 11,000 ounces of coal. Results were driven by an increase in stockpiled material to the mill, which led to lower recoveries for the period. Grades on copper recoveries are expected to increase in the second half of the year due to higher contributions from fresh ore and less stockpiled material processed. Chapada is tracking to guidance for the year for both copper and gold. At Eagle, nickel production was 2,300 tons and copper production was 2,100 tons for the quarter. Ramp rehabilitation at Eagle East has been completed after the fall of ground in Q2 2024, and normal production levels are expected for the remainder of 2025. Mine sequencing and grades are expected to normalize in Q2, which will support the annual guidance forecast for the year. In the first quarter, we experienced impacts from winter weather that affected the ore haulage, which affected mining rates and mill throughput. Overall, we have had a good start of the year, and production is tracking to guidance for 2025. I will now turn the call over to Tyler to provide the summary on our financial results.

Okay, thank you, Juan Andres, and good morning, everyone. So before going into the numbers, a reminder that for the first quarter 25, we continue to report our European assets as discontinued operations. And the balance sheet items from these subsidiaries will be reported as assets and liabilities held for sale. As previously mentioned, the transaction closed on 16th of April. And as such, our reporting for the second quarter will also include the contribution from our European assets for the first 15 days of the second quarter as discontinued operations. So the company generated 964 million in revenue from continuing operations. The quarter benefited from certain delayed shipments at Casarone, around 40,000 metric tons of concentrate. which slipped into January and contributed around 80 million to our revenue generation for the first quarter. With the sale of our European assets, our revenue mix is now even more geared towards copper, with copper generating 84% of the quarter's revenue compared to last year when copper made up around 76%. Approximately 95% of our revenue now comes from our South American assets, with Candelaria and Casrola being the largest contributors. Turning to slide 13, as mentioned previously with the delayed shipments from Casarona, this benefited the volume of copper sold during the quarter. On a consolidated basis, we did in fact sell around 5% more copper in the quarter than we produced. The total copper sold amounted to 81,000 tons during the quarter at a realized price of $4.63 per pound of copper and 30,000 ounces of gold at $3,350 per ounce. from prior period sales. This translated into, as I said, $964 million for the quarter in revenue, which also includes $45 million positive adjustments from prior period provisional pricing on copper and gold. And as you can see on the graph to the right, this quarter was the highest revenue generation from our continuous operations over the last five quarters. A portion of our revenue for the quarter is derived from volumes sold under provisional pricing. The final prices for these volumes are subject to adjustments and will typically be determined in the following quarter. At the end of the first quarter, just over 80,000 tons of copper were provisionally priced at $4.43 per pound, with final pricing still pending. Turning to slide 14. Production costs from continuing operations totaled 517 million for the quarter, which is slightly higher than the costs recorded for the previous couple of quarters. This quarter includes the costs associated with the change in inventory at Cacerones in relation to the previously mentioned delayed shipments of concentrate, in addition to recording higher production costs at Eagle. In the previous two quarters, a portion of the costs at EGLE were categorized as standby costs, so not reflected in production costs, while RAP rehabilitation work was carried out. But with EGLE now having returned to full production, all costs incurred are now charged through the production cost line, and thus increasing our consolidated production costs for the quarter by around 15 to 20 million compared to the previous two quarters. Adelaria's total costs have come down from prior quarter due to lower sales volumes, while C1 costs for the quarter are slightly higher compared to previous two quarters as the mine went through higher grade ores during the second half of last year. Costs at Casarona were driven by higher throughputs and an increase in sales volumes from the previously mentioned delayed shipments, while Casarona's C1 costs continue to remain fairly stable. At Chapata, our C1 costs for the quarter are somewhat higher than the previous two quarters due to lower sold volumes for copper and gold. Nevertheless, the C1 costs for the quarter remain significantly below guidance of $1.80 to $2 per pound copper for the full year, the continued favorable FX, and also due to higher gold prices. On a consolidated basis, as previously mentioned, our C1 costs amounted to $2.07 per pound copper, which is towards the bottom end of our guidance of $2.05 per copper to $2.30 per copper. Our costs continue to benefit from weaker local currencies, and our C1 unit costs also continue to benefit from higher gold prices compared to what's assumed in our guidance. On to slide 15, the total capital expenditure for the quarter were below guidance, primarily due to the deferral of capital projects at Candelaria, including deferrals of the SAG power system upgrade and the deferral of relocating certain electrical lines, as well as lower volume at Casaronas TSF. These are all expenditure deferrals and are expected to be incurred later in the year. Almost 70 percent of the sustaining CapEx in the quarter was for stripping and tailing storage development. Only mining's 50 percent share of capital expenditure related to Vicuña was 43 million, which is tracking slightly above the full-year guidance. Higher expansionary capital costs during the quarter were also the result of an opportunistic mineral rights purchase at Candelaria during the quarter. We remain on track for full year guidance with sustaining and expansionary CAPEX of 175 million for the quarter, while the total guidance for the year is 735 million. The first quarter key financial metrics are presented on slides 16 and 17. As mentioned, we generated adjusted EBITDA of 388 million and adjusted operating cash flow of 337 million, which excludes a build of working capital of 250 million during the first quarter. Cash taxes of 43 million also impacted the operating cash flow in the quarter. with a further cash tax installment of 108 million made in April to settle final taxes due in Chile and Brazil for 2024. Pre-cash flow from operations was 22 million from continuing operations, which includes the working capital bill of 215 million. Adjusted earnings were 94 million for the quarter. We finished the quarter in a moderate net debt position of roughly 1.44 which equates to a leverage ratio of one-time net debt to adjusted EBITDA for continuing operations. The company remains in good financial health, with costs trending according to guidance, with some potential upside on the cost structure due to continued weaker local currencies, as well as a stronger gold price. Turning to slide 18, with the closing of the Vicuña transaction in January and the closing of the European asset sale in April, there have been a number of cash inflows and outflows impacting our cash flow statement and our net debt positions. Reading this chart from left to right, we have already explained the quarterly adjusted operating cash flow, working capital build, and the expenditure on capital items. The closing of Vicuña resulted in a net cash inflow of 79 million, with a cash payment to FIDO shareholders of 611 million, and receipt of cash from BHP for their 50% stake in Hans Maria of 690 million. With our recently announced revised shareholder distribution policy, the company has pivoted to do more share buybacks, and the company bought 71 million worth of its own shares during the quarter. Accounting for cash interest and certain other items, the company ended the quarter with a net debt of 1.44 billion. After Q1, the company completed the sale of the European assets and received 1.4 billion in proceeds and released to Bulletin accumulated cash in dissolved subsidiaries amounting to 84 million. Following the closing of the European asset sale, the company paid off 1.15 billion in term loans as well as repaid 170 million of debts drawn under the revolving credit facility. The company also paid out Q4 dividend of just over 50 million and continued to repurchase shares during April. As previously mentioned, we paid a cash tax installment of 108 million in April to settle final taxes due in Chile and Brazil for 2024, leaving the company with a net debt position of $262 million as of May 2nd, 2025. So with that, I will now turn the call back to Jack.

Thank you, Titor.

During the quarter, as I mentioned, we entered into an earning agreement with Talon Metals to acquire up to 70% ownership in the Boulder Dash property, which is adjacent to our Eagle Mine. Initial drilling at Boulder Dash intercepted 100 meters, grading 0.41% nickel and 0.35% copper, starting at a depth of approximately 9 meters. More recently, drilling has intercepted grades of 2.33% nickel and 2.95% copper, which is in line with the current head grades at Eagle. Lundin Mining has agreed to fund an initial 30,000-meter drill campaign. Following the completion of the 30,000 meters of drilling, the company can decide to fund a feasibility study in exchange for a total ownership of 70%. This highly anticipated drilling program is set to start within the coming weeks. On Monday's webinar, we were able to detail the announcement of the impressive Vicuña mineral resource estimate. A replay is available on our website, which I encourage the audience to visit. The initial mineral resource has highlighted the Vicuña project as one of the highest-grade, undeveloped, open-pittable copper projects. Its size and scale, not only in copper, validates Vicuña as one of the largest gold and silver resources globally as well. The total measured, indicated, and inferred resource contains 38 million tons of copper, 81 million ounces of gold, and just under 1.5 billion ounces of silver. Filo del Sol and the Vicuña District are poised to develop into a world-class deposit that will support a globally ranked mining complex. Since the initial oxide discovery in 2000, Filo del Sol has emerged as a generational discovery, highlighted by the drilling of the high-grade Aurora Zone in 2021. Alongside Jose Maria discovered in 2004, it forms the Vicuña Project, now representing the largest greenfield copper discovery in the last 30 years. The figure to the bottom of the screen shows resource data collected from SMP Global Platform. The figure shows the relative measured, indicated, and inferred resource size of initial discoveries from 1990 until present day. You can see Vicuña as stacking up next to the large world-class mining operations such as Coyahuasi, Cerro Verde, and Escondida. The scale is impressive, however, not only the size and scale of Acuna, but also the elevated grades that exist in the core of the deposits make it truly unique. At Filo del Sol, there's over 600 million tons at 1.14% copper equivalent in the measured and indicated category, containing 4.5 million tons of copper. At Jose Maria, there's a near-surface high-grade core of 200 million tons at 0.73% copper equivalent, containing 1 million tons of copper, which would likely contribute to the initial years of mining. The mineral resource estimate is a key milestone for the district and will form the basis for the integrated technical report that will outline a combined project that is scheduled for completion in the beginning of 2026. In summary, Lundy Mining has completed a significant transformation to start the year. Most importantly, our existing operations are performing well and are tracking to full-year production guidance across all metals. To streamline our portfolio and position the organization with the ability to focus on the key value drivers for our business, we officially launched Vicunia Corp. in partnership with BHP in January. Since then, we have made solid progress in de-risking and confirming the significant growth potential of the Vicuna District, highlighted by the mineral resource estimate, which was released on May 4th. The accompanying technical report will follow within the coming weeks. Subsequent to the first quarter, we finalized the sale of our European assets, generating $1.4 billion in proceeds. This enabled us to repay and cancel our term loan and reduce our revolving credit facility, resulting in a strong balance sheet going forward. As we move into the next phase of growth, centered on the high potential Vicuna District, as well as near-term growth opportunities at our existing operations, we do so with an enhanced financial flexibility and a clear focus on delivering long-term shareholder value. The company is well-positioned for the future with a strong commitment to achieving our operational targets, improving margins through disciplined cost management, and maintaining the highest health and safety standards to protect our workforce. Thank you to those on the call, and I'll now open up for questions.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Lawson Winder of B of A Securities. Your line is now open.

Thank you very much, operator, and good morning, Jack and team. Thank you for the update. We spent a lot of time talking on Monday about So I think maybe I'd like to ask about some of the other operations this morning and ask about Candelaria and the expansion. So at this point, you know, what remains outstanding in terms of information that you need to gather in order to make a decision on the underground expansion? And then what is the current thinking on the timeline? Thank you.

Hi Lawson, it's Jack here. Thanks a lot for the question and thanks a lot for the interest on the call on Monday as well. Yeah, for Candelaria, the underground, we were looking historically at quite a large underground expansion that we were dubbing as the QJET project. And I think we've telegraphed in recent calls that we've since kind of modified the approach to the underground expansion and looked at kind of increasing the capacity from the underground in more of an incremental way and through more traditional measures rather than implementing underground infrastructure like crushing and conveying. We're looking at improving the productivity of our underground mining crews and then potentially adding more mobile underground equipment to increase production from the underground incrementally. So QGEP The large QGEP expansion project has been, you know, essentially put to the side. And at our capital markets day in June, we'll be outlining kind of the next steps for how we're going to be incrementally growing production from the underground. But it's not going to be a heavy CapEx item. We're looking at a low capital intensity, you know, initiative to incrementally increase production. And we'll outline those details in June at our capital markets day.

Yeah, that'll be very helpful. But what does that imply in terms of permitting? Does incremental mean a more streamlined permitting process, or do you face the same constraints on that front?

Awesome. This is Juan Andres. In terms of permitting, the underground expansion was already permitted in the EIA 2040. But as Jack mentioned, since we're making some changes from underground material handling system to more mobile-based expansion, we'll have to amend some permits, and we're currently working on doing that.

In any sense on timeline to having those amendments? Not yet. Okay. Something to follow up with on the investor day in June. That'll be very informative. On Candelaria as well, I wanted to ask you about the stream. So the drop down in the percent payout to Franco Nevada on both the gold and silver is approaching relatively quickly in my model. And at current gold and silver prices, we're getting something in the range of an annual boost to cash flow of about $100 million. Is that in line to your estimate at spot prices? And then what's your current estimate on the timing of that drop down?

Yeah, morning loss on its tighter here. Yeah, so we are currently forecasting that that step down from 68% of the gold down to 40% gold and silver should happen around about towards the end of 2026. And obviously, depending on spot prices at that point in time, yeah, I think your order of magnitude number is in the ballpark.

Okay, great. That'll be nice to have. And then just finally on... When you're thinking about the capital to develop Jose Maria and Filo, which I think you made very clear on the last call that it would be done so in an incremental fashion. Nevertheless, have you considered copper hedges as an option to protect downside risk and ensure funding for that process?

The short answer is no, we're not really contemplating copper hedges. I mean, as you've seen from our presentation today, our balance sheet is very, very strong. We are effectively at net debt zero. So we have all the flexibility in the world really in terms of how we go about funding this. I mean, we obviously will remain very disciplined on cost control and obviously trying to optimize the economics of Vicuña in terms of phasing of CapEx. But hedging on commodities is not on the table at the moment.

Fantastic. Thank you all very much.

Thank you. Thank you. Our next question comes from the line of Craig Hutchinson of TD Cowan. Your line is now open.

Good morning, guys. I just want to follow up from Monday's call. The integrated technical report that's going to come out in Q1 of next year, is the intent that the phase one Jose Maria will be at feasibility level And the oxides from Fila will be at a PEA level or do I have that right? And I guess I'm just going to ask you if the Jose Maria is the plan to whatever you put out in Q1, that's the project you're going to move forward with through the rigging?

Hey, Craig, thanks for the question. Yeah, that's right. So phase one, you know, what we're looking at right now, Jose Maria, we're getting the level definition of the study to a definitive feasibility study level. We've obviously been studying Jose Maria for a number of years and have much more detail on that project and have significantly de-risked it. We've been also looking, of course, at the phyllo oxides. There was a PFS that came out when PILO Corp was in control of the PILO del Sol deposit. And so we're advancing the and redoing kind of the PFS on the PILO oxides and then for the PILO sulfide. So once we get into large scale, full kind of capacity production, that would be at a PEA level. that we would be, you know, doing the study at. So, all of these three studies that are ran in parallel are at different definitions based on the amount of data we've accumulated and the amount of work we've done to date.

Okay, great. And do I understand it correctly? The idea is after you've kind of moved through the high-grade zone at Jose Maria, your look at the PA will look at potentially substituting that or the high-grade zone from Vila del Sopo.

Yeah, that's exactly right. I mean, we're integrating the deposits together and looking at coming up with the most optimal mine plan based on kind of the mineral resource endowment that both of these deposits have. And so the plan is for us to, as cost effectively as possible, get into production at scale and then ensure that we have a robust mine plan so that we're mining for as long as possible the highest grade material from either ore body. So, you know, that's why putting these deposits together and building it out in sequence makes so much sense because, as we've discussed, there's a high grade core in both deposits and for us to kind of capitalize on that through integrated mine planning, we'll be able to come up with the most, I think, economic and robust kind of scenario.

Okay, great. And just maybe one housekeeping item for me. Just the negative $215 million in non-cash working capital in the quarter. Can you just give some context around that, and do you expect some of that to unwind here in Q2 and Q3? Thanks.

Yeah, I mean, if you look at our Q4 numbers, we had the opposite effect. We had a big working capital cash inflow, and part of the reason was that these two customer-only shipments, which got delayed from December into January, we actually got Those prepaid, so they were paid upfront, which obviously impacted working capital positively in Q4, but it's reversing in Q1. And then just generally, you know, with copper prices having increased, you know, when you have increasing copper prices, your receivables are increasing, so that's always building working capital. So those are the reasons. Very great. Thanks, guys.

Thank you. Our next question comes from Connor McKay of Ventum Financial. Your line is now open.

Hey, thanks, guys. Thanks for taking my question here. I just want to talk about the investment climate in Argentina a bit. You know, I imagine with the... I think we've spoken in the past that the integrated technical report coming early next year is going to form the basis of the REGIE application for the Vicuna project. Have you been seeing other projects start to trickle into the Regie process? Is there any color you can provide on how those projects are advancing and if there's anything that you guys are watching out for in crafting your own application?

Thanks for the question, Conor. I think it's obviously super important to understand kind of the climate in Argentina as we look to potentially make a large investment into the country, into San Juan province. And what we've been seeing is a lot of positive momentum building in Argentina. A lot of the management team will be heading down there at the end of this month. We'll be going to Buenos Aires. We'll be heading to San Juan and visiting the site. And all of this is in anticipation of us getting ready to submit a RIGI application. And we're working now with the joint venture with our partners to kind of identify and align on when we think that application would be optimal to be sent into the government. Uh, but, but what we're seeing is, yeah, there are other projects coming in, not just in the mining sector. Uh, but, you know, any kind of industry that can be applicable for the regime there, there have been a number of applications, um, not many yet for mining, but, uh, you know, we're trending towards being in a position to apply. But overall, what we've been able to see and what Javier Mille, president of Argentina, has been able to do has been extremely positive for the investment climate for projects like ours. So, you know, we continue to be encouraged with what we're seeing in Argentina.

Awesome. That's good to hear. And then I just had a question on cash costs and particularly just want to get a reminder, what gold price did you guys assume in coming up with your cash cost guidance for the year? And if we do see these elevated gold prices continue throughout the remainder of the year, is there potential for guidance to come down or are you seeing maybe cost inflation elsewhere offset some of those gains?

Yeah, so we will revisit all our guidance at the capital market in mid-June, but what we so far have assumed is 2,500 ounces, $2,500 per ounce in gold. And on FX, we assumed 900 trillion pesos, dollar, and 550 Brazilian real.

Perfect. Thanks for the detail there. That's it for me. Thanks.

Thank you. Thank you. As a reminder, to ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced.

One moment, please.

Our next question comes from the line of Daniel Major of EUBS. Your line is now open.

Hi, guys. Thanks for the details on Monday, and thanks for the questions. Yeah, I just want to follow up a couple on Argentina. I mean, obviously, the integrated technical report is coming. But in terms of thinking about the structure of that, we discussed a little bit on Monday that you would look to develop the phyllo oxides and Josemaria sulfides in conjunction with each other in the first phase. If we're thinking about scaling the the capex for phase one is a reasonable starting point to assume the four billion plus guidance that you'd previously given for jose maria plus the kind of 1.8 i think it was uh philo guidance from 2023 technical report as a as a kind of starting point for for phase one

Thanks, thanks Daniel for the for the question.

So you know, as we go through the period that we're in right now to fully define and build those, you know, capital estimates for all phases that, you know, as I discussed, kind of a different level of definition, you know, we'll be in a position to kind of firmly announce what those numbers look like. But, you know, Jose Maria phase one, you know, looking to trend to probably a little bit higher than what you've said. And then the PFS level on the aux sides is still early days for us to kind of dictate what that number is going to be. But, you know, we're working hard to make sure that this is the most cost-effective initial capital project on phase one. And, you know, at this time, we're not really in a position to reveal more information than that.

Okay, thanks. And then a follow-up on the REGI and how that fits in with your timeline of potential fid in 2026 um if you submitted the rigi um by mid-year so you know the deadline for mid-year i mean would it be possible to fi or assume do you could fid the project as you've submitted that application or will it take a long time to to kind of process that and have visibility to FID the project? Is it going to be a long timeline for the RIGI to be processed?

No, we don't believe that critical path item would be the RIGI application. I think, you know, from what we're studying and what we understand is once we submit that application, it's quite a clear-cut process of going through and getting the, you know, enabling us to adhere to that. So RIGI is definitely not the hang-up. I mean, we're putting our efforts forward so that we can be in a position to really understand the magnitude of all phases of the project next year, understand, you know, the fiscal stability regime that, you know, once we sign up and adhere to, Rigi, so that next year we'll have all of the information in front of us and able to make a decision on sanction or, you know, going into construction or initiating phase one.

Great. Thanks so much.

Thank you. Our next question comes from the line of Ralph Profiti of Stifel. Your line is now open.

Thanks, operator, and thanks, Jack and team, for taking my questions. I wanted to delve into this irrigation rate flow at Kazaronis, which was behind some of the outperformance on production, and just wondering, is that a design change in leach kinetics, or is this the sort of ore character telling you something? And is there going to be a cost impact to some of these higher irrigation rates? And it leads into my second question, which is how close should we be watching this in terms of similar oxide characteristics at Phyllo del Sol's oxide core, and whether or not you're going to be learning lessons on how you take the approach from Casaronis oxides to Phyllo oxides. Thank you.

Morning, Ralph. Thanks for the question. So probably it's good to start by highlighting that Casadonis is a dumped leach. So the kinetic cycle is normally very long, especially with the secondary sulfites. So as we dump more secondary sulfites, of course, the extraction becomes a little slower. But in general, we're on track with the budget or internal plans on the placement of the leaching material. So we are taking advantage of irrigating some slopes in the dam bleach, and that is why we're being able to produce more cathodes than expected. But we're basically on track with our internal plans. Gotcha. Okay.

Thanks very much.

Thank you. I am showing no further questions at this time. I'd like to thank you for your participation in today's conference. This does conclude the program. You may now disconnect.