Amerigo Resources Ltd.

Good afternoon. My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the AmeriCorps Resources second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the formal remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, followed by the two. Thank you, Mr. Graham Farrell of Northstar Investor Relations.

You may begin your conference.

Thank you, Operator. Good afternoon and welcome everyone to Amerigo's quarterly conference call to discuss the company's financial results for the second quarter of 2025. We appreciate you joining us today. This call will cover Amerigo's financial and operating results for the second quarter into June 30th, 2025. Following our prepared remarks, we will open the conference call to a question and answer session. Our call today will be led by America's President and Chief Executive Officer, Aurora Davidson, along with the company's Chief Financial Officer, Carmen Amezquita. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations, or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested by any forward-looking statements due to a variety of factors which are discussed in detail in our CDAR Plus filings. I will now hand the call over to Aurora Davidson. Please go ahead, Aurora.

Thank you, Graham.

Welcome to America's Earnings Call for the second quarter of 2025. We are pleased to report positive operational and financial results. Amerigo has again demonstrated its operational excellence and capital allocation agility. We achieved strong copper production, managed cost effectively, and reinforced our commitment to shareholder returns. Our Chilean Operation NBC continued to operate consistently in the second quarter with no lost time accidents among our employees and no environmental incidents. In both of these operational performance categories, NVC continues to extend its multi-year company records. Copper production was 15.5 million pounds, and molybdenum production was also robust. Copper production in the first half of the year accounted for 46% of Amerigo's annual guidance of 62.9 million pounds. Our yearly guidance takes into account our lower production in Q1, which was associated with the annual maintenance shutdown. Therefore, our production guidance remains in place. We also maintain strict cost controls and our cash cost per pound declined to $1.82 in the second quarter. Our annual cash cost guidance of $1.93 per pound is also expected to be met. This guided cash cost target excludes the impact of NVC's collective bargaining cost, which is scheduled for October of this year. Collective bargaining occurs separately every three years at NVC for our two collective agreements. America's financial performance in the second quarter included revenue of 50.9 million at an average NVC copper price of $4.42 an ounce. This price excludes positive price-driven settlement adjustments of $700,000 on the first quarter sales.

The quarter was $3.5 million with earnings per year of $0.05. At the end of the year.

In line with America's Capital Return Strategy, or CRS, A quarter dividend of Canadian per share was paid, representing 3.5 million. Additionally, 3.1 million common shares were repurchased and canceled during the quarter at a weighted average price of $1.78 Canadian per share, representing 4 million. Year-to-date copper prices have been stronger than we budgeted, with NBC receiving a copper price of $4.42 per pound, compared to our conservative estimate of $4.15 per pound in 2020-2025. This is good news, and we'll discuss copper prices further shortly. The molybdenum price difference has been $20.3 per pound, and is trending very close to our annual estimate of $21 per pound. The average exchange rate of the Chilean peso to the U.S. dollar in the first half of the year was 955 pesos, also very close to our estimate of 940 pesos. Following the close of the second quarter, our operational results for July have been very positive, with a drop since 2020. The copper price has also remained strong in July at $4.44 per pound. If these conditions persist during August and September, we anticipate results in the third quarter. Moving on to our view of the copper landscape, I would like to provide a quick summary. The copper market is tight by nearly 30 levels this fall.

to deal with more standard checklists for cost .

Here are a few essential points. Global mine cover production is expected to grow . That is made in mid-2023. Factors such as increasing capital requirements, resource , political uncertainty,

and declines as headwinds against in the refined copper market.

We continue to see record low spot treatment and refinery charges, also known as TCRCs. This reflects the difficulty of refiner's phase in securing . and below TCRCs, they now charge copper miners, indicate the desperation to secure an adequate supply. Estimated that 70% global smelter operations are currently unprofitable. This could lead to smelter shutdowns and cause a sharp decrease in the growth of refined copper output. In 2023, refined copper supply grew by 4.2% and is now estimated to grow by only 1.3% in 2025. Refined product inventories in LME and Shanghai have also fallen sharply this year. Concurrent with this suffering supply scenario in the constantly unregistered copper markets, demand and mechanics have improved. This demand has been electrification, the growth of AI data centers, grid modernization, and traditional demand.

We have discussed this a couple of times.

By putting together this plant demand outlook, a market deficit is expected by year end, and the International Energy Agency projects a strain market.

pert with resilient demand.

This is bullish for copper prices and Amerigo. In addition, tariff-induced market distortions are undefined or have amplified market tightness and have impacted short-term copper prices. During our last earnings call, I discussed the high arbitration seen in this year between the copper prices at the alien market and the comics. This trend continues to reach Amerigo highs two weeks ago copper. However, the higher comics prices had a positive impact on LME prices, which in turn had a positive effect on . Pricing in the expected relative to LME prices with the average reaching over 45 cents per pound. This price divergence led to a massive redirection of copper inventories from Europe and Asia to the U.S., driven both by speculation and structural factors. U.S. buyers scrambled to secure physical copper before others heard.

As there will be conditions, the lending market will shift from its usual contangible to an extreme backward. The futures market signals an extreme tightness.

Days before the August 1st official coverage of copper, additional information was finally released by the U.S. government indicating the tariffs would only apply to copper products such as wires,

to $4.36 per day. This is a trading instrument, and not just one. .

to capture copper price stocks in a very short duration and convert them into for sure.

strategy. Next. to rebound capital to shareholders at a rapid pace. Operators seem to have more connection issues. Am I not being correctly heard?

Now we can hear you now, but you've been cutting in and out, Aurora.

Oh, I'm sorry about that. Well, I'll continue. The script will be on the website, and we can go over any questions. Sorry about that. Okay. Cumulatively, the CRS has returned $92.2 million since its inception, with 66% of the amount returned via dividends and 34% through buybacks. In addition to these returns of capital, there is also the benefit of share price appreciation. During the second quarter, Amerigo's share price increased from $1.91 to Canadian $2.12, and today the share price is Canadian $2.17, representing a 36% year-to-date increase. I am often asked about whether Amerigo's board of directors prioritizes dividends over share buybacks. The answer is that the CRS is flexible and multifaceted. There is no absolute preference for one over the other. Instead, we use these tools strategically to maximize shareholder value under varying market conditions. The CRS provides us with the flexibility to adapt to the inherent volatility of the corporate sector without being locked into a single method. The quarterly dividends are the foundation of the CRS. They provide a stable and predictable return to shareholders. Performance dividends are a flexible tool. We use the dividends to distribute excess cash when copper prices are strong and the company's cash balance exceeds $25 million. Performance dividends enable us to quickly share the benefits of spikes in copper prices with shareholders. And share buybacks are used opportunistically to take advantage of periods of share price weakness and to reduce dilution. We have stated the Board's intention to buy back enough shares to eliminate annual shareholder dilution at a minimum, but we have been doing more than that. And to be clear, being active on shared buybacks does not mean there will be no performance dividends. Both can occur under strong copper prices. So our preference is for a balanced and opportunistic approach to capital return. The consistent quarterly dividends provide stability, performance dividends capture upside, and shared buybacks manage dilution and capitalize on undervaluation. Our ultimate goal is to generate maximum value for shareholders and to utilize all the tools of the CRS to achieve this. Amerigo's CFO, Carmen Amesquita, will now discuss the company's financial results. Carmen, please go ahead.

Thanks, Aurora. I'm pleased to present the financial report for the second quarter of 2025 from Amerigo and its NBC operation in Chile. During the three months ended June 30, 2025, the company posted a net income of $7.5 million, earnings per share of $0.05 or $0.06 Canadian, and EBITDA of $17.8 million. Net income was $2.2 million lower than in Q2 2024, primarily because during the second quarter of 2024, Amerigo booked $6.9 million in positive fair value adjustments to copper revenue receivables, resulting from a sharp quarter-on-quarter increase in copper prices. For comparison, during Q2 2025, the total positive fair value adjustments amounted to $0.7 million. Revenue in Q2 2025 was $50.8 million compared to $51.6 million in Q2 2024. This included copper tolling revenue of $43.8 million and molybdenum revenue of $7 million. In Q2 2025, the gross value of copper tolled on behalf of DET was $66.9 million. From this gross revenue, we deducted notional items, including DET royalties of $19.9 million, smelting and refining of $3.6 million, and transportation of $0.4 million, and then added positive fair value adjustments to settlement receivables of $0.7 million, which, as I mentioned, were significantly lower than the positive fair value adjustments in the second quarter of 2024. Revenue also included molybdenum revenue of $7 million. We reported a provisional copper price of $4.42 per pound on our Q2 2025 sales, which coincidentally were the same provisional price we had for the first quarter of 2025. The final settlement prices for April, May, and June 2025 sales will be based on the average London metal exchange prices for July, August, and September 2025, respectively. We now know July's average price, which is $4.44. A 10% increase or decrease from the $4.42 per pound provisional price used on June 30, 2025, would result in a $6.9 million change in revenue in Q3 2025, regarding Q2 2025 production. Tolling in production costs increased 10% from $35.1 million in Q2 2024 to $38.7 million in Q2 2025, which can be mainly attributed to an 11% increase in production between both quarters due to the timing differences of MVC's annual maintenance shutdown, which in 2024 took place in the second quarter, but this year took place during the first quarter. The most significant cost variances between the two quarters were consumption-driven. They included higher power costs of $1.2 million, lime costs of $0.6 million, and other direct tolling costs, such as copper reagents, of $0.8 million. MOLLE production costs increased by $0.3 million due to higher production associated with more processing of historic tailings in Q2 2025. The gross profit after revenue and production costs was $12.1 million compared to $16.5 million in Q2 2024. General and administration expenses were $1 million compared to $1.1 million in Q2 2024. These expenses included salaries, management, and professional fees of $0.6 million, office and general expenses of $0.2 million, and share-based payments of $0.2 million. Other gains were $0.1 million compared to $0.6 million in the second quarter of 2024, driven mainly by foreign exchange gains in both periods. Finance expense was $0.4 million consistent with Q2 2024 and consisted entirely of interest on loans and bank charges. Income tax expense was $2.6 million compared to $5.6 million in Q2 2024. Beginning this quarter, we have included a breakdown of the company's tax expense in the P&L, separating current taxes from deferred income taxes. The current tax represents both actual income tax for MVC and repatriation taxes to bring funds from Chile to Canada. Deferred income tax is an accounting figure used to reconcile timing differences, in Amerigo's case, primarily arising from the differences in the timing of financial and tax depreciation. Current tax expense in Q2 2025 was $4.4 million compared to $6.3 million in Q2 2024. Before moving on to the statement of financial position, I will mention some non-IFRS measures used by the company, cash cost, total cost, and all-in sustaining cost. Amerigo's cash cost in Q2 2025 was $1.82 per pound, decreasing from $1.96 per pound in Q2 2024. The 14 cents per pound reduction in cash cost was primarily due to a 19 cent per pound decrease in smelting and refining charges in response to the current annual benchmark, offset by increases of 3 cents per pound in lime costs and other direct costs. Total costs decreased to $3.55 per pound, a decrease of 23 cents per pound from Q2 2024's $3.78 per pound. This was the result of a $0.14 reduction in cash costs, a $0.04 decrease in DET royalties, and a $0.05 decrease in depreciation. All in sustaining costs, which include total costs, sustaining capex, and corporate GNA, were $3.69 per pound in Q2 2025, compared to $4.20 in Q2 2024. This is the result of per pound decreases of $0.23 in total costs. $0.27 in sustaining capex, and $0.01 in corporate G&A expenses. Moving on to the statement of financial position, on June 30, 2025, the company had cash and cash equivalents of $23.3 million, restricted cash of $0.9 million, and had a working capital deficiency of $5.4 million, down from a working capital deficiency of $6.5 million on December 31, 2024. Trade-in accounts payable decreased from $24.6 million as of December 31, 2024 to $19.7 million at the end of June 2025. Current income tax liabilities also decreased from $8.5 million on December 31, 2024 to $0.1 million. Most of the tax balance due at the end of 2024 related to income tax owing by MVC in respect of 2024 earnings. which exceeded the monthly tax installments made. This tax was paid in April 2025, when MVC's annual tax declaration was filed in Chile. Note that, in line with Chilean tax requirements, MVC plays monthly tax installments based on a percentage of revenue, which may or may not be close to the final corporate tax for a given year. Then in April of the following year, when the tax declaration is filed for the previous year, Any difference in the amount owing exceeding the monthly tax installments is paid. You will notice that the company's debt, which is shown as $7 million net of transaction fees, is now shown fully as current debt. As guided to the market, we intend to make the remaining scheduled payment of $4 million in the second half of the year and prepay the remaining $3.5 million, which is formally due on June 30, 2026. In this way, Amerigo will be in a zero debt position by the end of 2025. Regarding cash flows during the quarter, Amerigo generated $11.9 million in cash flow from operations. Net operating cash flow, which includes changes in non-cash working capital, was $6.3 million. Included in the changes in non-cash working capital are payments related to current income taxes, income tax liabilities, rather, of $9.5 million, which includes the 2024 income tax payment we previously discussed. These decreases in accounts payable and income tax result in an outlay of cash, thereby decreasing the cash flow from operations net of these non-cash working capital changes. In terms of uses of cash during the quarter, $1.4 million was used for investing activities, in other words for CapEx payments, and $9.4 million was used in financing activities. These financing activities included Amerigo returning $7.6 million to shareholders, $3.5 million through Amerigo's regular quarterly dividend of $0.03 Canadian per share, and $4 million from the purchase and cancellation of 3.1 million common shares through a normal course issuer bid. The company also paid $4 million on borrowings, including $2.3 million paid with restricted cash. Briefly touching on the results for the first half of the year compared to guidance, our cash cost for the six months ended June 30, 2025, was $2 per pound, and our forecast indicates that we are on track to meet the company's 2025 guidance of an annual normalized cash cost of $1.93 per pound. Our normalized cash cost guidance excludes any signing bonus associated with a three-year collective labor agreement with NBC's Operators Union, that will occur later this year. In 2025, MVC is expected to incur capex of $13 million, of which $4.4 million is optimization capex, $4.4 million is sustaining capex, and $4.2 million is capex associated with the annual plant maintenance shutdown and strategic spares. Year-to-date 2025, capex additions were $6 million and capex payments were $8.2 million. We remain on track with our annual CapEx guidance. We will report Amerigo's Q3 2025 financial results in October 2025 and want to thank you for your continued interest in the company. We will now take questions from call participants.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press the star followed by the two. And if you're using a speakerphone, please lift the handset before pressing any keys.

The first question comes from Terry Fisher at CIBC World Markets. Please go ahead.

Yes, good afternoon, everybody. I believe it's already been flagged that there was really a lot of problems with the connection while Aurora was speaking, particularly about the outlook for copper and copper markets. But I think you said that the text of the speech will be available on the website, so I don't expect you to repeat it here. I did want to ask, though, about the likelihood, because I think you mentioned it, but I didn't get it because the phone broke up, of a positive fair value adjustment in the third quarter given where copper prices are and have been. Is that a reasonable expectation?

Terry, first of all, sorry about that. We did a sound check before we had the call and we didn't have any problems, so It's unfortunate that I didn't come through, but yes, the text of the earnings call will be available on the website as soon as we get it from the supplier. I did speak about the fact that July has been a good month, both in terms of production and we also saw, because now we have the average prices for the month of July, $4.44 per pound. We marked to market on average at $4.42 at the end of June 30th, as Carmen was mentioning. Right now, as we speak, there is a positive, small positive adjustment on a pricing basis for the first month that has settled, which is essentially we have settled now April at the July average prices. The outlook remains positive from our perspective. I did speak about, and hopefully that wasn't broken, about what happened yesterday with the clarification of what the US tariff is going to be looking like, essentially exempting copper concentrates and copper, unrefined copper from the tariffs. And that caused a sharp correction of that arbitrage that we had been seeing between comics and the LME markets for most of the year. So if you look at copper comics, price day, and the LME, there's a three cent difference, which is life is back to normal in terms of what you what you normally have in those markets. Does that answer your question?

Yes, that's fine. And I'll read the text. My second question sort of left field, but I'm wondering if you've heard of a company called still bright?

No, I haven't heard about them.

Okay, well, I'll leave that with you to research still bright. I just saw an interview today on television. I'd never heard of it before. It's a startup, kind of a technology company that has received some seed financing but what they have is a new process for essentially smelting copper but it's through flotation cells and they use vanadium as a catalyst and they're able to recover the copper without producing the waste products that many smelters do of lead and arsenic and they can do it at a lot much lower cost and quicker startup to build these things. From what the person said, I think it's unlikely that it would be targeted towards processing tailings. I think it's more an alternative to shipping ore to China to be smelted and doing it domestically in the U.S. and other countries. But anyway, worth researching. So I'll leave that with you. The only other question I had actually is for a Carmen question. It'd be exciting for Carmen. It's a two-part question. One is that with all the depreciation we're taking at over $22 million a year, which I know helps with cash conservation by deferring taxes, because there's tax depreciation. I don't know what CCA is versus depreciation rates in Chile. But in any event, it seems to me that the fixed assets now are being considerably undervalued in the balance sheet And related to that balance sheet, we also have $24 million of other assets, and I forget what those are. So the question is, are the assets undervalued in the balance sheet, and what are the $24 million of other assets?

All right.

So I think you have to remember, when you look at depreciation, tax depreciation and accounting depreciation are different. So what we're taking on the P&L, that's just our standard depreciation rate over the life of the asset, whereas the tax depreciation is completely different. So we don't do it in a way to save taxes on the accounting side.

Okay, sorry, I phrased the question improperly. Forget about the tax depreciation. It just seems to me that even with the depreciation rates the company uses. Relative to the age and the value of the assets, the assets in the balance sheet are probably understated, which is a good thing for us. But I guess it doesn't matter a lot, given that there's no fixed debt on the balance sheet as well, so there's no leverage to that. But still, book value matters to some people.

Yeah, I wouldn't say the assets are understated.

Okay. Can you answer the other question? What are the other assets, $24 million?

Sure. So that relates to all of the plant and equipment that's on site. So mostly the plant.

Other assets are plant, not fixed assets.

Yeah. So machinery... Machinery and equipment would relate to all of the other assets that are not there.

Oh, all right. Okay, so that's part of the whole plant and equipment. Okay, that's a good thing. Exactly.

Yeah, that's the majority of what we have in fixed assets on the balance sheet, and then there's also the machinery and equipment that we use as well.

Okay, I have just one final question for Aurora. It seems to me that in the quarter we've had with obviously the U.S., copper price up because of the Trump tariffs and that's now gone away. Still, I would have thought there would have been a greater arbitrage effect on the LME price than we actually saw. Can you explain why that didn't happen?

Terry, what we basically do is we mark to market, as we always disclose, based on the progression of the copper prices at month end, and then we settle those prices at the actual average price for the LME of the month in question. So, for example, when you're looking at the average prices that we had for the second quarter, I'll tell you what they were, although this is available online. The average LME copper price for April was $4.17. There was a significant decline from $4.42 to $4.17 in April. So that was final price for January sales was the April LME price, $4.17. The final settlement price for the February sales, which was the May price, was $4.32. And the final settlement price for the March sales was June average price of $4.46. So if you're looking at what happened there that I didn't see that huge pickup, April was a defining moment or a defining month of negative adjustments from 442 to 417. And then May was also settled at a lower price of 432 compared to the 442 that we have marked the market. So the only month in the second quarter where there were positive settlement adjustments compared to our mark-to-market at March 31st was the month of June 4th and 6th. I'm sorry this all sounds so confusing. We tried to simplify all of that information in the notes to our actually news release. So all of that information is there, but there certainly was a negative final settlement when you looked at the April realized prices of 417.

Right. I get that, and I actually do understand it because I've been following the company a long time. I didn't phrase the question very well, I guess. I was just thinking about the LME price versus the spot price and the U.S. copper price and why there wasn't a greater pull on the LME price. Nothing to do with Amerigo. Maybe that's a question that can't be answered, but it just surprised me that there wouldn't have been a greater effect on the LME.

a greater positive or a greater negative effect?

Well, if the price of copper is higher in the U.S. because Americans are buying it to front-run the tariffs, you would expect that would increase demand for copper even globally, which would reflect on the LME settlement prices.

And I think it did, and I mentioned that, sorry, that was one of the things that I mentioned on the script. The run-up that we saw on comics prices during the quarter, and basically during the first semester of the year, had a positive effect on the LME. I think it did pull it up. And now if you look at the prices today, 439 comics, LME spot price 436, we're back to normal. But I think that trading run opened up a lot of eyes into what's going on with the copper fundamental structure, not just a trading story, which is a benefit for the industry in general, for all of us. Right.

Okay. That's great. I'll read your comment. I don't want to take up more time now, but thanks for everything. That's great.

Thank you. The next question comes from Ben Pyree at Atrium Research. Please go ahead.

Hi, Aurora, Graham, and Carmen. It's Ben from Atrium again. Firstly, congrats on a strong quarter, and it's good to see that shareholders are rewarding you guys for all the hard work. Just a couple questions here, and I think Terry covered a couple of them around the LME prices there. But in terms of CapEx, obviously, you had the main end shut down in Q1, so it was elevated. Q2 is quite low. What can we expect in Q3 and Q4 from a CapEx perspective?

You shouldn't expect any changes from the original guidance, which was $13 million. I think Robin spoke about that. What is in those $13 million? We have essentially five process optimization projects, which have a price tag of $4.4 million. This includes finalizing some projects that we initiated previously. in 2024 basically to expand and optimize the control of flotation sales and improve water evacuation in calcanis we also have a project to optimize flotation in the cascades and we have the addition of the second thickener for the mixed concentrate so what has transpired in terms of q1 q2 we had a front loading of a lot of the capex as associated with 2 things, the timing of the plant maintenance shutdown and the workload of those optimization projects. But we're on track to not have more than that 13M dollars of total CAPEX for the year. I did mention 4.4 for optimization. The other categories are $4.7 million, sorry, $4.2 million for a planned shutdown and $4 million just for sustaining CAPEX, boring sustaining CAPEX.

Okay, understood. Thank you. And then, yeah, in terms of share buybacks, and we did hear you were cutting in a little bit, cutting in and out a little bit, but on the buybacks in particular in Q2, there was obviously quite a jump from Q1. I think it was a 4 or 5X in terms of shares bought back. Why such a big change? And then in terms of consistency going into Q3 and Q4, I know you mentioned you're sort of going to be opportunistic with the buybacks, but can you just touch on this jump from Q1 to Q2?

Yes. I think what was happening was basically a strong cash generation and the recognition that there was, especially in the second quarter, an opportunity of buying back those shares at a really good price. I did mention that our average buyback price in the quarter was $1.78. So I think that was for the first semester. So I think that We were just watching how much cash is coming in as free cash flow and what is the best way of allocating that cash to ensure that we kept up with essentially that distribution commitment and share buybacks was an obvious opportunity for us in the second quarter.

Right. Okay. And then so Maybe you can touch on that sort of strategy in terms of how you're prioritizing shareholder returns, because it did cut out a little bit, but it sounds like when the share price is higher, you'll probably scale back the buybacks, but if the popper is high, performance dividends.

It's basically a more holistic answer. I wouldn't like to just provide a very linear answer. response saying, if copper price is here, we do this or we do that, or if the share price is here, we take this route. I think that the answer is that our CRS has to be flexible. We have no absolute preference other than ensuring that we live up to our word of returning that cash to shareholders. And we use the tools strategically. You know quite well that for us, The foundation of the CRS is the quarterly dividend. We want to provide that very stable, very predictable return to shareholders under this copper price conditions where that three cent Canadian dividend is absolutely safe. Then the question becomes, what do we do next? Performance dividends or the share buybacks? The performance dividends are a great tool. For example, when we have a spike in copper prices, We saw that happening in the second quarter of 2024, and the obvious answer was we've realized the benefits of this a strong settlement in the quarter for prior quarter sales, and we have to return this. The best way of doing it quickly is through the performance dividend. But short buybacks, if we see a period of short price weakness, we act on that. If we want to reduce dilution, we act on that. We have stated at the very minimum We want to end each year with no dilution, but we've done more than that this year. Certainly, you saw the activity that we had in the second quarter, and literally what was happening is we had the free cash flow. We were looking at our share price movement, and we thought this is a great opportunity to go out in the market and buy back those shares at a bargain price, and we did that.

Understood. Yeah, no, that makes sense. And then I guess just the last question would be, obviously, you've been paying down the debt. quite aggressively over the last year and a half. What are the plans to do with the excess cash flow once this debt is paid off at the end of the year? Is there a chance that the fixed dividend portion could increase?

That is certainly a possibility. Depending on where share price performance is additional activity on the buyback is also a possibility or a heftier or more frequent performance dividend. So it's A, B, or C. That's an easy answer because that's basically there's going to be a substantial catalyst in terms of additional free cash flow to equity. I think Carmen mentioned that. On average, if you look at our scheduled debt repayments for the debt worth $7 million, add to that $2 million of finance costs, so that's $9 million that are becoming available as of 2026.

Yep, understood. And I guess it's good to keep that flexibility and see how things go. Okay, well, that's all I had for today. Again, congrats and thanks.

Thanks, Ben.

Thank you. The next question comes from John Polcari at Mutual of America. Please go ahead.

Thank you. Another well-managed quarter. Thank you. Two questions, and I will not repeat or bother you with the question regarding dividends or increases, but in addition to eliminating dilution, is there a minimum number of shares that you think might be retained as far as reducing the flow to was an aggressive repurchase of shares in the second quarter that obviously will vary from quarter to quarter but again is there a minimum amount that in order to maintain liquidity that you think would be appropriate that you would not want to drop below in terms of number of shares outstanding or um

No, the commitment is basically don't avoid dilution, and I don't think that we have reached a situation where we think that buying back any more shares or buying back a big block of shares would represent a detrimental decision for the company to take on.

Okay, so as we speak, if there was an appropriate decision and there was adequate cash,

As we speak, sure, buybacks are absolutely on the table as are performance dividends and possibly in 2026 an increase to the quarterly dividend. So the three tools remain fully valid and executable on depending on circumstances.

Thank you. And the other question I had was just if you could take just a moment out to refresh me on, if you will, the chain of custody for copper delivery. After you've extracted the copper from the tailings, they assume it goes to port, and at what point do you turn over, say, title to the copper? At what point do you receive payment?

It is easier than that in terms of when is title transferred. Our copper concentrate, it's a copper concentrate, so it's not obviously a cathode. It's not a finished product. It's a dark... powder called copper concentrate. It is shipped out on a daily basis. As soon as it's put on the LTN into trucks, it passes title. We bill for those deliveries on a weekly basis. We get a provisional price on a weekly basis, and we settle that final provisional price three months later when the known price starts from the third month following delivery takes place.

I understand.

And that provisional price? Yeah. That provisional price is always, yeah, go ahead.

Always based on the LME?

It's always LME. It's always LME. We actually look, the provisional weekly price is based on the provisional price that is used until things are settled three months later. Always LME.

Great. All right. That's all I had, and thank you again for managing us to another hotel quarter.

Thank you.

Thank you. The next question comes from William Gower, an investor. Please go ahead.

All right. And I just want to echo the congratulations to everybody on the call, but also to the teams in Chile doing the work. This is incredible operational performance, managerial performance. And just quick follow-up on the settlement. So it sounds like the fair value adjustment is made three months later. And that – I mean, we're marking the market, but when is the cash actually hitting our account? And then kind of along the same lines, are we waiting to make decisions on cash flows such as buybacks or dividends until we know what the provisional adjustment is so that way – you know, essentially there's going to be a quarterly delay in the effect of the cash flows and then the decisions we make based on the cash flows?

William, thank you for recognizing the team in Chile. They are the real people that make all of this happen. We just coordinate them. There are two parts to your question regarding the mark-to-market, but I think that we mark-to-market every month. Carmen prepares consolidated financial statements on a monthly basis, not on a quarterly basis. We take the... the LME and the LME, sorry, the LME spot price and the LME M plus three price. And we create a progression for the M plus one, M plus two based on those two data points. And we do the mark to market on a monthly basis. But I think most important or the most important part of your question is what happens with the cash and what happens with the decision-making around that cash. So the payment terms from Codelco to NVC can be summarized in three steps. We issue weekly invoices each Monday for 75% of the prior week's copper production, which is provisionally priced, as I was speaking in my prior question, at the week's average LME price. Once the month is completed, we issue one monthly invoice to true the amount up to set 90% of the month production, which is provisionally priced at the monthly average price, less the weekly interim payments. So basically, at each month end, we are caught up with 90% of the deliveries that were done during the prior month. priced at the most recent LME price for 90% of those deliveries. And then the final terms, when the final terms are known three months later, we issue one final either credit note or debit note at the final price, which is the M plus 3 price. So cash flow is coming in on a weekly basis at 75% of our production price. It is trued up to 90% of our production rate a week after the end of the month. And the final settlement, positive or negative, takes place three weeks before. So there's always a continuum of cash flow coming in on a weekly basis. We update all of this information in our model. So we basically are working with real-time data that allows us to know How much, for example, can be allocated to share buybacks on a weekly basis when we're active on the buyback program? Or when copper prices are closer to lower prices, how safe is our capex payment or debt repayment, our quarterly dividend? We're monitoring all of that information essentially, I would say, daily. We have that. We're just plugging the copper price that we think is going to apply for each week, and we have all the data right in front of us.

Perfect. Thank you so much. I have another two follow-ups, not to that specific area, but with regards to cost guidance, it's around $2 per pound, and Obviously, it's been beaten in Q1 and Q2 and really – In Q2, in Q2. In Q2, okay. And largely because of smelting refining charges being lower. Is that something – and I know you've maintained the cost. Go ahead.

No, we guide it. If you're interested in the guidance, I would say the best source of information and probably the news release you should keep close to you year-round is our guidance news release, which is usually our first news release of the year. We provide not only what the task of guidance is going to be, but also for in terms of what happens with copper prices moving up or down, all the prices moving up or down, and even poor exchange. When we provided our guidance for the year in terms of cash costs, we knew already what the spot prices, sorry, what the PCR fees, the treatment and refinery charges were going to be for the year. So any variations that you've seen from guidance to actual are not driven by a lower smelter and refinery charges.

And I guess, and I'm probably just ignorant and don't understand it, and maybe you can better explain it, but so are these decreases, at least the lower numbers than the cash cost guidance, expected from smelting and refining? And I guess what I'm getting at is, is this something that's going to be long-term, or is this kind of one-off?

No, the variances that we're seeing right now are coming in from higher Molly production. They're coming in from a better or from a lower, from a least strong Chilean peso compared to the US dollar. Those are the significant variances are coming from. They're not coming by lower smelter and refinery charges. In our case, as is also the case for most copper concentrate producers, we work not on the basis of spot treatment and refinery charges, but on what's called an annual benchmark treatment and refinery charge that is known at the end of the prior year, and then you work with those figures, with those charges for the rest of the year, irrespective of what happens with a spot TCRC. So there are long-term or annually set rate that doesn't change through the year.

Okay, thank you. And then the last subject, and I'll preempt this question by thanking you for doing the interviews that you do, the kind of long-form hour, hour-and-a-half-long videos. Those are incredibly helpful and answer a lot of my questions. And part of that, when you're questioned about the overall DET contracts, both for historic and fresh tailings, you know, there's – obviously you provide guidance in the – management discussion analysis saying basically there's very little chance of DET canceling our contract in the short term. But with regards to the current extension contract deadlines, obviously it's been renewed and renewed. Can you provide us any guidance on when we might hear about talks of an additional extension or just kind of when we should start thinking about hearing that or I don't know, some sort of guidance on that.

We are 12 years away from the contract expiring. Can I share you one thing? If I'm still CEO in 12 years, you will not hear from it on year 11. You probably will hear from it around year six, six years before. This is critical to us. It is a genesis of what the company is, so this is not a discussion or a negotiation that we're going to leave to the end of or closer to 2037. But we're still 12 years away from that.

Yeah, I know. And obviously, it's very important. I think it's very important. That's why I figured I'd ask. So I appreciate it and your confidence there. is one of the main reasons I'm an investor. You are one of the main reasons I'm an investor in America. So I appreciate you and the entire team there. So thank you for all the work that you do.

You're very kind.

Thank you. We have no further questions. I will turn the call back over to Aurora Davidson for closing comments.

Thank you very much. Again, my apologies for any communication disruptions through the call. We try to avoid them as much as we can. Thank you for attending today's call, and thank you to Carmen and Graham for being on the call as well. The recording and the script will be available on Amerigo's website in the next few days. We will hold our next earnings call on Thursday, October 30th, to report our third quarter results. Please visit our website regularly for updates, and feel free to contact us with any questions at your convenience. Thank you for your continued interest in Amerigo.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.